SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

¨ ~~(Do not check if a smaller reporting company)~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨☐ Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Item 1. Financial Statements.

CHATHAM LODGING TRUST

Consolidated Balance Sheets

(In thousands, except share and per share data)

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

CHATHAM LODGING TRUST

Consolidated Statements of Operations

(In thousands, except share and per share data)

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

CHATHAM LODGING TRUST

Consolidated Statements of Equity

(In thousands, except share and per share data)


Three months ended June 30, 2019 and 2020
	Common Shares					Additional Paid - In Capital		Retained earnings (distributions in excess of retained earnings)		Total Shareholders’ Equity		Noncontrolling Interest in Operating Partnership		Total Equity
	Shares	Amount
Balance, April 1, 2019	46,571,005	$	466	$	897,161	$	(113,039)	$	784,588	$	10,329	$	794,917

Issuance of shares, net of offering costs of $32	347,378	3		6,823		—		6,826		—		6,826



Amortization of share based compensation	—	—		15		—		15		1,110		1,125
Dividends declared on common shares ($0.33 per share)	—	—		—		(15,447)		(15,447)		—		(15,447)
Distributions declared on LTIP units ($0.33 per unit)	—	—		—		—		—		(349)		(349)

Reallocation of noncontrolling interest	—	—		70		—		70		(70)		—
Net income	—	—		—		9,437		9,437		88		9,525
Balance, June 30, 2019	46,918,383	$	469	$	904,069	$	(119,049)	$	785,489	$	11,108	$	796,597
Balance, April 1, 2020	46,960,389	$	469	$	905,936	$	(180,479)	$	725,926	$	12,344	$	738,270

Issuance of shares, net of offering costs of $1	5,438	1		35		—		36		—		36



Amortization of share based compensation	—	—		6		—		6		1,025		1,031




Net loss	—	—		—		(26,827)		(26,827)		(366)		(27,193)
Balance, June 30, 2020	46,965,827	$	470	$	905,977	$	(207,306)	$	699,141	$	13,003	$	712,144

Common Shares
Additional
Paid - In
Capital
Retained earnings (distributions in excess of retained earnings)
Total
Shareholders’
Equity

Noncontrolling
Interest in
Operating
Partnership

Total
Equity
Shares Amount
Balance, January 1, 2016 38,308,937
$ 379
$ 719,773
$ (27,281 ) $ 692,871
$ 4,131
$ 697,002
Issuance of shares pursuant to Equity Incentive Plan 26,488
—
550
—
550
—
550
Issuance of shares, net of offering costs of $8 16,454
1
336
—
337
—
337
Issuance of restricted time-based shares 7,851
—
—
—
—
—
—
Amortization of share based compensation —
—
963
—
963
916
1,879
Dividends declared on common shares ($0.97 per share) —
—
—
(37,266 ) (37,266 ) —
(37,266 )
Distributions declared on LTIP units ($0.97 per unit) —
—
—
—
—
(537 ) (537 )
Reallocation of noncontrolling interest —
—
11
—
11
(11 ) —
Net income —
—
—
28,823
28,823
195
29,018
Balance, September 30, 2016 38,359,730
$ 380
$ 721,633
$ (35,724 ) $ 686,289
$ 4,694
$ 690,983
Balance, January 1, 2017 38,367,014
$ 380
$ 722,019
$ (45,657 ) $ 676,742
$ 4,848
$ 681,590
Issuance of shares pursuant to Equity Incentive Plan 23,980
—
500
—
500
—
500
Issuance of shares, net of offering costs of $812 1,443,482
15
28,909
—
28,924
—
28,924
Issuance of restricted time-based shares 5,000
—
—
—
—
—
—
Amortization of share based compensation —
—
619
—
619
1,791
2,410
Dividends declared on common shares ($0.99 per share) —
—
—
(38,495 ) (38,495 ) —
(38,495 )
Distributions declared on LTIP units ($0.99 per unit) —
—
—
—
—
(721 ) (721 )
Reallocation of noncontrolling interest —
—
101
—
101
(101 ) —
Net income —
—
—
24,055
24,055
167
24,222
Balance, September 30, 2017 39,839,476
$ 395
$ 752,148
$ (60,097 ) $ 692,446
$ 5,984
$ 698,430


Six Months Ended June 30, 2019 and 2020
	Common Shares					Additional Paid - In Capital		Retained earnings (distributions in excess of retained earnings)		Total Shareholders’ Equity		Noncontrolling Interest in Operating Partnership		Total Equity
	Shares	Amount
Balance, January 1, 2019	46,525,652	$	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 $201	364,861	4		6,915		—		6,919		—		6,919



Amortization of share based compensation	—	—		31		—		31		2,041		2,072
Dividends declared on common shares ($0.66 per share)	—	—		—		(30,814)		(30,814)		—		(30,814)
Distributions declared on LTIP units ($0.66 per unit)	—	—		—		—		—		(651)		(651)

Reallocation of noncontrolling interest	—	—		337		—		337		(337)		—
Net income	—	—		—		11,050		11,050		103		11,153
Balance, June 30, 2019	46,918,383	$	469	$	904,069	$	(119,049)	$	785,489	$	11,108	$	796,597
Balance, January 1, 2020	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 $3	12,866	1		125		—		126		—		126



Amortization of share based compensation	—	—		15		—		15		2,397		2,412
Dividends declared on common shares ($0.22 per share)	—	—		—		(10,331)		(10,331)		—		(10,331)
Distributions declared on LTIP units ($0.22 per unit)	—	—		—		—		—		(233)		(233)

Reallocation of noncontrolling interest	—	—		1,114		—		1,114		(1,114)		—
Net loss	—	—		—		(54,610)		(54,610)		(694)		(55,304)
Balance, June 30, 2020	46,965,827	$	470	$	905,977	$	(207,306)	$	699,141	$	13,003	$	712,144

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

CHATHAM LODGING TRUST

Consolidated Statements of Cash Flows

Supplemental disclosure of non-cash investing and financing information:

On January 15, ~~2017,~~2020, the Company issued ~~23,980~~24,516 shares to its independent trustees pursuant to the Company’s Equity Incentive Plan as compensation for services performed in ~~2016.~~2019. On January ~~15, 2016,~~16, 2019, the Company issued ~~26,488~~27,870 shares to its independent trustees pursuant to the Company’s Equity Incentive Plan as compensation for services performed in ~~2015.~~2018.

As of ~~September~~June 30, ~~2017~~,2020, the Company had accrued distributions payable of ~~$5,217~~.$469. These distributions ~~were paid on October 27, 2017, except for~~ ~~$783~~ related to accrued but unpaid distributions on unvested performance based shares and LTIP ~~units (See Note 11).~~units. As of ~~September~~June 30, ~~2016~~,2019, the Company had accrued distributions payable of ~~$4,746~~.$5,895. These distributions were paid on ~~October 28, 2016,~~July 26, 2019, except for ~~$487~~$658 related to accrued but unpaid distributions on unvested performance based shares.

Accrued share based compensation of ~~$433~~$225 and ~~$377~~$225 is included in accounts payable and accrued expenses as of ~~September~~June 30, ~~2017~~2020 and ~~2016~~,2019, respectively.

Accrued capital improvements of ~~$1,797~~$1,554 and ~~$2,368~~$2,296 are included in accounts payable and accrued expenses as of ~~September~~June 30, ~~2017~~2020 and ~~2016~~,2019, respectively.

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

CHATHAM LODGING TRUST

Notes to the Consolidated Financial Statements

(in thousands, except share and per share data, unless otherwise specified)

Chatham Lodging Trust (“we,” “us” or the “Company”) was formed as a Maryland real estate investment trust (“REIT”) on October 26, 2009. The Company is internally-managed and invests primarily in upscale extended-stay and premium-branded select-service hotels.

In January 2014, the Company established an At the Market Equity Offering ("Prior ATM Plan") whereby, from time to time, we may publicly offer and sell our common shares having an aggregate maximum offering price of up to $50 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,~~1933. The Company filed a $100 million registration statement for a new ATM program (the "ATM Plan" and together with the Prior ATM Plan, the "ATM Plans") on December 28, 2017 to replace the prior program. At the same time, the Company entered into sales agreements with Cantor Fitzgerald & Co. ("Cantor") ~~acting as sales agent pursuant to a Sales Agreement (the “Cantor Sales Agreement”). On January 13, 2015, the Company entered into a Sales Agreement (the “Barclays Sales Agreement”) with~~, Barclays Capital Inc. (“Barclays”) ~~to add Barclays~~, Robert W. Baird & Co. Incorporated, ("Baird"), Citigroup Global Markets Inc. ("Citigroup"), Stifel, Nicolaus & Company, Incorporated ("Stifel") and Wells Fargo Securities, LLC ("Wells Fargo") as ~~an additional~~ sales ~~agent under the Company’s ATM Plan.~~ agents. During the ~~three~~six months ended ~~September~~June 30, ~~2017,~~2020, we issued ~~464,454~~0 shares under the ATM ~~Plan at a weighted average price of $20.91, which generated $9.6 million of gross proceeds.~~Plan. As of ~~September~~June 30, ~~2017, we had issued 1,993,199 shares under the ATM Plan at a weighted average price of $21.92. As of~~ ~~September 30, 2017, there~~2020, there was approximately ~~$6.3~~$90.4 million available for issuance under the ATM Plan.

In January 2014, the Company established a $25 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 "New DRSPP" and together with the Prior DRSPP, the "DRSPPs") on December 28, 2017 to replace the prior program. Under the ~~DRSPP,~~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 prospectus for the ~~DRSPP. In January 2017, we filed a new $25 million registration statement for the DRSPP to replace the prior existing program.~~DRSPPs. During the three months ended ~~September~~June 30, ~~2017,~~2020, we issued ~~149,305~~5,438 shares under the New DRSPP at a weighted average price of ~~$20.92,~~$6.54, which generated ~~$3.1 million~~$35.6 thousand of ~~gross~~ proceeds. As of ~~September~~June 30, ~~2017, we had issued 360,436 shares under the DRSPP at a weighted average price of $20.54. As of~~ ~~September 30, 2017~~,2020, there was approximately ~~$17.6~~$27.7 million available for issuance under the New DRSPP.

The net proceeds from any share offerings or issuances 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. Chatham Lodging Trust is the sole general partner of the Operating Partnership and owns ~~100%~~100.0% of the common units of limited partnership interest in the Operating Partnership. 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.

On January 1, 2016, the Company adopted accounting guidance under Accounting Standards Codification (ASC) Topic 810, "Consolidation,” modifying the analysis it must perform to determine whether it should consolidate certain types of legal entities. The guidance does not amend the existing disclosure requirements for variable interest entities ("VIEs") or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, the Operating Partnership is a VIE of the Company. As the Operating Partnership is already consolidated in the financial statements of the Company, the identification of this entity as a VIE has no impact on the consolidated financial statements of the Company. There were no other legal entities qualifying under the scope of the revised guidance that were consolidated as a result of the adoption. In addition, there were no other voting interest entities under prior existing guidance determined to be variable interest entities under the revised guidance.

As of ~~September~~June 30, ~~2017~~,2020, the Company wholly owned 3940 hotels with an aggregate of ~~5,843~~6,092 rooms located in 15 states and the District of Columbia. As of ~~September~~June 30, ~~2017,~~2020, the Company also (i) held a 10.3% noncontrolling interest in a joint venture (the “NewINK JV”) with affiliates of Colony ~~NorthStar,~~Capital, Inc. ("~~CLNS"~~CLNY"), which ~~was formed in the second quarter of 2014 and~~currently owns 46 hotels acquired47 ~~hotels comprising an aggregate of 6,097 rooms~~ from a joint venture (the "Innkeepers JV") between the Company and Cerberus Capital Management ("Cerberus"), comprising 5,948 rooms and (ii) held a ~~10.0%~~10% noncontrolling interest in a separate joint venture (the "Inland JV") with ~~affiliates of CLNS,~~CLNY, which ~~was formed in the fourth quarter of 2014 and acquired~~owns 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of ~~6,401~~6,402 rooms. We sometimes ~~refer~~use the term "JVs", which refers collectively to the NewINK JV and Inland ~~JV collectively as the ("JVs").~~JV.

To qualify as a REIT, the Company cannot operate the 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 ~~all of~~ the 4746 NewINK JV hotels and (ii) owns its 10% interest in ~~all of~~ 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 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 revenue. The initial term of each of the TRS leases is 5 ~~years~~.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 ~~September~~June 30, ~~2017~~,2020, Island Hospitality Management LLC (“IHM”), which is ~~51%~~52.5% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all 3940 of the Company’s wholly owned hotels. As of ~~September~~June 30, ~~2017~~,2020, all of the NewINK JV hotels were managed by IHM. As of ~~September~~June 30, ~~2017~~,2020, 34 of the Inland JV hotels were managed by IHM and 14 of the Inland JV hotels were managed by Marriott International, Inc. ("Marriott").

Due to the COVID-19 pandemic and the effects of travel restrictions both globally and in the United States, the hospitality industry has experienced drastic drops in demand. We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have, a material negative impact on our financial results and cash flows, and such negative impact may continue beyond the containment of the pandemic. On May 6, 2020, we amended our credit facility to suspend financial covenants through March 31, 2021 and provide access to the entire $250 million facility size. We have also taken additional measures to improve our liquidity, including reducing operating expenses, deferring capital expenditures, and suspending dividends. Based on the successful amendment of our credit facility and the steps we have taken to reduce hotel operating costs, delay capital expenditures and suspend dividends, we believe that we have sufficient liquidity to satisfy our obligations for the foreseeable future.

Basis of Presentation

The accompanying unaudited interim 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”) applicable to interim financial information. These unaudited 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. Interim results are not necessarily indicative of full year performance due to seasonal and other factors, including the timing of the acquisition or sale of hotels.

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. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited financial statements prepared in accordance with GAAP, and the related notes thereto as of December 31, ~~2016,~~2019, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2019.

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.

Recently Adopted Accounting Policies

~~3. Recently Issued~~

On January 1, 2019, the Company adopted accounting guidance under Accounting Standards

~~On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09 ("ASU 2014-09"),~~ ~~Revenue from Contracts with Customers~~, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The standard permits the use of either the retrospective or modified retrospective approach. In July 2015, the FASB voted to defer the effective date to January 1, 2018 with early adoption beginning January 1, 2017. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. The Company is finalizing its evaluation of each of its revenue streams under the new model and because of the short-term, day-to-day nature of the Company's hotel revenues, the pattern of revenue recognition is not expected to change significantly. The Company does not expect adoption of this standard will have a material impact on its consolidated financial statements. We expect to adopt the standard using the modified retrospective approach, which requires a cumulative effect adjustment, if any, as of the date of adoption. The new standard is effective for us beginning with the first quarter of 2018.

~~On February 25, 2016, the FASB issued ASU~~ Codification (ASU) 2016-02 (“ASU 2016-02”), Leases, which relates to the accounting for leasing transactions. ~~This standard~~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 new 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 new 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 ~~and~~or lease liabilities for ~~the rights and obligations created by~~ leases with ~~lease~~ terms ~~of more than 12 months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. Leases with a term~~ of 12 months or ~~less will be~~ less. For our ground lease agreements and corporate office lease agreement, all of which are currently

accounted for ~~similarly to existing guidance for~~as operating leases, ~~today. The Company is the lessee on certain air/land rights arrangements and an office~~we recognized lease ~~and expects to record right~~liabilities of $25.7 million with corresponding right-of use assets ~~and lease liabilities for these leases under the new standard. This guidance is effective for~~of $23.1 million our consolidated balance sheet as of January 1, 2019.

3. Disposition of Hotel Properties

On May 7, 2019, the Company sold the Courtyard by Marriott hotel in Altoona, PA for $4.6 million and recognized a loss on ~~January 1, 2019, however, early adoption is permitted. The standard requires a modified retrospective approach for leases that exist or are entered into after~~ the ~~beginning~~sale of the ~~earliest comparative period~~hotel property of $4.4 million. On May 15, 2019, the Company sold the SpringHill Suites by Marriott hotel in Washington, PA for $5.1 million and recognized a gain on the ~~financial statements. The Company is evaluating~~sale of the ~~impact~~hotel property of $1.1 million. Proceeds from the sales were used to repay amounts outstanding on the Company's revolving credit facility. These sales did not represent a strategic shift that ~~ASU 2016-02 will have on its consolidated financial statements and related disclosures.~~

~~On August 26, 2016, the FASB issued ASU 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. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with earlier adoption permitted. The Company has certain cash payments and receipts related to debt extinguishment and distributions from equity method investments that will be affected by the new standard. The Company does not anticipate that this guidancehad or will have a ~~material impact~~major effect on the ~~adoption of ASU 2016-15~~Company's operations and financial results and did not qualify to ~~our consolidated financial statements.~~be reported as discontinued operations.

~~On November 17, 2016,~~During the ~~FASB issued ASU 2016-18 ("ASU 2016-18"),~~ ~~Restricted Cash,~~ ~~which requires that~~three and six months ended June 30, 2020 and 2019, 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 will be effective for public companies for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and all other entities for fiscal years beginning after December 15, 2018. This standard addresses presentation of restricted cash in theCompany's consolidated statements of ~~cash flows only and will have no effect on our reported consolidated financial condition or results of operations.~~

~~On January 5, 2017, the FASB issued ASU 2017-01 ("ASU 2017-01"),~~ ~~Definition of a Business,~~ which will likely result in more acquisitions being accounted for as asset acquisitions across all industries, particularly real estate, pharmaceutical and oil and gas. Application of the changes would also affect the accounting for disposal transactions. The changesoperations included operating income related to the definition of a business will likely result in more of the Company's property acquisitions qualifying as asset acquisitions, which will permit capitalization of acquisition costs. This standard will be effective for public business entities with a calendar year end in 2018 and all other entities have an additional year to adopt. The Company has adopted this guidance as of 2017. The adoption did not have a material impact on our consolidated financial statements.

~~4. Acquisition of Hotel Properties~~

~~Hotel Purchase Price Allocation~~

~~We acquired the Hilton Garden Inn Portsmouth ("Portsmouth") hotel for $43.4 million on September 20,2017. The allocation of the purchase price was (dollars in thousands):~~

Portsmouth
Acquisition date 9/20/2017
Number of Rooms 131
Land $ 3,600
Building and improvements 37,630
Furniture, fixtures and equipment 2,120
Cash 8
Accounts receivable 32
Prepaid expenses and other assets 12
Accounts payable and accrued expenses (27 )
Net assets acquired $ 43,375
Net assets acquired, net of cash $ 43,367

The Company incurred acquisition costs of $0.4 million and $0.4 million, respectively, during the three and nine months ended September 30, 2017 and $0.6 million and $1.4 million, respectively, during the three and nine months ended September 30, 2016.

~~The amount of revenue and operating income from the hotel acquired in 2017 from its respective date of acquisition through September 30, 2017 is~~disposed hotels as follows (in thousands):


	For the three months ended						For the six months ended
	June 30,						June 30,
	2020		2019		2020		2019
Altoona CY	$	—	$	11	$	—	$	24
Washington SHS	—		33		—		198
Total	$	—	$	44	$	—	$	222

5.4. Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts at a level believed to be adequate to absorb estimated probable losses. That estimate is based on past loss experience, current economic and market conditions and other relevant factors. The allowance for doubtful accounts was ~~$0.2~~$0.4 million and ~~$0.2~~$0.5 million as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

Investment in Hotel Properties,net

Investment in hotel properties, net as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 consisted of the following (in thousands):


	June 30, 2020		December 31, 2019
Land and improvements	$	296,905	$	296,884
Building and improvements	1,232,263		1,216,849
Furniture, fixtures and equipment	88,846		81,707
Renovations in progress	15,809		31,589
	1,633,823		1,627,029
Less: accumulated depreciation	(305,106)		(279,913)
Investment in hotel properties, net	$	1,328,717	$	1,347,116

September 30, 2017 December 31, 2016
Land and improvements $ 284,655
$ 274,554
Building and improvements 1,087,046
1,045,880
Furniture, fixtures and equipment 59,040
50,495
Renovations in progress 14,807
10,067
1,445,548
1,380,996
Less: accumulated depreciation (182,365 ) (147,902 )
Investment in hotel properties, net $ 1,263,183
$ 1,233,094

~~During the nine months ended September 30, 2017, the Company identified indicators of impairment at its Washington SHS, PA~~Investment in hotel ~~primarily due to decreased operating performance and continued economic weakness. As such, the Company was required to perform~~properties under development

We are developing a ~~test of recoverability. This test compared the sum of the estimated future undiscounted cash flow attributable to the~~ hotel over its remaining anticipated holding period and to its disposition. The Company determined that the estimated undiscounted future cash flow attributable to the hotel did not exceed its carrying value and an impairment existed. As a result, the Company recorded a $6.7 million impairment charge in ~~the consolidated statements of operations during the nine months ended September 30, 2017. Fair value was determined based~~Los Angeles, CA on a ~~discounted cash flow model using third-party market data, considered Level 3 inputs.~~parcel of land owned by us. We ~~may record additional impairment charges if operating results~~have incurred $30.5 million of ~~this hotel are materially different from our forecasts, the economy~~costs to date, which includes $6.6 million of land acquisition costs and ~~lodging industry weakens, or we shorten our contemplated holding period.~~$23.9 million of other development costs.

6. Investment in Unconsolidated Entities

On June 9, 2014, the Company acquired a 10.3% interest in the NewINK JV, a joint venture between affiliates of NorthStar Realty Finance Corp. ("NorthStar") and the Operating Partnership. The Company accounts for this investment under the equity method. NorthStar merged with Colony Capital, Inc. ("Colony") on January 10, 2017 to form a new company, ~~CLNS,~~CLNY, which owns a 89.7% interest in the NewINK JV. The value of NewINK JV assets and liabilities were adjusted to reflect estimated fair market value at the time Colony merged with NorthStar. As of ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the Company’s share of partners’ capital in the NewINK JV was approximately ~~$52.8~~$5.2 million and ~~$11.0~~$46.4 million, respectively, and the total difference between the carrying amount of investment and the Company’s share of partners’ capital was approximately ~~$58.7~~$23.0 million and ~~$16.3~~$56.5 million, respectively, (for which the basis difference related to amortizing assets is being recognized over the life of the related assets as a basis difference adjustment). The ~~value~~Company offset approximately $32.2 million of its share of the NewINK ~~JV assets and liabilities were adjusted to reflect estimated fair market value at~~JV's impairment loss in the ~~time Colony merged with NorthStar.~~current period by its remaining basis difference in the NewINK JV. The Company serves as managing member of the NewINK JV. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~,2019, the Company received cash distributions from the NewINK JV as follows (in thousands):

For the three months ended For the nine months ended
September 30, September 30,
2017 2016 2017 2016
Cash generated from other activities and excess cash $ 1,182
$ 1,542
$ 1,901
$ 4,111
Total $ 1,182
$ 1,542
$ 1,901
$ 4,111


	For the three months ended						For the six months ended
	June 30,						June 30,
	2020		2019		2020		2019
Cash generated from other activities and excess cash	$	—	$	411	$	—	$	411


Total	$	—	$	411	$	—	$	411

On November 17, 2014, the Company acquired a 10.0% interest in the Inland JV, a joint venture between affiliates of NorthStar and the Operating Partnership. The Company accounts for this investment under the equity method. NorthStar merged with Colony ~~Capital, Inc. ("Colony")~~ on January 10, 2017 to form a new company, ~~CLNS,~~CLNY, which owns a ~~90.0%~~90% interest in the Inland JV. As of September 30, 2017 and 2016, the Company's share of partners' capital in the Inland JV was approximately $36.6 million and $20.9 million, respectively, and the total difference between the carrying amount of the investment and the Company's share of partners' capital is approximately $11.2 million and $0.0 million, respectively (for which the basis difference related to amortizing assets is being recognized over the life of the related assets as a basis difference adjustment). The value of Inland JV assets and liabilities were adjusted to reflect estimated fair market value at the time Colony merged with NorthStar. The Company serves as managing member of the Inland JV. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~,2019, the Company received 0 cash distributions from the Inland ~~JV as follows (in thousands):~~JV.

For the three months ended For the nine months ended
September 30, September 30,
2017 2016 2017 2016
Cash generated from other activities and excess cash $ 100
$ 1,000
100
$ 2,500
Total $ 100
$ 1,000
100
$ 2,500

On May 9, 2017, the NewINK JV refinanced the $840.0 million loan collateralized by the 47 hotels then owned with a new $850.0 million loan with an interest at a rate of LIBOR plus a spread of 2.79%, an initial maturity date of June 7, 2019 and 3 one-year extension options. The NewINK JV exercised the first extension and the maturity was extended to June 7, 2020. On November 7, 2019, the NewINK JV refinanced the $850.0 million~~loan.~~ ~~The~~ loan with a new $855.0 million non-recourse loan is ~~with~~from Morgan Stanley Bank, N.A., JPMorgan Chase Bank, National Association, and Bank of America, N.A. (collectively the "Lender"), collateralized by the then owned 46 hotels. The new loan bears interest at a rate of LIBOR plus a spread of ~~2.79%~~2.82%, has an initial maturity of ~~June~~November 7, ~~2019~~2021 and ~~three~~5 one-year extension options.

On April 7, 2020 and May 7, 2020, the NewINK JV failed to make debt service payments related to its $855.0 million loan. The servicer and lender subsequently agreed to fund the April 7, 2020 and May 7, 2020 interest payments for the senior portion of the loan from restricted cash balances that were originally escrowed to fund future capital expenditures. The NewINK JV made the debt payment due to senior lenders on June, 7, 2020 but has not made the debt payment due to senior lenders on July 7, 2020.The NewINK JV did not make the interest payment due to mezzanine lenders on April 7, 2020 and has not made any of the subsequent monthly interest payments due to mezzanine lenders. The failure to make the required debt service payments is an event of default under the NewINK loan agreement and could result in a foreclosure by the lender. The NewINK JV is attempting to negotiate a forbearance agreement with the lender but cannot provide any assurance that such an agreement will be reached. The NewINK JV debt is non-recourse to Chatham with the exception of customary non-recourse carve-out provisions such as fraud, material and intentional misrepresentations and misapplication of funds. A default under the NewINK loan agreement does not trigger a cross-default under any of Chatham’s debt agreements.

On June 9, 2017, the Inland JV refinanced the $817.0 million loan collateralized by the 48 hotels with a new ~~$780.0~~$780.0 millionnon-recourse loan with Column Financial, Inc. On June 9, 2017, the Company contributed an additional~~$5.0~~ $5.0 million of capital related to its share in the Inland JV to reduce the debt collateralized by the 48 hotels. The new loan bears interest at a rate of LIBOR plus a spread of 3.3%, ~~has~~had an initial maturity date of July 9, 2019 and ~~three~~3 one-year extension options. The Inland JV exercised the first extension and the maturity was extended to July 9, 2020.

On April 9, 2020 the Inland JV failed to make a debt service payment related to its $780.0 million loan and has not made any of its subsequent monthly debt service payments. The failure to make the required debt service payments is an event of default under the Inland loan agreement. The Inland JV has not been successful in negotiating a forbearance agreement with its lenders. The Inland JV debt is non-recourse to Chatham with the exception of customary non-recourse carve-out provisions such as fraud, material and intentional misrepresentations and misapplication of funds. A default under the Inland JV loan agreement does not trigger a cross-default under any of Chatham’s debt agreements.

The Company’s ownership interests in the JVs are subject to change in the event that either the Company or ~~CLNS~~CLNY calls for additional capital contributions to the respective JVs necessary for the conduct of business, including contributions to fund costs and expenses related to capital expenditures. In connection with (i) the non-recourse mortgage loan secured by the NewINK JV properties and the related non-recourse mezzanine loan secured by the membership interests in the owners of the NewINK JV properties and (ii) the non-recourse mortgage loan secured by the Inland JV properties, the Operating Partnership provided the applicable lenders with customary environmental indemnities, as well as guarantees of certain customary non-recourse ~~carveout~~carve-out provisions such as fraud, material and intentional misrepresentations and misapplication of funds. In some circumstances, such as the bankruptcy of the applicable borrowers, the guarantees are for the full amount of the outstanding debt, but in most circumstances, the guarantees are capped at 15% of the debt outstanding at the time in question (in the case of the NewINK JV loans) or 20% of the debt outstanding at the time in question (in the case of the Inland JV loans). In connection with each of the NewINK JV and Inland JV loans, the Operating Partnership has entered into a contribution agreement with its JV partner whereby the JV partner is, in most cases, responsible to cover such JV partner’s pro rata share of any amounts due by the Operating Partnership under the applicable guarantees and environmental indemnities. The Company manages the JVs and will receive a promote interest in each applicable JV if it meets certain return thresholds for such JV. ~~CLNS~~CLNY may also approve certain actions by the JVs without the Company’s consent, including certain property dispositions conducted at arm’s length, certain actions related to the restructuring of the applicable JV and removal of the Company as managing member in the event the Company fails to fulfill its material obligations under the applicable joint venture agreement.

During the three months ended March 31, 2020, the Company determined that an other than temporary decline in the value of its equity investment in the Inland JV had occurred. The Inland JV’s operating performance has been significantly impacted by the COVID-19 pandemic. The Inland JV has high leverage, limited liquidity and limited ability to fund the current level of operating losses caused by the COVID-19 pandemic for a sustained period of time. Based on these factors, we have assessed that the fair market value of our equity investment in the Inland JV is $0 and the Company did not consider the investment recoverable and therefore recorded an impairment of $15.3 million on the investment. Since the Company’s basis in the Inland JV is now $0 and we expect that ongoing losses are not sustainable, we stopped recording any equity income or losses from the Inland JV as of March 31, 2020.

The Company's ~~investment~~recorded investments in the NewINK JV and the Inland JV were ~~$(6.0)~~$(17.8) million and ~~$25.4~~$0.0 million, respectively, at ~~September~~June 30, ~~2017~~ ~~and $(6.0) million and $20.4 million, respectively, at December 31, 2016.~~2020. The following table sets forth the combined components of net ~~income,~~loss, including the Company’s share, related to ~~the NewINK JV and Inland JV~~all JVs for the three and six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 (in thousands):


	For the three months ended						For the six months ended
	June 30,						June 30,
	2020		2019		2020		2019
Revenue	$	37,897	$	134,457	$	128,767	$	246,576
Total hotel operating expenses	39,987		84,974		111,952		164,073
Hotel operating (loss) income	$	(2,090)	$	49,483	$	16,815	$	82,503
Impairment loss	$	561,494	$	—	$	575,375	$	—
Net (loss) income from continuing operations	$	(604,721)	$	565	$	(645,006)	$	(14,454)
Gain (loss) on sale of hotels	68		—		(14)		—
Net (loss) income	$	(604,653)	$	565	$	(645,020)	$	(14,454)

(Loss) income allocable to the Company	$	(1,905)	$	58	$	(5,977)	$	(1,464)
Basis difference adjustment	327		399		726		798
Total (loss) income from unconsolidated real estate entities attributable to the Company	$	(1,578)	$	457	$	(5,251)	$	(666)

For the three months ended For the nine months ended
September 30, September 30,
2017 2016 2017 2016
Revenue $ 134,048
$ 132,991
$ 372,813
$ 372,251
Total hotel operating expenses 78,107
75,948
221,366
218,400
Operating income $ 55,941
$ 57,043
$ 151,447
$ 153,851
Net income from continuing operations $ 7,721
$ 8,794
$ 8,282
$ 8,673
Net income $ 7,721
$ 8,794
$ 8,282
$ 8,673

Income allocable to the Company $ 790
$ 901
$ 855
$ 896
Basis difference adjustment 399
150
1,176
450
Total income from unconsolidated real estate entities attributable to the Company $ 1,189
$ 1,051
$ 2,031
$ 1,346

The Company’s mortgage loans are collateralized by first-mortgage liens on certain of the Company’s properties. The ~~mortgages~~mortgage loans are non-recourse except for instances of fraud or misapplication of funds. Mortgage and ~~senior unsecured~~ revolving credit facility debt consisted of the following (dollars in thousands):

(1)The interest rate for the ~~senior unsecured~~ revolving credit facility is variable and based on LIBOR (subject to a 0.5% floor) plus a spread of 2.5% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million.

At June 30, 2020 and ~~based on either LIBOR plus an applicable margin ranging from 1.55% to 2.3%, or prime plus an applicable margin of 0.55% to 1.3%.~~

At ~~September 30, 2017~~ ~~and~~ December 31, ~~2016~~,2019, the Company had ~~$75.0~~$173.0 million and ~~$52.5~~$90.0 million,, respectively, of outstanding borrowings under its ~~senior unsecured~~$250.0 million revolving credit facility. At ~~September 30, 2017, the maximum borrowing availability under the senior unsecured revolving credit facility was~~ ~~$250.0 million~~.

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. All of the Company's mortgage loans are fixed-rate. Rates take into consideration general market conditions, quality and estimated value of collateral and maturity of debt with similar credit terms and are classified within level 3 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 was ~~$534.1~~$479.5 million and ~~$516.0~~$501.5 million,, respectively.

The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with similar maturity and is classified within level 3 of the fair value hierarchy. As of ~~September~~June 30, ~~2017,~~2020, the Company’s only variable rate debt is under its ~~senior unsecured~~ revolving credit facility. The estimated fair value of the ~~Company’s~~Company��s variable rate debt as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 was ~~$75.0~~$173.0 million and ~~$52.5~~$90.0 million,, respectively.

On May 6, 2020, the company amended its credit facility to provide it with certain relief from the effects of the COVID-19 pandemic. The amendment provides for the waiver of certain financial covenants through March 31, 2021 and allows Chatham to borrow up to the entire $250 million facility size during this period. During this covenant waiver period, Chatham 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, Chatham added 6 hotels to the credit facility’s borrowing base which now has a total of 18 properties. The amendment provided Chatham’s credit facility lenders with pledges of the equity in the 18 borrowing base hotels. The amendment places additional limits on Chatham’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 2.5% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. As of ~~September~~June 30, ~~2017~~,2020, the Company was in compliance with all of its modified financial covenants. At ~~September 30, 2017, the Company’s consolidated fixed charge coverage ratio was 3.29 and the bank covenant is 1.5.~~

Future scheduled principal payments of debt obligations as of ~~September~~June 30, ~~2017~~,2020, for the current year and each of the next ~~four~~five calendar years and thereafter are as follows (in thousands):


	Amount
2020 (remaining six months)	$	4,982
2021	22,050
2022	182,954
2023	143,084
2024	296,387
2025	15,920
Thereafter	—
Total debt before unamortized debt issue costs	$	665,377
Unamortized mortgage debt issue costs	(1,202)
Total debt outstanding	$	664,175

The Company’s TRS is subject to federal and state income taxes.

~~The components of income~~ Income tax expense was 0 for the ~~following periods are as follows (in thousands):~~

For the three months ended For the nine months ended
September 30, September 30,
2017 2016 2017 2016
Federal $ —
$ (10 ) $ 271
$ 142
State —
(2 ) 46
25
Tax expense (benefit) $ —
$ (12 ) $ 317
$ 167
three months ended June 30, 2020 and 2019 and 0 for the six months ended June 30, 2020 and 2019

As of each reporting date, the Company's management considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets. The Company's TRS is expecting ~~increased~~continued taxable losses in ~~2017.~~2020. As of ~~September~~June 30, ~~2017 and during the period,~~2020, the TRS continues to recognize a full valuation allowance equal to 100% of the ~~gross~~net deferred tax ~~asset~~assets, with the exception of the AMT tax credit, due to the uncertainty of the TRS's ability to utilize these net deferred tax assets. Management will continue to monitor the need for a valuation ~~allowance~~allowance.

During the third quarter of 2018, the Company was notified that the tax return of the Company's TRS was going to be examined by the Internal Revenue Service for the tax year ended December 31, 2016. The examination remains open. The Company believes it does not need to record a liability related to matters contained in the tax period open to examination. However, should the Company experience an unfavorable outcome in the matter, such outcome could have a material impact on ~~a quarterly basis.~~its results of operations, financial position and cash flows.

The Company declared total common share dividends of ~~$0.33~~$0.22 per share and distributions on LTIP units of ~~$0.33~~$0.22 per unit for the ~~three~~six months ended ~~September~~June 30, ~~2017 and $0.99 per share and distributions on LTIP units~~2020. The Company suspended dividends beginning after the payment of ~~$0.99 per unit for~~ the ~~nine months ended September 30, 2017.~~March 27, 2020 dividend due to a decline in operating performance caused by the COVID-19 pandemic. The dividends and distributions were as follows:


	Record Date		Payment Date		Common share distribution amount			LTIP unit distribution amount
January		1/31/2020		2/28/2020		$	0.11		$	0.11
February		2/28/2020		3/27/2020		0.11			0.11

1st Quarter 2020						$	0.22		$	0.22











Total 2020						$	0.22		$	0.22

~~11.~~10. Earnings Per Share

The two-class method is used to determine earnings per share because unvested restricted shares and unvested LTIP units are considered to be participating shares. The LTIP units held by the non-controlling interest holders, which may be converted to common shares of beneficial interest, have been excluded from the denominator of the diluted earnings per share calculation as there would be no effect on the amounts since limited partners' share of income or loss would also be added back to net income or loss. Unvested restricted shares, unvested long-term incentive plan units and unvested Class A Performance 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. The following is a reconciliation of the amounts used in calculating basic and diluted net income per share (in thousands, except share and per share data):


	For the three months ended						For the six months ended
	June 30,						June 30,
	2020		2019		2020		2019
Numerator:
Net income (loss) attributable to common shareholders	$	(26,827)	$	9,437	$	(54,610)	$	11,050
Dividends paid on unvested shares and units	—		(107)		(50)		(192)

Net income (loss) attributable to common shareholders	$	(26,827)	$	9,330	$	(54,660)	$	10,858
Denominator:
Weighted average number of common shares - basic	46,960,289		46,760,016		46,954,411		46,658,973

Unvested shares	—		216,983		—		196,943
Weighted average number of common shares - diluted	46,960,289		46,976,999		46,954,411		46,855,916
Basic income (loss) per Common Share:
Net income (loss) attributable to common shareholders per weighted average basic common share	$	(0.57)	$	0.20	$	(1.16)	$	0.23
Diluted income (loss) per Common Share:
Net income (loss) attributable to common shareholders per weighted average diluted common share	$	(0.57)	$	0.20	$	(1.16)	$	0.23

For the three months ended For the nine months ended
September 30, September 30,
2017 2016 2017 2016
Numerator:
Net income attributable to common shareholders $ 14,392
$ 13,355
$ 24,055
$ 28,823
Dividends paid on unvested shares and units (64 ) (48 ) (171 ) (141 )
Undistributed earnings allocated to unvested shares and units —
—
—
—
Net income attributable to common shareholders $ 14,328
$ 13,307
$ 23,884
$ 28,682
Denominator:
Weighted average number of common shares - basic 39,298,974
38,307,382
38,731,900
38,293,704
Unvested shares 251,520
260,080
228,555
226,985
Weighted average number of common shares - diluted 39,550,494
38,567,462
38,960,455
38,520,689
Basic income per Common Share:
Net income attributable to common shareholders per weighted average basic common share $ 0.36
$ 0.35
$ 0.62
$ 0.75
Diluted income per Common Share:
Net income attributable to common shareholders per weighted average diluted common share $ 0.36
$ 0.35
$ 0.61
$ 0.74

~~12.~~11. Equity Incentive Plan

The Company maintains its Equity Incentive Plan to attract and retain independent trustees, executive officers and other key employees and service providers. The plan provides for the grant of options to purchase common shares, share awards, share appreciation rights, performance units and other equity-based awards. The plan was amended and restated as of May 17, 2013 to increase the maximum number of shares available under the plan to 3,000,000 shares. Share awards under this plan generally vest over three years, though compensation for the Company’s independent trustees includes share grants that vest immediately. The Company pays dividends on unvested shares and units, except for ~~performance based~~performance-based shares and outperformance based units, for which dividends on unvested ~~performance based~~performance-based shares and units are accrued and not paid until those shares or units vest. Certain awards may provide for accelerated vesting if there is a change in control. In January ~~2017~~2020 and ~~2016,~~2019, the Company issued ~~23,980~~24,516 and ~~26,488~~27,870 common shares, respectively, to its independent trustees as compensation for services performed in ~~2016~~2019 and ~~2015,~~2018, respectively. The quantity of shares was calculated based on the average of the closing price for the Company’s common shares on the NYSE for the last ten trading days of 2016. The Company would have distributed 17,745 common shares for services performed in 2017 had this liability classified award been satisfied as of September 30, 2017. As of ~~September~~June 30, ~~2017,~~2020, there were ~~1,871,942~~760,748 common shares available for issuance under the Equity Incentive Plan.

Restricted Share Awards

~~A summary of~~From time to time, the Company may award restricted shares ~~granted to executive officers that have not fully vested pursuant to~~under the Equity Incentive Plan as of ~~September 30, 2017~~ ~~is as follows:~~

Award Type Award Date Total Shares Granted Vested as of September 30, 2017
2014 Time-based Awards 1/31/2014 48,213
48,213
2014 Performance-based Awards 1/31/2014 38,805
12,935
2015 Time-based Awards 1/30/2015 40,161
26,774
2015 Performance-based Awards 1/30/2015 36,144
—
2015 Time-based Awards 6/1/2015 8,949
5,966
2017 Restricted Board Awards 1/11/2017 5,000
—

~~Time-based share awards vest over a~~ ~~three-year period. The performance-based share awards will be issued~~compensation to officers, employees and vest over a three-year period only if and to the extent that long-term performance criteria established by the Board of Trustees are met and the recipient remains employed by the Company through the vesting date.

non-employee trustees. The Company ~~measures~~recognizes compensation expense for ~~time-based share awards based upon~~ the ~~fair market value of its common~~restricted shares at the date of grant. For the performance-based shares granted in 2014 and 2015, compensation expense is based on a valuation of $13.17 and $21.21, respectively, per performance share granted, which takes into account that some or all of the awards may not vest if long-term performance criteria are not met during the vesting period. The 2014 performance-based shares did not meet the vesting criteria for 2015 or 2016 causing those shares not to be eligible for future vesting.

~~The grant date fair values of the performance-based share awards were determined using a Monte Carlo simulation method with the following assumptions:~~

Performance Award Risk Free Interest
Grant Date Volatility Dividend Yield Rate
1/31/2014 27% —% 0.71%
1/30/2015 29% —% 0.84%

~~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. The Company pays dividends on unvested time-based restricted shares. Dividends for performance-based shares are accrued and paid annually only if and to the extent that long-term performance criteria established by the Board of Trustees are met and the recipient remains employed by the Companybased on the ~~vesting date.~~fair market value of the shares on the date of issuance.

A summary of the Company’s restricted share awards for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and the year ended December 31, ~~2016~~2019 is as follows:


	Six Months Ended				Year Ended
	June 30, 2020				December 31, 2019
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Shares	Weighted-Average Grant Date Fair Value
Non-vested at beginning of the period	5,001	$	18.33	8,334	$	18.52
Granted	—	—		—	—
Vested	(1,667)	20.20		(3,333)	18.80
Forfeited	—	—		—	—
Non-vested at end of the period	3,334	$	17.40	5,001	$	18.33

Nine Months Ended Year Ended
September 30, 2017 December 31, 2016

Number of
Shares

Weighted -
Average Grant
Date Fair
Value

Number of
Shares

Weighted -
Average Grant
Date Fair
Value
Non-vested at beginning of the period 110,825
$ 22.05
170,480
$ 21.38
Granted 5,000
20.20
—
—
Vested (32,441 ) 25.77
(59,655 ) 20.14
Forfeited (25,870 ) $ 13.17
—
$ —
Non-vested at end of the period 57,514
$ 23.78
110,825
$ 22.05

As of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~,2019, there were ~~$0.3 million~~$43.0 thousand and ~~$0.9 million~~,$58.5 thousand, respectively, of unrecognized compensation costs related to restricted share awards. As of ~~September~~June 30, ~~2017~~,2020, these costs were expected to be recognized over a weighted–average period of approximately ~~0.8 years~~.1.5 years. For the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~,2019, the Company recognized approximately ~~$0.2 million~~$7.3 thousand and ~~$0.3 million~~,$15.7 thousand, respectively, and for ~~the nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the Company recognized approximately ~~$0.6 million~~$15.5 thousand and ~~$1.0 million,~~$31.3 thousand, respectively, of expense related to the restricted share awards. ~~This expense is included in general and administrative expenses in the accompanying consolidated statements~~

Table of ~~operations.~~Contents

Long-Term Incentive Plan ~~Units~~Awards

~~The Company recorded~~ ~~$0.7 million~~ ~~and~~ ~~$0.3 million~~ ~~in compensation expense related to the~~ LTIP units ~~for the~~ ~~three months ended September 30, 2017~~ ~~and~~ ~~2016, respectively, and for the nine months ended September 30, 2017 and 2016, the Company recognized approximately $1.8 million and $0.9 million, respectively. As~~are a special class of ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, there was~~ ~~$5.1 million~~ ~~and~~ ~~$2.6 million, respectively, of total unrecognized compensation cost related to LTIP units. This cost is expected to be recognized over approximately~~ ~~2.1 years~~, which represents the weighted average remaining vesting period of the LTIP units. Upon the closing of the Company's equity offering on September 30, 2013, the Company determined that a revaluation event occurred, as definedpartnership interests in ~~the Internal Revenue Code of 1986, as amended (the "Code"), and~~ ~~26,250~~ ~~LTIP units awarded in 2010 and held by one of the officers of the Company had achieved full parity with the common units of~~ the Operating Partnership ~~with respect~~which may be issued to ~~liquidating distributions and all other purposes.~~ ~~100%~~eligible participants for the performance of ~~these units have vested as of September 30, 2017. As of June 4, 2014,~~services to or for the ~~Company determined that a revaluation event occurred, as defined in the Code, and 231,525 LTIP units awarded in 2010 and held by two other officers~~benefit of the ~~Company had achieved full parity with~~Company. Under the Equity Incentive Plan, each LTIP unit issued is deemed equivalent to an award of one common ~~units~~share thereby reducing the number of ~~the Operating Partnership with respect to liquidating distributions and all~~shares available for other ~~purposes. As of September 30, 2017, 100% of these units have vested. As of June 1, 2017, the Company determined that~~equity awards on a revaluation event occurred, as defined in the Code, and 118,791 and 128,859 LTIP units awarded in 2016 and 2017, respectively, and held by six officers of the Company had achieved full parity with the common units of the Operating Partnership with respect to liquidating distributions and all other purposes. As of September 30, 2017, 33% and 0% of these units awarded in 2016 and 2017, respectively, have vested. Accordingly, these LTIP units awarded in 2010, 2016 and 2017 are allocated their pro-rata share of the Company's net income.1-for-one basis.

A summary of the Company's LTIP Unit awards for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and the year ended December 31, ~~2016~~2019 is as follows:

Outperformance Plan LTIP Awards

On June 1, 2015, the Company's Operating Partnership granted 183,300 Class A Performance LTIP units, as recommended by the Compensation Committee of the Board (the “Compensation Committee”), pursuant to a long-term, multi-year performance plan (the “Outperformance Plan”). ~~The awards granted pursuant to the Outperformance Plan are subject to two separate performance measurements, with 60%~~As of the award (the "Absolute Award") based solely on the Company's total shareholder return ("TSR") (the "Absolute TSR Component") and 40% of the award (the "Relative Award") measured by the Company's TSR (the "Relative TSR Component") relative to the other companies (the "Index Companies") that were constituents of the SNL US REIT Hotel Index (the "Index") during the entire measurement period. Under the Absolute TSR Component, 37.5% of the Absolute Award is earned if the Company achieves a 25% TSR over the measurement period. That percentage increases on a linear basis with the full Absolute Award being earned at a 50% TSR over the measurement period. For TSR performance below 25%, no portion of the Absolute Award will be earned. Under the Relative TSR Component, 37.5% of the Relative Award is earned if the Company is at the 50th percentile of the Index Companies at the end of the measurement period. That percentage increases on a linear basis with the full Relative Award earned if the Company is at the 75th percentile of the Index Companies at the end of the measurement period. If the Company is below the 50th percentile of the Index Companies at the end of the measurement period, no portion of the Relative Award will be earned. Compensation expense is based on an estimated value of $14.13 per Class A Performance LTIP unit, which takes into account that some or all of the awards may not vest if long-term performance criteria are not met during the vesting period. Awards earned under the Outperformance Plan will vest 50% at the end of the three-year measurement period on June 1, 2018, and 25% each on the one-year and two-year anniversaries of the end of the three-year measurement period, or June 1, 2019 and 2020, respectively, and provided that the recipient remains employed by the Company through the vesting dates. In the event of a Change in Control (as defined in the executive officers’ employment agreements), Outperformance Plan awards will be earned contingent upon the attainment of a pro rata TSR hurdle for the Absolute Award and achievement of the relative TSR percentile for the Relative Award based upon the in-place formula and using the Change of Control as the end of measurement period. Vesting continues to apply to awards earned upon a Change of Control, subject to full acceleration upon termination without cause or resignation for good reason within 18 months of the Change of Control. 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 the terms of the Class A Performance LTIP units ~~a holder~~did not meet the required market based Total Shareholder Return ("TSR") measurements and therefore, the accrued dividends and units have been forfeited. The expense related to these LTIP units was completely amortized as of a Class A Performance 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 LTIP unit (the “Pre-Vesting Distributions”), (ii) be entitled, upon the vesting of such Class A Performance 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 LTIP unit minus the aggregate amount of Pre-Vesting Distributions paid on such Class A Performance LTIP unit, and (iii) be entitled, following the vesting of such Class A Performance LTIP unit, to receive the same amount of distributions paid on a common unit of the Operating Partnership.May 31, 2020.

Time-Based ~~Equity Incentive~~LTIP Awards

On ~~January 28, 2016,~~March 1, 2020, the Company’s Operating Partnership, upon the recommendation of the Compensation Committee, granted ~~72,966~~130,206 time-based ~~LTIP unit~~ awards (the ~~“2016~~“2020 Time-Based LTIP Unit Award”). The grants were made pursuant to award agreements that provide for time-based ~~vesting.~~vesting (the "LTIP Unit Time-Based Vesting Agreement").

~~The 2016 Time-Based~~Time-based LTIP Unit Awards will vest ratably ~~on each of January 28, 2017, January 28, 2018 and January 28, 2019 (provided~~provided that the recipient remains employed by the Company through the applicable vesting date, subject to acceleration of vesting in the event of the recipient’s death, disability, termination without cause or resignation with good reason, or in the event of a change of control of the ~~Company~~).Company. Prior to vesting, a holder is entitled to receive distributions on the LTIP Units that comprise the ~~2016~~2020 Time-Based LTIP Unit ~~Awards. Compensation expense is based on an estimated value of $16.69 per 2016 Time-Based~~Awards and the prior year LTIP ~~Unit Award.~~unit Awards set forth in the table above.

Performance-Based LTIP Awards

On March 1, ~~2017,~~2020, the Company's Operating Partnership, upon recommendation of the Compensation Committee, granted 89,574 time-based awards (the "2017 Time-Based LTIP Unit Award"). The grants were made pursuant to the award agreements that provide for time-based vesting.

The 2017 Time-based LTIP Unit Awards will vest ratably on each of March 1, 2018, March 1, 2019 and March 1, 2020 (provided that the recipient remains employed by the Company through the applicable vesting date, subject to acceleration of vesting in the event of the recipient’s death, disability, termination without cause or resignation with good reason, or in the event of a change of control of the Company). Prior to vesting, a holder is entitled to receive distributions on the LTIP Units that comprise the 2017 Time-Based LTIP Unit Awards. Compensation expense is based on an estimated value of $18.53 per 2017 Time-Based LTIP Unit Award.

~~Performance-Based Equity Incentive Awards~~

~~On January 28, 2016, the Company’s Operating Partnership,~~ upon the recommendation of the Compensation Committee, also granted ~~39,285~~195,301 performance-based ~~LTIP unit~~ awards (the ~~"2016~~"2020 Performance-Based LTIP Unit Awards"). The grants were made pursuant to award agreements that ~~provide for performance-based vesting.~~ have market based vesting conditions. The ~~2016~~ Performance-Based LTIP Unit Awards are comprised of Class A Performance LTIP Units that will vest only if and to the extent that (i) the Company achieves certain long-term ~~performance~~market based TSR criteria established by the Compensation Committee and (ii) the recipient remains employed by the Company through the applicable vesting date, subject to acceleration of vesting in the event of the recipient’s death, disability, termination without cause or resignation with good reason, or in the event of a change of control of the Company. Compensation expense is based on an estimated value of ~~$11.09~~$13.66 per ~~2016~~2020 Performance-Based LTIP Unit Award, which takes into account that some or all of the awards may not vest if long-term ~~performance~~market based TSR criteria are not met during the vesting period.

The ~~2016~~ 2020 Performance-Based LTIP Unit Awards ~~shall vest based on the following:~~

(a) The number of Class A Performance LTIP Units that most nearly equals (but does not exceed) one-third of the Class A Performance LTIP Units issued pursuant to such 2016 Performance-Based LTIP Unit Award shall vest on January 28, 2017, if the Total Shareholder Return for the 12-month period beginning January 28, 2016 and ending on January 27, 2017 is 8% or more.

(b) The number of Class A Performance LTIP Units that most nearly equals (but does not exceed) one-third of the Class A Performance LTIP Units issued pursuant to such 2016 Performance-Based LTIP Unit Award shall vest on January 28, 2018, if the Total Shareholder Return for the 12-month period beginning January 28, 2017 and ending on January 27, 2018 is 8% or more.

(c) The number of Class A Performance LTIP Units that most nearly equals (but does not exceed) one-third of the Class A Performance LTIP Units issued pursuant to such 2016 Performance-Based LTIP Unit Award shall vest on January 28, 2019, if the Total Shareholder Return for the 12-month period beginning January 28, 2018 and ending on January 27, 2019 is 8% or more.

(d) All of the Class A Performance LTIP Units issued pursuant to such 2016 Performance-Based LTIP Unit Award (less any Class A Performance LTIP Units that previously vested under paragraphs (a), (b) or (c) above), shall vest on January 28, 2019, if the average Total Shareholder Return for the 36-month period ending on January 27, 2019 is 8% or more.

For purposes of the 2016 Performance-Based LTIP Unit Awards, "Total Shareholder Return" means, with respect to the measurement periods described in paragraphs (a), (b), (c) and (d) above, the total percentage return per common share of the Company based on the closing price of the Company’s common shares on the NYSE on the last trading day immediately preceding the first day of the applicable measurement period compared to the closing price of the Company’s common shares on the NYSE on the last trading day of such measurement period and assuming contemporaneous reinvestment in Company common shares of all dividends and other distributions at the closing price of the Company’s common shares on the date such dividend or other distribution was paid.

On March 1, 2017, the Company's Operating Partnership, upon the recommendation of the Compensation Committee, also granted 134,348 performance-based awards (the "2017 Performance-Based LTIP Unit Awards"). The grants were made pursuant to award agreements that provide for performance-based vesting. The ~~2017~~ ~~Performance-Based LTIP Unit Awards are comprised of Class A Performance LTIP Units~~ that will vest only if and to the extent that (i) the Company achieves certain long-term performance criteria established by the Compensation Committee and (ii) the recipient remains employed by the Company through the vesting date, subject to acceleration of vesting in the event of the recipient’s death, disability, termination without cause or resignation with good reason, or in the event of a change of control of the Company. Compensation expense is based on an estimated value of $19.65 per 2017 Performance-Based LTIP Unit Award, which takes into account that some or all of the awards may not vest if long-term performance criteria are not met during the vesting period.

~~The 2017~~ ~~Performance-Based LTIP Unit Awards~~ may be earned based on the Company’s relative TSR performance for the three-year period beginning on March 1, ~~2017~~2020 and ending on February 28, ~~2020.~~2023. The ~~2017~~ 2020 Performance-Based LTIP Unit Awards, if earned, will be paid out between 50% and 150% of target value as follows:



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

Payouts at performance levels in between the hurdles will be calculated by straight-line interpolation. ~~The TSR hurdles are based on the Company’s performance relative to the average TSR for the companies included in the SNL US Hotel REIT Index.~~ ~~TSR will be calculated to include share price appreciation plus dividends assuming the reinvestment of dividends as calculated by a third-party such as SNL Financial.~~

The Company ~~will estimate~~estimated the aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC 718, excluding the effect of estimated forfeitures, ~~and will calculate the value at the grant date based on the probable outcome of the performance conditions.~~

A holder of a Class A Performance LTIP Unit will generally (i) only be entitled, during the period prior to the vesting of such Class A Performance LTIP Unit, to receive 10% of the distributions made on a common unit of limited partnership interest (“Common Unit”) in the Operating Partnership (the “Pre-Vesting Distributions”), and (ii) be entitled, upon the vesting of such Class A Performance LTIP Unit, to 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 LTIP Unit minus the aggregate amount of Pre-Vesting Distributions paid on such Class A Performance LTIP Unit. In addition, prior to the vesting of a Class A Performance LTIP Unit, the holder of such Class A Performance LTIP Unit will not be entitled to vote on such Class A Performance LTIP Unit.

~~The LTIP units' fair value was determined~~ using a Monte Carlo approach. In determining the discounted value of the LTIP units, the Company considered the inherent uncertainty that the LTIP units would never reach parity with the other common units of the Operating Partnership and thus have an economic value of zero to the grantee. Additional factors considered in ~~reaching~~estimating the ~~assumptions~~value of ~~uncertainty~~LTIP units included discounts for illiquidity; expectations for future dividends; limited or no operations history as of the date of the grant; significant dependency on the efforts and services of our executive officers and other key members of management to implement the Company's business plan; available acquisition opportunities;risk free interest rates; stock price volatility; and economic environment and market conditions.

The grant date fair ~~value~~values of the ~~performance~~LTIPs and the assumptions used to estimate the values are as follows:


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

The Company recorded $1.0 million and $1.1 million in compensation expense related to the LTIP ~~awards were determined using a Monte Carlo simulation method with~~units for the ~~following assumptions (based on~~three months ended June 30, 2020 and 2019, respectively, and six months ended June 30, 2020 and 2019, the ~~three-year risk free U.S. Treasury yield~~Company recognized approximately $2.4 million and $2.0 million, respectively. As of June 30, 2020 and December 31, 2019, there was $6.9 million and $4.9 million, respectively, of total unrecognized compensation cost related to LTIP units. This cost is expected to be recognized over approximately 2.1 years, which represents the ~~measurement~~weighted average remaining vesting period of the LTIP ~~awards):~~units.

Grant Date Volatility Dividend Yield Risk Free Interest Rate Discount
Outperformance Plan 6/1/2015 26% 4.5% 0.95% —%
2016 Time-Based LTIP Unit Awards 1/28/2016 28% —% 0.79% 7.5%
2016 Performance-Based LTIP Unit Awards 1/28/2016 30% 5.8% 1.13% —%
2017 Time-Based LTIP Unit Awards 3/1/2017 24% —% 0.92% 7.5%
2017 Performance-Based LTIP Unit Awards 3/1/2017 25% 5.8% 1.47% —%

~~13. Commitments and Contingencies~~

The nature 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. The Company is not presently subject to any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the Company or its properties.

~~Hotel Ground Rent~~

The Courtyard Altoona hotel iswas subject to a ground lease with an expiration date of April 30, 2029 with an extension option by the Company of up to 12 additional terms of five years each. Monthly payments ~~are~~were determined by the quarterly average room occupancy of the hotel. Rent ~~is currently~~was equal to approximately ~~$8,000~~$8,400 per month when monthly occupancy iswas less than 85% and ~~can~~could increase up to approximately $20,000 per month if occupancy iswas 100%, with minimum rent increased by two and one-half percent (2.5%) on an annual basis. The Altoona hotel was sold on May 7, 2019.

The Residence Inn Gaslamp hotel is subject to a ground lease with an expiration date of January 31, 2065 with an extension option by the Company of up to ~~three~~3 additional terms of ten years each. Monthly payments are currently approximately ~~$40,000~~$44,400 per month and increase 10% every five years. The hotel is subject to annual supplemental rent payments calculated as 5% of gross revenues during the applicable lease year, minus 12 times the monthly base rent scheduled for the lease year.

The Residence Inn New Rochelle is subject to an air rights lease and garage lease that each expire on December 1, ~~2104~~.2104. The lease agreements with the City of New Rochelle cover the space above the parking garage that is occupied by the hotel as well as 128 parking spaces in a parking garage that is attached to the hotel. The annual base rent for the garage lease is the hotel’s proportionate share of the city’s adopted budget for the operations, management and maintenance of the garage and established reserves to fund for the cost of capital repairs. Aggregate rent for ~~2017~~2020 is approximately ~~$26,000~~$31,000 per quarter.

The Hilton Garden Inn Marina del Rey hotel is subject to a ground lease with an expiration date of December 31, 2067. Minimum monthly payments are currently approximately ~~$43,000~~$47,500 per month and a percentage rent payment less the minimum rent is due in arrears equal to 5% to 25% of gross income based on the type of ~~income less the minimum rent is due in arrears.~~

~~Office Lease~~income.

The Company entered into a ~~new~~ corporate office lease in September 2015. The lease is for a term of 11 years and includes a 12-month rent abatement period and certain tenant improvement allowances. The Company has a renewal option of up to ~~two~~2 successive terms of ~~five~~5 years each. The Company shares the space with related parties and is reimbursed for the pro-rata share of rentable space occupied by the related parties.

~~Future minimum rental payments under the terms of all non-cancellable operating ground leases and the office lease under which the~~The Company is the lessee under ground, air rights, garage and office lease agreements for certain of its properties, all of which qualify as operating leases as of June 30, 2020. These leases typically provide multi-year renewal options to extend term as lessee at the Company's option. Option periods are ~~expensed~~included in the calculation of the lease obligation liability only when options are reasonably certain to be exercised.

In calculating the Company's lease obligations under the various leases, the Company uses discount rates estimated to be equal to what the Company would have to pay to borrow on a ~~straight-line~~collateralized basis ~~regardless~~over a similar term, for an amount equal to the lease payments, in a similar economic environment.

The following tables include information regarding the Company's leases for which it is the lessee, as of ~~when payments are due.~~ June 30, 2020:


Total Future Lease Payments
	Amount
2020 (remaining six months)	$	1,018
2021	2,051
2022	2,071
2023	2,093
2024	2,115
2025	2,186
Thereafter	66,720
Total lease payments	$	78,254
Less: Imputed interest	(54,771)
Present value of lease liabilities	$	23,483

The following is a schedule of the minimum future payments required under the ground, air rights, ~~garages~~garage leases and office lease as of ~~September 30, 2017, for the remainder of~~ ~~2017~~ ~~and~~December 31, 2019, for each of the next five calendar years and ~~thereafter (in thousands):~~thereafter:


	Amount
2020	$	2,027
2021	2,051
2022	2,071
2023	2,093
2024	2,115
Thereafter	68,906
Total lease payments	$	79,263
Less: Imputed interest	(55,546)
Present value of lease liabilities	$	23,717

For the six months ended June 30, 2020, the Company incurred $0.6 million of fixed lease payments and $1.0 thousand of variable lease payments, which are included in property taxes, ground rent and insurance in our consolidated statement of operations.

The following table includes information regarding the right of use assets and lease liabilities of the Company as of June 30, 2020:


	Right of Use Asset		Lease Liability
Balance as of January 1, 2020	$	21,270	$	23,717
Amortization	(311)		(234)

Balance as of June 30, 2020	$	20,959	$	23,483


Lease Term and Discount Rate			6/30/2020

Weighted-average remaining lease term (years)			40.70
Weighted-average discount rate			6.56%

The nature 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 is currently a defendant in several class action lawsuits pending in the state of California.

The first class action lawsuit was filed in the Santa Clara County Superior Court on October 21, 2016 under the title Ruffy, et al, v. Island Hospitality Management, LLC, et al. Case No. 16-CV-301473 (“Ruffy”) and the second class action 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 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 allege 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

Other Leases⁽¹⁾
Office Lease
Amount
2017 (remaining three months) $ 304
$ 192
2018 1,217
772
2019 1,220
792
2020 1,267
812
2021 1,273
832
2022 1,276
853
Thereafter 68,178
3,310
Total $ 74,735
$ 7,563
interest. A settlement agreement has been negotiated and approved by the applicable courts for Ruffy and Doonan. As of June 30, 2020, included in accounts payable is $0.1 million which represents an estimate of the Company’s total exposure to the Ruffy and Doonan litigations based on standard indemnification obligations under hotel management agreements with IHM.

~~(1) Other leases includes ground, garage~~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, and ~~air rights leases at our hotels.~~

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 allege 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. Settlement agreements have been negotiated and currently await approval by the applicable courts. As of June 30, 2020, included in accounts payable and accrued expenses is $0.6 million which represents an estimate of the Company’s total exposure to the Perez class actions based on standard indemnification obligations under hotel management agreements with IHM.

Management Agreements

~~The management agreements with Concord Hospitality Services Company ("Concord") had an initial~~ ~~ten~~-year term that would have expired on February 28, 2017. The management agreements with Concord were terminated as of December 31, 2016. The company entered into management agreements with IHM for the hotels previously managed by Concord beginning January 1, 2017.

The management agreements with IHM have an initial term of five years and automatically renew for ~~two~~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~~its 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.

In addition to entering into agreements with IHM to manage two of the hotels formerly managed by Concord, upon renewal in July 2016, five management agreements related to the Residence Inns were amended to be consistent with the remainder of the hotel portfolio. The updated agreements are summarized as follows:

Property Courtyard Altoona Springhill Suites Washington Residence Inn Garden Grove Residence Inn San Diego Residence Inn San Antonio Residence Inn Vienna Residence Inn Washington D.C.

Original Management Fee 4.0 % 4.0 % 2.5 % 2.5 % 2.5 % 2.5 % 2.5 %
Amended Management Fee 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 %
Original Monthly Accounting Fee 1,211
991
1,000
1,000
1,000
1,000
1,000
Amended Monthly Accounting Fee 1,500
1,200
1,200
1,200
1,200
1,200
1,200
Original Monthly Revenue Management Fee —
—
—
—
—
—
—
Amended Monthly Revenue Management Fee 1,000
1,000
1,000
1,000
1,000
1,000
1,000

~~The company renewed six management agreements in 2017. The updated agreements are summarized as follows:~~

Property Homewood Suites Billerica Homewood Suites Bloomington Homewood Suites Maitland Homewood Suites Dallas Homewood Suites Brentwood Homewood Suites Farmington

Renewal Date 4/1/2017
4/1/2017
5/1/2017
5/1/2017
6/1/2017
8/1/2017
Original Management Fee 2.0 % 2.0 % 2.0 % 2.0 % 2.0 % 2.0 %
Amended Management Fee 3.0 % 3.0 % 3.0 % 3.0 % 3.0 % 3.0 %
Original Monthly Accounting Fee 1,000
1,000
1,000
1,000
1,000
1,000
Amended Monthly Accounting Fee 1,200
1,200
1,200
1,200
1,200
1,200
Original Monthly Revenue Management Fee 550
550
550
550
550
550
Amended Monthly Revenue Management Fee 1,000
1,000
1,000
1,000
1,000
1,000

~~Terms of the Company's management agreements entered into during the three and nine months ended September 30, 2017 are as follows:~~

Property Management Company Base Management Fee Monthly Accounting Fee Monthly Revenue Management Fee Incentive Management Fee
Hilton Garden Inn Portsmouth IHM 3% $1,500 $1,000 1%

Management fees totaled approximately ~~$2.7~~$0.8 million and ~~$2.6~~$2.9 million,, respectively, for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~,2019, respectively, and approximately ~~$7.5~~$2.9 million and ~~$7.2~~$5.4 million, respectively, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016.~~2019.

Franchise Agreements

The fees associated with the franchise agreements are calculated ~~on the~~as a specified percentage of the hotel's gross room revenue. ~~Terms of the Company's franchise agreements entered into during the three and nine months ended September 30, 2017 are as follows:~~

Property Franchise Company Franchise/Royalty Fee Marketing Program Fee Expiration
Hilton Garden Inn Portsmouth Hilton Franchise Holding LLC 5.5% 4% 2037

Franchise and marketing fees totaled approximately ~~$6.4~~$1.6 million and ~~$6.2 million, respectively, for the~~ ~~three months ended September 30, 2017~~ ~~and 2016 and approximately $17.8 million and $17.3~~$7.0 million, respectively, for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016.~~2019 and approximately $6.4 million and $12.9 million, respectively, for the six months ended June 30, 2020 and 2019. The initial term of the agreements range from 10 to 30 years with the weighted average expiration being July 2030.

Prior to March 1, 2019, Mr. Fisher owned 51% of IHM. On March 1, 2019, Mr. Fisher acquired the 1.5% ownership interest of an employee who was leaving IHM. As of June 30, 2020, Mr. Fisher owns ~~51%~~52.5% of IHM. As of ~~September~~June 30, ~~2017,~~2020, the Company had hotel management agreements with IHM to manage 39all 40 of its wholly owned hotels. As of ~~September~~June 30, ~~2017,~~2020, all 4746 hotels owned by the NewINK JV and 34 of the 48 hotels owned by the Inland JV ~~are~~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 three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 were ~~$2.7~~$0.8 million and ~~$2.5~~$2.9 million, respectively, and for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 were ~~$7.5~~$2.9 million and ~~$7.0~~$5.4 million, respectively. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the amounts due to IHM were ~~$1.3~~$0.4 million and ~~$0.9~~$0.7 million, respectively. The Company provides services to an entity Castleblack Owner Holding, LLC ("Castleblack") which is 97.5% owned by affiliates of CLNY and 2.5% owned by Mr. Fisher. During the six months ended June 30, 2020 and 2019 the company received $49 thousand and $66 thousand, respectively, for these services.

Cost reimbursements from unconsolidated real estate entities revenue represent reimbursements of costs incurred on behalf of the NewINK JV, Inland JV and ~~an entity, Castleblack Owner Holding, LLC ("Castleblack"), which is 97.5% owned by affiliates of CLNS and 2.5% owned by Mr. Fisher.~~Castleblack. These costs relate primarily to corporate payroll costs at the NewINK JV, ~~and~~ Inland JV and Castleblack where the Company is the ~~employer.~~employer and shared office expenses. 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 from the JVs 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. Insurance expense for medical, workers compensation and general liability are paid by the NewINK JV and allocated back to the hotel properties or applicable entity for the three months ended September 30, 2017 and 2016 were $1.4 million and $1.5 million, respectively, and for the nine months ended September 30, 2017 and 2016 were $4.5 million and $4.6 million, respectively.

The Inland JV has not been successful in negotiating a forbearance agreement with its lenders. After June 30, 2020, at the direction of the special servicer for the Inland JV loan, control of Inland JV properties is starting to ~~September 30, 2017~~,be transitioned to a court appointed receiver. When the ~~Company sold additional shares from its ATM~~receiver has been appointed for Inland JV hotels, it has replaced IHM with new hotel management companies. The Inland JV debt is non-recourse to Chatham with the exception of customary non-recourse carve-out provisions such as fraud, material and ~~DRSPP plans. The Company issued~~ ~~154,496~~ ~~shares~~intentional misrepresentations and misapplication of funds. A default under the ~~ATM Plan at~~Inland JV loan agreement does not trigger a ~~weighted average price~~cross-default under any of Chatham’s debt agreements.

On August 4, 2020, a subsidiary of Chatham entered into an agreement with affiliates of Mack Real Estate Credit Strategies to obtain a $40 million loan to fund the remaining construction costs of the Warner Center hotel development. $~~21.27, which generated~~ ~~$3.3~~1.5 million of ~~gross proceeds. We issued~~ ~~377,192~~ ~~shares under~~ the ~~DRSPP~~loan was funded at close and additional amounts will be funded over time as work on the project is completed. The loan has an initial term of 4 years and there are 2 six-month extension options. The rate on the loan is LIBOR, subject to a ~~weighted average price~~0.25% floor, plus a spread of ~~$21.41, which generated~~ ~~$8.1 million~~7.5%. After the property has achieved a 9.0% debt yield, the spread will decrease to 6.0%. The loan is guaranteed by Chatham Lodging, L.P.

Table of gross proceeds. Proceeds from the shares sold were used to pay down borrowings under the Company's senior unsecured revolving credit facility, including debt incurred in connection with the acquisition of the Portsmouth hotel.Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Dollar amounts presented in this Item 2 are in thousands, except per share data, unless otherwise specified.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019. In this report, we use the terms “the Company," “we” or “our” to refer to Chatham Lodging Trust and its consolidated subsidiaries, unless the context indicates otherwise.

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 and spread of the outbreak, the existence of governmental stay-at-home orders, 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 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 dividends, reducing 2020 capital expenditures, borrowing under its credit facility, obtaining credit facility covenant waivers, and temporarily reducing executive compensation.

Statement Regarding Forward-Looking Information

The following information contains forward-looking statements, including those with regard to the potential future impact of the COVID-19 pandemic, within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements include information about possible or assumed future results of the lodging industry and our business, financial condition, liquidity, results of operations, cash flow and plans and objectives. These statements generally are characterized by the use of the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements. Important factors that we think could cause our actual results to differ materially from expected results are summarized below. One of the most significant factors, however, is the ongoing impact of the current outbreak of the COVID-19 pandemic on the United States, regional and global economies, the broader financial markets, our customers and employees, governmental responses thereto and the operation changes we have and may implement in response thereto. The current outbreak of the COVID-19 pandemic has also impacted, and is likely to continue to impact, directly or indirectly, many of the other important factors below. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In particular, it is difficult to fully assess the impact of the COVID-19 pandemic at this time due to, among other factors, uncertainty regarding the severity and duration of the outbreak domestically and internationally and the effectiveness of federal, state and local governments' efforts to contain the spread of COVID-19 and respond to its direct and indirect impact on the U.S. economy and economic activity. Some factors that might cause such a difference include the following: local, national and global economic conditions, increased direct competition, changes in government regulations or accounting rules, changes in local, national and global real estate conditions, declines in lodging industry fundamentals, increased operating costs, seasonality of the lodging industry, our ability to obtain debt and equity financing on satisfactory terms, changes in interest rates, our ability to identify suitable investments, our ability to close on identified investments, ~~and~~ inaccuracies of our accounting ~~estimates.~~estimates, the uncertainty and economic impact of pandemics, epidemics or other public health emergencies or fear of such events, such as the recent COVID-19 pandemic the impact of and changes to various government programs, including in response to COVID-19, the timing of the development of any effective cure or treatment for COVID-19, the restoration of public confidence in domestic and international travel and or ability to dispose of selected hotel properties on the terms and timing we expect, if at all. Given these uncertainties, undue reliance should not be placed on such statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances or to reflect the occurrence of unanticipated events. The forward-looking statements should also be read in light of the risk factors identified in the “Risk Factors” section in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 as updated by the Company's subsequent filings with the SEC under the Exchange ~~Act.~~Act, including the Quarterly Report for the three months ended March 31, 2020 and this Quarterly Report on Form 10-Q for the three months ended June 30, 2020.

Table of Contents

Overview

We are a self-advised hotel investment company organized in October 2009 that commenced operations in April 2010. Our investment strategy is to invest in upscale extended-stay and premium-branded select-service hotels in geographically diverse markets with high barriers to entry near strong demand generators. We may acquire portfolios of hotels or single hotels. We expect that a significant portion of our portfolio will consist of hotels in the upscale extended-stay or select-service categories, including brands such as Homewood Suites by Hilton^®, Residence Inn by Marriott^®, Hyatt Place^®, Courtyard by Marriott^®, SpringHill Suites by Marriott^®, Hilton Garden Inn by Hilton^®, Embassy Suites^®, Hampton Inn^® and Hampton Inn and Suites^®.

The Company's future hotel acquisitions may be funded by issuances of both common and preferred shares or the issuance of partnership interests in our operating partnership, Chatham Lodging, L.P. (the "Operating Partnership"), draw-downs under our ~~senior unsecured~~ revolving credit facility, the incurrence or assumption of debt, available cash, proceeds from dispositions of assets or distributions from our 10.3% investment in a joint venture with affiliates of Colony ~~NorthStar,~~Capital, Inc. (“~~CLNS”~~CLNY”) that owns 4746 hotels (the "NewINK JV"~~) or distributions from our 10.0% investment in a joint venture with CLNS that owns 48 hotels (the "Inland JV" and together with the NewINK JV, the "JVs"~~). We intend to acquire quality assets at attractive prices and improve their returns through knowledgeable asset management and seasoned, proven hotel management while remaining prudently leveraged.

At ~~September~~June 30, ~~2017,~~2020, our leverage ratio was ~~39.5% based on~~36.6% measured as the ratio of our net debt (total debt outstanding before deferred financing costs less unrestricted cash and cash equivalents) to hotel investments at cost, including the JV investments. Over the past several years, we have maintained a leverage ratio between the mid-30s and the low 50s to fund our acquisitions and JV investments. As of ~~September~~June 30, ~~2017,~~2020, we have total debt of ~~$604.5~~$665.4 million at an average interest rate of approximately ~~4.6%~~4.3%. Accordingly, our debt coverage ratios currently are favorable and, as a result, we are comfortable in this leverage range and believe we have the capacity and flexibility to take advantage of acquisition opportunities as they arise. We intend to continue to fund our investments with a prudent balance of debt and equity.

We are a real estate investment trust (“REIT”) for federal income tax purposes. In order to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), we cannot operate our hotels. Therefore, our Operating Partnership and its subsidiaries lease our hotel properties to taxable REIT subsidiary lessees (“TRS Lessees”), who in turn engage eligible independent contractors to manage the hotels. Each of the TRS Lessees is treated as a taxable REIT subsidiary for federal income tax purposes and is consolidated within our financial statements for accounting purposes. However, since we control both the Operating Partnership and the TRS Lessees, our principal source of funds on a consolidated basis is from the operations of our hotels. The earnings of the TRS Lessees are subject to taxation as regular C corporations, as defined in the Code, potentially reducing the TRS Lessees’ cash available to pay dividends to us, and therefore our funds from operations and the cash available for distribution to our shareholders.

~~Financial Condition and~~Key Indicators of Operating Performance ~~Metrics~~

and Financial Condition

We measure ~~our~~ 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,

~~Average Daily Rate (“ADR”),~~

~~Occupancy,~~

•Funds From Operations (“FFO”),

•Adjusted FFO,

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

•EBITDAre,

•Adjusted EBITDA, and

•Adjusted Hotel ~~EBITDA~~

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. ~~RevPAR, which is calculated as total room revenue divided by total number of available rooms, is an important metric for monitoring hotel operating performance, and more specifically hotel revenue.~~

~~“Non-GAAP~~See “Non-GAAP Financial Measures” ~~herein provides a detailed~~for further discussion ~~of our use~~ of FFO, Adjusted FFO, EBITDA, ~~Adjusted~~ EBITDA ~~and Hotel EBITDA and a reconciliation of FFO, Adjusted FFO, EBITDA,~~re, Adjusted EBITDA and Adjusted Hotel ~~EBITDA to net income or loss, measurements recognized by generally accepted accounting principles in the United States (“GAAP”).~~EBITDA.

Table of Contents

Results of Operations

Industry Outlook

~~We believe that~~The lodging industry has been significantly impacted by the ~~lodging industry’s performance is correlated~~COVID-19 pandemic. Steps have been taken to ~~the performance of the economy overall, and specifically, key economic indicators such as GDP growth, employment trends, corporate~~restrict inbound international travel and corporate profits. Trends for many of these indicators appear to be moderating. GDP growth is currently modest, with growth of 2.2% forecasted for 2017. Lodging industry performance is also impacted by room supply growth, which is currently increasing. Overall U.S. room supply increased 1.6%there has been a significant decline in 2016, but supply in the Upscale segment, in which most of our hotels operate, increased by 5.6% in 2016. Year to date in 2017 overall U.S. room supply growth was 1.8% and supply growth in the Upscale segment was 6.0%.domestic travel. Smith Travel Research ~~is projecting U.S. hotel supply growth~~reported that US lodging industry RevPAR declined 69.9% for the three months ended June 30, 2020, with RevPAR down 79.9% in April 2020, down 71.0% in May 2020 and down 60.6% in June 2020. We expect the current trend of significant RevPAR declines to ~~increase 2.0% in 2017. Continued supply growth, especially when coupled with slowing corporate demand, could negatively~~continue until public concerns regarding the severity of the ongoing COVID-19 pandemic are assuaged. The full impact ~~RevPAR growth. We~~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, peoples' willingness to travel, and the strength and timing of an economic recovery. All of these factors are ~~currently projecting a 2017 RevPAR change~~uncertain, and the full impact of ~~0.9% to +1.0% as compared to 2016.~~the COVID-19 pandemic on the lodging industry cannot be predicted at this time.

Comparison of the three months ended ~~September~~June 30, ~~2017~~2020 to the three months ended ~~September~~June 30, ~~2016~~2019

Results of operations for the three months ended ~~September~~June 30, ~~2017~~2020 include the operating activities of our 3940 wholly owned hotelsthat were owned for the entire period and our investments in the NewINK JV and Inland JV. We ~~wholly owned 38 hotels~~sold one hotel in Altoona, PA on May 7, 2019 and one hotel in Washington, PA on May 15, 2019. Our financial results were adversely impacted by decreased visitation at ~~July 1, 2016. Accordingly,~~our properties due to the COVID-19 pandemic. The comparisons below are influenced by these dispositions and the ~~fact that we acquired one hotel in Portsmouth, NH on September 20, 2017 during the third quarter of 2017.~~COVID-19 pandemic.

Revenues

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):


	For the three months ended
	June 30, 2020		June 30, 2019		% Change
Room	$	18,389	$	79,970	(77.0)	%
Food and beverage	117		2,535		(95.4)	%
Other	873		3,934		(77.8)	%
Cost reimbursements from unconsolidated real estate entities	794		1,435		(44.7)	%
Total revenue	$	20,173	$	87,874	(77.0)	%

For the three months ended
September 30, 2017 September 30, 2016 % Change
Room $ 76,221
$ 74,736
2.0 %
Food and beverage 1,378
1,494
(7.8 )%
Other 3,052
2,699
13.1 %
Cost reimbursements from unconsolidated real estate entities 753
804
(6.3 )%
Total revenue $ 81,404
$ 79,733
2.1 %

Total revenue was ~~$81.4~~$20.2 million for the quarter ended ~~September~~June 30, ~~2017, up $1.7~~2020, down $67.7 million compared to total revenue of ~~$79.7~~$87.9 million for the corresponding ~~2016~~2019 period. The primary decrease in total revenue was related to the COVID-19 pandemic. Total revenue related to the ~~one hotel acquired during the third quarter of 2017~~two hotels sold in 2019 contributed ~~$0.4~~$0.6 million of the ~~increase.~~decrease. Since all of our hotels are 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 ~~93.6%~~91.2% and ~~93.7%~~91.0%, respectively, of total revenue for the quarters ended ~~September~~June 30, ~~2017~~2020 and ~~2016.~~2019. Room revenue was ~~$76.2~~$18.4 million and ~~$74.7~~$80.0 million for the quarters ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively, ~~with $0.3~~and the decrease in room revenue primarily was related to the COVID-19 pandemic. Room revenue related to the two hotels sold in 2019 contributed $0.5 million of the increase in 2017 attributable to the one hotel acquired during the third quarter of 2017. At the 38 comparable hotels owned by the Company throughout the 2016 and 2017 periods, room revenue was up $1.1 million or 1.5%, driven primarily by RevPar growth of 1.0%.decrease.

Food and beverage revenue was ~~$1.4~~$0.1 million for the quarter ended ~~September~~June 30, ~~2017,~~2020, down ~~$0.1~~$2.4 million compared to ~~$1.5~~$2.5 million for the corresponding ~~2016~~2019 period. The decrease in food and beverage revenue primarily was related to a decline in occupancies at our hotels due to the COVID-19 pandemic.

Other operating revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue, was ~~up $0.4~~down $3.0 million for the three months ended ~~September~~June 30, ~~2017.~~2020. Other operating revenue was ~~$3.1~~$0.9 million and ~~$2.7~~$3.9 million for the quarters ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. ~~Increases were~~The decrease in other operating revenue primarily was related to a decline in occupancies at our hotels due to ~~increases in parking, restaurant lease income and miscellaneous room income.~~the COVID-19 pandemic.

~~Cost reimbursements~~Reimbursable costs from unconsolidated real estate entities, comprised of payroll costs at the JVs and ~~an entity~~Castleblack Owner Holding, LLC ("Castleblack"), which is 97.5% owned by affiliates of ~~CLNS~~CLNY and 2.5% by Mr. Fisher, where the Company is the employer, were $0.8 million and ~~$0.8~~$1.4 million for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The ~~costs~~cost reimbursements were offset by the reimbursed costs from unconsolidated real estate entities included in operating expenses.

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As reported by Smith Travel Research, U.S lodging industry RevPAR for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 decreased 69.9% and increased ~~1.9% and 3.3%~~1.1%, respectively, in the ~~2017~~2020 and ~~2016~~2019 periods as compared to the respective prior periods. Smith Travel Research reported that US lodging industry RevPAR ~~at our wholly owned hotels increased 1.0%~~declined 79.9% in April 2020, declined 71.0% in May 2020 and ~~decreased 2.1%, respectively,~~declined 60.6% in June 2020. We expect the ~~2017 and 2016 periods as compared~~current trend of significant RevPAR declines to continue until public concerns regarding the ~~respective prior periods primarily due to increased RevPAR index at our hotels and~~severity of the ~~increased demand in the Houston market in the third quarter of 2017.~~ongoing COVID-19 pandemic are assuaged.

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 ~~September~~June 30, ~~2017 reflect the performance of the hotels during the entire period,~~2020 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 periods prior to our ownership were provided to us by prior owners and have not been adjusted by us.


	For the three months ended June 30,
	2020									2019							Percentage Change
	Same Property (40 hotels)			Actual (40 hotels)			Same Property (40 hotels)			Actual (42 hotels)			Same Property (40 hotels)		Actual (40/42 hotels)
Occupancy	33.8		%	33.8		%	83.3		%	83.6		%	(59.4)	%	(59.6)	%
ADR	$	98.20		$	98.20		$	172.00		$	172.08		(42.9)	%	(42.9)	%
RevPAR	$	33.17		$	33.17		$	143.31		$	143.81		(76.9)	%	(76.9)	%

For the three months ended September 30,
2017 2016 Percentage Change
Same Property (39 hotels) Actual (39 hotels) Same Property (39 hotels) Actual (38 hotels) Same Property (39 hotels) Actual (39/38 hotels)
Occupancy 84.6 % 84.6 % 84.2 % 84 % 0.5 % 0.7 %
ADR $ 172.77
$ 172.77
$ 171.92
$ 170.25
0.5 % 1.5 %
RevPAR $ 146.23
$ 146.23
$ 144.79
$ 143.02
1.0 % 2.2 %

For the three months ended June 30, 2020 same property RevPAR ~~increased 1.0% primarily~~decreased 76.9% due to ~~an increase~~a decrease in ADR of ~~0.5%~~42.9% and ~~a increase~~an decrease in occupancy of ~~0.5%.~~59.4% primarily related to the COVID-19 pandemic. Same property RevPAR declined 82.7% in April 2020, declined 77.9% in May 2020, and declined 70.6% in June 2020. Same property RevPAR was $23.83 in April 2020, $30.93 in May 2020, and $44.81 in June 2020.

Hotel Operating Expenses

Hotel operating expenses consist of the following for the periods indicated (dollars in thousands):


	For the three months ended
	June 30, 2020		June 30, 2019		% Change
Hotel operating expenses:
Room	$	4,517	$	16,372	(72.4)	%
Food and beverage	128		2,120		(94.0)	%
Telephone	351		410		(14.4)	%
Other	182		971		(81.3)	%
General and administrative	3,360		6,574		(48.9)	%
Franchise and marketing fees	1,636		6,984		(76.6)	%
Advertising and promotions	854		1,485		(42.5)	%
Utilities	1,863		2,525		(26.2)	%
Repairs and maintenance	1,640		3,431		(52.2)	%
Management fees	848		2,892		(70.7)	%
Insurance	361		365		(1.1)	%
Total hotel operating expenses	$	15,740	$	44,129	(64.3)	%

Table of Contents

For the three months ended
September 30, 2017 September 30, 2016 % Change
Hotel operating expenses:
Room $ 15,618
$ 15,068
3.7 %
Food and beverage 1,307
1,280
2.1 %
Telephone 410
449
(8.7 )%
Other 737
563
30.9 %
General and administrative 5,906
5,652
4.5 %
Franchise and marketing fees 6,366
6,157
3.4 %
Advertising and promotions 1,353
1,203
12.5 %
Utilities 2,708
2,684
0.9 %
Repairs and maintenance 3,467
3,084
12.4 %
Management fees 2,693
2,558
5.3 %
Insurance 297
318
(6.6 )%
Total hotel operating expenses $ 40,862
$ 39,016
4.7 %

Hotel operating expenses ~~increased $1.9~~decreased $28.4 million or ~~4.7%~~64.3% to ~~$40.9~~$15.7 million for the three months ended ~~September~~June 30, ~~2017~~2020 from ~~$39.0~~$44.1 million for the three months ended ~~September~~June 30, ~~2016.~~2019. The primary cause of the decrease in hotel operating expenses was related to the decrease in revenues and occupancy caused by the COVID-19 pandemic. Our hotel managers have taken significant steps to reduce operating costs in light of the reduction in demand caused by the COVID-19 pandemic. Total hotel operating expense related to the two hotels sold in 2019 contributed $0.5 million of the decrease.

Room expenses, which are the most significant component of hotel operating expenses, ~~increased $0.5~~decreased $11.9 million ~~or 3.7%~~ from ~~$15.1~~$16.4 million in ~~2016~~2019 to ~~$15.6~~$4.5 million in the ~~third~~second quarter of ~~2017.~~2020. The decrease in room expenses primarily was related to a decline in occupancies and revenues at our hotels due to the COVID-19 pandemic. Room expenses related to the two hotels sold in 2019 contributed $0.2 million of the decrease.

The remaining hotel operating expenses decreased $16.6 million, from $27.8 million in the second quarter of 2019 to $11.2 million in the second quarter of 2020. The decrease in other remaining expenses primarily was related to a decline in occupancies and revenues at our hotels due to the COVID-19 pandemic. A decrease of $0.3 million in hotel operating expenses related to the two hotels sold in 2019.

Depreciation and Amortization

Depreciation and amortization expense increased $0.7 million from $13.0 million for the three months ended June 30, 2019 to $13.7 million for the three months ended June 30, 2020. The increase was primarily due to ~~commissions and guest reward programs.~~

The remaining hotel operating expenses increased $1.3 million, from $23.9 million in the third quarter of 2016 to $25.2 million in the third quarter of 2017. The increase was primarily due to increases in utility costs, repairs and management fees.

~~Depreciation and Amortization~~

Depreciation and amortization expense decreased $1.1 million from $12.0 million for the three months ended September 30, 2016 to $10.9 million for the three months ended September 30, 2017. The decrease is due to lower depreciation due to some assets being fully depreciated.renovations. Depreciation is generally recorded on our assets over 40 years for buildings, 20 years for land improvements, 15 years for building improvements and one to ten years for furniture, fixtures and equipment from the date of acquisition on a straight-line basis. Depreciable lives of hotel furniture, fixtures and equipment are generally assumed to be the difference between the date of acquisition and the date that the furniture, fixtures and equipment will be replaced. Amortization of franchise fees is recorded on a straight-line basis over the term of the respective franchise agreement.

Property Taxes, Ground Rent and Insurance

Total property taxes, ground rent and insurance expenses decreased ~~$0.1 million~~ from ~~$5.4~~$6.2 million for the three months ended ~~September~~June 30, ~~2016~~2019 to ~~$5.3~~$5.9 million for the three months ended ~~September~~June 30, ~~2017.~~2020. The decrease iswas primarily ~~attributed~~related to decreased ~~real estate taxes~~ground rent at our hotels ~~during the quarter related~~due to ~~successful real estate tax appeals at some of our properties.~~lower revenues.

General and Administrative

General and administrative expenses principally consist of employee-related costs, including base payroll, bonuses and amortization of restricted stock and awards of long-term incentive plan ~~(“LTIP”) units in the Operating Partnership.~~units. These expenses also include corporate operating costs, professional fees and trustees’ fees. Total general and administrative expenses (excluding amortization of stock based compensation of ~~$1.0~~$1.1 million and ~~$0.8~~$1.2 million for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively) ~~remained static from $2.2~~decreased to $1.3 million for the three months ended ~~September~~June 30, ~~2017 to $2.2~~2020 from $2.4 million in the three months ended ~~September~~June 30, ~~2016.~~2019 with the decrease primarily due to a reduction in compensation.

~~Hotel Property Acquisition Costs and~~

Other Charges

~~Hotel property acquisition costs and other~~

Other charges ~~decreased~~increased from ~~$49~~$25 thousand for the three months ended ~~September~~June 30, ~~2016~~2019 to ~~$(15) thousand~~$0.2 million for the three months ended ~~September~~June 30, ~~2017. Acquisition costs are capitalized starting in 2017 compared~~2020. Other charges primarily include deductibles related to ~~expensing them in previous years due to the adoption of Financial Accounting Standards Board ("FASB") ASU 2017-01.~~insurance claims.

~~Reimbursed~~

Reimbursable Costs from Unconsolidated Real Estate Entities

~~Reimbursed~~

Reimbursable costs from unconsolidated real estate entities, comprised of corporate payroll and rent costs atof the NewINK ~~and~~JV, Inland JVs and ~~an entity~~Castleblack, which is ~~97.5%~~2.5% owned ~~by affiliates of CLNS and 2.5%~~ by Mr. Fisher, where the Company is the employer, were $0.8 million and ~~$0.8~~$1.4 million for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. The cost reimbursements were offset by the cost reimbursements from unconsolidated real estate entities included in revenues.

Gain (loss) on Sale of Hotel Property

Gain on sale of hotel property decreased $3.3 million for the three months ended June 30, 2020 compared to the three months ended June 30, 2019 due to the $3.3 million loss from the sales of the Courtyard Altoona, PA on May 7, 2019 and the SpringHill Suites Washington, PA on May 15, 2019 and no comparable loss in 2020.

Table of Contents

Interest and Other Income

Interest on cash and cash equivalents and other income ~~increased $2~~decreased $27 thousand from $7$66 thousand for the three months ended ~~September~~June 30, ~~2016~~2019 to $9$39 thousand for the three months ended ~~September~~June 30, ~~2017.~~2020. The decrease is primarily related to reimbursements from escrow accounts from previous lenders in 2019.

Interest Expense, Including Amortization of Deferred Fees

Interest expense ~~remained static~~decreased $0.1 million from $7.1 million for the three months ended ~~September~~June 30, ~~2016~~2019 to ~~$7.1~~$7.0 million for the three months ended ~~September~~June 30, ~~2017~~2020 and is comprised of the following (dollars in thousands):


	For the three months ended
	June 30, 2020		June 30, 2019		% Change
Mortgage debt interest	$	5,811	$	5,908	(1.6)	%
Credit facility interest and unused fees	1,278		1,070		19.4	%
Capitalized interest	(318)		(74)		329.7	%
Amortization of deferred financing costs	263		227		15.9	%
Total	$	7,034	$	7,131	(1.4)	%

For the three months ended
September 30, 2017 September 30, 2016 % Change
Mortgage debt interest $ 6,231
$ 6,345
(1.8 )%
Credit facility interest and unused fees 579
469
23.5 %
Amortization of deferred financing costs 255
268
(4.9 )%
Total $ 7,065
$ 7,082
(0.2 )%

The decrease in interest expense for the three months ended ~~September~~June 30, ~~2017~~2020 as compared to the three months ended ~~September~~June 30, ~~2016~~2019 is primarily related to an increase in capitalized interest and a decrease in interest expense on the Company's mortgage debt due to lower principal balances ~~on our mortgage debt. Interest expense on the Company's senior unsecured revolving credit facility increased due to an increase in LIBOR~~ for the three months ended ~~September~~June 30, ~~2017~~2020 compared to the three months ended ~~September~~June 30, ~~2016.~~2019.

~~Income~~(Loss) income from Unconsolidated Real Estate Entities

Income from unconsolidated real estate entities was ~~$1.1~~$0.5 million for the three months ended ~~September~~June 30, ~~2016 and $1.2~~2019 compared to a loss of $1.6 million for the three months ended ~~September~~June 30, ~~2017.~~2020. The ~~primary source of the difference~~decrease is due primarily to ~~activity at~~a decline in operating performance due to the ~~JVs.~~COVID-19 pandemic.

Income Tax Expense

Income tax expense for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 was $0.0 million and $0.0 million, respectively. We are subject to income taxes based on the taxable income of our TRS Lessees at a combined federal and state tax rate of approximately 25%. The Company’s TRS is expecting taxable losses in 2020 and recognizes full valuation allowance equal to 100% of the gross deferred tax assets, with the exception of the AMT tax credit, due to the uncertainty of the TRS's ability to utilize these deferred tax assets.

Net ~~Income~~loss

Net ~~income~~loss was ~~$14.5~~$27.2 million for the three months ended ~~September~~June 30, ~~2017,~~2020, compared to net ~~income~~loss of ~~$13.4~~$9.5 million for the three months ended ~~September~~June 30, ~~2016.~~2019. The change in net income was due to the factors discussed above.

~~Material Trends or Uncertainties~~

~~We are not aware~~

Table of any material trends or uncertainties, favorable or unfavorable, that may be reasonably anticipated to have a material impact on either the capital resources or the revenues or income to be derived from the acquisition and operation of properties, loans and other permitted investments, other than those referred to in this report and in the risk factors identified in our Annual Report on Form 10-K for the year ended December 31, 2016.Contents

Comparison of the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 to the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2019

Results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 include the operating activities of our 3940 wholly owned hotelsthat were owned for the entire period, partial period results for two hotels which were sold during this period, and our investments in the NewINK JV and Inland JV. ~~Accordingly,~~We sold one hotel in Altoona, PA on May 7, 2019 and one hotel in Washington, PA on May 15, 2019. Our financial results were adversely impacted by decreased visitation at our properties due to the COVID-19 pandemic. The majority of the negative impact of the COVID-19 pandemic on our hotels’ operations began during the second half of March 2020, so the results of operations for the six months ended June 30, 2020 reflect the negative impact of the COVID-19 pandemic for only a portion of the period. The comparisons below are influenced by these dispositions and the ~~fact that we acquired one hotel in Portsmouth, NH on September 20, 2017 during the third quarter of 2017.~~COVID-19 pandemic.

Revenues

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):


	Six Months Ended
	June 30, 2020		June 30, 2019		% Change
Room	$	71,437	$	148,055	(51.7)	%
Food and beverage	2,180		4,962		(56.1)	%
Other	4,391		7,610		(42.3)	%
Cost reimbursements from unconsolidated real estate entities	2,374		2,926		(18.9)	%
Total revenue	$	80,382	$	163,553	(50.9)	%

Nine Months Ended
September 30, 2017 September 30, 2016 % Change
Room $ 213,415
$ 211,438
0.9 %
Food and beverage 4,353
4,728
(7.9 )%
Other 8,465
7,689
10.1 %
Cost reimbursements from unconsolidated real estate entities 2,302
2,728
(15.6 )%
Total revenue $ 228,535
$ 226,583
0.9 %

Total revenue was ~~$228.5~~$80.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017, up $1.9~~2020, down $83.2 million compared to total revenue of ~~$226.6~~$163.6 million for the corresponding ~~2016~~2019 period. The decrease in total revenue primarily was related to the COVID-19 pandemic. Total revenue related to the ~~one hotel acquired during the third quarter of 2017~~two hotels sold in 2019 contributed ~~$0.4~~$1.6 million of the ~~increase.~~decrease. Since all of our hotels are 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 ~~93.4%~~88.9% and ~~93.3%~~90.5% of total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. Room revenue was ~~$213.4~~$71.4 million and ~~$211.4~~$148.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively, ~~with $0.3~~and the decrease in room revenue primarily was related to the COVID-19 pandemic. Room revenue related to the two hotels sold in 2019 contributed $1.5 million of the increase in 2017 attributable to the one hotel acquired during the third quarter of 2017. For the 38 comparable hotels owned by us throughout the 2016 and 2017 periods, room revenue was up $1.6 million or 1.5%, driven primarily by RevPar growth of 0.6%.decrease.

Food and beverage revenue was ~~$4.4~~$2.2 million, for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, down ~~$0.3~~$2.8 million, compared to ~~$4.7~~$5.0 million for the corresponding ~~2016~~2019 period. The decrease in food and beverage revenue primarily was related to a decline in occupancies at our hotels due to the COVID-19 pandemic.

Other ~~operating~~operating revenue, comprised of parking, meeting room, gift shop, in-room movie and other ancillary amenities revenue was ~~$8.5 million and $7.7~~down $3.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020. Other operating revenue was $4.4 million and ~~2016,~~$7.6 million for the six months ended June 30, 2020 and 2019, respectively. The ~~increase~~decrease in other operating revenue primarily was related ~~primarily~~ to ~~guaranteed no show bookings, restaurant lease income, meeting rooms, miscellaneous room revenue and parking.~~a decline in occupancies at our hotels due to the COVID-19 pandemic.

~~Cost reimbursements~~

Reimbursable costs from unconsolidated real estate entities, comprised of payroll costs at the JVs and an entity, Castleblack, which is 97.5% owned by affiliates of ~~CLNS~~CLNY and 2.5% by Mr. Fisher, where the Company is the employer, were ~~$2.3~~$2.4 million and ~~$2.7~~$2.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. Cost reimbursements decreased in 2017 due to a change in percentage of costs reimbursed for construction employees based on changes in the number of properties being renovated from 2016 to 2017 at the various portfolios. The ~~decline in~~ cost reimbursements ~~was~~were offset by the ~~decline in~~ reimbursed costs from unconsolidated real estate entities included in operating expenses.

As reported by Smith Travel Research, industry RevPAR for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 decreased 45.5% and increased ~~2.6% and 3.2%~~1.2%, respectively, in the ~~2017~~2020 and ~~2016~~2019 periods as compared to the respective prior year periods. We expect the current trend of significant RevPAR ~~at our wholly owned hotels increased 0.8% and 0.2%, respectively, in~~declines to continue until public concerns regarding the ~~2017 and 2016 periods as compared to~~severity of the ~~respective prior year periods.~~ongoing COVID-19 pandemic are assuaged.

For the nine months ended September 30,
2017 2016 Percentage Change
Same Property (39 hotels) Actual (39 hotels) Same Property (39 hotels) Actual (38 hotels) Same Property (39 hotels) Actual (39/38 hotels)
Occupancy 79.5 % 79.5 % 80.6 % 82.5 % (1.4 )% (3.6 )%
ADR $ 172.77
$ 172.77
$ 169.14
$ 164.75
2.1 % 4.9 %
RevPAR $ 137.40
$ 137.40
$ 136.34
$ 135.87
0.8 % 1.1 %

~~The~~


	For the six months ended June 30,
	2020									2019							Percentage Change
	Same Property (40 hotels)			Actual (40 hotels)			Same Property (40 hotels)			Actual (42 hotels)			Same Property (40 hotels)		Actual (40/42 hotels)
Occupancy	48.2		%	48.2		%	79.7		%	79.8		%	(39.5)	%	(39.6)	%
ADR	$	133.57		$	133.57		$	166.74		$	165.99		(19.9)	%	(19.5)	%
RevPAR	$	64.44		$	64.44		$	132.87		$	132.43		(51.5)	%	(51.3)	%

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

~~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~~		Florida		33401
(Address of Principal Executive Offices)				(Zip Code)



Title of each class	Trading Symbol(s)	Name of Each Exchange On Which Registered
Common Shares of Beneficial Interest, $0.01 par value	CLDT	New York Stock Exchange


Large accelerated filer		x			Accelerated filer		¨

~~Large accelerated filer~~		x	~~Accelerated filer~~	¨

Non-accelerated filer	¨ ~~(Do not check if a smaller reporting company)~~		Smaller reporting company			¨☐
					Emerging growth company		¨☐



Class			Outstanding at ~~October 31, 2017~~August 5, 2020
Common Shares of Beneficial Interest ($0.01 par value per share)			~~40,371,958~~46,967,891


					Page
			PART I. FINANCIAL INFORMATION

				~~Page~~
Item1.	~~PART I. FINANCIAL INFORMATION~~

~~Item 1.~~	Financial Statements.	3
~~Item 2.~~Item2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations.		2624
~~Item 3.~~Item3.			Quantitative and Qualitative Disclosures about Market Risk.		4442
~~Item 4.~~Item4.			Controls and Procedures.		4543

			PART II. OTHER INFORMATION

~~Item 1.~~Item1.			Legal Proceedings.		4543
~~Item 1A.~~Item1A.			Risk Factors.		4543
~~Item 2.~~Item2.			Unregistered Sales of Equity Securities and Use of Proceeds.		45
~~Item 3.~~Item3.			Defaults Upon Senior Securities.		45
~~Item 4.~~Item4.			Mine Safety Disclosures.		45
~~Item 5.~~Item5.			Other Information.		45
~~Item 6.~~Item6.			Exhibits.		46


x	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


¨	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~


	September 30, 2017			December 31, 2016				June 30, 2020		December 31, 2019
	(unaudited)							(unaudited)
Assets:							Assets:
Investment in hotel properties, net	$	1,263,183		$	1,233,094		Investment in hotel properties, net	$	1,328,717	$	1,347,116
Investment in hotel properties under development							Investment in hotel properties under development	30,546		20,496
Cash and cash equivalents	11,282			12,118			Cash and cash equivalents	36,883		6,620
Restricted cash	27,693			25,083			Restricted cash	8,863		13,562
Investment in unconsolidated real estate entities	25,448			20,424			Investment in unconsolidated real estate entities	—		17,969
Hotel receivables (net of allowance for doubtful accounts of $249 and $155, respectively)	7,691			4,389
Right of use asset, net							Right of use asset, net	20,959		21,270
Hotel receivables (net of allowance for doubtful accounts of $355 and $451, respectively)							Hotel receivables (net of allowance for doubtful accounts of $355 and $451, respectively)	2,251		4,626
Deferred costs, net	4,882			4,642			Deferred costs, net	4,495		4,271
Prepaid expenses and other assets	4,350			2,778			Prepaid expenses and other assets	4,612		2,615
Deferred tax asset, net	—			426			Deferred tax asset, net	29		29
Total assets	$	1,344,529		$	1,302,954		Total assets	$	1,437,355	$	1,438,574
Liabilities and Equity:							Liabilities and Equity:
Mortgage debt, net	$	527,144		$	530,323		Mortgage debt, net	$	491,175	$	495,465
Revolving credit facility	75,000			52,500			Revolving credit facility	173,000		90,000
Accounts payable and accrued expenses	32,763			27,782			Accounts payable and accrued expenses	19,306		33,012
Distributions and losses in excess of investments of unconsolidated real estate entities	5,975			6,017
Distributions and losses in excess of investments in unconsolidated real estate entities							Distributions and losses in excess of investments in unconsolidated real estate entities	17,778		15,214
Lease liability, net							Lease liability, net	23,483		23,717
Distributions payable	5,217			4,742			Distributions payable	469		6,142
Total liabilities	646,099			621,364			Total liabilities	725,211		663,550
Commitments and contingencies (Note 13)							Commitments and contingencies (Note 13)
Equity:							Equity:
Shareholders’ Equity:							Shareholders’ Equity:
Preferred shares, $0.01 par value, 100,000,000 shares authorized and unissued at September 30, 2017 and December 31, 2016	—			—
Common shares, $0.01 par value, 500,000,000 shares authorized; 39,839,476 and 38,367,014 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	395			380
Preferred shares, $0.01 par value, 100,000,000 shares authorized and unissued at June 30, 2020 and December 31, 2019							Preferred shares, $0.01 par value, 100,000,000 shares authorized and unissued at June 30, 2020 and December 31, 2019	—		—
Common shares, $0.01 par value, 500,000,000 shares authorized; 46,965,827 and 46,928,445 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively							Common shares, $0.01 par value, 500,000,000 shares authorized; 46,965,827 and 46,928,445 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively	470		469
Additional paid-in capital	752,148			722,019			Additional paid-in capital	905,977		904,273
Retained earnings (distributions in excess of retained earnings)	(60,097		)	(45,657		)
Accumulated deficit							Accumulated deficit	(207,306)		(142,365)
Total shareholders’ equity	692,446			676,742			Total shareholders’ equity	699,141		762,377
Noncontrolling Interests:							Noncontrolling Interests:
Noncontrolling interest in Operating Partnership	5,984			4,848			Noncontrolling interest in Operating Partnership	13,003		12,647
Total equity	698,430			681,590			Total equity	712,144		775,024
Total liabilities and equity	$	1,344,529		$	1,302,954		Total liabilities and equity	$	1,437,355	$	1,438,574


	For the three months ended						For the nine months ended							For the three months ended						For the six months ended
	September 30,													June 30,						June 30,
	2017			2016			2017			2016				2020		2019		2020		2019
Revenue:													Revenue:
Room	$	76,221		$	74,736		$	213,415		$	211,438		Room	$	18,389	$	79,970	$	71,437	$	148,055
Food and beverage	1,378			1,494			4,353			4,728			Food and beverage	117		2,535		2,180		4,962
Other	3,052			2,699			8,465			7,689			Other	873		3,934		4,391		7,610
Cost reimbursements from unconsolidated real estate entities	753			804			2,302			2,728
Reimbursable costs from unconsolidated real estate entities													Reimbursable costs from unconsolidated real estate entities	794		1,435		2,374		2,926
Total revenue	81,404			79,733			228,535			226,583			Total revenue	20,173		87,874		80,382		163,553
Expenses:													Expenses:
Hotel operating expenses:													Hotel operating expenses:
Room	15,618			15,068			44,147			43,453			Room	4,517		16,372		17,912		31,942
Food and beverage	1,307			1,280			3,770			3,703			Food and beverage	128		2,120		2,018		4,129
Telephone	410			449			1,205			1,300			Telephone	351		410		730		843
Other hotel operating	737			563			2,047			1,790			Other hotel operating	182		971		992		1,910
General and administrative	5,906			5,652			17,534			16,848			General and administrative	3,360		6,574		8,636		12,741
Franchise and marketing fees	6,366			6,157			17,758			17,293			Franchise and marketing fees	1,636		6,984		6,356		12,916
Advertising and promotions	1,353			1,203			3,955			3,899			Advertising and promotions	854		1,485		2,364		3,018
Utilities	2,708			2,684			7,431			7,301			Utilities	1,863		2,525		4,378		5,275
Repairs and maintenance	3,467			3,084			9,898			9,443			Repairs and maintenance	1,640		3,431		5,101		7,042
Management fees	2,693			2,558			7,511			7,171			Management fees	848		2,892		2,872		5,436
Insurance	297			318			925			993			Insurance	361		365		721		702
Total hotel operating expenses	40,862			39,016			116,181			113,194			Total hotel operating expenses	15,740		44,129		52,080		85,954
Depreciation and amortization	10,944			11,997			34,662			36,753			Depreciation and amortization	13,667		12,999		26,729		25,771
Impairment loss	—			—			6,663			—
Impairment loss on investment in unconsolidated real estate entities													Impairment loss on investment in unconsolidated real estate entities	—		—		15,282		—
Property taxes, ground rent and insurance	5,349			5,417			15,710			15,454			Property taxes, ground rent and insurance	5,892		6,242		11,990		12,409
General and administrative	3,151			2,992			9,706			9,076			General and administrative	2,487		3,611		5,252		7,125
Hotel property acquisition costs and other charges	(15		)	49			—			359
Reimbursed costs from unconsolidated real estate entities	753			804			2,302			2,728
Other charges													Other charges	215		25		2,984		42
Reimbursable costs from unconsolidated real estate entities													Reimbursable costs from unconsolidated real estate entities	794		1,435		2,374		2,926
Total operating expenses	61,044			60,275			185,224			177,564			Total operating expenses	38,795		68,441		116,691		134,227
Operating income	20,360			19,458			43,311			49,019
Operating (loss) income before gain (loss) on sale of hotel property													Operating (loss) income before gain (loss) on sale of hotel property	(18,622)		19,433		(36,309)		29,326
Gain (loss) on sale of hotel property													Gain (loss) on sale of hotel property	2		(3,300)		3		(3,300)
Operating (loss) income													Operating (loss) income	(18,620)		16,133		(36,306)		26,026
Interest and other income	9			7			27			43			Interest and other income	39		66		120		121
Interest expense, including amortization of deferred fees	(7,065		)	(7,082		)	(20,830		)	(21,211		)	Interest expense, including amortization of deferred fees	(7,034)		(7,131)		(13,867)		(14,328)
Loss on early extinguishment of debt	—			—			—			(4		)
Income from unconsolidated real estate entities	1,189			1,051			2,031			1,346
Loss on sale from unconsolidated real estate entities	—			—			—			(8		)
Income before income tax benefit (expense)	14,493			13,434			24,539			29,185
Income tax benefit (expense)	—			12			(317		)	(167		)
Net income	14,493			13,446			24,222			29,018
Net income attributable to noncontrolling interests	(101		)	(91		)	(167		)	(195		)
Net income attributable to common shareholders	$	14,392		$	13,355		$	24,055		$	28,823

Income per Common Share - Basic:
Net income attributable to common shareholders (Note 11)	$	0.36		$	0.35		$	0.62		$	0.75
Income per Common Share - Diluted:
Net income attributable to common shareholders (Note 11)	$	0.36		$	0.35		$	0.61		$	0.74
(Loss) income from unconsolidated real estate entities													(Loss) income from unconsolidated real estate entities	(1,578)		457		(5,251)		(666)

(Loss) income before income tax expense													(Loss) income before income tax expense	(27,193)		9,525		(55,304)		11,153
Income tax expense													Income tax expense	—		—		—		—
Net (loss) income													Net (loss) income	(27,193)		9,525		(55,304)		11,153
Net (loss) income attributable to noncontrolling interests													Net (loss) income attributable to noncontrolling interests	366		(88)		694		(103)
Net (loss) income attributable to common shareholders													Net (loss) income attributable to common shareholders	$	(26,827)	$	9,437	$	(54,610)	$	11,050

(Loss) income per Common Share - Basic:													(Loss) income per Common Share - Basic:
Net (loss) income attributable to common shareholders (Note 10)													Net (loss) income attributable to common shareholders (Note 10)	$	(0.57)	$	0.20	$	(1.16)	$	0.23
(Loss) income per Common Share - Diluted:													(Loss) income per Common Share - Diluted:
Net (loss) income attributable to common shareholders (Note 10)													Net (loss) income attributable to common shareholders (Note 10)	$	(0.57)	$	0.20	$	(1.16)	$	0.23
Weighted average number of common shares outstanding:													Weighted average number of common shares outstanding:
Basic	39,298,974			38,307,382			38,731,900			38,293,704			Basic	46,960,289		46,760,016		46,954,411		46,658,973
Diluted	39,550,494			38,567,462			38,960,455			38,520,689			Diluted	46,960,289		46,976,999		46,954,411		46,855,916
Distributions declared per common share:	$	0.33		$	0.33		$	0.99		$	0.97		Distributions declared per common share:	$	—	$	0.33	$	0.22	$	0.66



	Common Shares			Additional Paid - In Capital		Retained earnings (distributions in excess of retained earnings)			Total Shareholders’ Equity			Noncontrolling Interest in Operating Partnership			Total Equity
	Shares	Amount		Additional Paid - In Capital					Total Shareholders’ Equity			Noncontrolling Interest in Operating Partnership			Total Equity
Balance, January 1, 2016	38,308,937	$	379	$	719,773	$	(27,281	)	$	692,871		$	4,131		$	697,002
Issuance of shares pursuant to Equity Incentive Plan	26,488	—		550		—			550			—			550
Issuance of shares, net of offering costs of $8	16,454	1		336		—			337			—			337
Issuance of restricted time-based shares	7,851	—		—		—			—			—			—
Amortization of share based compensation	—	—		963		—			963			916			1,879
Dividends declared on common shares ($0.97 per share)	—	—		—		(37,266		)	(37,266		)	—			(37,266		)
Distributions declared on LTIP units ($0.97 per unit)	—	—		—		—			—			(537		)	(537		)
Reallocation of noncontrolling interest	—	—		11		—			11			(11		)	—
Net income	—	—		—		28,823			28,823			195			29,018
Balance, September 30, 2016	38,359,730	$	380	$	721,633	$	(35,724	)	$	686,289		$	4,694		$	690,983
Balance, January 1, 2017	38,367,014	$	380	$	722,019	$	(45,657	)	$	676,742		$	4,848		$	681,590
Issuance of shares pursuant to Equity Incentive Plan	23,980	—		500		—			500			—			500
Issuance of shares, net of offering costs of $812	1,443,482	15		28,909		—			28,924			—			28,924
Issuance of restricted time-based shares	5,000	—		—		—			—			—			—
Amortization of share based compensation	—	—		619		—			619			1,791			2,410
Dividends declared on common shares ($0.99 per share)	—	—		—		(38,495		)	(38,495		)	—			(38,495		)
Distributions declared on LTIP units ($0.99 per unit)	—	—		—		—			—			(721		)	(721		)
Reallocation of noncontrolling interest	—	—		101		—			101			(101		)	—
Net income	—	—		—		24,055			24,055			167			24,222
Balance, September 30, 2017	39,839,476	$	395	$	752,148	$	(60,097	)	$	692,446		$	5,984		$	698,430



	Portsmouth
Acquisition date	9/20/2017
Number of Rooms	131
Land	$	3,600
Building and improvements	37,630
Furniture, fixtures and equipment	2,120
Cash	8
Accounts receivable	32
Prepaid expenses and other assets	12
Accounts payable and accrued expenses	(27		)
Net assets acquired	$	43,375
Net assets acquired, net of cash	$	43,367



	For the three months ended September 30,								For the nine months ended September 30,
	2017				2016				2017				2016
	Revenue		Operating Income		Revenue		Operating Income		Revenue		Operating Income		Revenue		Operating Income

Hilton Garden Inn Portsmouth	$	392	$	241	$	—	$	—	$	392	$	241	$	—	$	—
Total	$	392	$	241	$	—	$	—	$	392	$	241	$	—	$	—



	September 30, 2017			December 31, 2016
Land and improvements	$	284,655		$	274,554
Building and improvements	1,087,046			1,045,880
Furniture, fixtures and equipment	59,040			50,495
Renovations in progress	14,807			10,067
	1,445,548			1,380,996
Less: accumulated depreciation	(182,365		)	(147,902		)
Investment in hotel properties, net	$	1,263,183		$	1,233,094


Collateral	Interest Rate		Maturity Date	9/30/17 Property Carrying Value		Balance Outstanding on Loan as of						Collateral	Interest Rate		Maturity Date	6/30/20 Property Carrying Value		Balance Outstanding on Loan as of
						September 30, 2017			December 31, 2016													June 30, 2020	December 31, 2019
Senior Unsecured Revolving Credit Facility⁽¹⁾	4.03	%	November 25, 2019	$	—	$	75,000		$	52,500
Revolving Credit Facility (1)												Revolving Credit Facility (1)	3.11	%	March 8, 2022	$	397,214	$	173,000	$	90,000

Residence Inn by Marriott New Rochelle, NY	5.75	%	September 1, 2021	19,381		13,859			14,141			Residence Inn by Marriott New Rochelle, NY	5.75	%	September 1, 2021	20,455		12,790		12,936
Residence Inn by Marriott San Diego, CA	4.66	%	February 6, 2023	45,257		28,612			29,026			Residence Inn by Marriott San Diego, CA	4.66	%	February 6, 2023	44,234		26,957		27,272
Homewood Suites by Hilton San Antonio, TX	4.59	%	February 6, 2023	32,074		16,336			16,575			Homewood Suites by Hilton San Antonio, TX	4.59	%	February 6, 2023	29,231		15,381		15,563
Residence Inn by Marriott Vienna, VA	4.49	%	February 6, 2023	30,419		22,365			22,699			Residence Inn by Marriott Vienna, VA	4.49	%	February 6, 2023	31,535		21,038		21,291
Courtyard by Marriott Houston, TX	4.19	%	May 6, 2023	32,381		18,473			18,758			Courtyard by Marriott Houston, TX	4.19	%	May 6, 2023	30,651		17,345		17,559
Hyatt Place Pittsburgh, PA	4.65	%	July 6, 2023	35,036		22,546			22,864			Hyatt Place Pittsburgh, PA	4.65	%	July 6, 2023	34,361		21,278		21,520
Residence Inn by Marriott Bellevue, WA	4.97	%	December 6, 2023	67,833		45,653			46,206			Residence Inn by Marriott Bellevue, WA	4.97	%	December 6, 2023	63,198		43,433		43,857
Residence Inn by Marriott Garden Grove, CA	4.79	%	April 6, 2024	38,984		33,291			33,674			Residence Inn by Marriott Garden Grove, CA	4.79	%	April 6, 2024	41,239		31,762		32,053
Residence Inn by Marriott Silicon Valley I, CA	4.64	%	July 1, 2024	80,296		64,800			64,800			Residence Inn by Marriott Silicon Valley I, CA	4.64	%	July 1, 2024	77,528		63,918		64,406
Residence Inn by Marriott Silicon Valley II, CA	4.64	%	July 1, 2024	87,836		70,700			70,700			Residence Inn by Marriott Silicon Valley II, CA	4.64	%	July 1, 2024	85,898		69,738		70,270
Residence Inn by Marriott San Mateo, CA	4.64	%	July 1, 2024	63,527		48,600			48,600			Residence Inn by Marriott San Mateo, CA	4.64	%	July 1, 2024	63,983		47,939		48,305
Residence Inn by Marriott Mountain View, CA	4.64	%	July 6, 2024	55,668		37,900			37,900			Residence Inn by Marriott Mountain View, CA	4.64	%	July 6, 2024	51,144		37,384		37,670
SpringHill Suites by Marriott Savannah, GA	4.62	%	July 6, 2024	36,535		30,000			30,000			SpringHill Suites by Marriott Savannah, GA	4.62	%	July 6, 2024	33,953		29,590		29,817
Hilton Garden Inn Marina del Rey, CA	4.68	%	July 6, 2024	42,145		21,859			22,145			Hilton Garden Inn Marina del Rey, CA	4.68	%	July 6, 2024	38,620		20,713		20,931
Homewood Suites by Hilton Billerica, MA	4.32	%	December 6, 2024	11,435		16,225			16,225			Homewood Suites by Hilton Billerica, MA	4.32	%	December 6, 2024	13,489		15,553		15,693
Homewood Suites by Hilton Carlsbad CA	4.32	%	December 6, 2024	29,185		19,950			19,950

Hampton Inn & Suites Houston Medical Center, TX	4.25	%	January 6, 2025	15,170		18,300			18,300			Hampton Inn & Suites Houston Medical Center, TX	4.25	%	January 6, 2025	16,111		17,558		17,717

Total debt before unamortized debt issue costs				$	723,162	$	604,469		$	585,063		Total debt before unamortized debt issue costs				$	1,072,844	$	665,377	$	586,860
Unamortized mortgage debt issue costs						(2,325		)	(2,240		)	Unamortized mortgage debt issue costs						(1,202)		(1,395)
Total debt outstanding						$	602,144		$	582,823		Total debt outstanding						$	664,175	$	585,465



	Amount
2017 (remaining three months)	$	1,239
2018	5,374
2019	82,340
2020	9,899
2021	22,308
2022	10,350
Thereafter	472,959
Total debt before unamortized debt issue costs	$	604,469
Unamortized mortgage debt issue costs	(2,325		)
Total debt outstanding	$	602,144



Maryland						27-1200777



	Record Date	Payment Date	Common share distribution amount		LTIP unit distribution amount
January	1/31/2017	2/24/2017	$	0.11	$	0.11
February	2/28/2017	3/31/2017	0.11		0.11
March	3/31/2017	4/28/2017	0.11		0.11
1st Quarter 2017			$	0.33	$	0.33

April	4/28/2017	5/26/2017	$	0.11	$	0.11
May	5/26/2017	6/30/2017	0.11		0.11
June	6/30/2017	7/28/2017	0.11		$	0.11
2nd Quarter 2017			$	0.33	$	0.33

July	7/31/2017	8/25/2017	$	0.11	$	0.11
August	8/31/2017	9/29/2017	0.11		0.11
September	9/29/2017	10/27/2017	0.11		0.11
3rd Quarter 2017			$	0.33	$	0.33

Total 2017			$	0.99	$	0.99



Award Type	Award Date	Total Shares Granted	Vested as of September 30, 2017
2014 Time-based Awards	1/31/2014	48,213	48,213
2014 Performance-based Awards	1/31/2014	38,805	12,935
2015 Time-based Awards	1/30/2015	40,161	26,774
2015 Performance-based Awards	1/30/2015	36,144	—
2015 Time-based Awards	6/1/2015	8,949	5,966
2017 Restricted Board Awards	1/11/2017	5,000	—



Performance Award			Risk Free Interest
Grant Date	Volatility	Dividend Yield	Rate
1/31/2014	27%	—%	0.71%
1/30/2015	29%	—%	0.84%



	Nine Months Ended				Year Ended
	September 30, 2017				December 31, 2016
	Number of Shares		Weighted - Average Grant Date Fair Value		Number of Shares		Weighted - Average Grant Date Fair Value
Non-vested at beginning of the period	110,825		$	22.05	170,480		$	21.38
Granted	5,000		20.20		—		—
Vested	(32,441	)	25.77		(59,655	)	20.14
Forfeited	(25,870	)	$	13.17	—		$	—
Non-vested at end of the period	57,514		$	23.78	110,825		$	22.05



	Other Leases⁽¹⁾		Office Lease
	Amount
2017 (remaining three months)	$	304	$	192
2018	1,217		772
2019	1,220		792
2020	1,267		812
2021	1,273		832
2022	1,276		853
Thereafter	68,178		3,310
Total	$	74,735	$	7,563



Property	Courtyard Altoona		Springhill Suites Washington		Residence Inn Garden Grove		Residence Inn San Diego		Residence Inn San Antonio		Residence Inn Vienna		Residence Inn Washington D.C.

Original Management Fee	4.0	%	4.0	%	2.5	%	2.5	%	2.5	%	2.5	%	2.5	%
Amended Management Fee	3.0	%	3.0	%	3.0	%	3.0	%	3.0	%	3.0	%	3.0	%
Original Monthly Accounting Fee	1,211		991		1,000		1,000		1,000		1,000		1,000
Amended Monthly Accounting Fee	1,500		1,200		1,200		1,200		1,200		1,200		1,200
Original Monthly Revenue Management Fee	—		—		—		—		—		—		—
Amended Monthly Revenue Management Fee	1,000		1,000		1,000		1,000		1,000		1,000		1,000



Property	Homewood Suites Billerica		Homewood Suites Bloomington		Homewood Suites Maitland		Homewood Suites Dallas		Homewood Suites Brentwood		Homewood Suites Farmington

Renewal Date	4/1/2017		4/1/2017		5/1/2017		5/1/2017		6/1/2017		8/1/2017
Original Management Fee	2.0	%	2.0	%	2.0	%	2.0	%	2.0	%	2.0	%
Amended Management Fee	3.0	%	3.0	%	3.0	%	3.0	%	3.0	%	3.0	%
Original Monthly Accounting Fee	1,000		1,000		1,000		1,000		1,000		1,000
Amended Monthly Accounting Fee	1,200		1,200		1,200		1,200		1,200		1,200
Original Monthly Revenue Management Fee	550		550		550		550		550		550
Amended Monthly Revenue Management Fee	1,000		1,000		1,000		1,000		1,000		1,000



Property	Management Company	Base Management Fee	Monthly Accounting Fee	Monthly Revenue Management Fee	Incentive Management Fee
Hilton Garden Inn Portsmouth	IHM	3%	$1,500	$1,000	1%



Property	Franchise Company	Franchise/Royalty Fee	Marketing Program Fee	Expiration
Hilton Garden Inn Portsmouth	Hilton Franchise Holding LLC	5.5%	4%	2037



	For the three months ended
	September 30, 2017		September 30, 2016		% Change
Room	$	76,221	$	74,736	2.0	%
Food and beverage	1,378		1,494		(7.8	)%
Other	3,052		2,699		13.1	%
Cost reimbursements from unconsolidated real estate entities	753		804		(6.3	)%
Total revenue	$	81,404	$	79,733	2.1	%


	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)	$	5,403	$	409	$	1,684	$	1,770	$	1,540
Revolving credit facility, including interest (2)	182,317		2,767		179,550		—		—
Ground leases	72,851		609		2,438		2,438		67,366
Property loans, including interest (2)	556,980		16,285		77,214		447,550		15,931
Total	$	817,551	$	20,070	$	260,886	$	451,758	$	84,837


~~(1)~~	~~The Company entered into a new 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 shares the space with related parties and is reimbursed for the pro-rata share of rentable space occupied by related parties.


~~(2)~~	Does not reflect paydowns or additional borrowings under the senior unsecured revolving credit facility after September 30, 2017. Interest payments are based on the interest rate in effect as of September 30, 2017. See Note 8, “Debt” to our unaudited consolidated financial statements for additional information relating to our property loans.



Exhibit Number		Description of Exhibit


3.1		Articles of Amendment and Restatement of Chatham Lodging Trust ⁽¹⁾

3.2		Second Amended and Restated Bylaws of Chatham Lodging Trust⁽²⁾

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~~Section302 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~~Section302 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~~Section906 of the Sarbanes-Oxley Act of 2002

~~101.INS~~	~~XBRL Instance Document~~

~~101.SCH~~	~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~	~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~



*101.INS						The instance document does not appear in the interactive data file because its 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.


*		Furnished herewith. Such certification shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

(1(1)	)	Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed with the SEC on February 29, 2016 (File No. 001-34693).

(2(2)	)	Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on April 21, 2015 (File No. 001-34693).


			CHATHAM LODGING TRUST

Dated:		August 5, 2020	~~CHATHAM LODGING TRUST~~

~~Dated:~~	~~October 31, 2017~~	By: /s/ JEREMY B. WEGNER
			Jeremy B. Wegner
			Senior Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer and duly authorized officer of the registrant)