10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________

(Mark One)

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

For the quarterly period ended March 31, 2022

OR

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

For the transition period ended ______ to ______

Commission file number 001-36594

___________________________

Xenia Hotels & Resorts, Inc.

(Exact Name of Registrant as Specified in Its Charter)

_______________________

Maryland	20-0141677
(State of Incorporation)	(I.R.S. Employer Identification No.)
200 S. Orange Avenue
Suite 2700, Orlando, Florida	32801
(Address of Principal Executive Offices)	(Zip Code)

(407) 246-8100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	XHR	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

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

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of April 29, 2022, there were 114,353,273 shares of the registrant’s common stock outstanding.

XENIA HOTELS & RESORTS, INC.

TABLE OF CONTENTS

Part I - Financial Information		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021	2
	Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	5
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	37
Part II - Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

XENIA HOTELS & RESORTS, INC.

Condensed Consolidated Balance Sheets

As of March 31, 2022 and December 31, 2021

(Dollar amounts in thousands, except per share data)

	March 31, 2022		December 31, 2021
Assets	(Unaudited)		(Audited)
Investment properties:
Land	$	467,708	$	431,427
Buildings and other improvements	3,160,421		2,856,671
Total	$	3,628,129	$	3,288,098
Less: accumulated depreciation	(919,045)		(888,717)
Net investment properties	$	2,709,084	$	2,399,381
Cash and cash equivalents	179,077		517,377
Restricted cash and escrows	40,158		36,854
Accounts and rents receivable, net of allowance for doubtful accounts	36,242		28,528
Intangible assets, net of accumulated amortization of $2,352 and $2,231, respectively	5,414		5,446
Other assets	70,112		65,109
Assets held for sale	—		34,621
Total assets	$	3,040,087	$	3,087,316
Liabilities
Debt, net of loan premiums, discounts and unamortized deferred financing costs (Note 5)	$	1,429,616	$	1,494,231
Accounts payable and accrued expenses	92,818		84,051
Other liabilities	79,248		68,648
Liabilities associated with assets held for sale	—		2,305
Total liabilities	$	1,601,682	$	1,649,235
Commitments and Contingencies (Note 12)
Stockholders' equity
Common stock, $0.01 par value, 500,000,000 shares authorized, 114,353,273 and 114,306,727 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	$	1,144	$	1,143
Additional paid in capital	2,090,627		2,090,393
Accumulated other comprehensive loss	(837)		(4,089)
Accumulated distributions in excess of net earnings	(661,785)		(656,461)
Total Company stockholders' equity	$	1,429,149	$	1,430,986
Non-controlling interests	9,256		7,095
Total equity	$	1,438,405	$	1,438,081
Total liabilities and equity	$	3,040,087	$	3,087,316

See accompanying notes to the condensed consolidated financial statements.

1

XENIA HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended March 31, 2022 and 2021

(Unaudited)

(Dollar amounts in thousands, except per share data)

	Three Months Ended March 31,
	2022		2021
Revenues:
Rooms revenues	$	123,198	$	55,646
Food and beverage revenues	67,735		21,592
Other revenues	19,414		10,614
Total revenues	$	210,347	$	87,852
Expenses:
Rooms expenses	29,217		15,537
Food and beverage expenses	45,610		18,178
Other direct expenses	5,294		3,198
Other indirect expenses	53,860		37,327
Management and franchise fees	7,626		2,844
Total hotel operating expenses	$	141,607	$	77,084
Depreciation and amortization	30,565		33,197
Real estate taxes, personal property taxes and insurance	10,855		10,540
Ground lease expense	517		403
General and administrative expenses	7,786		6,922
Gain on business interruption insurance	—		(1,116)
Impairment and other losses	1,278		—
Total expenses	$	192,608	$	127,030
Operating income (loss)	$	17,739	$	(39,178)
Other (loss) income	(777)		116
Interest expense	(20,538)		(18,750)
Loss on extinguishment of debt	(294)		—
Net loss before income taxes	$	(3,870)	$	(57,812)
Income tax expense	(1,607)		(165)
Net loss	$	(5,477)	$	(57,977)
Net loss attributable to non-controlling interests (Note 1)	153		1,626
Net loss attributable to common stockholders	$	(5,324)	$	(56,351)

2

XENIA HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss, Continued

For the Three Months Ended March 31, 2022 and 2021

(Unaudited)

(Dollar amounts in thousands, except per share data)

	Three Months Ended March 31,
	2022		2021
Basic and diluted loss per share
Net loss per share available to common stockholders - basic and diluted	$	(0.05)	$	(0.50)
Weighted-average number of common shares (basic and diluted)	114,326,406		113,780,388
Comprehensive Loss:
Net loss	$	(5,477)	$	(57,977)
Other comprehensive income (loss):
Unrealized gain on interest rate derivative instruments	2,517		104
Reclassification adjustment for amounts recognized in net loss (interest expense)	1,152		2,330
	$	(1,808)	$	(55,543)
Comprehensive (gain) loss attributable to non-controlling interests (Note 1)	(264)		1,558
Comprehensive loss attributable to the Company	$	(2,072)	$	(53,985)

See accompanying notes to the condensed consolidated financial statements.

3

XENIA HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Changes in Equity

For the Three Months Ended March 31, 2022 and 2021

(Unaudited)

(Dollar amounts in thousands, except per share data)

	Common Stock
	Shares	Amount		Additional paid in capital		Accumulated other comprehensive income (loss)		Distributions in excess of retained earnings		Non-controlling interests of Operating Partnership		Total
Balance at December 31, 2021	114,306,727	$	1,143	$	2,090,393	$	(4,089)	$	(656,461)	$	7,095	$	1,438,081
Net loss	—	—		—		—		(5,324)		(153)		(5,477)
Share-based compensation	63,024	1		537		—				1,897		2,435
Shares redeemed to satisfy tax withholding on vested share-based compensation	(16,478)	—		(303)		—		—		—		(303)
Other comprehensive loss:
Unrealized gain on interest rate derivative instruments	—	—		—		2,133		—		384		2,517
Reclassification adjustment for amounts recognized in net loss	—	—		—		1,119		—		33		1,152
Balance at March 31, 2022	114,353,273	$	1,144	$	2,090,627	$	(837)	$	(661,785)	$	9,256	$	1,438,405

Balance at December 31, 2020	113,755,513	$	1,138	$	2,080,364	$	(14,425)	$	(513,002)	$	12,788	$	1,566,863
Net loss	—	—		—		—		(56,351)		(1,626)		(57,977)
Share-based compensation	67,554	—		1,045		—		—		1,640		2,685
Shares redeemed to satisfy tax withholding on vested share-based compensation	(18,993)	—		(318)		—		—		—		(318)
Other comprehensive loss:
Unrealized gain on interest rate derivative instruments	—	—		—		101		—		3		104
Reclassification adjustment for amounts recognized in net loss	—	—		—		2,265		—		65		2,330
Balance at March 31, 2021	113,804,074	$	1,138	$	2,081,091	$	(12,059)	$	(569,353)	$	12,870	$	1,513,687

See accompanying notes to the condensed consolidated financial statements.

4

XENIA HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2022 and 2021

(Unaudited)

(Dollar amounts in thousands)

	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(5,477)	$	(57,977)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	30,429		32,929
Non-cash ground rent and amortization of other intangibles	136		268
Amortization of debt premiums, discounts, and financing costs	1,286		1,767
Loss on extinguishment of debt	294		—
Gain on insurance recoveries	(994)		—
Share-based compensation expense	2,207		2,295
Deferred interest expense	(409)		—
Changes in assets and liabilities:
Accounts and rents receivable	(7,599)		(5,604)
Other assets	(5,315)		(8,286)
Accounts payable and accrued expenses	8,234		212
Other liabilities	9,780		3,236
Net cash provided by (used in) operating activities	$	32,572	$	(31,160)
Cash flows from investing activities:
Purchase of investment properties	(328,493)		—
Capital expenditures	(7,499)		(7,242)
Proceeds from sale of investment properties	32,820		—
Proceeds from property insurance	1,168		—
Performance guaranty payments	912		695
Net cash used in investing activities	$	(301,092)	$	(6,547)
Cash flows from financing activities:
Payoff of mortgage debt	(65,000)		—
Principal payments of mortgage debt	(932)		(1,357)
Shares redeemed to satisfy tax withholding on vested share-based compensation	(490)		(443)
Dividends and dividend equivalents	(54)		(54)
Net cash used in financing activities	$	(66,476)	$	(1,854)
Net decrease in cash and cash equivalents and restricted cash	(334,996)		(39,561)
Cash and cash equivalents and restricted cash, at beginning of period	554,231		428,786
Cash and cash equivalents and restricted cash, at end of period	$	219,235	$	389,225

5

XENIA HOTELS & RESORTS, INC.

Condensed Consolidated Statements of Cash Flows, Continued

For the Three Months Ended March 31, 2022 and 2021

(Unaudited)

(Dollar amounts in thousands)

	Three Months Ended March 31,
	2022		2021
Supplemental disclosure of cash flow information:
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amount shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	179,077	$	354,597
Restricted cash	40,158		34,628
Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	219,235	$	389,225
The following represent cash paid during the periods presented for the following:
Cash paid for interest, net of capitalized interest	$	21,433	$	24,814
Cash recovered for taxes	—		(72)
Supplemental schedule of non-cash investing and financing activities:
Accrued capital expenditures	$	2,891	$	368

See accompanying notes to the condensed consolidated financial statements.

6

XENIA HOTELS & RESORTS, INC.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

March 31, 2022

1. Organization

Xenia Hotels & Resorts, Inc. (the "Company" or "Xenia") is a Maryland corporation that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on the top 25 lodging markets as well as key leisure destinations in the United States.

Substantially all of the Company's assets are held by, and all the operations are conducted through, XHR LP (the "Operating Partnership"). XHR GP, Inc. is the sole general partner of XHR LP and is wholly-owned by the Company. As of March 31, 2022, the Company collectively owned 97.1% of the common limited partnership units issued by the Operating Partnership ("Operating Partnership Units"). The remaining 2.9% of the Operating Partnership Units are owned by the other limited partners comprised of certain of our current executive officers and members of our Board of Directors and includes vested and unvested long-term incentive plan ("LTIP") partnership units. LTIP partnership units may or may not vest based on the passage of time and whether certain market-based performance objectives are met.

Xenia operates as a real estate investment trust ("REIT"). To qualify as a REIT the Company cannot operate or manage its hotels. Therefore, the Operating Partnership and its subsidiaries lease the hotel properties to XHR Holding, Inc. and its subsidiaries (collectively with its subsidiaries, "XHR Holding"), the Company's taxable REIT subsidiary ("TRS"), which engages third-party eligible independent contractors to manage the hotels.

As of March 31, 2022 and 2021, the Company owned 34 and 35 lodging properties, respectively.

Ongoing Impact of COVID-19

We began to see improvements in leisure demand during the second half of 2020, a trend that accelerated in 2021 and has continued into 2022. During the first quarter of 2022, operations continued to improve due to a re-acceleration in leisure travel and higher levels of business transient and group demand beginning in mid-February.

Despite this improvement, there remains significant uncertainty regarding the pace of recovery and whether and when business travel and larger group meetings will return to pre-pandemic levels. We may be impacted by, among other things, the distribution and acceptance of COVID-19 vaccines and boosters, breakthrough cases, and new variants of COVID-19, as well as the ongoing local and national response to the virus. As the recovery continues, we expect that the pace will vary from market to market and may be uneven in nature.

2. Summary of Significant Accounting Policies

The unaudited interim condensed consolidated financial statements and related notes have been prepared on an accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. The unaudited condensed consolidated financial statements include normal recurring adjustments, which management considers necessary for the fair presentation of the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of changes in equity and condensed consolidated statements of cash flows for the periods presented. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2021, included in the Company's Annual Report on Form 10-K filed with the SEC on March 1, 2022. Operating results for the three months ended March 31, 2022 are not necessarily indicative of actual operating results for the entire year.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and XHR Holding. The Company's subsidiaries generally consist of limited liability companies, limited partnerships and the TRS. The effects of all inter-company transactions have been eliminated.

7

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management's best judgment, after considering past, current and expected future economic conditions. Actual results could differ from these estimates.

Risks and Uncertainties

As a result of the COVID-19 pandemic, the majority of the Company's hotels and resorts temporarily suspended operations for certain periods of time during 2020. All of the Company's hotels had resumed operations by the end of May 2021. The Company's portfolio consists of luxury and upper upscale hotels and resorts, which generally offer restaurant and bar venues, large meeting facilities and event space, and amenities, including spas and golf courses, some of which may have limited operations or may not be able to operate during the recovery in order to comply with implemented safety measures, ongoing or reimplemented restrictions and to accommodate reduced levels of demand. The Company continues to monitor the evolving situation and guidance from federal, state and local governmental and public health authorities and additional actions may be taken or required based on their recommendations and regulations in place. Under these circumstances, there may be developments that require further adjustments to operations.

The Company cannot predict with certainty whether and when business levels will return to normalized levels after the effects of the pandemic subside or whether hotels will be forced to suspend operations or impose additional restrictions due to future variants of COVID-19. Although it is improving, the lodging industry, particularly with respect to business transient and group business, has continued to lag behind the recovery of other industries. Factors such as public health (including a significant increase in variant strains of COVID-19 cases), availability and effectiveness of COVID-19 vaccines/boosters and therapeutics, the level of acceptance of the vaccine by the general population and the economic and geopolitical environments may impact the timing, extent and pace of such recovery. Additionally, the effects of the pandemic could materially and adversely affect the Company's ability to consummate acquisitions and dispositions of hotel properties in the near term.

The Company cannot predict with certainty the full extent and duration of the effects of the COVID-19 pandemic on its business, operating margins, results of operations, cash flows, financial condition, the market price of its common stock, its ability to make distributions to its shareholders, its access to equity and credit markets or its ability to service its indebtedness. Further, the Company continues to monitor and evaluate the challenges associated with inflationary pressures, the evolving workforce landscape, particularly related to industry-wide labor shortages and expected increases in wages, as well as ongoing supply chain issues which may continue to impact the hotels' ability to source operating supplies and other materials.

For the three months ended March 31, 2022, the Company had a geographical concentration of revenues generated from hotels in the Orlando, Florida and Phoenix, Arizona markets that exceeded 10% of total revenues for the period then ended. For the three months ended March 31, 2021, the Company had a geographical concentration of revenues generated from hotels in the Phoenix, Arizona, Orlando, Florida and Houston, Texas markets that exceeded 10% of total revenues for the period then ended. To the extent adverse changes continue in these markets, or the industry sectors that operate in these markets, our business and operating results could continue to be negatively impacted.

Consolidation

The Company evaluates its investments in partially owned entities to determine whether such entities may be a variable interest entity ("VIE") or voting interest entity. If the entity is a VIE, the determination of whether the Company is the primary beneficiary must be made. The primary beneficiary determination is based on a qualitative assessment as to whether the entity has (i) power to direct significant activities of the VIE and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The Company will consolidate a VIE if it is deemed to be the primary beneficiary. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary, or the entity is not a VIE and over which the Company does not have effective control but can exercise influence over the entity with respect to its operations and major decisions.

The Operating Partnership is a VIE. The Company's significant asset is its investment in the Operating Partnership, as described in Note 1, and consequently, substantially all of the Company's assets and liabilities represent those assets and liabilities of the Operating Partnership.

8

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased, and similar accounts with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at various financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant as the Company does not anticipate non-performance by the financial institutions.

Restricted Cash and Escrows

Restricted cash primarily relates to FF&E reserves as required per the terms of the Company's management and franchise agreements, cash held in restricted escrows for real estate taxes and insurance, capital spending reserves and, at times, disposition-related holdback escrows.

Acquisition of Real Estate

Investments in hotel properties, including land and land improvements, building and building improvements, furniture, fixtures and equipment, and identifiable intangibles assets, will generally be accounted for as asset acquisitions. Acquired assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related to finding, analyzing and negotiating a transaction.

The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture and fixtures, inventory, acquired above market and below market leases, in-place lease value (if applicable), advance bookings, and any assumed financing that is determined to be above or below market terms. Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.

Impairment

Long-lived assets and intangibles

The Company assesses the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Events or circumstances that may cause a review include, but are not limited to, when (1) a hotel property experiences a significant decrease in the market price of the long-lived asset, (2) a hotel property experiences a current or projected loss from operations combined with a history of operating or cash flow losses, (3) it becomes more likely than not that a hotel property will be sold before the end of its useful life, (4) an accumulation of costs is significantly in excess of the amount originally expected for the acquisition, construction or renovation of a long-lived asset, (5) adverse changes in demand occur for lodging at a specific property due to declining national or local economic conditions and/or new hotel construction in markets where the hotel is located, (6) there is a significant adverse change in legal factors or in the business climate that could affect the value of the long-lived asset and/or (7) there is a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed carrying value, the Company records an impairment charge to the extent that the carrying value exceeds fair value.

Involuntary Conversion

In August 2021, Hurricane Ida impacted Loews New Orleans Hotel located in New Orleans, Louisiana. During the three months ended March 31, 2022, the Company recorded additional hurricane-related repair and cleanup costs of $1.3 million which is included in impairment and other losses on the condensed consolidated statement of operations and comprehensive loss for the period then ended. The Company also has various other ongoing claims for damage sustained during winter storms in Texas in early 2021.

9

Insurance Recoveries

Insurance proceeds received in excess of recognized losses are treated as gain and are not recorded until contingencies are resolved. During the three months ended March 31, 2022, the Company received insurance proceeds related to damage sustained at Loews New Orleans Hotel during Hurricane Ida. These insurance proceeds were in excess of recognized losses and resulted in a gain on insurance recovery of $1.0 million which is included in other (loss) income on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

The Company may also be entitled to business interruption proceeds for losses occurring at certain properties; however, an insurance recovery receivable will not be recorded until a final settlement has been reached with the insurance company. The Company is currently seeking business interruption proceeds related to properties impacted by storms under the Company's various insurance policies. During the three months ended March 31, 2021, the Company recognized $1.1 million in business interruption insurance proceeds for a portion of lost revenues associated with cancellations related to the COVID-19 pandemic. These amounts are included in gain on business interruption insurance on the condensed consolidated statement of operations and comprehensive loss for the period then ended. No business interruption insurance recovery receivables were recognized during the three months ended March 31, 2022.

Disposition of Real Estate

The Company accounts for dispositions of real estate in accordance with ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets ("Subtopic 610-20") for the transactions between the Company and unrelated third-parties that are not considered a customer in the ordinary course of business. Typically, the real estate assets disposed of do not represent the transfer of a business or contain a material amount of financial assets, if any. The real estate assets promised in a sales contract are typically nonfinancial assets (i.e. land or a leasehold interest in land, building, furniture, fixtures and equipment) or in substance nonfinancial assets. The Company recognizes a gain or loss in full when the real estate is sold, provided (a) there is a valid contract and (b) transfer of control has occurred.

Revenues

Revenues consist of amounts derived from hotel operations, including the sale of rooms for lodging accommodations, food and beverage, and other ancillary revenue generated by hotel amenities including spa, parking, golf, resort fees and other services.

Revenues are generated from various distribution channels including but not limited to direct bookings, global distribution systems and Internet travel sites. Room transaction prices are based on an individual hotel's location, room type and the bundle of services included in the reservation and are set by the hotel daily. Any discounts, including advance purchase, loyalty point redemptions or promotions are recognized at the discounted rate whereas rebates and incentives are recorded as a reduction in rooms revenues when earned. Revenues from online channels are generally recognized net of commission fees, unless the end price paid by the guest is known. Rooms revenue is recognized over the length of stay that the hotel room is occupied by the guest. Cash received from a guest prior to check-in is recorded as an advance deposit and is generally recognized as rooms revenue at the time the room reservation has become non-cancellable, upon occupancy or upon expiration of the re-booking date. Advance deposits are included in other liabilities on the condensed consolidated balance sheets. Payment of any remaining balance is typically due from the guest upon check-out. Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenues).

Food and beverage transaction prices are based on the stated price for the specific food or beverage and varies depending on type, venue and hotel location. Service charges are typically a percentage of food and beverage prices and meeting space rental. Food and beverage revenue is recognized at the point in time in which the goods and/or services are rendered to the guest. Cash received in advance of an event is recorded as either a security or advance deposit. Security and advance deposits are recognized as revenue when it becomes non-cancellable or at the time the food and beverage goods and services are rendered to the guest. Payment for the remaining balance of food and beverage goods and services is due upon delivery and completion of such goods and services.

Parking and audio visual fees are recognized at the time services are provided to the guest at the stated price for the service or goods. In parking and audio visual contracts in which the Company has control over the services provided, the Company is considered the principal in the agreement and recognize the related revenues gross of associated costs. If the Company does not have control over the services in the contract, the Company is considered the agent and record the related revenues net of associated costs.

10

Resort and amenity fees, spa, golf and other ancillary amenity revenues are recognized at the point in time the goods or services have been rendered to the guest at the stated price for the service or amenity.

Share-Based Compensation

The Company maintains a share-based incentive plan that provides for the grant of stock options, stock awards, restricted stock units, LTIP units and other equity-based awards. Share-based compensation is measured at the estimated fair value of the award on the date of grant, adjusted for forfeitures as they occur, and recognized as an expense on a straight-line basis over the longest vesting period for each grant for the entire award. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of the Company's share price, expected dividend yield, expected term and assumptions of whether certain of these awards will achieve performance thresholds. Share-based compensation is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss and capitalized in buildings and other improvements in the condensed consolidated balance sheets for certain employees that manage property developments, renovations and capital improvements.

3. Revenues

The following represents total revenues disaggregated by primary geographical markets (as defined by STR, Inc. ("STR")) for the three months ended March 31, 2022 and 2021 (in thousands):

	Three Months Ended
Primary Markets	March 31, 2022
Orlando, FL	$	36,207
Phoenix, AZ	30,707
Houston, TX	20,996
San Diego, CA	19,188
Dallas, TX	12,846
Atlanta, GA	10,965
San Francisco/San Mateo, CA	9,578
Florida Keys	9,365
Denver, CO	9,052
Washington, DC-MD-VA	7,461
Other	43,982
Total	$	210,347

	Three Months Ended
Primary Markets	March 31, 2021
Phoenix, AZ	$	14,255
Orlando, FL	11,957
Houston, TX	10,517
Florida Keys	6,094
Denver, CO	5,812
Atlanta, GA	5,432
San Diego, CA	5,263
Dallas, TX	3,767
Savannah, GA	3,572
Washington, DC-MD-VA	3,354
Other	17,829
Total	$	87,852

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4. Investment Properties

From time to time, the Company evaluates acquisition opportunities based on our investment criteria and/or the opportunistic disposition of our hotels in order to take advantage of market conditions or in situations where the hotels no longer fit within our strategic objectives.

Acquisitions

On March 29, 2022, the Company acquired a fee-simple interest in the 346-room W Nashville located in Nashville, Tennessee for a purchase price of $328.5 million including acquisition costs and a $1.3 million credit related to an unfinished portion of the hotel provided by seller at closing.

The acquisition of W Nashville was funded with cash on hand and was accounted for as an asset acquisition resulting in the related acquisition costs being capitalized as part of the purchase price. The results of operations for W Nashville have been included in the Company’s condensed consolidated statements of operations and comprehensive loss since its acquisition date.

The Company recorded the identifiable assets and liabilities, including intangible assets and liabilities, acquired in the asset acquisition at the acquisition date relative fair value, which is based on the total accumulated costs of the acquisition. The following represents the purchase price allocation of the hotel acquired during the three months ended March 31, 2022 (in thousands):

	March 31, 2022
Land	$	36,364
Building and improvements	264,766
Furniture, fixtures, and equipment	31,091
Intangible and other assets(1)	232
Intangible liability(2)	(3,960)
Total purchase price(3)	$	328,493

(1)As part of the purchase price allocation for W Nashville, the Company allocated $0.1 million to advance bookings that will be amortized over 1.3 years as well as $0.1 million allocated to food inventory.

(2)As part of the purchase price allocation for W Nashville, the Company allocated $4.0 million to a liability associated with key money received by the seller from the third-party hotel manager. This liability will be amortized over 29.8 years and in the event of early termination is payable to the third-party hotel manager on a pro rata basis for the remaining portion of the term of the hotel management agreement.

(3)The total cost capitalized includes acquisition costs as the transaction was accounted for an an asset acquisition.

Dispositions

In November 2021, the Company entered into an agreement to sell the 191-room Kimpton Hotel Monaco Chicago in Chicago, Illinois for a sale price of $36.0 million. The sale closed in January 2022 and did not result in a gain or loss after previously recording an impairment of $15.7 million during the year ended December 31, 2021. Proceeds from the sale were used for general corporate purposes.

The operating results of the hotel that was sold during the three months ended March 31, 2022 are included in the Company's condensed consolidated financial statements as part of continuing operations as the disposition did not represent a strategic shift nor did it have a major impact on the Company's results of operations.

5. Debt

Debt as of March 31, 2022 and December 31, 2021 consisted of the following (dollar amounts in thousands):

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						Balance Outstanding as of
	Rate Type	Rate(1)			Maturity Date	March 31, 2022		December 31, 2021
Mortgage Loans
Renaissance Atlanta Waverly Hotel & Convention Center	Fixed (2)	4.45	%		8/14/2024	$	100,000	$	100,000
Andaz Napa	Fixed (3)	2.98	%		9/13/2024	55,460		55,640
The Ritz-Carlton, Pentagon City	Fixed (4)	—	%		1/31/2025	—		65,000
Grand Bohemian Hotel Orlando, Autograph Collection	Fixed	4.53	%		3/1/2026	56,523		56,796
Marriott San Francisco Airport Waterfront	Fixed	4.63	%		5/1/2027	111,623		112,102
Total Mortgage Loans		4.27	%	(5)		$	323,606	$	389,538
Corporate Credit Facilities
Corporate Credit Facility Term Loan $125M	Fixed (6)	3.92	%		9/13/2024	125,000		125,000
Revolving Credit Facility (7)	Variable	3.00	%		2/28/2024	—		—
Total Corporate Credit Facilities						$	125,000	$	125,000
2020 Senior Notes $500M	Fixed	6.38	%		8/15/2025	500,000		500,000
2021 Senior Notes $500M	Fixed	4.88	%		6/1/2029	500,000		500,000
Loan premiums, discounts and unamortized deferred financing costs, net (8)						(18,990)		(20,307)
Total Debt, net of loan premiums, discounts and unamortized deferred financing costs		5.18	%	(5)		$	1,429,616	$	1,494,231

(1)The rates shown represent the annual interest rates as of March 31, 2022. The variable index for the Renaissance Atlanta Waverly Hotel & Convention Center mortgage loan is daily SOFR and for the Andaz Napa mortgage loan is one-month LIBOR. The variable index for the corporate credit facilities reflects a 25 basis point LIBOR floor which is applicable for the value of all corporate credit facilities not subject to an interest rate hedge.

(2)A variable interest rate loan for which the interest rate has been fixed through October 2022, after which the rate reverts to variable.

(3)A variable interest loan for which the interest rate has been fixed on $25 million of the balance through October 2022, after which the rate reverts to variable.

(4)A variable interest rate loan for which the interest rate was fixed through January 2023. The outstanding balance of this mortgage loan was repaid in January 2022 and the two interest rate swaps associated with this loan were terminated in connection with the repayment.

(5)Represents the weighted-average interest rate as of March 31, 2022.

(6)A variable interest loan for which LIBOR has been fixed through September 2022. The spread to LIBOR may vary, as it is determined by the Company's leverage ratio. The applicable interest rate has been set to the highest level of grid-based pricing during the covenant waiver period.

(7)Commitments under the revolving credit facility totaled $523 million through February 2022, after which the total commitments decreased to $450 million through maturity in February 2024.

(8)Includes loan premiums, discounts and deferred financing costs, net of accumulated amortization.

Mortgage Loans

Of the total outstanding debt at March 31, 2022, none of the mortgage loans were recourse to the Company. As of March 31, 2022, the Company was not in compliance with its debt covenants on one mortgage loan which did not result in an event of default but allows the lender the option to institute a cash sweep until covenant compliance is achieved for a period of time specified in the loan agreement. The cash sweep permits the lender to withdraw excess cash generated by the property into a separate bank account that they control, which may be used to reduce the outstanding loan balance. The mortgage loan agreements require contributions to be made to FF&E reserves. In addition, certain quarterly financial covenants have been waived for a period of time specified in the respective amended loan agreements and certain financial covenants have been adjusted following the waiver periods.

In January 2022, the Company repaid in full the $65.0 million outstanding balance on the mortgage loan collateralized by The Ritz-Carlton, Pentagon City.

Corporate Credit Facilities

Certain financial covenants related to the Company's amended corporate credit facilities have been suspended until the date that financial statements are required to be delivered thereunder for the fiscal quarter ending June 30, 2022 (such period, unless

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earlier terminated by the Operating Partnership in accordance with the terms of the corporate credit facilities, the "covenant waiver period") and, once quarterly testing resumes, certain financial covenants have been modified through the second quarter in 2023. In addition, the amended corporate credit facilities have certain restrictions and covenants which are applicable during the covenant waiver period, including (i) mandatory prepayment requirements, (ii) affirmative covenants related to the pledge of equity of certain subsidiaries and (iii) negative covenants restricting certain acquisitions, investments, capital expenditures, ground leases and distributions. A minimum liquidity covenant also applies during the covenant waiver period.

As of March 31, 2022, there was no outstanding balance on the revolving credit facility. During the three months ended March 31, 2022, the Company incurred unused commitment fees of approximately $0.4 million and did not incur interest expense. During the three months ended March 31, 2021, the Company incurred unused commitment fees of approximately $0.3 million and interest expense of $1.2 million.

Senior Notes

The indentures governing the Senior Notes contain customary covenants that limit the Operating Partnership's ability and, in certain circumstances, the ability of its subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends, redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the indentures.

Debt Outstanding

Total debt outstanding as of March 31, 2022 and December 31, 2021 was $1,449 million and $1,515 million, respectively, and had a weighted-average interest rate of 5.18% per annum for the periods then ended. The following table shows scheduled principal payments and debt maturities for the next five years and thereafter (in thousands):

	As of March 31, 2022		Weighted-  average interest rate
2022	$	3,632	4.08%
2023	5,537		4.13%
2024	280,160		3.94%
2025	503,512		6.36%
2026	54,379		4.53%
Thereafter	601,386		4.83%
Total Debt	$	1,448,606	5.18%
Revolving Credit Facility (matures in 2024)	—		3.00%
Loan premiums, discounts and unamortized deferred financing costs, net	(18,990)		—
Debt, net of loan premiums, discounts and unamortized deferred financing costs	$	1,429,616	5.18%

In connection with the repayment of one mortgage loan during the three months ended March 31, 2022, the Company wrote-off the related unamortized deferred financing costs of $0.3 million, which is included in loss on extinguishment of debt on the condensed consolidated statements of operations and comprehensive loss for the period then ended.

6. Derivatives

The Company primarily uses interest rate swaps as part of its interest rate risk management strategy for variable rate debt. As of March 31, 2022, all interest rate swaps were designated as cash flow hedges and involve the receipt of variable rate payments from a counterparty in exchange for making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. Unrealized gains and losses of hedging instruments are reported in other comprehensive income or loss on the condensed consolidated statements of operations and comprehensive loss. Amounts reported in accumulated other comprehensive loss related to currently outstanding derivatives are recognized as an adjustment to income or loss through interest expense as interest payments are made on the Company’s variable rate debt. During the three months ended March 31, 2022, the Company terminated two interest rate swaps prior to their maturity and incurred swap termination costs of

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$1.6 million which is included in other (loss) income on the condensed consolidated statements of operations and comprehensive loss for the period then ended.

Derivative instruments held by the Company with the right of offset in a net liability position were included in other liabilities on the condensed consolidated balance sheets.

The following table summarizes the terms of the derivative financial instruments held by the Company as of March 31, 2022 and December 31, 2021, respectively (in thousands):

						March 31, 2022				December 31, 2021
Hedged Debt	Type	Fixed Rate	Index	Effective Date	Maturity	Notional Amounts		Estimated Fair Value		Notional Amounts		Estimated Fair Value
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	$	50,000	$	(160)	$	50,000	$	(591)
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(295)
Mortgage Debt	Swap	1.84%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(297)
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(296)
$125M Term Loan	Swap	1.91%	1-Month LIBOR	10/13/2017	9/13/2022	40,000		(147)		40,000		(445)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	40,000		(148)		40,000		(446)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	25,000		(93)		25,000		(279)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	20,000		(74)		20,000		(223)
Mortgage Debt(1)	Swap	2.80%	1-Month LIBOR	6/1/2018	2/1/2023	—		—		24,000		(598)
Mortgage Debt(1)	Swap	2.89%	1-Month LIBOR	1/17/2019	2/1/2023	—		—		41,000		(1,061)
						$	250,000	$	(862)	$	315,000	$	(4,531)

(1)    The Company terminated two interest rate swaps prior to maturity in connection with the repayment of the mortgage loan collateralized by The Ritz-Carlton, Pentagon City in January 2022.

The table below details the location in the condensed consolidated financial statements of the gains and losses recognized on derivative financial instruments designated as cash flow hedges for the three months ended March 31, 2022 and 2021 (in thousands):

		Three Months Ended March 31,
		2022		2021
Effect of derivative instruments:	Location in Statements of Operations and Comprehensive Loss:
Gain recognized in other comprehensive loss	Unrealized gain on interest rate derivative instruments	$	2,517	$	104
Gain reclassified from accumulated other comprehensive loss to net loss	Reclassification adjustment for amounts recognized in net loss (interest expense)	$	1,152	$	2,330
Total interest expense in which effects of cash flow hedges are recorded	Interest expense	$	20,538	$	18,750
Realized loss on termination of derivative instruments	Other (loss) income	$	(1,555)	$	—

The Company expects approximately $0.8 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense in the next 12 months.

7. Fair Value Measurements

The Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

•Level 1 - Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access.

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•Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.

For assets and liabilities measured at fair value on a recurring basis and non-recurring basis, quantitative disclosure of their fair values are included in the condensed consolidated balance sheets as of as of March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurement Date
	March 31, 2022				December 31, 2021
Location on Condensed Consolidated Balance Sheets/Description of Instrument	Observable Inputs  (Level 2)		Significant Unobservable Inputs  (Level 3)		Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)
Recurring measurements
Liabilities
Interest rate swaps(1)	$	(862)	$	—	$	(4,531)	$	—
Non-recurring measurements
Net investment properties
Kimpton Hotel Monaco Chicago	$	—	$	—	$	34,093	$	—

(1)Interest rate swap fair values are netted as applicable per the terms of the respective master netting agreements.

Recurring Measurements

The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows under each arrangement. This analysis reflects the contractual terms of the derivative instrument, including the period to maturity, and utilizes observable market-based inputs, including interest rate curves and implied volatilities, which are classified within Level 2 of the fair value hierarchy. The Company also incorporates credit value adjustments to appropriately reflect each parties’ nonperformance risk in the fair value measurement, which utilizes Level 3 inputs such as estimates of current credit spreads. However, the Company has assessed that the credit valuation adjustments are not significant to the overall valuation of the derivatives and, as a result, its derivative valuations in their entirety are classified within Level 2 of the fair value hierarchy.

Non-Recurring Measurements

Investment Properties

In November 2021, the Company entered into an agreement to sell the 191-room Kimpton Hotel Monaco Chicago for $36.0 million. Management estimated the future undiscounted cash flows for the scenario of a shortened hold period and for holding the asset long-term. Based on the results of the probability weighted-average undiscounted cash flow analysis, management determined the hotel was impaired as the estimated undiscounted cash flows were less than the carrying value of the hotel as of December 31, 2021. Management determined the impairment loss as the difference between the carrying value and the estimated fair value. The fair value was estimated using Level 2 assumptions, including values from market participants. As a result, for the year ended December 31, 2021, the Company recorded an impairment loss of $15.7 million, which is included in impairment and other losses on the consolidated statement of operations and comprehensive (loss) income for the period then ended. The sale closed in January 2022.

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Financial Instruments Not Measured at Fair Value

The table below represents the fair value of financial instruments presented at carrying values in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Total Mortgage and Corporate Credit Facility Term Loan	$	448,606	$	434,669	$	514,538	$	503,265
Senior Notes	1,000,000		1,012,823		1,000,000		1,055,323
Revolving Credit Facility	—		—		—		—
Total	$	1,448,606	$	1,447,492	$	1,514,538	$	1,558,588

The Company estimated the fair value of its total debt, net of discounts, using a weighted-average effective interest rate of 5.59% and 5.23% per annum as of March 31, 2022 and December 31, 2021, respectively. The assumptions reflect the terms currently available to borrowers with credit profiles similar to the Company's. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy.

8. Income Taxes

The Company estimated the TRS income tax expense for the three months ended March 31, 2022 using an estimated federal and state combined effective tax rate of 16.00% and recognized an income tax expense of $1.6 million.

The Company estimated the TRS income tax expense for the three months ended March 31, 2021 using an estimated federal and state combined effective tax rate of 2.45% and recognized an income tax expense of $0.2 million. The income tax expense for three months ended March 31, 2021 was primarily attributed to state taxes levied on gross receipts.

9. Stockholders' Equity

Common Stock

The Company maintains an "At-the-Market" ("ATM") program pursuant to an Equity Distribution Agreement ("ATM Agreement") with Wells Fargo Securities, LLC, Robert W. Baird & Co. Incorporated, Jefferies LLC, KeyBanc Capital Markets Inc. and Raymond James & Associates, Inc. In accordance with the terms of the ATM Agreement, the Company may from time to time offer and sell shares of its common stock having an aggregate offering price of up to $200 million. In May 2021, the Company upsized the ATM Agreement and, as a result, had $200 million available for sale as of March 31, 2022. No shares were sold under the ATM Agreement during the three months ended March 31, 2022 and 2021. As of March 31, 2022, and December 31, 2021, the Company had accumulated offering related costs included in other assets on the condensed consolidated balance sheets of $0.8 million and $0.7 million, respectively. These amounts will be reclassified to additional paid in capital to offset proceeds from the sale of common stock. Any remaining accumulated offering costs will be written off when the existing registration statement expires in August 2023.

The Board of Directors has authorized a stock repurchase program pursuant to which the Company is authorized to purchase up to $175 million of the Company’s outstanding common stock in the open market, in privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 plans (the "Repurchase Program"). The Repurchase Program does not have an expiration date. This Repurchase Program may be suspended or discontinued at any time and does not obligate the Company to acquire any particular amount of shares. As of March 31, 2022, the Company had approximately $94.7 million remaining under its share repurchase authorization.

No shares were purchased as part of the Repurchase Program during the three months ended March 31, 2022 and 2021. The Company is prohibited under the terms of the amended corporate credit facilities from making repurchases of the Company's common stock until the Company achieves compliance with applicable debt covenants and the Company's covenant waiver period ends.

Distributions

The Company has suspended its quarterly dividend in order to preserve liquidity and did not declare any dividends during the three months ended March 31, 2022 and 2021. The Company's ability to make distributions is currently limited by the

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provisions of the Company's amended corporate credit facilities. The Company will evaluate if and when to resume paying dividends in the future based on business and economic conditions and the requirement to distribute 90% of REIT taxable income in order to remain qualified as a REIT.

Non-Controlling Interest of Common Units in Operating Partnership

As of March 31, 2022, the Operating Partnership had 3,385,789 LTIP Units outstanding, representing a 2.9% partnership interest held by the limited partners. Of the 3,385,789 LTIP Units outstanding at March 31, 2022, 1,057,195 units had vested and had yet to be converted or redeemed. Only vested LTIP Units may be converted to common units of the Operating Partnership, which in turn can be tendered for redemption per the terms of the partnership agreement of the Operating Partnership.

10. Earnings Per Share

Basic earnings per common share is calculated by dividing net income or loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income or loss available to common stockholders by the weighted-average number of common shares outstanding during the period plus any shares that could potentially be outstanding during the period. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation.

Unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested share-based compensation have been excluded, as applicable, from net income or loss available to common stockholders used in the basic and diluted earnings per share calculations.

Income or loss allocated to non-controlling interests in the Operating Partnership has been excluded from the numerator and Operating Partnership Units and LTIP Units in the Operating Partnership have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact.

The following table reconciles net loss attributable to common stockholders to basic and diluted earnings per share (in thousands, except share and per share data):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net loss available to common stockholders	$	(5,324)	$	(56,351)
Denominator:
Weighted-average shares outstanding - Basic	114,326,406		113,780,388
Effect of dilutive share-based compensation(1)	—		—
Weighted-average shares outstanding - Diluted	114,326,406		113,780,388
Basic and diluted loss per share:
Net loss per share available to common stockholders - basic and diluted	$	(0.05)	$	(0.50)

(1)During the three months ended March 31, 2022 and 2021, the Company excluded 423,043 and 546,124 anti-dilutive shares from its calculation of diluted earnings per share, respectively.

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11. Share-Based Compensation

2015 Incentive Award Plan

Restricted Stock Unit Grants

The Compensation Committee of the Board of Directors approved the following grants of restricted stock units to certain Company employees:

Grant Date	Grant Description	Time-Based Grants	Performance-Based Grants	Weighted-Average Grant Date Fair Value
February 2022	2022 Restricted Stock Units	91,272	47,944	$	16.09

Each award of time-based Restricted Stock Units will vest as follows, subject to continued employment with the Company or its affiliates through each applicable vesting date: 33% on the first anniversary of the vesting commencement date, 33% on the second anniversary of the vesting commencement date, and 34% on the third anniversary of the vesting commencement date.

The performance-based Restricted Stock Units are designated twenty-five percent (25%) as absolute total stockholder return ("TSR") units and seventy-five percent (75%) as relative TSR share units. The absolute TSR share units vest based on achievement of varying levels of the Company's TSR over the three-year performance period. The relative TSR share units vest based on the ranking of the Company's TSR as compared to a defined peer group over the three-year performance period. Vesting of performance-based Restricted Stock Units is also subject to continued employment with the Company or its affiliates through the applicable vesting date.

In March 2022, pursuant to the Company's Director Compensation Program, 451 fully vested shares of common stock with a grant date fair value of $18.50 per share were granted to a non-employee director in connection with such non-employee director's appointment to the Company's Board of Directors.

LTIP Unit Grants

The Compensation Committee of the Board of Directors approved the issuance of the following awards under the 2015 Incentive Award Plan:

Grant Date	Grant Description	Time-Based LTIP Units	Performance-Based Class A LTIP Units	Weighted-Average Grant Date Fair Value
February 2022	2022 LTIP Units	101,474	816,843	$	10.49

Each award of time-based LTIP Units will vest as follows, subject to continued employment with the Company or its affiliates through each applicable vesting date: 33% on the first anniversary of the vesting commencement date, 33% on the second anniversary of the vesting commencement date, and 34% on the third anniversary of the vesting commencement date.

A portion of each award of Class A LTIP Units are designated as a number of "base units". The base units are designated twenty-five percent (25%) as absolute TSR base units, and vest based on achievement of varying levels of the Company's TSR over the three-year performance period. The other seventy-five percent (75%) of the base units are designated as relative TSR base units and vest based on the ranking of the Company's TSR as compared to a defined peer group over the three-year performance period. Vesting of Class A LTIP Units is also subject to continued employment with the Company or its affiliates through the vesting date.

LTIP Units (other than unvested Class A LTIP Units), whether vested or unvested, receive the same quarterly per-unit distributions as common units in the Operating Partnership, which equal the per-share distributions on the common stock of the Company. Class A LTIP Units that have not vested receive a quarterly per-unit distribution equal to 10% of the distribution paid on common units in the Operating Partnership.

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The following is a summary of the unvested incentive awards under the 2015 Incentive Award Plan as of March 31, 2022:

	2015 Incentive Award Plan Restricted Stock Units		2015 Incentive Award Plan LTIP Units(1)		Total
Unvested as of December 31, 2021	261,727		1,500,317		1,762,044
Granted	139,667		918,317		1,057,984
Vested(2)	(63,024)		(90,040)		(153,064)
Forfeited	—		—		—
Unvested as of March 31, 2022	338,370		2,328,594		2,666,964
Weighted-average fair value of unvested shares/units	$	14.94	$	11.42	$	11.86

(1)    Includes time-based LTIP Units and performance-based Class A LTIP Units.

(2)    During the three months ended March 31, 2022 and 2021, 16,478 and 18,993 shares of common stock, respectively, were withheld by the Company upon the settlement of the applicable awards in order to satisfy minimum tax withholding requirements with respect to Restricted Stock Units granted under the 2015 Incentive Award Plan.

The grant date fair values of the vested common stock, time-based Restricted Stock Units and time-based LTIP Units were determined based on the closing price of the Company’s common stock on the grant date and compensation expense is recognized on a straight-line basis over the vesting period. The grant date fair values of performance-based awards are determined based on a Monte Carlo simulation method with the following assumptions and compensation expense is recognized on a straight-line basis over the performance period:

Performance Award Grant Date	Percentage of Total Award	Grant Date Fair Value by Component (in dollars)	Volatility	Interest Rate	Dividend Yield
February 25, 2022
Absolute TSR Restricted Stock Units	25%	$9.72	41.28%	0.68% - 1.72%	—%
Relative TSR Restricted Stock Units	75%	$11.70	41.28%	0.68% - 1.72%	—%
Absolute TSR Class A LTIP Units	25%	$9.62	41.28%	0.68% - 1.72%	—%
Relative TSR Class A LTIP Units	75%	$11.33	41.28%	0.68% - 1.72%	—%

The absolute and relative total stockholder returns are market conditions as defined by Accounting Standard Codification ("ASC") 718, Compensation - Stock Compensation. Market conditions include provisions wherein the vesting condition is met through the achievement of a specific value of the Company’s common stock, which is total stockholder return in this case. Market conditions differ from other performance awards under ASC 718 in that the probability of attaining the condition (and thus vesting of the units or shares) is reflected in the initial grant date fair value of the award.

Accordingly, it is not appropriate to reconsider the probability of vesting in the award subsequent to the initial measurement of the award, nor is it appropriate to reverse any of the expense if the condition is not met. As such, once the expense for these awards is measured, the expense must be recognized over the vesting period regardless of whether the target is met, or at what level the target is met. Expense may only be reversed if the holder of the instrument forfeits the award as a result of the holder's termination of service to the Company prior to vesting.

For the three months ended March 31, 2022, the Company recognized approximately $2.2 million of share-based compensation expense (net of forfeitures) related to fully vested Restricted Stock Units and LTIP Units provided to its executive officers and certain corporate employees. In addition, for the three months ended March 31, 2022, the Company capitalized approximately $0.2 million related to Restricted Stock Units provided to certain other employees who oversee development and capital projects on behalf of the Company. As of March 31, 2022, there was $20.7 million of total unrecognized compensation costs related to unvested Restricted Stock Units, Class A LTIP Units and Time-Based LTIP Units issued under the 2015 Incentive Award Plan, which are expected to be recognized over a remaining weighted-average period of 2.15 additional years.

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For the three months ended March 31, 2021, the Company recognized approximately $2.3 million of share-based compensation expense (net of forfeitures) related to Restricted Stock Units and LTIP Units provided to certain of its executive officers and other members of management. In addition, for the three months ended March 31, 2021, the Company capitalized approximately $0.4 million related to Restricted Stock Units provided to certain members of management who oversee development and capital projects on behalf of the Company.

12. Commitments and Contingencies

Leases

The Company is a lessee to long-term ground, parking, and its corporate office leases, which are accounted for as operating leases. The following is a summary of the Company's leases as of and for the three months ended March 31, 2022 (dollar amounts in thousands):

	March 31, 2022
Weighted-average remaining lease term, including reasonably certain extension options(1)	21 years
Weighted-average discount rate	5.70%
ROU asset(2)	$	19,366
Lease liability(3)	$	20,637
Operating lease rent expense	$	537
Variable lease costs	812
Total rent and variable lease costs	$	1,349

(1)The weighted-average remaining lease term including all available extension options is approximately 56 years.

(2)The ROU asset is included in other assets on the condensed consolidated balance sheet as of March 31, 2022.

(3)The lease liability is included in other liabilities on the condensed consolidated balance sheet as of March 31, 2022.

The following table shows the remaining lease payments, which includes reasonably certain extension options, for the next five years and thereafter reconciled to the lease liability as of March 31, 2022 (in thousands):

	Year Ending December 31, 2022
2022 (excluding the three months ended March 31, 2022)	$	1,596
2023	2,142
2024	2,157
2025	2,172
2026	2,188
Thereafter	26,648
Total undiscounted lease payments	$	36,903
Less imputed interest	(16,266)
Lease liability(1)	$	20,637

(1)The lease liability is included in other liabilities on the condensed consolidated balance sheet as of March 31, 2022.

Management and Franchise Agreements

In order to maintain its qualification as a REIT, the Company cannot directly or indirectly operate any of its hotels. The Company leases each hotel to TRS lessees, which in turn engage property managers to manage the hotels. Each hotel is operated pursuant to a hotel management agreement with an independent third-party hotel management company.

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Pursuant to the hotel management agreements, the management company controls the day-to-day operation of each hotel, and the Company is granted limited approval rights with respect to certain of the management company’s actions. The hotel management agreements typically contain a two-tiered fee structure, wherein the management company receives a base management fee and, if certain financial thresholds are met or exceeded, an incentive management fee. Many hotel management agreements also require the maintenance of a capital reserve fund based on a percentage of hotel revenues to be used for capital expenditures to maintain the quality of the hotels.

Management agreements for brand-managed hotels have terms generally ranging from 5 to 32 years and allow for one or more renewal periods at the option of the hotel manager. Assuming all renewal periods are exercised, the average remaining term is 26 years. Management agreements for franchised hotels generally contain initial terms between 10 and 15 years with an average remaining initial term of approximately two years.

The Company is generally limited in its ability to sell, lease or otherwise transfer hotels unless the transferee assumes the related hotel management agreement. However, most agreements include owner rights to terminate the agreements on the basis of the manager’s failure to meet certain performance-based metrics. Typically, these criteria are subject to the manager’s ability to ‘cure’ and avoid termination by payment to the Company of specified deficiency amounts (or, in some instances, waiver of the right to receive specified future management fees).

Franchise agreements contain initial terms of 15 to 20 years, with an average remaining initial term of approximately eight years. The franchise agreements require royalty fees based on a percentage of gross rooms revenue and, for certain hotels, an additional fee based on a percentage of gross food and beverage revenue. In addition, franchise agreements require fees for marketing, reservation or other program fees based on a percentage of gross rooms revenue. Many franchise agreements also require the maintenance of a capital reserve fund based on a percentage of hotel revenues to be used for capital expenditures to maintain the quality of the hotels.

The Company incurred management and franchise expenses of $7.6 million and $2.8 million for the three months ended March 31, 2022 and 2021, respectively, which are included on the condensed consolidated statements of operations and comprehensive loss for the periods then ended.

Reserve Requirements

Certain franchise and management agreements require the Company to reserve funds relating to replacements and renewals of the hotels' furniture, fixtures and equipment. As of March 31, 2022 and December 31, 2021, the Company had a balance of $33.4 million and $29.3 million, respectively, in reserves for such future improvements. This amount is included in restricted cash and escrows on the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively.

Renovation and Construction Commitments

As of March 31, 2022, the Company had various contracts outstanding with third-parties in connection with the renovation of certain of its hotel properties. The remaining commitments under these contracts as of March 31, 2022 totaled $6.9 million.

Legal

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the financial condition of the Company.

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

Certain statements in this Quarterly Report on Form 10-Q, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include statements about Xenia’s plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions,prospects or future events and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” “illustrative” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by Xenia and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. Forward-looking statements in this Form 10-Q include, among others, statements about our plans, strategies and the effects of the COVID-19 pandemic, including on the demand for travel (including leisure travel and transient and group business travel), capital expenditures and the timing of renovations, and derivations thereof, financial performance, prospects or future events. There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors include, among others: the factors set forth under “Part I-Item 1A. Risk Factors” and “Part II-Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 1, 2022, as may be updated elsewhere in this report; and the information set forth in other Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we have filed or will file with the SEC; the short- and longer-term effects of the COVID-19 pandemic, including on the demand for travel (including leisure travel and transient and group business travel), and levels of consumer confidence; actions that governments, businesses, and individuals take in response to the COVID-19 pandemic or any resurgence of the disease or its variants, including limiting or banning travel and implementation of social distancing requirements; the impact of the COVID-19 pandemic, and actions taken in response to the COVID-19 pandemic or any resurgence of the disease or its variants, on global and regional economies, travel, and economic activity, including the duration and magnitude of its impact on unemployment rates, impacts to supply chains, and consumer discretionary spending; the broad distribution of COVID-19 vaccines and boosters and wide acceptance by the general population of such vaccines and boosters; the effectiveness of the vaccines and boosters; the ability of third-party managers or other partners to successfully navigate the impacts of the COVID-19 pandemic including labor shortages; the pace of recovery following the COVID-19 pandemic or any resurgence of the disease or its variants; COVID-19 may cause us to incur additional expenses; our ability to successfully negotiate amendments and covenant waivers under our indebtedness; our ability to comply with contractual covenants; business, financial and operating risks inherent to real estate investments and the lodging industry; seasonal and cyclical volatility in the lodging industry; adverse changes in specialized industries, such as the energy, technology and/or tourism industries that result in a sustained downturn of related businesses and corporate spending that may negatively impact our revenues and results of operations; difficulties in procuring required products caused by supply chain disruptions; macroeconomic and other factors beyond our control that can adversely affect and reduce demand for hotel rooms, food and beverage services, and/or meeting facilities, including inflation; contraction in the U.S. and/or global economy or low levels of economic growth; inflationary pressures which increases our labor and other costs of providing services to guests and meeting hotel brand standards, as well as costs related to construction and other capital expenditures, property and other taxes, and insurance which could result in reduced operating profit margins; levels of spending in business and leisure segments as well as consumer confidence; declines in occupancy and average daily rate; decreased demand for business travel due to technological advancements and preferences for virtual over in-person meetings and/or changes in guest and consumer preferences, including consideration of the impact of travel on the environment; fluctuations in the supply of hotels, due to hotel construction and/or renovation and expansion of existing hotels, and demand for hotel rooms; changes in the competitive environment in the lodging industry, including due to consolidation of management companies, franchisors and online travel agencies, and changes in the markets where we own hotels; events beyond our control, such as war, terrorist or cyber-attacks, mass casualty events, government shutdowns and closures, travel-related health concerns, and natural disasters; cyber incidents and information technology failures, including unauthorized access to our computer systems and/or our vendors' computer systems, and our third-party management companies' or franchisors' computer systems and/or their vendors' computer systems; our inability to directly operate our properties and reliance on third-party hotel management companies to operate and manage our hotels; our ability to maintain good relationships with our third-party hotel management companies and franchisors; our failure to maintain and/or comply with brand operating standards; our ability to maintain our brand licenses at our hotels; relationships with labor unions and changes in labor laws (including increases in minimum wages); loss of our senior management team or key corporate personnel; our ability to identify and consummate acquisitions and dispositions of hotels; our ability to integrate and successfully operate any hotel properties acquired in the future and the risks

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associated with these hotel properties; the impact of hotel renovations, repositionings, redevelopments and re-branding activities; our ability to access capital for renovations and acquisitions and general operating needs on terms and at times that are acceptable to us; the fixed cost nature of hotel ownership; our ability to service, restructure or refinance our debt; changes in interest rates and operating costs, including labor and service related costs; compliance with regulatory regimes and local laws; uninsured or under insured losses, including those relating to natural disasters, the physical effects of climate change, civil unrest, terrorism or cyber-attacks; changes in distribution channels, such as through internet travel intermediaries or websites that facilitate short-term rental of homes and apartments from owners; the amount of debt that we currently have or may incur in the future; provisions in our debt agreements that may restrict the operation of our business; our organizational and governance structure; our status as a real estate investment trust (“REIT”); our taxable REIT subsidiary (“TRS”) lessee structure; the cost of compliance with and liabilities under environmental, health and safety laws; adverse litigation judgments or settlements; changes in real estate and zoning laws; increases in insurance or other fixed costs and increases in real property tax valuations or rates; changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting REITs; changes in governmental regulations or interpretations thereof; and estimates relating to our ability to make distributions to our stockholders in the future.

These factors are not necessarily all of the important factors that could cause our actual financial results, performance, achievements or prospects to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. 

The following discussion and analysis should be read in conjunction with the Company’s Unaudited Condensed Consolidated Financial Statements and accompanying notes, which appear elsewhere in this Quarterly Report on Form 10-Q.

Overview

Xenia Hotels & Resorts, Inc. ("we", "us", "our", "Xenia" or the "Company") is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on top 25 lodging as well as key leisure destinations in the United States. As of March 31, 2022, we owned 34 hotels, comprising 9,814 rooms, across 14 states. Our hotels are operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, Hilton, The Kessler Collection and Davidson.

Ongoing Impact of COVID-19 on our Business

The onset and global spread of the COVID-19 pandemic led federal, state and local governments in the United States to impose measures intended to control its spread, including restrictions on freedom of movement and business operations, and also to implement multi-step phased policies of re-opening regions of the country. The effects of the COVID-19 pandemic on the hotel industry have been significant and unprecedented.

We began to see improvements in leisure demand during the second half of 2020, a trend that accelerated in 2021 and has continued into 2022. During the first quarter of 2022, operations continued to improve due to a re-acceleration in leisure travel and higher levels of business transient and group demand beginning in mid-February resulting in total portfolio ADR climbing above 2019 levels for the comparable period.

Despite this improvement, there remains significant uncertainty regarding the pace of recovery and whether and when business travel and larger group meetings will return to pre-pandemic levels. We may be impacted by, among other things, the distribution and acceptance of COVID-19 vaccines and boosters, breakthrough cases, and new variants of COVID-19, as well as the ongoing local and national response to the virus. As the recovery continues, we expect that the pace will vary from market to market and may be uneven in nature.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and XHR Holding. The Company's subsidiaries generally consist of limited liability companies, limited partnerships and the TRS. The effects of all inter-company transactions have been eliminated. Corporate costs directly associated with our principal executive offices, personnel and other administrative costs are reflected as general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

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Our Revenues and Expenses

Our revenue is primarily derived from hotel operations, including rooms revenue, food and beverage revenue and other revenue, which consists of parking, spa, resort fees, other guest services, and tenant leases, among other items.

Our operating costs and expenses consist of the costs to provide hotel services, including rooms expense, food and beverage expense, other direct and indirect operating expenses, and management and franchise fees. Rooms expense includes housekeeping wages and associated payroll taxes, room supplies, laundry services and front desk costs. Food and beverage expense primarily includes the cost of food, beverages and associated labor. Other direct and indirect hotel expenses include labor and other costs associated with the other operating department revenue, as well as labor and other costs associated with general and administrative departments, sales and marketing, information technology and telecommunications, repairs and maintenance and utility costs. We enter into management agreements with independent third-party management companies to operate our hotels. The management companies typically earn base and incentive management fees based on the levels of revenues and profitability of each individual hotel.

Key Indicators of Operating Performance

We measure hotel results of operations and the operating performance of our business by evaluating financial and nonfinancial metrics such as Revenue Per Available Room ("RevPAR"); average daily rate ("ADR"); occupancy rate ("occupancy"); earnings before interest, income taxes, depreciation and amortization for real estate ("EBITDAre") and Adjusted EBITDAre; and funds from operations ("FFO") and Adjusted FFO. We evaluate individual hotel and company-wide performance with comparisons to budgets, prior periods and competing properties. RevPAR, ADR, and occupancy may be impacted by macroeconomic factors as well as regional and local economies and events. See "Non-GAAP Financial Measures" for further discussion of the Company's use, definitions and limitations of EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO and the reasons management believes these financial measures are useful to investors.

Results of Operations

Lodging Industry Overview

We began to see improvements in leisure demand during the second half of 2020, a trend that accelerated in 2021 and has continued into the first quarter of 2022. Further, by mid-February, we began to experience higher levels of business transient and group business. Despite this relative improvement, there is still significant uncertainty regarding the pace of recovery and the length of time it will take for business travel and larger group meetings to return to pre-pandemic levels.

The U.S. lodging industry has historically exhibited a strong correlation to U.S. GDP, which decreased at an estimated annual rate of approximately 1.4% during the first quarter of 2022, according to the U.S. Department of Commerce, compared to the annual rate growth trend from the third and fourth quarters of 2021 of 2.3% and 6.9%, respectively. The decrease during the first quarter reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending that were partially offset by increases in personal consumption expenditures, nonresidential fixed investment, residential fixed investment, and imports. In addition, the unemployment rate fell to 3.6% in March from 3.9% in December 2021 and from 4.8% in September 2021. The unemployment rate has declined considerably from the April 2020 high of 14.7%.

The U.S. lodging industry has been more acutely impacted by the COVID-19 pandemic than the overall U.S. economy and other industries and has not experienced the same level of recovery as the U.S. economy which is largely due to the persistence of the COVID-19 pandemic and its variants and sentiment towards business and leisure travel as a result of the pandemic. Additionally, we expect the recovery of the lodging industry will take longer than it will for the broader economy and many other industries. Further, we continue to monitor and evaluate the challenges associated with inflationary pressures, the evolving workforce landscape, particularly related to achieving the appropriate balance between hotel staffing levels and demand as business at our hotels increases as well as ongoing supply chain issues which may continue to impact the hotels' ability to source operating supplies and other materials.

Demand and new hotel supply increased 26.4% and 4.0%, respectively, during the three months ended March 31, 2022. The significant increase in demand led to increases in industry RevPAR of 67.2% for the three months ended March 31, 2022 compared to 2021, which was driven by an increase in occupancy of 21.6% coupled with an increase of 37.5% in ADR, respectively. All U.S. data for the three months ended March 31, 2022 are per industry reports.

First Quarter 2022 Overview

Our total portfolio RevPAR, which includes the results of hotels sold or acquired for the period of ownership by the Company, increased 133.1% to $143.99 for the three months ended March 31, 2022 compared to $61.76 for the three months ended March 31, 2021 driven by increases in leisure transient business and improving business transient and corporate group demand.

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Net loss decreased 90.6% for the three months ended March 31, 2022 compared to 2021, which was primarily attributed to an increase in operating income of $59.3 million from the 33 hotels owned during the three months ended March 31, 2022 and 2021 as a result of a recovery from the COVID-19 pandemic, a $0.7 million reduction in operating loss attributed to the sale of hotels in November 2021 and January 2022 and a $0.2 million increase in operating income attributed to the acquisition of W Nashville. These increases were partially offset by a $1.8 million increase in interest expense attributed to a higher weighted-average interest rate coupled with an increase in weighted-average debt outstanding, a $1.4 million increase in income tax expense, a $1.3 million increase in impairment and other losses, a $1.1 million reduction attributed to business interruption proceeds, a $0.9 million increase in corporate general and administrative expenses, other losses of $0.8 million in 2022 compared to other income of $0.1 million in 2021 and a $0.3 million increase in loss on extinguishment of debt.

Adjusted EBITDAre and Adjusted FFO attributable to common stock and unit holders for the three months ended March 31, 2022 increased 1,469.5% and 239.9%, respectively, compared to 2021, which was attributable to the extent and timing of the impact of the COVID-19 pandemic on our results of operations. Refer to "Non-GAAP Financial Measures" for the definition of these financial measures, a description of the reasons we believe they are useful to investors as key supplemental measures of our operating performance and the reconciliation of these non-GAAP financial measures to net loss attributable to common stock and unit holders.

Operating Information Comparison

The following table sets forth certain operating information for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
	2022			2021			Change
Number of properties at March 31	34			35			(1)
Number of rooms at March 31	9,814			10,011			(197)
Number of hotels open at March 31	34			34			—
Number of rooms in hotels open at March 31	9,814			9,511			303
Number of hotels with temporarily suspended operations at March 31	—			1			(1)
Number of rooms in hotels with temporarily suspended operations at March 31	—			600			(600)
	Three Months Ended March 31,
	2022			2021			Increase
Total Portfolio Statistics:
Occupancy (1)	56.6		%	32.7		%	2,390	bps
ADR (1)	$	254.57		$	188.68		34.9	%
RevPAR (1)	$	143.99		$	61.76		133.1	%

(1)    For hotels acquired during the applicable period, includes operating statistics since the date of acquisition. For hotels disposed of during the period, operating results and statistics are included through the date of the respective disposition. The three months ended March 31, 2022 and 2021 includes hotels that had suspended operations for a portion of or all of the periods presented.

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Revenues

Revenues consists of rooms, food and beverage, and other revenues from our hotels, as follows (in thousands):

	Three Months Ended March 31,
	2022		2021		Increase		% Change
Revenues:
Rooms revenues	$	123,198	$	55,646	$	67,552	121.4	%
Food and beverage revenues	67,735		21,592		46,143		213.7	%
Other revenues	19,414		10,614		8,800		82.9	%
Total revenues	$	210,347	$	87,852	$	122,495	139.4	%

Rooms revenues

Rooms revenues increased by $67.6 million, or 121.4%, to $123.2 million for the three months ended March 31, 2022 from $55.6 million for the three months ended March 31, 2021 primarily due to increases in occupancy and ADR due to a recovery from the COVID-19 pandemic. Additionally, the acquisition of W Nashville in March 2022 contributed to the increase in rooms revenue by $0.3 million. The increase is net of a reduction of $1.2 million attributed to the sale of Marriott Charleston Town Center in November 2021 and Kimpton Hotel Monaco Chicago in January 2022 (collectively, "the hotels sold in November 2021 and January 2022").

Food and beverage revenues

Food and beverage revenues increased by $46.1 million, or 213.7%, to $67.7 million for the three months ended March 31, 2022 from $21.6 million for the three months ended March 31, 2021 primarily due to increases in occupancy due to a recovery from the COVID-19 pandemic. The impact from the acquisition of W Nashville in March 2022 was offset by the impact from the hotels sold in November 2021 and January 2022.

Other revenues

Other revenues increased by $8.8 million, or 82.9%, to $19.4 million for the three months ended March 31, 2022 from $10.6 million for the three months ended March 31, 2021 primarily due to a recovery from the COVID-19 pandemic. This increase includes $3.2 million in revenues from cancellations and attrition and is net of a reduction of $0.2 million attributed to the hotels sold in November 2021 and January 2022. The acquisition of W Nashville in March 2022 did not have a significant impact on other revenues.

Hotel Operating Expenses

Hotel operating expenses consist of the following (in thousands):

	Three Months Ended March 31,
	2022		2021		Increase		% Change
Hotel operating expenses:
Rooms expenses	$	29,217	$	15,537	$	13,680	88.0	%
Food and beverage expenses	45,610		18,178		27,432		150.9	%
Other direct expenses	5,294		3,198		2,096		65.5	%
Other indirect expenses	53,860		37,327		16,533		44.3	%
Management and franchise fees	7,626		2,844		4,782		168.1	%
Total hotel operating expenses	$	141,607	$	77,084	$	64,523	83.7	%

Total hotel operating expenses

In general, hotel operating costs fluctuate based on various factors, including occupancy, labor costs, utilities and insurance costs. Luxury and upper upscale hotels generally have higher fixed costs than other types of hotels due to the level of services and amenities provided to guests.

Total hotel operating expenses increased $64.5 million, or 83.7%, to $141.6 million for the three months ended March 31, 2022 from $77.1 million for the three months ended March 31, 2021 primarily due to increases in occupancy and other related

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operating costs due to the extent and timing of the impact of COVID-19. Additionally, W Nashville contributed to the increase in hotel operating expenses by $0.3 million. The increase in total hotel operating expenses is net of a reduction of $2.1 million attributed to the hotels sold in November 2021 and January 2022.

Corporate and Other Expenses

Corporate and other expenses consist of the following (in thousands):

	Three Months Ended March 31,
	2022		2021		Increase / (Decrease)		% Change
Depreciation and amortization	$	30,565	$	33,197	$	(2,632)	(7.9)	%
Real estate taxes, personal property taxes and insurance	10,855		10,540		315		3.0	%
Ground lease expense	517		403		114		28.3	%
General and administrative expenses	7,786		6,922		864		12.5	%
Gain on business interruption insurance	—		(1,116)		1,116		100.0	%
Impairment and other losses	1,278		—		1,278		100.0	%
Total corporate and other expenses	$	51,001	$	49,946	$	1,055	2.1	%

Depreciation and amortization

Depreciation and amortization expense decreased $2.6 million, or 7.9%, to $30.6 million for the three months ended March 31, 2022 from $33.2 million for the three months ended March 31, 2021. This decrease was primarily attributed to the timing of fully depreciated assets during the comparable periods and a reduction in depreciation expense related to the hotels sold in November 2021 and January 2022. The acquisition of W Nashville in March 2022 did not have a significant impact on depreciation and amortization expense.

Real estate taxes, personal property taxes and insurance

Real estate taxes, personal property taxes and insurance expense increased $0.3 million, or 3.0%, to $10.9 million for the three months ended March 31, 2022 from $10.5 million for the three months ended March 31, 2021. This increase was primarily attributed a $1.5 million non-recurring property tax refund received in 2021 and increases in insurance premiums of $0.8 million. These increases were partially offset by a $1.3 million reduction in real estate taxes and a $0.5 million reduction related to the hotels sold in November 2021 and January 2022. The acquisition of W Nashville in March 2022 did not have a significant impact.

General and administrative expenses

General and administrative expenses increased $0.9 million, or 12.5%, to $7.8 million for the three months ended March 31, 2022 from $6.9 million for the three months ended March 31, 2021 primarily due to increases in corporate employee related compensation.

Gain on business interruption insurance

Gain on business interruption insurance was $1.1 million for the three months ended March 31, 2021, which was attributed to insurance proceeds for a portion of lost revenue associated with cancellations related to the COVID-19 pandemic.

Impairment and other losses

In August 2021, Hurricane Ida impacted Loews New Orleans Hotel located in New Orleans, Louisiana. During the three months ended March 31, 2022, the Company expensed additional hurricane-related repair and cleanup costs of $1.3 million.

Non-Operating Income and Expenses

Non-operating income and expenses consist of the following (in thousands):

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	Three Months Ended March 31,
	2022		2021		Increase / (Decrease)	% Change
Non-operating income and expenses:
Other (loss) income	$	(777)	$	116	(893)	(769.8)	%
Interest expense	(20,538)		(18,750)		1,788	9.5	%
Loss on extinguishment of debt	(294)		—		294	100.0	%
Income tax expense	(1,607)		(165)		1,442	873.9	%

Other (loss) income

Other loss decreased $0.9 million, or 769.8%, to $0.8 million for the three months ended March 31, 2022 from income of $0.1 million for the three months ended March 31, 2021. The decrease was primarily attributed to the recognition of $1.6 million of costs associated with the termination of two interest rate hedges partially offset by a gain of $1.0 million from the receipt of insurance proceeds in excess of recognized losses associated with hurricane-related damage at Loews New Orleans Hotel.

Interest expense

Interest expense increased $1.8 million, or 9.5%, to $20.5 million for the three months ended March 31, 2022 from $18.8 million for the three months ended March 31, 2021. The increase was primarily due to an increase in the weighted-average interest rate and an increase in the outstanding debt as of March 31, 2022 compared to 2021. Refer to Note 5 in the accompanying condensed consolidated financial statements for further discussion.

Loss on extinguishment of debt

The loss on extinguishment of debt of $0.3 million for the three months ended March 31, 2022 was attributable to the write-off of unamortized debt issuance costs upon the early repayment of one mortgage loan.

Income tax expense

Income tax expense increased $1.4 million, or 873.9%, to $1.6 million for the three months ended March 31, 2022 from $0.2 million for the three months ended March 31, 2021. The increase from prior year was primarily attributed to higher projected taxable income related to the recovery from the COVID-19 pandemic and the acquisition of W Nashville in March 2022 coupled with an increase in the effective tax rate for the first quarter of 2022 compared to 2021. These increases were partially offset by the use of the Company's federal and state net operation loss carryforwards.

Liquidity and Capital Resources

We expect to meet our short-term liquidity requirements from cash on hand, cash flow from hotel operations, use of our unencumbered asset base, asset dispositions, borrowings under our revolving credit facility, and proceeds from various capital market transactions, including issuances of debt and equity securities. The objectives of our cash management policy are to maintain the availability of liquidity and minimize operational costs.

On a long-term basis, our objectives are to maximize revenue and profits generated by our existing properties and acquired hotels, to further enhance the value of our portfolio and produce an attractive current yield, as well as to generate sustainable and predictable cash flow from our operations to distribute to our common stock and unit holders. We believe successful improvements to the performance of our portfolio will result in increased operating cash flows over time. Additionally, we may meet our long-term liquidity requirements through additional borrowings, the issuance of equity and debt securities, which may not be available on advantageous terms or at all, and/or proceeds from the sales of hotels.

Liquidity

As of March 31, 2022, we had $179.1 million of consolidated cash and cash equivalents and $40.2 million of restricted cash and escrows. The restricted cash as of March 31, 2022 primarily consisted of $33.4 million related to furniture, fixtures and equipment replacement reserves ("FF&E reserves") as required per the terms of our management and franchise agreements, cash held in restricted escrows of $4.3 million primarily for real estate taxes and mortgage escrows, $1.8 million in deposits made for capital projects and $0.7 million for disposition-related holdbacks.

As of March 31, 2022, there was no outstanding balance on our revolving credit facility and the full $450 million is available to be borrowed. Proceeds from future borrowings may be used for working capital, general corporate or other purposes permitted by the revolving credit agreement (subject to certain additional restrictions during the covenant waiver period).

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In May 2021, we upsized the ATM Agreement and, as a result, the we had $200 million available for sale under the ATM Agreement as of March 31, 2022. The terms of the amended revolving credit facility impose restrictions on the use of proceeds raised from equity issuances.

We remain committed to increasing total shareholder returns through the following priorities: (1) maximize revenue and profits generated by our existing properties and acquired hotels, including the continued focused management of expenses, (2) further enhance the value of our portfolio and produce an attractive current yield and (3) generate sustainable and predictable cash flow from our operations to distribute to our common stock and unit holders. Future determinations regarding the declaration and payment of dividends will be at the discretion of our Board of Directors and will depend on then-existing conditions, including our results of operations, payout ratio, capital requirements, financial condition, prospects, contractual arrangements, any limitations on payment of dividends present in our current and future debt agreements, maintaining our REIT status and other factors that our Board of Directors may deem relevant.

Debt and Loan Covenants

As of March 31, 2022, our outstanding total debt was $1.4 billion and had a weighted-average interest rate of 5.18%.

Mortgage Loans

In January 2022, the Company repaid in full the $65.0 million outstanding balance on the mortgage loan collateralized by The Ritz-Carlton, Pentagon City. Our mortgage loan agreements require contributions to be made to FF&E reserves. In addition, certain quarterly financial covenants have been waived for a period of time specified in the respective amended loan agreements and certain financial covenants have been adjusted following the waiver periods.

Corporate Credit Facilities

Certain financial covenants related to our amended corporate credit facilities have been suspended until the date that financial statements are required to be delivered thereunder for the fiscal quarter ending June 30, 2022 (such period, unless earlier terminated by the Operating Partnership in accordance with the terms of the corporate credit facilities, the "covenant waiver period") and, once quarterly testing resumes, certain financial covenants have been modified through the second quarter in 2023. In addition, the amended corporate credit facilities have certain restrictions and covenants which are applicable during the covenant waiver period, including (i) mandatory prepayment requirements, (ii) affirmative covenants related to the pledge of equity of certain subsidiaries and (iii) negative covenants restricting certain acquisitions, investments, capital expenditures, ground leases and distributions. A minimum liquidity covenant also applies during the covenant waiver period.

Senior Notes

The indentures governing the Senior Notes contain customary covenants that limit the Operating Partnership's ability and, in certain circumstances, the ability of its subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends, redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the indentures.

Debt Covenants

As of March 31, 2022, the Company was not in compliance with its debt covenants on one mortgage loan which did not result in an event of default but allows the lender the option to institute a cash sweep until covenant compliance is achieved for a period of time specified in the loan agreement. The cash sweep permits the lender to withdraw excess cash generated by the property into a separate bank account that they control, which may be used to reduce the outstanding loan balance.

Derivatives

As of March 31, 2022, we had eight interest rate swaps with an aggregate notional amount of $250.0 million. These swaps fix a portion of the variable interest rate on two of our mortgage loans for a portion of the term of each respective mortgage loan and fix LIBOR for a portion of the term of our one outstanding corporate credit facility term loan agented by KeyBank National Association. The corporate credit facility term loan spread may vary, as it is determined by the Company's leverage ratio. The applicable interest rate for the corporate credit facility term loan has been set to the highest level of grid-based pricing during the covenant waiver period. In addition, two interest rate swaps were terminated in January 2022 in connection with the repayment of a $65.0 million mortgage loan.

Our ability to apply hedge accounting in the future could be impacted to the extent that the payment terms of our loans change. The discontinuation of hedge accounting could result in future changes in the fair market values of hedges and/or a portion or

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all of the $0.8 million balance of accumulated other comprehensive loss as of March 31, 2022 to be recognized on the condensed consolidated statements of operations and comprehensive loss through net loss. Any future defaults by the Company under the terms of its hedges, including those which may arise from cross default provisions with loan agreements, could result in the Company being immediately liable for the fair market value liability of the defaulted hedges.

In March 2021, the Financial Conduct Authority ("FCA") announced that USD LIBOR will no longer be published after June 30, 2023. This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to the Secured Overnight Financing Rate ("SOFR"). Additionally, banking regulators were encouraging banks to discontinue new LIBOR debt issuance by December 31, 2021. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

All of our interest rate swap contracts mature prior to June 30, 2023. While we expect LIBOR to be available in substantially its current form through maturity, it is possible that LIBOR will become unavailable prior to that date. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified. The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.

Capital Markets

We maintain an established "At-the-Market" ("ATM") program pursuant to an Equity Distribution Agreement ("ATM Agreement") with Wells Fargo Securities, LLC, Robert W. Baird & Co. Incorporated, Jefferies LLC, KeyBanc Capital Markets Inc. and Raymond James & Associates, Inc. In accordance with the terms of the ATM Agreement, we may from time to time offer and sell shares of common stock having an aggregate offering price of up to $200 million. In May 2021, we upsized the ATM Agreement and, as a result, had $200 million available for sale as of March 31, 2022. No shares were sold under the ATM Agreement during the three months ended March 31, 2022 and 2021.

Our Board of Directors has authorized a stock repurchase program pursuant to which we are authorized to purchase up to $175 million of our outstanding common stock in the open market, in privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 plans (the "Repurchase Program"). The Repurchase Program does not have an expiration date. This Repurchase Program may be suspended or discontinued at any time and does not obligate us to acquire any particular amount of shares. As of March 31, 2022, we had approximately $94.7 million remaining under our share repurchase authorization.

No shares were purchased as part of the Repurchase Program during the three months ended March 31, 2022 and 2021. The terms of our amended corporate credit facilities currently prohibit us from making repurchases of our common stock until we achieve compliance with applicable debt covenants and our covenant waiver period ends.

Capital Expenditures and Reserve Funds

We maintain each of our properties in good repair and condition and in conformity with applicable laws and regulations, franchise agreements and management agreements. Routine capital expenditures are administered by the hotel management companies. However, we have approval rights over the capital expenditures as part of the annual budget process for each of our properties. From time to time, certain of our hotels may undergo renovations as a result of our decision to expand or upgrade portions of the hotels, such as guest rooms, public space, meeting space and/or restaurants, in order to better compete with other hotels in our markets. In addition, upon the acquisition of a hotel we may be required to complete a property improvement plan in order to bring the hotel into compliance with the respective brand standards. If permitted by the terms of the management agreement, funding for a renovation will first come from the FF&E reserves. We are obligated to maintain reserve funds with respect to certain agreements with our hotel management companies, franchisors and lenders to provide funds, generally 3% to 5% of hotel revenues, sufficient to cover the cost of certain capital improvements to the hotels and to periodically replace and update furniture, fixtures and equipment. Certain of the agreements require that we reserve this cash in separate accounts. To the extent that the FF&E reserves are not available or adequate to cover the cost of the renovation, we may fund a portion of the renovation with cash on hand, borrowings from our revolving credit facility and/or other sources of available liquidity. We have been, and will continue to be, prudent with respect to our capital spending, taking into account our cash flows from operations.

As of March 31, 2022 and December 31, 2021, we had a total of $33.4 million and $29.3 million, respectively, of FF&E reserves. During the three months ended March 31, 2022 and 2021, we made total capital expenditures of $7.5 million and $7.2 million, respectively.

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Off-Balance Sheet Arrangements

As of March 31, 2022, we had various contracts outstanding with third-parties in connection with the renovation of certain of our hotel properties. The remaining commitments under these contracts as of March 31, 2022 totaled $6.9 million.

Sources and Uses of Cash

Our principal sources of cash are cash flows from operations, borrowing under debt financings, including draws on our revolving credit facility, and from various types of equity offerings or the sale of our hotels. As a result of the impact the COVID-19 pandemic has had on our business, along with rising rates of inflation and interest rates, certain sources of capital may not be as readily available to us as they have been historically or may come at higher costs. Our principal uses of cash are asset acquisitions, capital investments, routine debt service and debt repayments, operating costs, corporate expenses and dividends. We may also elect to use cash to buy back our common stock in the future under the Repurchase Program. We are prohibited under the terms of the amended corporate credit facilities from making repurchases of our common stock until we achieve compliance with applicable debt covenants for a period of time and our covenant waiver period ends.

Comparison of the Three Months Ended March 31, 2022 to the Three Months Ended March 31, 2021

The table below presents summary cash flow information for the condensed consolidated statements of cash flows (in thousands):

	Three Months Ended March 31,
	2022		2021
Net cash provided by (used in) operating activities	$	32,572	$	(31,160)
Net cash used in investing activities	(301,092)		(6,547)
Net cash used in financing activities	(66,476)		(1,854)
Net decrease in cash and cash equivalents and restricted cash	$	(334,996)	$	(39,561)
Cash and cash equivalents and restricted cash, at beginning of period	554,231		428,786
Cash and cash equivalents and restricted cash, at end of period	$	219,235	$	389,225

Operating

•Cash provided by operating activities was $32.6 million and cash used in operating activities was $31.2 million for the three months ended March 31, 2022 and 2021, respectively. Cash flows from operating activities generally consist of the net cash generated by our hotel operations, partially offset by the cash paid for interest, corporate expenses and other working capital changes. Our cash flows from operating activities may also be affected by changes in our portfolio resulting from hotel acquisitions, dispositions or renovations. The net increase in cash from operating activities during the three months ended March 31, 2022 was primarily due to an increase in hotel operating income attributed to a recovery from the impact of the COVID-19 pandemic net of reductions from the hotels sold in November 2021 and January 2022. Refer to the "Results of Operations" section for further discussion of our operating results for the three months ended March 31, 2022 and 2021.

Investing

•Cash used in investing activities was $301.1 million and $6.5 million for the three months ended March 31, 2022 and 2021, respectively. Cash used in investing activities for the three months ended March 31, 2022 was attributed to $328.5 million for the acquisition of W Nashville and $7.5 million in capital improvements at our hotel properties, which was partially offset by net proceeds of $32.8 million from the disposition of Kimpton Hotel Monaco Chicago, $1.2 million of proceeds from property insurance and $0.9 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis. Cash used in investing activities for the three months ended March 31, 2021 was attributed to $7.2 million in capital improvements at our hotel properties, which was partially offset by $0.7 million of performance guaranty payments received that were recorded as a reduction in the respective hotel's cost basis.

Financing

•Cash used in financing activities was $66.5 million and $1.9 million for the three months ended March 31, 2022 and 2021, respectively. Cash used in financing activities for the three months ended March 31, 2022 was attributed the repayment of mortgage debt totaling $65.0 million, principal payments of mortgage debt totaling $0.9 million and shares redeemed to satisfy tax withholding on vested share-based compensation of $0.5 million. Cash used in financing activities for the three months ended March 31, 2021 was primarily attributed to principal payments of

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mortgage debt totaling $1.4 million and payments to satisfy withholding on vested share-based compensation of $0.4 million.

Non-GAAP Financial Measures

We consider the following non-GAAP financial measures to be useful to investors as key supplemental measures of our operating performance: EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss, operating profit, cash from operations, or any other operating performance measure as prescribed per GAAP.

EBITDA, EBITDAre and Adjusted EBITDAre

EBITDA is a commonly used measure of performance in many industries and is defined as net income or loss (calculated in accordance with GAAP) excluding interest expense, provision for income taxes (including income taxes applicable to sale of assets) and depreciation and amortization. We consider EBITDA useful to investors in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results, even though EBITDA does not represent an amount that accrues directly to common stockholders. In addition, EBITDA is used as one measure in determining the value of hotel acquisitions and dispositions and, along with FFO and Adjusted FFO, is used by management in the annual budget process for compensation programs.

We calculate EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines EBITDAre as EBITDA plus or minus losses and gains on the disposition of depreciated property, including gains or losses on change of control, plus impairments of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property in the affiliate, and adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.

We further adjust EBITDAre to exclude the impact of non-controlling interests in consolidated entities other than our Operating Partnership Units because our Operating Partnership Units may be redeemed for common stock. We also adjust EBITDAre for certain additional items such as depreciation and amortization related to corporate assets, hotel property acquisition, terminated transaction and pre-opening expenses, amortization of share-based compensation, non-cash ground rent and straight-line rent expense, the cumulative effect of changes in accounting principles, and other costs we believe do not represent recurring operations and are not indicative of the performance of our underlying hotel property entities. We believe it is meaningful for investors to understand Adjusted EBITDAre attributable to all common stock and unit holders. We believe Adjusted EBITDAre attributable to common stock and unit holders provides investors with another useful financial measure in evaluating and facilitating comparison of operating performance between periods and between REITs that report similar measures.

FFO and Adjusted FFO

We calculate FFO in accordance with standards established by Nareit, as amended in the December 2018 restatement white paper, which defines FFO as net income or loss (calculated in accordance with GAAP), excluding real estate-related depreciation, amortization and impairments, gains or losses from sales of real estate, the cumulative effect of changes in accounting principles, similar adjustments for unconsolidated partnerships and consolidated variable interest entities, and items classified by GAAP as extraordinary. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. We believe that the presentation of FFO provides useful supplemental information to investors regarding operating performance by excluding the effect of real estate depreciation and amortization, gains or losses from sales for real estate, impairments of real estate assets, extraordinary items and the portion of these items related to unconsolidated entities, all of which are based on historical cost accounting and which may be of lesser significance in evaluating current performance. We believe that the presentation of FFO can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common stockholders. Our calculation of FFO may not be comparable to measures calculated by other companies who do not use the Nareit definition of FFO or do not calculate FFO per diluted share in accordance with Nareit guidance. Additionally, FFO may not be helpful when comparing us to non-REITs. We present FFO attributable to common stock and unit holders, which includes our Operating Partnership Units because our Operating Partnership Units may be redeemed for common stock. We believe it is meaningful for the investor to understand FFO attributable to common stock and unit holders.

We further adjust FFO for certain additional items that are not in Nareit’s definition of FFO such as hotel property acquisition, terminated transaction and pre-opening expenses, amortization of debt origination costs and share-based compensation, non-cash ground rent and straight-line rent expense, and other items we believe do not represent recurring operations. We believe that Adjusted FFO provides investors with useful supplemental information that may facilitate comparisons of ongoing

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operating performance between periods and between REITs that make similar adjustments to FFO and is beneficial to investors’ complete understanding of our operating performance.

The following is a reconciliation of net loss to EBITDA, EBITDAre and Adjusted EBITDAre attributable to common stock and unit holders for the three months ended March 31, 2022 and 2021 (in thousands):

	Three Months Ended March 31,
	2022		2021
Net loss	$	(5,477)	$	(57,977)
Adjustments:
Interest expense	20,538		18,750
Income tax expense	1,607		165
Depreciation and amortization	30,565		33,197
EBITDA and EBITDAre	$	47,233	$	(5,865)
Reconciliation to Adjusted EBITDAre
Depreciation and amortization related to corporate assets	$	(102)	$	(100)
Gain on insurance recoveries(1)	(994)		—
Loss on extinguishment of debt	294		—
Amortization of share-based compensation expense	2,207		2,295
Non-cash ground rent and straight-line rent expense	16		19
Other non-recurring expenses(2)	1,292		4
Adjusted EBITDAre attributable to common stock and unit holders	$	49,946	$	(3,647)

(1)     During the three months ended March 31, 2022, the Company received $1.0 million of insurance proceeds in excess of recognized losses related to damage sustained at Loews New Orleans Hotel during Hurricane Ida in August 2021. This gain on insurance recovery is included in other (loss) income on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

(2)    During the three months ended March 31, 2022, the Company recorded hurricane-related repair and cleanup costs of $1.3 million which is included in impairment and other losses on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

The following is a reconciliation of net loss to FFO and Adjusted FFO attributable to common stock and unit holders for the three months ended March 31, 2022 and 2021 (in thousands):

	Three Months Ended March 31,
	2022		2021
Net loss	$	(5,477)	$	(57,977)
Adjustments:
Depreciation and amortization related to investment properties	30,463		33,097
FFO attributable to common stock and unit holders	$	24,986	$	(24,880)
Reconciliation to Adjusted FFO
Gain on insurance recoveries(1)	$	(994)	$	—
Loss on extinguishment of debt	294		—
Loan related costs, net of adjustment related to non-controlling interests(2)	1,286		1,767
Amortization of share-based compensation expense	2,207		2,295
Non-cash ground rent and straight-line rent expense	16		19
Other non-recurring expenses(3)	1,292		4
Adjusted FFO attributable to common stock and unit holders	$	29,087	$	(20,795)

(1)     During the three months ended March 31, 2022, the Company received $1.0 million of insurance proceeds in excess of recognized losses related to damaged sustained at Loews New Orleans Hotel during Hurricane Ida in August 2021. This gain on insurance recovery is included in other (loss) income on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

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(2)     Loan related costs include amortization of debt premiums, discounts and deferred loan origination costs.

(3)     During the three months ended March 31, 2022, the Company recorded hurricane-related repair and cleanup costs of $1.3 million which is included in impairment and other losses on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

Use and Limitations of Non-GAAP Financial Measures

EBITDA, EBITDAre, Adjusted EBITDAre, FFO, and Adjusted FFO do not represent cash generated from operating activities under GAAP and should not be considered as alternatives to net income or loss, operating profit, cash flows from operations or any other operating performance measure prescribed by GAAP. Although we present and use EBITDA, EBITDAre, Adjusted EBITDAre, FFO and Adjusted FFO because we believe they are useful to investors in evaluating and facilitating comparisons of our operating performance between periods and between REITs that report similar measures, the use of these non-GAAP measures has certain limitations as analytical tools. These non-GAAP financial measures are not measures of our liquidity, nor are they indicative of funds available to meet our cash needs, including our ability to fund capital expenditures, contractual commitments, working capital, service debt or make cash distributions. These measurements do not reflect cash expenditures for long-term assets and other items that we have incurred and will incur. These non-GAAP financial measures may include funds that may not be available for discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, and other commitments and uncertainties. These non-GAAP financial measures as presented may not be comparable to non-GAAP financial measures as calculated by other real estate companies.

We compensate for these limitations by separately considering the impact of the excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable GAAP financial measures, and our condensed consolidated statements of operations and comprehensive loss, include interest expense, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our GAAP results and the reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts may differ significantly from these estimates and assumptions. We evaluate our estimates, assumptions and judgments to confirm that they are reasonable and appropriate on an ongoing basis, based on information that is then available to us as well as our experience relating to various matters. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 and Note 2 in the accompanying condensed consolidated financial statements included herein.

Inflation

We rely on the performance of the hotels to increase revenues to keep pace with inflation. Generally, in a stable macroeconomic environment, our hotel operators possess the ability to adjust room rates daily, except for group or corporate rates contractually committed to in advance, although competitive pressures or prevailing economic conditions may limit the ability of our operators to raise rates faster than inflation or even at the same rate.

Seasonality

Demand in the lodging industry is affected by recurring seasonal patterns, which are greatly influenced by overall economic cycles, the geographic locations of the hotels and the customer mix at the hotels. The impact of the COVID-19 pandemic has disrupted, and is expected to continue to disrupt, our historical seasonal patterns.

New Accounting Pronouncements Not Yet Implemented

See Note 2 in the accompanying condensed consolidated financial statements included herein for additional information related to recently issued accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risk associated with changes in interest rates both in terms of variable rate debt and the price of new fixed rate debt upon maturity of existing debt and for acquisitions. Our exposure to market risk has not materially changed from what we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

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Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. If market rates of interest on all of our variable rate debt as of March 31, 2022 permanently increased or decreased by 1%, the increase or decrease in interest expense on our variable rate debt would decrease or increase future earnings and cash flows by approximately $0.3 million per annum. If market rates of interest on all of our variable rate debt as of December 31, 2021 permanently increased or decreased by 1%, the increase or decrease in interest expense on our variable rate debt would decrease or increase future earnings and cash flows by approximately $0.3 million per annum.

With regard to our variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both of our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.

We monitor interest rate risk using a variety of techniques, including periodically evaluating fixed interest rate quotes on all variable rate debt and the costs associated with converting to fixed rate debt. Also, existing fixed and variable rate loans that are scheduled to mature in the next two years are evaluated for possible early refinancing or extension due to consideration given to current interest rates. We have taken significant steps in reducing our variable rate debt exposure by paying off property-level mortgage debt and entering into various interest rate swap agreements to hedge the interest rate exposure risk related to several variable rate loans. Refer to Note 5 in the accompanying condensed consolidated financial statements included herein, for our debt principal amounts and weighted-average interest rates by year and expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Refer to Note 6 in the accompanying condensed consolidated financial statements for more information on our interest rate swap derivatives.

We may continue to use derivative instruments to hedge exposures to changes in interest rates on loans secured by our properties. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. We maintain credit policies with regard to our counterparties that we believe reduce overall credit risk. These policies include evaluating and monitoring our counterparties' financial condition, including their credit ratings, and entering into agreements with counterparties based on established credit limit policies. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

The following table provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations outstanding as of March 31, 2022, the following table presents principal repayments and related weighted-average interest rates by contractual maturity dates (in thousands):

	2022		2023		2024		2025		2026		Thereafter		Total		Fair Value
Maturing debt(1):
Fixed rate debt(2)	$	2,822	$	4,457	$	251,590	$	503,512	$	54,379	$	601,386	$	1,418,146	$	1,417,584
Variable rate debt	810		1,080		28,570		—		—		—		30,460		29,908
Total	$	3,632	$	5,537	$	280,160	$	503,512	$	54,379	$	601,386	$	1,448,606	$	1,447,492
Weighted-average interest rate on debt:
Fixed rate debt(2)	4.57%		4.55%		4.17%		6.36%		4.53%		4.83%		5.24%		5.64%
Variable rate debt	2.36%		2.36%		2.36%		—%		—%		—%		2.36%		2.87%

(1)    Excludes net mortgage loan premiums, discounts and unamortized deferred loan costs. See Item 7A of our most recent Annual Report on Form 10-K and Note 5 in the accompanying condensed consolidated financial statements included herein.

(2)    Includes all fixed rate debt and all variable rate debt that was swapped to fixed rates as of March 31, 2022.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures. As required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act, our management, including our principal executive officer and our principal financial officer evaluated, as of the end of the period covered by this quarterly report, the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and Rule 15d-15(e) of the Exchange Act. Based on that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures, as of the end of the period covered by this quarterly report, were effective at a reasonable assurance level for the purpose of ensuring that information required to be disclosed by us in this quarterly report is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including our principal executive officer and our principal financial officer as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting. There has been no change in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various claims and lawsuits arising in the normal course of business, including proceedings involving tort and other general liability claims, related to our ownership of hotel properties. Most occurrences involving liability are covered by insurance with solvent insurance carriers. We recognize a liability when we believe a loss is probable and reasonably estimable. We currently believe that the ultimate outcome of any such lawsuits and proceedings will not, individually or in the aggregate, have a material effect on our consolidated financial position, results of operations, or liquidity.

Item 1A. Risk Factors

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

37

Item 6. Exhibits

Exhibit Number	Exhibit Description
2.1* +	Purchase and Sale Agreement dated as of February 25, 2022, among Nashville Gulch Hotel LLC and XHR Acquisitions, LLC
3.1	Articles of Restatement of Xenia Hotels & Resorts, Inc., as filed on November 10, 2015 with the Maryland Department of Assessments and Taxation (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q (File No. 001-36594) filed on November 12, 2015)
3.2	Articles Supplementary of Xenia Hotels and Resorts, Inc., as filed on November 10, 2015 with the Maryland Department of Assessments and Taxation (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-36594) filed on November 12, 2015)
3.3	Articles Supplementary of Xenia Hotels and Resorts, Inc., as filed on March 15, 2017 with the Maryland Department of Assessments and Taxation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36594) filed on March 15, 2017)
3.4	Articles of Amendment of Xenia Hotels and Resorts, Inc., as filed on May 22, 2018 with the Maryland Department of Assessments and Taxation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36594) filed on May 23, 2018)
3.5	Articles Supplementary of Xenia Hotels and Resorts, Inc., as filed on May 22, 2018 with the Maryland Department of Assessments and Taxation (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-36594) filed on May 23, 2018)
3.6	Second Amended and Restated Bylaws of Xenia Hotels & Resorts, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-36594) filed on November 28, 2018)
3.7	First Amendment to the Second Amended and Restated Bylaws of Xenia Hotels & Resorts, Inc. dated February 19, 2020 (incorporated by reference to Exhibit 3.6 to the Company’s Annual Report on Form 10-K (File No. 001-36594) filed on February 25, 2020)
31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH*	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 (formatted as Inline XBRL and contained in Exhibit 101)

*    Filed herewith

+    Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementally copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Xenia Hotels & Resorts, Inc.

May 3, 2022

/s/ MARCEL VERBAAS

Marcel Verbaas

Chairman and Chief Executive Officer

(Principal Executive Officer)

/s/ ATISH SHAH

Atish Shah

Executive Vice President, Chief Financial Officer and Treasurer

(Principal Financial Officer)

/s/ JOSEPH T. JOHNSON

Joseph T. Johnson

Senior Vice President and Chief Accounting Officer

(Principal Accounting Officer)

39

EX-2.1

PURCHASE AND SALE AGREEMENT

BETWEEN

NASHVILLE GULCH HOTEL LLC,
a Delaware limited liability company

AS SELLER

AND

XHR ACQUISITIONS, LLC,
a Delaware limited liability company

AS PURCHASER


DATED: February 25, 2022

TABLE OF CONTENTS

Article 1BASIC INFORMATION	1
Section 1.1Certain Basic Terms	1
Section 1.2Closing Costs	2
Section 1.3Notice Addresses	2
Article 2PROPERTY	3
Section 2.1Property	3
Section 2.2Management Agreement	5
Section 2.3Assumed Liabilities	5
Section 2.4Retained Liabilities	6
Article 3EARNEST MONEY	6
Section 3.1Deposit and Investment of Earnest Money	6
Section 3.2Independent Consideration	6
Section 3.3Disposition of Earnest Money	6
Article 4DUE DILIGENCE	6
Section 4.1Due Diligence Materials To Be Delivered	6
Section 4.2Physical Due Diligence	6
Section 4.3Due Diligence/Termination Right	6
Section 4.4Return of Documents and Reports	7
Section 4.5Service Contracts	7
Section 4.6Proprietary Information; Confidentiality	7
Section 4.7No Representation or Warranty by Seller	7
Section 4.8Purchaser’s Responsibilities	8
Article 5TITLE AND SURVEY	8
Section 5.1Title Commitment	8
Section 5.2New or Updated Survey	8
Section 5.3Title Review	8
Section 5.4Delivery of Title Policy at Closing	9
Article 6OPERATIONS AND RISK OF LOSS	9
Section 6.1Ongoing Operations	9
Section 6.2Damage	11
Section 6.3Condemnation	12
Section 6.4Estoppels	12
Section 6.5 Construction Warranties	12
Article 7CLOSING	13
Section 7.1Closing	13
Section 7.2Conditions to Parties’ Obligation to Close	13
Section 7.3Seller’s Deliveries in Escrow	14
Section 7.4Purchaser’s Deliveries in Escrow	16
Section 7.5Closing Statements	16

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Section 7.6Purchase Price	16
Section 7.7Possession	16
Section 7.8Delivery of Books and Records	16
Section 7.9Seller Post-Closing Obligation Regarding Construction Warranties	17
Article 8PRORATIONS, DEPOSITS, COMMISSIONS	17
Section 8.1Prorations	17
Section 8.2Final Determination of Adjustments and Prorations	20
Section 8.3Safes and Baggage	21
Section 8.4Closing Costs	21
Section 8.5Tenant Deposits	22
Section 8.6Commissions	22
Section 8.7Music Venue Improvements Credit	22
Section 8.8Allocation of Purchase Price	22
Section 8.9Survive Closing	22
Article 9REPRESENTATIONS AND WARRANTIES	22
Section 9.1Seller’s Representations and Warranties	22
Section 9.2Purchaser’s Representations and Warranties	27
Section 9.3Survival of Representations and Warranties	28
Section 9.4Punch List; Holdback Escrow	29
Article 10DEFAULT AND REMEDIES	30
Section 10.1Seller’s Remedies	30
Section 10.2Purchaser’s Remedies	30
Section 10.3Attorneys’ Fees	31
Section 10.4Other Expenses	31
Article 11DISCLAIMERS, RELEASE AND INDEMNITY	31
Section 11.1Disclaimers By Seller	31
Section 11.2Sale - As Is, Where Is	32
Section 11.3Seller Released from Liability	32
Section 11.4Intentionally Omitted	33
Section 11.5Indemnity	33
Section 11.6Survival	35
Article 12MISCELLANEOUS	35
Section 12.1Parties Bound; Assignment	35
Section 12.2Headings	36
Section 12.3Invalidity and Waiver	36
Section 12.4Governing Law	36
Section 12.5Survival	36
Section 12.6Entirety and Amendments	36
Section 12.7Time	36
Section 12.8Confidentiality; Press Releases	36
Section 12.9Electronic Transactions	37

ii

Section 12.10Notices	37
Section 12.11Construction	37
Section 12.12Calculation of Time Periods	37
Section 12.13Execution in Counterparts	38
Section 12.14No Recordation	38
Section 12.15Further Assurances	38
Section 12.16No Third Party Beneficiary	38
Section 12.17Reporting Person	38
Section 12.18Bulk Sales	38
Article 13MANAGER EMPLOYEES	38

iii

LIST OF EXHIBITS

Exhibit A    -    Legal Description of Real Property

Exhibit B    -    Form of Special Warranty Deed

Exhibit C-1    -    Form of Bill of Sale

Exhibit C-2    -    Form of Assignment and Assumption Agreement

Exhibit D    -    List of Service Contracts, Leases, and License Agreements

Exhibit E    -    Non-Terminable Contracts

Exhibit F    -    Seller’s Certificate

Exhibit G    -    Purchaser’s Certificate

Exhibit H    -    Form of Holdback Escrow Agreement

Exhibit I    -    Punch-List Reserve Obligations List

Exhibit J    -    Defined Terms

Exhibit K    -    Assignment and Assumption of Hotel Agreements

LIST OF SCHEDULES

Schedule 2.1.3        Excluded Tangible Personal Property

Schedule 4.5        Rejected Contracts

Schedule 6.5        Construction Warranties

Schedule 9.1.4        Claims

Schedule 9.1.18    Vouchers

Schedule 9.1.22    Vehicles

Schedule 9.4.1        Punch List Reserve Obligations

iv

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (this “Agreement”) is made and entered into as of the Effective Date, by and between Purchaser and Seller.

RECITALS

A.Defined terms are indicated by initial capital letters. Defined terms shall have the meaning set forth herein, whether or not such terms are used before or after the definitions are set forth. Defined terms are listed in alphabetic order in Exhibit J hereto.

B.Purchaser desires to purchase the Property and Seller desires to sell, assign, and convey the Property, all upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and agreements set forth herein, as well as the sums to be paid by Purchaser to Seller, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Purchaser and Seller agree as follows:

ARTICLE 1
BASIC INFORMATION

Section 1.1     Certain Basic Terms. The following defined terms shall have the meanings set forth below:

1.1.1.Seller:	Nashville Gulch Hotel LLC, a Delaware limited liability company (“Seller”)
1.1.2.Purchaser:	XHR Acquisitions, LLC, a Delaware limited liability company (“Purchaser”)
1.1.3.Purchase Price:	$328,700,000.00, subject to adjustments and prorations as provided herein.
1.1.4.Earnest Money:	$10,000,000.00 (the “Earnest Money”), including interest thereon, to be deposited in accordance with Section 3.1.
1.1.5.Title Company and Escrow Agent:	First American Title Insurance Company 611 Commerce Street, Suite 3101 Nashville, TN 37203 Attn: Jodean King Email: jodking@firstam.com
1.1.6.Effective Date:	February 25, 2022

1

1.1.7.Title Commitment:	That certain Commitment for Title Insurance issued by the Title Company with a commitment date of January 24, 2022 and identified as Commitment No. NCS-1109998-NAS.
1.1.8.Inspection Period:	The period commencing upon the execution of the Access Agreement and ending at 5:00 p.m. Central Standard Time on February 25, 2022.
1.1.9.Scheduled Closing Date:	March 28, 2022.

Section 1.2Closing Costs. Closing costs shall be allocated and paid as follows:

COST	RESPONSIBLE PARTY
Premium for the Title Policy issued at Closing, with extended coverage and deletion of general exceptions	Seller
Premium for any endorsements to the Title Policy desired by Purchaser	Purchaser
Costs of the Survey and/or any revisions, modifications or recertifications thereto	Purchaser
Costs for UCC searches	Purchaser
Recording fees for Deed and Deed of Trust	Purchaser
Recording fees for lien and mortgage releases	Seller
Any deed taxes, documentary stamps, transfer taxes, intangible taxes, or other similar taxes, fees or assessments imposed by any governmental or quasi-governmental entity	Purchaser
Any escrow fee charged by Escrow Agent for holding the Earnest Money or conducting the Closing	Purchaser – ½ Seller – ½
Mortgage taxes or similar taxes on mortgage indebtedness incurred by Purchaser	Purchaser
All other closing costs, expenses, charges and fees	In accordance with local custom in Nashville, TN

Section 1.3Notice Addresses:

Purchaser:     c/o Xenia Hotels & Resorts Inc.         200 S. Orange Avenue         Suite 2700         Orlando, FL 32801         Attn: Shamir Kanji and         Taylor Kessel Email:        skanji@xeniareit.com and        tkessel@xeniareit.com Copy to:     Latham & Watkins     330 North Wabash Avenue     Suite 2800     Chicago, IL 60611 Attn:         Gary E. Axelrod
Email:         gary.axelrod@lw.com

2

Seller:        Nashville Gulch Hotel LLC         150 Fourth Avenue, North         Suite 1100         Nashville, TN 37219 Attn:         David Tessier Email: davidtessier@hospitalitygaming.com	Copy to: Nelson Mullins Riley &                             Scarborough LLP                             150 Fourth Avenue North                             Suite 1100                             Nashville, TN 37219 Attn: Laurence M. Papel Email: larry.papel@nelsonmullins.com
	And to:     Magellan HoldCo LLC         225 North Columbus Drive         Suite 100         Chicago, IL 60602 Attn:         Kimberly J. Sharon Email: ksharon@magellandevelopment.com

ARTICLE 2
PROPERTY

Section 2.1Property. Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign, and convey to Purchaser, and Purchaser agrees to purchase from Seller, the following property (collectively, the “Property”):

2.1.1.Real Property. The land described in Exhibit A attached hereto (the “Land”), together with (a) all buildings, structures, fixtures that constitute real property under applicable law, parking areas, and other improvements presently located upon the Real Property (“Improvements”), (b) all right, title and interest of Seller, if any, in and to the rights, benefits, privileges, easements, air rights, development rights, tenements, hereditaments, and appurtenances thereon or in anywise appertaining thereto, and (c) all right, title, and interest of Seller, if any, in and to all rights-of-way strips and gores and any land lying in the bed of any street, road or alley, open or proposed, adjoining the Land (collectively, the “Real Property”). The Real Property consists of a hotel building, commonly known as the W Hotel Nashville and related amenities, which have a current street address of 300 Twelfth Avenue South, Nashville, Tennessee 37203(the “Hotel”).

2.1.2.Leases. All of Seller’s right, title and interest, in all leases, licenses and other occupancy or use agreements for space in or on the Real Property or any portion thereof (other than License Agreements), including leases which may be made by Seller after the Effective Date and prior to Closing as permitted by this Agreement (collectively, the “Leases”).

2.1.3.Tangible Personal Property. All equipment, machinery, furniture, furnishings, supplies, Inventory, fixtures (not part of the Real Property or affixed thereto), machinery, carpets, drapes, blinds or mini-blinds, service and maintenance equipment, vehicles, appliances, tools, signs, landscaping equipment, supplies, pool equipment, television systems, intercom equipment and systems, and replacement parts owned by Seller, and all other articles of personal property owned by Seller and now or hereafter used in connection with the operation, ownership or management of the Real Property (whether located at the Real Property or stored off-site if any), but specifically excluding any items of personal property owned by third parties and licensed for use in the Hotel (specifically including, but not limited to, art work belonging to David Tessier and Mark J. Bloom on loan to the Hotel pursuant to the Loaned Art Agreements (as defined in Exhibit D)), any personal property of Hotel guests, and further excluding any items

3

of personal property owned by third parties and leased to Seller pursuant to equipment leases (collectively, the “Tangible Personal Property”). A preliminary schedule of excluded Tangible Personal Property is attached as Schedule 2.1.3.

2.1.4.Intangible Personal Property. All of Seller’s right, title and interest, if any, without warranty (except as provided herein or in the Closing Documents), in all intangible personal property related to the Real Property, including, without limitation: (A) all trade names, service marks, symbols and trademarks associated with the Real Property and the Improvements, including Seller’s rights and interests, if any, in the name of the Real Property; including, without limitation, Seller’s rights, if any, to use the name “W Hotel Nashville,” including the domain names and the URL internet address, (B) all logos and photographs and other images of the Property in Seller’s possession and control, (C) all telephone and facsimile numbers owned by Seller used exclusively in connection with the Real Property (other than tenants’ telephone numbers); (D) those certain contracts related to the operation, ownership, repair, improvement or management of the Real Property, including maintenance, service, construction, booking, reservation, credit card service and supply agreements, and equipment leases and contracts entered into by or on behalf of Seller in connection with the Property, but not including Leases or License Agreements (collectively, the “Service Contracts”) (but only to the extent assignable or to the extent consent to assignment is obtained and Seller’s obligations after the Closing thereunder are expressly assumed by Purchaser pursuant to this Agreement); (E) warranties (to the extent owned by Seller and assignable without cost to Seller); (F) governmental permits, approvals, entitlements and licenses, if any (to the extent owned by Seller and assignable without cost to Seller); and (G) similar property used in connection with the operation of the Property and the hotel business currently operated thereon (all of the items described in this Section 2.1.4 collectively referred to as the “Intangible Personal Property”). Tangible Personal Property and Intangible Personal Property shall not include (a) any appraisals or other economic evaluations of, or projections with respect to, all or any portion of the Property, including, without limitation, budgets prepared by or on behalf of Seller or any its Affiliate, (b) any documents, materials or information belonging to Seller which are subject to attorney/client, work product or similar privilege, which constitute attorney communications with respect to the Property and/or Seller or (c) subject to Section 8.1.3, guest ledger balances and other cash receivables whether in banks, in hand, in petty cash, cash banks or otherwise; (d) guest or other parties’ assets stored in the Hotel; and (e) Seller’s escrow accounts with lenders, including, but not limited to, reserve accounts for taxes, insurance, or other lender required reserves or accounts.

2.1.5.Inventory. All inventory, supplies, food and beverages (non-alcoholic) and other materials used in connection with the Property and the hotel business operated thereon, including other articles of personal property owned by Seller and used in connection with the ownership, operation, and maintenance of the Hotel, gift shop inventories, which are located at the Real Property or stored off-site, whether opened or unopened, for future use at the Real Property, as of the Closing, including all food and beverages (non-alcholic)located in the guest rooms, but expressly excluding any alcoholic beverages, the sale or transfer of which is not permitted under applicable law (collectively, the “Inventory”). The parties acknowledge and agree that alcoholic beverage inventory at the Property is held by Manager as the holder of the liquor license and will continue to be held by Manager following the Closing, and Seller hereby relinquishes all right, title and interest with respect thereto.

2.1.6.License Agreements. All of Seller’s right, title and interest, in and to all agreements (other than Leases), if any, for the leasing or licensing of rooftop space or equipment, telecommunications equipment, cable access and other space, equipment and facilities that are located on or within the Real Property and generate income to Seller as the owner of the Real Property, agreements with NOHO Hospitality LLC for services related to the “The Dutch” and “Carne Mare” restaurants in the Hotel, and Barista Parlor, LLC, related to the “Barista Parlor” coffee shop, including agreements which may be made by Seller after the Effective Date and

4

prior to Closing as permitted by this Agreement (collectively, the “License Agreements”). Anything in this Agreement to the contrary notwithstanding, Purchaser shall assume the obligations of the “lessor” or “licensor” first arising from and after the Closing under all License Agreements, some or all of which may be non-cancelable.

2.1.7.Books and Records. To the extent not prohibited by the Management Agreement, all files and records owned by Seller and in Seller’s or Manager’s possession or control (including but not limited to all files and records relating to the Hotel and the development, operation, management, maintenance, repair, marketing and promotion thereof, such as financial records and statements, maintenance records, building plans, specifications and drawings, group and individual guest history records and all reservation and booking records for rooms and meeting space, regardless of whether such files and records are stored in paper form, on computer hard drive, computer disk, CD Rom, DVD or other medium) (collectively, the “Books and Records”), in each case except for: (a) files, records or documents owned by Manager, or (b) all Guest Data (as defined in the Management Agreement), or (c) all documents and other materials which (i) are legally privileged or which constitute attorney work product, (ii) are subject to an applicable law or a confidentiality agreement prohibiting their disclosure by Seller, or (iii) constitute confidential internal assessments, reports, studies, memoranda, notes or other correspondence prepared by or on behalf of any officer or employee of Seller, including, without limitation, all (A) internal financial analyses, appraisals, income tax returns (but not property-level tax returns), financial statements of the Seller (but not property-level financial statements), (B) corporate or other entity governance records of the Seller, (C) employee personnel files, (D) any work papers, memoranda, analysis, correspondence and similar documents and materials prepared by or for Seller in connection with the transaction described in this Agreement.

Section 2.2Management Agreement. Purchaser acknowledges that the Hotel is currently managed pursuant to that certain Operating Agreement dated June 30, 2015, by and between Twelfth Avenue Partners, LLC, a Tennessee limited liability company (“Original Owner”), and W Hotel Management, Inc. (“Manager”), as amended by that certain First Amendment to Operating Agreement dated September 26, 2017, between Original Owner, 12th Avenue Realty Holding Company LLC and Manager, as assigned to Seller pursuant to that certain Assignment and Assumption Agreement dated September 13, 2018 between Original Owner and Seller, as modified by that certain Letter Agreement dated September 13, 2018, as further amended by that certain Second Amendment to Operating Agreement dated August 31, 2021, between Seller and Manager, and as further modified by that certain Letter Agreement dated October 5, 2021 (collectively, and as the same may be further amended, modified or otherwise supplemented in accordance with the terms of this Agreement, the “Management Agreement” ). Purchaser’s assumption of the Management Agreement at Closing shall be a condition precedent of Seller’s obligation to close this transaction, unless Seller fails to comply with or satisfy any of the items required under Section 7.2(a) and (b) of the Management Agreement.

Section 2.3Assumed Liabilities. At Closing, without limiting Seller’s obligations under this Agreement or in any agreements executed and delivered by Seller at Closing with respect to the covenants, representations and warranties of Seller expressly set forth either in this Agreement or any agreements executed and delivered by Seller at Closing, Purchaser shall assume any liability, obligation, damage, loss, diminution in value, cost or expense of any kind or nature whatsoever, whether accrued or unaccrued, actual or contingent, known or unknown, foreseen or unforeseen (“Liabilities”) (i) first arising from and after the Closing under the Management Agreement, Leases, Assumed Service Contracts, License Agreements and bookings which Purchaser assumes at Closing pursuant to this Agreement and (ii) for the payment of any amounts payable or accrued for the period prior to the Closing Date but not yet due or payable prior to the Closing Date to the extent Purchaser has received a credit for such Liabilities under

5

Article 8, (collectively, the “Assumed Liabilities”). Purchaser’s rights and obligations under this Section 2.3 shall survive the Closing.

Section 2.4Retained Liabilities. At Closing, Seller shall retain all Liabilities relating to the Property or the Hotel that are not Assumed Liabilities (collectively, the “Retained Liabilities”). Seller’s rights and obligations under this Section 2.4 shall survive the Closing.

ARTICLE 3
EARNEST MONEY

Section 3.1Deposit and Investment of Earnest Money. Purchaser has deposited the Earnest Money with Escrow Agent. Escrow Agent shall hold the Earnest Money pursuant to the terms of that Escrow Agreement dated January 28, 2022 (“Escrow Agreement”).

Section 3.2Independent Consideration. Notwithstanding anything to the contrary in the Escrow Agreement, if Purchaser elects to terminate this Agreement for any reason and is entitled to receive a return of the Earnest Money pursuant to the terms hereof, the Escrow Agent shall first disburse to Seller One Hundred and No/100 Dollars ($100.00) as independent consideration for Seller’s performance under this Agreement (“Independent Consideration”), which shall be retained by Seller in all instances.

Section 3.3Disposition of Earnest Money. The Earnest Money shall be disbursed in accordance with the terms of this Agreement and the Escrow Agreement.

ARTICLE 4
DUE DILIGENCE

Section 4.1Due Diligence Materials To Be Delivered. Seller has delivered, or has made available to Purchaser, certain leases, service contracts, as-built plans and specifications, construction agreements, punch lists, brand specs, lien waivers, change order logs, surveys, title searches, soil test results, engineering, asbestos, environmental and other studies and reports, and other documents, contracts and agreements with respect to the Property (the “Property Documents”), to the extent in Seller’s possession or control, and required pursuant to that certain Access and Exclusivity Agreement dated as of January 13, 2022, between Seller and Purchaser (the “Access Agreement”). For avoidance of doubt, prior to Closing, Seller shall continue to make available to Purchaser for inspection the Property and any other Property Documents reasonably requested by Purchaser pursuant to the terms of the Access Agreement, which is hereby incorporated by reference into this Agreement.

Section 4.2Physical Due Diligence. Commencing on the effective date of the Access Agreement and continuing until expiration of the Inspection Period or earlier termination of this Agreement, Purchaser and Purchaser’s employees, agents, engineers, contractors and environmental consultants (“Purchaser Representatives”) shall have access to the Property at all reasonable times during normal business hours, upon appropriate prior notice to Seller, as provided in and subject to the terms and conditions of Section 1 of the Access Agreement.

Section 4.3Due Diligence/Termination Right. Purchaser shall have the right, for any reason or no reason, in its sole and absolute discretion, through the expiration of the Inspection Period in which to determine whether to proceed with the acquisition of the Property. Notwithstanding anything to the contrary in this Agreement, Purchaser may terminate this Agreement for any reason or no reason, in its sole and absolute discretion, by giving written notice of termination to Seller and Escrow Agent (the “Due Diligence Termination Notice”) prior to the expiration of the Inspection Period, which Due Diligence Termination Notice may be sent by Purchaser’s counsel by email to Seller’s counsel with evidence thereof in the form of a

6

delivery receipt or as otherwise permitted pursuant to Section 12.10 hereof. If Purchaser does not timely give a Due Diligence Termination Notice, this Agreement shall continue in full force and effect.

Section 4.4Return of Documents and Reports. Upon any termination of this Agreement (other than arising out of a Seller default hereunder), Purchaser shall, upon written request by Seller within thirty (30) days after the effective date of the termination, provide to Seller copies of all final third party property condition reports and environmental reports, investigations and studies prepared for Purchaser in connection with its due diligence review of the Property but, for the avoidance of doubt, excluding (i) all draft reports and any other reports, investigations and studies and (ii) economic analyses and other than legal analysis memoranda and internal reports prepared by Purchaser or reports or memoranda prepared by Purchaser’s counsel (collectively, the “Reports” and, individually, a “Report”), if Seller executes the providers’ standard and mutually approved non-reliance letter and reimburses Purchaser for the actual fees and related expenses paid to the third party Report providers. The Reports shall be delivered to Seller without any liability to Seller and without representation or warranty from Purchaser as to the completeness, truth, or accuracy of the Reports or any other matter relating thereto. Purchaser’s obligation to deliver the Property Documents and the Reports to Seller, and Seller’s obligation to reimburse in full Purchaser shall survive the termination of this Agreement. Notwithstanding anything herein to the contrary, Seller shall not have any right to rely on the content of the Reports delivered to Seller pursuant to this Section 4.4, and Seller acknowledges and agrees that Purchaser has not made any representation or warranty in connection therewith. The provisions of this Section 4.4 shall survive any termination of this Agreement for a period of one (1) year following the termination of this Agreement, except for the immediately prior sentence of this Section 4.4, which sentence shall survive any termination of this Agreement indefinitely.

Section 4.5Service Contracts. Seller shall terminate those Service Contracts listed on Schedule 4.5 attached hereto at Seller’s sole cost and expense effective as of the Closing, provided Seller shall have no obligation to terminate, and Purchaser shall be obligated to assume, any Service Contracts set forth on Exhibit E hereto (the “Non-Terminable Contracts”). Seller shall deliver at Closing notices of termination of all Service Contracts that are not so assumed. Purchaser must assume the obligations arising from and after the Closing Date under those Service Contracts that Purchaser has agreed to assume, or that Purchaser is obligated to assume pursuant to this Section 4.5 (collectively, the “Assumed Service Contracts”).

Section 4.6Proprietary Information; Confidentiality. Purchaser acknowledges that the Property Documents are proprietary and confidential and will be delivered to Purchaser solely to assist Purchaser in determining the feasibility of purchasing the Property and for owning the Property after the Closing. The Property Documents and confidentiality provisions of the Access Agreement are incorporated by reference into this Agreement.

Section 4.7No Representation or Warranty by Seller. Purchaser acknowledges that, except as expressly set forth in this Agreement or in any of the documents executed by Seller and delivered to Purchaser at Closing (collectively, the “Seller Closing Documents”), Seller has not made and does not make any warranty or representation regarding the truth, accuracy or completeness of the Property Documents or the source(s) thereof. Purchaser further acknowledges that some if not all of the Property Documents were prepared by third parties other than Seller. Except as expressly set forth in this Agreement or in any of the Seller Closing Documents, (a) Seller expressly disclaims any and all liability for representations or warranties, express or implied, statements of fact and other matters contained in such information, or for omissions from the Property Documents, or in any other written or oral communications transmitted or made available to Purchaser and (b) Purchaser shall rely solely upon its own investigation with respect to the Property, including, without limitation, the Property’s physical,

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environmental or economic condition, compliance or lack of compliance with any ordinance, order, permit or regulation or any other attribute or matter relating thereto. Except as expressly set forth in this Agreement or in any of the Seller Closing Documents, Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of the Property Documents and is providing the Property Documents solely as an accommodation to Purchaser.

Section 4.8Purchaser’s Responsibilities. During the Inspection Period, Purchaser, and Purchaser’s Representatives shall use commercially reasonable efforts to: (a) not unreasonably disturb the Hotel or the Hotel’s customers, or unreasonably interfere with their use or operation of the Hotel; and (b) not unreasonably interfere with the operation and maintenance of the Hotel

ARTICLE 5
TITLE AND SURVEY

Section 5.1Title Commitment. Seller has delivered the Title Commitment, in the amount of the Purchase Price and on a ALTA 2016 Standard Formcommitment, with Purchaser as the proposed insured, and (b) legible copies of all documents of record referred to in the Title Commitment as exceptions to title to the Real Property.

Section 5.2New or Updated Survey. Prior to the Effective Date, Seller has delivered to Purchaser a copy of that certain ALTA/NSPS Land Title Survey of the Real Property prepared by S+ME Engineering and certified as of September 6, 2018. Purchaser may elect to obtain a new survey of the Property or revise, modify, or re-certify the aforementioned survey of the Property (such new or revised, modified or re-certified survey, the “Survey”) as necessary in order for the Title Company to delete the survey exception from the Title Policy or to otherwise satisfy Purchaser’s objectives.

Section 5.3Title Review. During the Inspection Period, Purchaser reviewed title to the Property as disclosed by the Title Commitment and the Survey. Except as related to a Permitted Exception, Seller shall be obligated to cure, remove, bond over, or cancel of record, on or before the Closing Date (with Seller having the right to apply the Purchase Price or a portion thereof for such purpose), (a) to the extent caused or permitted by Seller, all mortgages, security deeds, deeds of trust, final and non-appealable judgment liens and materialmen’s liens (other than liens for real estate taxes and assessments that are not yet due and payable), (b) Taxes which would be delinquent if unpaid at Closing, (c) all liens under the Perishable Agricultural Commodities Act or the Packer and Stockyard Act, (d) the matters identified in items 2, 7(a), 8-12, 14, 17 and 21 of Schedule B, Part I of the Title Commitment, (e) the matters identified in items 2-7, 14 and 15 of Schedule B, Part II of the Title Commitment, and (f) any other items Seller agrees in writing to cure pursuant to its response to Purchaser’s title and survey objections (the items in this sentence shall be referred to as the “Title Clearance Matters”). Seller shall have no obligation to cure title and survey objections that are not Title Clearance Matters, and Seller shall deliver the Property free and clear of any such Title Clearance Matters. If Purchaser receives an update to the Title Commitment or the Survey following the Inspection Period, Purchaser shall have three (3) business days after the date on which Purchaser has received such update within which to notify Seller in writing of any defects in title or matters disclosed by the Survey to which Purchaser objects and which are not Permitted Exceptions. Subject to Seller’s obligation regarding Title Clearance Matters, if Seller notifies Purchaser at any time that Seller is unable or unwilling to cure any such objections which it is not obligated to cure, then within three (3) business days after receipt of Seller’s notice, Purchaser must elect to either (i) terminate this Agreement and Escrow Agent will deliver the Earnest Money to Purchaser, or (ii) waive such objections and proceed toward Closing. If Purchaser does not elect either clause (i) or (ii) within the period prescribed in the preceding sentence, then Purchaser will be deemed to have elected clause (ii). The term “Permitted Exceptions” shall mean: (i) the specific exceptions

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(excluding the standard exceptions that are part of the promulgated title insurance form) in the Title Commitment that the Title Company has not agreed to remove from the Title Commitment as of the end of the Title and Survey Review Period and that Seller is not required to remove as provided above as a Title Clearance Matter; (ii) matters created by, through or under Purchaser; (iii) items shown on the Survey which have not been objected to by Purchaser as of the end of the Inspection Period (or if Purchaser does not obtain a Survey, all matters that a current, accurate survey of the Property would show); (iv) subject to the terms of Section 8.1.2 hereof, real estate taxes not yet due and payable; (v) rights of tenants, as tenants only, under the Leases, with no rights of first offer, rights of first refusal, or options to purchase, and (vi) to the extent any of the License Agreements constitute an interest in real property, rights of tenants or licensees, as tenants or licensees only, under the License Agreements, with no rights of first offer, rights of first refusal, or options to purchase. Notwithstanding anything herein to the contrary, in no event shall Title Clearance Matters be considered Permitted Exceptions.

Section 5.4Delivery of Title Policy at Closing. In the event that the Title Company does not issue at Closing, or unconditionally commit at Closing to issue, to Purchaser, an ALTA owner’s title policy in accordance with the Title Commitment, insuring Purchaser’s title to the Real Property in the amount of the Purchase Price, subject only to the Permitted Exceptions (the “Title Policy”), Purchaser shall have the right to terminate this Agreement, in which case the Earnest Money (less the Independent Consideration) shall be immediately returned to Purchaser and the parties hereto shall have no further rights or obligations, other than those that by their terms survive the termination of this Agreement.

ARTICLE 6
OPERATIONS AND RISK OF LOSS

Section 6.1Ongoing Operations. From the Effective Date through Closing or earlier termination of this Agreement (except as provided herein), Seller hereby covenants with Purchaser that Seller shall conduct operations at the Property and the Hotel in the ordinary course of business and in compliance with the Management Agreement, including the following:

6.1.1.Management Agreement, Leases, Service Contracts and License Agreements. Seller will perform or cause to be performed its obligations under the Management Agreement and under any Leases, Service Contracts and License Agreements. Seller covenants and agrees that it shall operate or cause the Property and Hotel to be operated consistent with the manner in which the Property and Hotel have been operated prior to the Effective Date.

6.1.2.New Contracts. Seller will not amend, modify or terminate any existing, or enter into any new, Leases, Service Contracts, or License Agreements that will be an obligation affecting the Property or Hotel subsequent to the Closing without Purchaser’s prior written consent, except for any contracts which Manager is permitted to enter into without Seller’s consent pursuant to the Management Agreement. Notwithstanding anything herein to the contrary, Purchaser shall be deemed to have consented to Seller’s entry into any contract that is terminable without cause and without the payment of any termination penalty on not more than thirty (30) days’ prior notice if Purchaser fails to approve or deny Seller’s request for consent to enter into such contract within two (2) business days following receipt of Seller’s written request therefor. Seller shall provide Purchaser with copies of any such agreements entered into by Manager, or entered into by Seller with Purchaser’s consent, promptly following execution thereof.

6.1.3.Operation of Property. Prior to the Closing, Seller shall continue to maintain, operate and manage (or shall cause Manager to maintain, operate and manage) the Property in all material respects in the same manner that Seller and/or Manager have heretofore

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maintained and operated the Property, including renewing all licenses and permits prior to their expiration.

6.1.4.Inventory. Seller shall maintain, or cause to be maintained, Inventory at levels maintained in the ordinary course of business, including “par” linens as currently maintained by Manager.

6.1.5.Manager’s Continued Responsibility. Seller shall use reasonable efforts to cause Manager to continue to manage the Hotel pursuant to and in accordance with the Management Agreement. From the Effective Date until Closing or the earlier termination of this Agreement, Seller will not amend, modify or terminate the Management Agreement.

6.1.6.Maintenance of Improvements; Removal of Personal Property. Subject to Section 6.2 and Section 6.3, and subject to the terms of the Management Agreement, (a) Seller shall maintain all Improvements and Tangible Personal Property substantially in their present condition (ordinary wear and tear and casualty excepted) and in a manner consistent with Seller’s maintenance of the Improvements and Tangible Personal Property during Seller’s period of ownership, and (b) Seller will not remove or permit to be removed any Tangible Personal Property except as may be required for necessary repair or replacement, and replacement shall be of approximately equal quality and quantity as the removed item of Tangible Personal Property.

6.1.7.Transfer of Property, Creation of Encumbrances, Zoning. Seller shall not (a) sell, dispose of or otherwise transfer the Property or any portion thereof, (b) create or permit to exist on the Property any liens, easements, mortgages or other encumbrances (other than typical short term indebtedness incurred in the ordinary course of business that does not constitute a lien on the Real Property) which will survive Closing, and (c) approve or agree to any adverse changes to the zoning classification or permitted use of the Land applicable to the Property.

6.1.8.Insurance. Seller shall keep (or cause to be kept) the Improvements insured against loss or damage (including rental loss) by fire and all risks covered by the Seller’s insurance that is in compliance with the Management Agreement. Seller, upon request, shall provide Purchaser an insurance certificate confirming the amounts and types of coverages upon the Property.

6.1.9.Notices. Seller shall furnish Purchaser with copies of all written notices (a) received by Seller from any Governmental Authority of any violation of any law, statute, ordinance, regulation or order of any governmental or public authority relating to the Property, and (b) given or received in respect of any litigation or in connection with the Management Agreement, Leases, License Agreements and Service Contracts, promptly following Seller’s receipt thereof.

6.1.10.Marketing; Exclusivity. Seller shall not sell, assign or otherwise transfer a direct or indirect interest in Seller or in any or all of the Property (except for Inventory and Tangible Personal Property as expressly permitted in this Agreement), and Seller shall not market the same or enter into any letters of intent for the same with anyone other than Purchaser, in each case, during the period commencing on the Effective Date and ending on the earlier to occur of either the Closing or earlier termination of this Agreement.

6.1.11.Liquor License.

(a)Generally. Purchaser and Seller recognize that the liquor license for the Hotel is statutorily regulated pursuant to applicable law. If the liquor license is subject to transfer under applicable law, Seller shall (and shall cause Manager to, if

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applicable) transfer the liquor license to Purchaser (and/or to Manager, if applicable) in accordance with applicable law. The parties recognize that the transfer of the liquor license may occur subsequent to the Closing, and after the Closing, Purchaser and Seller shall each continue to use commercially reasonable efforts and cooperate in the prompt transfer of the liquor license. Subject to the foregoing, Seller shall execute, and shall use commercially reasonable efforts to cause Manager to execute, all necessary forms, applications and papers with the appropriate alcoholic beverage authorities within five (5) business days following written request from Purchaser. Notwithstanding the foregoing, the parties acknowledge and agree that as of the Effective Date the Hotel liquor licenses are issued in the name of Manager and, if Purchaser elects in its sole discretion to cause Manager to continue to hold such liquor licenses following the Closing, Seller shall not object to the same and shall execute, and shall use commercially reasonable efforts to cause Manager to execute, all necessary forms, applications and papers with the appropriate alcoholic beverage authorities within five (5) business days following written request from Purchaser, if any.

(b)Interim Liquor Agreement. If it appears that the transfer of the liquor license or issuance of a new liquor license, as applicable, will not occur by the Closing Date, Seller, at Purchaser’s request, shall (and shall cause Manager, if applicable to) enter into an interim liquor management agreement (“Interim Liquor Agreement”) that will permit alcoholic beverages to be sold at the Hotel from and after the Closing consistent with the practices and procedures in effect as of the Effective Date. Any Interim Liquor Agreement shall (i) be in form and substance reasonably satisfactory to Seller, Manager (if applicable) and Purchaser, as applicable, and (ii) expire upon the completion of the transfer of the liquor license or issuance of a new liquor license, as applicable.

(c)Survival. The covenants and agreements in this Section shall survive the Closing.

Section 6.2Damage. If prior to Closing the Property is damaged by fire or other casualty (excluding ordinary wear and tear), Seller shall estimate the cost to repair and the time required to complete repairs and will provide Purchaser written notice of Seller’s estimation, together with a supporting opinion from the Casualty Consultant (hereinafter defined) (the “Casualty Notice”), as soon as reasonably possible after the occurrence of the casualty.

6.2.1.Material Damage. In the event any Material Damage to all or a portion of the Property occurs prior to Closing, Purchaser may, at its option, terminate this Agreement by delivering written notice to Seller on or before the expiration of ten (10) days after the date Seller delivers the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be extended to give Purchaser the full ten (10) day period to make such election). Upon any such termination, the Earnest Money (less the Independent Consideration) shall be returned to Purchaser and the parties hereto shall have no further rights or obligations hereunder, other than those that by their terms survive the termination of this Agreement. If Purchaser does not terminate this Agreement within said ten (10) day period, then the parties shall proceed under this Agreement and close on schedule (subject to extension of Closing as provided above), and as of Closing Seller shall assign to Purchaser, all of Seller’s rights in and to any resulting insurance proceeds (including any rent loss insurance applicable to any period on and after the Closing Date) due Seller as a result of such damage or destruction (less the cost of any repairs performed by Seller) and Purchaser shall assume full responsibility for all remaining repairs, and Purchaser shall receive a credit at Closing for any deductible amount under such insurance policies, and any uninsured amount of such casualty (but the amount of the deductible plus insurance proceeds shall not exceed the cost of repair and a pro rata share of the rental or business loss proceeds, if any). If, for any reason, Seller commences repairs prior to the Closing, then either (x) the repair work

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must be fully paid for and completed to Purchaser’s reasonable satisfaction prior to the Closing, including receipt of lien waivers from all contractors and subcontractors, or (y) the repair work must be performed by a contractor reasonably acceptable to Purchaser pursuant to a contract reasonably acceptable to Purchaser and which is assigned to Purchaser at the Closing. For the purposes of this Agreement, “Material Damage” and “Materially Damaged” means damage which in the good faith opinion of an independent architect or other independent appropriate professional selected by Seller and approved by Purchaser (the “Casualty Consultant”) exceeds $5,000,000.00 to repair.

6.2.2.Not Material Damage. If the Property is not Materially Damaged, then neither Purchaser nor Seller shall have the right to terminate this Agreement, and at Seller’s option, either (a) Seller shall repair the damage before the Closing in a manner reasonably satisfactory to Purchaser (and if necessary, Seller may extend the Closing Date up to thirty (30) days to complete such repairs), or (b) Purchaser shall assume full responsibility for all repairs, and Purchaser shall receive a credit at Closing for any deductible amount under such insurance policies, and any uninsured amount of such casualty (but the amount of the deductible plus insurance proceeds shall not exceed the cost of repair and a pro rata share of the rental or business loss proceeds, if any).

Section 6.3Condemnation. If proceedings in eminent domain or similar taking are instituted or threatened with respect to the Property or any portion thereof, other than non-material proceedings which would not interfere with business operations or the Property, Purchaser may, at its option, by written notice to Seller given within ten (10) days after Seller notifies Purchaser of such proceedings in writing (and if necessary the Closing Date shall be automatically extended to give Purchaser the full ten (10) day period to make such election), either: (a) terminate this Agreement, in which case the Earnest Money (less the Independent Consideration) shall be immediately returned to Purchaser and the parties hereto shall have no further rights or obligations, other than those that by their terms survive the termination of this Agreement, or (b) proceed under this Agreement, in which event Seller shall, at the Closing, assign to Purchaser its entire right, title and interest in and to any condemnation award, and Purchaser shall have the sole right to negotiate and otherwise deal with the condemning authority in respect of such matter. If Purchaser does not give Seller written notice of its election within the time required above, then Purchaser shall be deemed to have elected option (b) above. For purposes of this Section 6.3, a proceeding shall be deemed to be material if the proceeding would or could reasonably involve financial repercussions to the Hotel (the value of “taken” property and/or physical repairs required) in excess of $2,000,000.00.

Section 6.4Estoppels. Promptly following Purchaser’s request, Seller shall use commercially reasonable efforts to obtain and deliver to Purchaser estoppel certificates from the counterparties under (i) any reciprocal easement agreements, operating easement agreements, and covenants, conditions and restrictions, affecting all or any portion of the Property, (ii) the Leases, and (iii) the License Agreements, in each case in such reasonable form as Purchaser provides to Seller.

Section 6.5Construction Warranties. At Closing, Seller (a) shall assign all of Seller’s right, title and interest in any unexpired general contractor warranties, subcontractor warranties and manufacturer warranties relating to the Property (the “Construction Warranties”) to Purchaser, pursuant to pursuant to Sections 3.5.1 and 3.5.2 of the General Conditions attached as Exhibit E to that certain Guaranteed Maximum Price Agreement by and between Seller (as owner) and W. G. Yates & Sons Company, a Mississippi corporation (as contractor) (“General Contractor ”), dated September 12, 2018 (the “GC Contract”), and shall use reasonably commercial efforts to obtain General Contractor’s consent to Seller’s assignment of the Construction Warranties thereunder to Purchaser, but failure to obtain same shall not be a

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default by Seller hereunder nor shall it be a failure of a condition precedent entitling Purchaser to terminate this Agreement.

ARTICLE 7
CLOSING

Section 7.1Closing. The consummation of the transaction contemplated herein (“Closing”) shall occur subject to the satisfaction of the terms and conditions of this Agreement, on the Scheduled Closing Date or such other date as Seller and Purchaser may agree in writing (the actual date on which the Closing occurs, the “Closing Date”) through a “New York” style closing through the Escrow Agent without the obligation of Seller or Purchaser to be physically present. Upon satisfaction or completion of all closing conditions and deliveries, the parties shall direct Escrow Agent to immediately record and deliver the Closing Documents to the appropriate parties and make disbursements according to the closing statements executed by Seller and Purchaser.

Section 7.2Conditions to Parties’ Obligation to Close. The obligation of Seller to consummate the transactions contemplated hereunder are conditioned upon Sections 7.2.1, 7.2.2, 7.2.3, 7.2.4, 7.2.5 and 7.2.6. The obligation of Purchaser to consummate the transactions contemplated hereunder are conditioned upon Sections 7.2.2, 7.2.3, 7.2.4, 7.2.5, 7.2.6, 7.2.7, and 7.2.8. In addition, in the event Manager shall not have executed and delivered the Assignment and Assumption of Hotel Agreements as of the Scheduled Closing Date for any reason other than the occurrence of an event which is a default by Purchaser hereunder, Purchaser shall have the right to adjourn the Closing for up to up to two (2) business days in order to obtain the same.

7.2.1.Purchaser’s Assumption of the Management Agreement. Purchaser and Manager shall have entered into Management Agreement assumption documents that are acceptable to Purchaser in its reasonable discretion and that provide, among other things, that (i) Purchaser assumes all of Seller’s obligations under the Management Agreement relating to the time on and subsequent to the Closing Date and (ii) the Management Agreement shall remain in full force and effect, with no termination or transfer fees chargeable to Seller. A copy of a Manager-approved form of an Assignment and Assumption of Hotel Agreements (“Assignment and Assumption of Hotel Agreements”) is attached as Exhibit K hereto;

7.2.2.Representations and Warranties. The other party’s representations and warranties contained herein shall be true and correct in all material respects as of the Effective Date and the Closing Date (or, if expressly made as of a certain date, as of such date to which such representation or warranty expressly is made);

7.2.3.Covenants and Obligations. As of the Closing Date, the covenants and obligations of the other party which are to be performed at or prior to Closing shall have been performed in all material respects;

7.2.4.Adverse Law. No applicable law shall have been enacted that would make illegal or invalid or otherwise prevent the consummation of the transaction described in this Agreement;

7.2.5.Deliveries. As of the Closing Date, the other party shall have tendered all deliveries to be made by it at Closing;

7.2.6.Actions, Suits, etc. There shall exist no pending or threatened (in writing) actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings, against the other party that would prevent the other party from performing its obligations under this Agreement;

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7.2.7.Title Policy. The Title Company shall be unconditionally and irrevocably committed to issue the Title Policy to Purchaser in accordance with Section 5.4 subject only to the Permitted Exceptions and payment of the applicable premium; and

7.2.8.Licenses and Permits. Purchaser or Manager, as applicable, shall have received all licenses and permits (including the liquor license) from the applicable Governmental Authorities necessary for Purchaser to own the Property and for Manager to operate the Hotel after Closing; provided, such condition shall be deemed satisfied with respect to the liquor license if the same is the subject of the Interim Liquor Agreement in accordance with Section 6.1.11(b).

Section 7.3Seller’s Deliveries in Escrow. As of or prior to the Closing Date, Seller shall deliver in escrow to Escrow Agent the following, each of which may be provided solely in electronic format unless otherwise stated below or unless required by the Title Company:

7.3.1.Deed. A “wet ink” original special warranty deed executed by Seller relative to the Real Property in the form of Exhibit B hereto and including a list of the Permitted Exceptions to which the conveyance shall be subject, executed and acknowledged by Seller, conveying to Purchaser the Seller’s fee simple interest in the Real Property subject only to the Permitted Exceptions (the “Deed”), which Deed will contain the vesting legal description, with, if requested, a customary Tennessee form of quitclaim deed conveying the Real Property containing the as-surveyed legal description; provided, however, such quitclaim deed will be delivered to Purchaser only in the event that Purchaser obtains a new survey or survey update of the Real Property and such surveyed legal description is different from the vesting legal description;

7.3.2.Bill of Sale. A Bill of Sale executed by Seller in the form of Exhibit C-1 hereto, conveying the Tangible Personal Property, Intangible Personal Property, Inventory, Real Property not conveyed by other instruments provided for herein, and other tangible personal property included in the Property, free and clear of any lien or encumbrance, and containing a warranty of title to the respective Tangible Personal Property, Intangible Personal Property, Inventory and other personal property against the lawful claims of all persons claiming by, under or through Seller;

7.3.3.Assignment and Assumption. An Assignment and Assumption Agreement executed by Seller, in the form of Exhibit C-2 hereto, executed and acknowledged by Seller and Purchaser, assigning all of Seller’s interest in and to all licenses, permits, Assumed Service Contracts, Leases, License Agreements, Books and Records and other items of the Property, free and clear of any lien or encumbrance, together with written evidence satisfactory to Purchaser of any required third party consent to such assignment. Seller shall deliver to Purchaser all original Assumed Service Contracts, Leases, License Agreements, licenses and permits in Seller’s possession or control; all surviving warranties and guarantees (and assignments thereof to Purchaser) issued in connection with the Real Property and Improvements, any Tangible Personal Property, and Inventory, and any repairs or additions thereto; guest registration records; keys; permits, approvals and licenses issued by all appropriate governmental authorities and fire underwriting organizations with respect to the construction and use of the Property or any part thereof; and any existing copies of architectural plans and specifications, blueprints and building plans which may be in Seller’s possession;

7.3.4.Conveyancing or Transfer Tax Forms or Returns. Such conveyancing or transfer tax forms or returns, if any, as are required to be delivered or signed by Seller by applicable state and local law in connection with the conveyance of the Real Property, which shall be provided as “wet ink” originals to the extent required by Title Company;

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7.3.5.FIRPTA. A Foreign Investment in Real Property Tax Act affidavit executed with respect to Seller, certifying that Seller is not a foreign person or corporation within the meaning of Sections 1445 and 7701 of the Internal Revenue Code of 1986, as amended (the “Code” );

7.3.6.Authority. Evidence of the existence, organization and authority of Seller and of the authority of the persons executing documents on behalf of Seller reasonably satisfactory to the underwriter for the Title Policy;

7.3.7.Tax Clearance Certificate. A tax clearance certificate for any State of Tennessee Tax liabilities;

7.3.8.Assumption of Management Agreement. Seller’s counterpart to the Management Agreement assumption documents, which shall be provided as “wet ink” originals to the extent required by Manager;

7.3.9.Warranties. To the extent not already stored on-site at the Property or delivered to Purchaser or Purchaser’s representatives, a copy of each of the warranties for the Improvements and Tangible Personal Property to the extent copies thereof are available (which in such case will be delivered to the on-site management office of the Property);

7.3.10.Title Documents. Such documents, indemnities and affidavits as are required to satisfy any “seller requirements” to the issuance of the Title Policy, including, to the extent required by the Title Company, an Owner’s Affidavit and gap indemnity, executed by Seller in the form reasonably acceptable to Title Company and Seller, regarding the rights of tenants in occupancy and the status of mechanics’, materialmen’s and/or broker’s liens and other matters required by the Title Company sufficient to remove the applicable exceptions from the Purchaser’s and Purchaser’s lender’s title policies and otherwise insure Seller’s fee simple ownership in the Property with gap coverage and subject only to the Permitted Exceptions;

7.3.11.Seller’s Certificate. A certificate in the form attached hereto as Exhibit F evidencing the reaffirmation of the truth and accuracy of Seller’s representations and warranties as of the Closing Date (subject to any exceptions noted in the certificate) and the compliance in all material respects with all covenants to be complied with prior to Closing;

7.3.12.Holdback Escrow Agreement. The Holdback Escrow Agreement in the form of Exhibit H, duly executed by Seller;

7.3.13.Interim Liquor Agreement. The Interim Liquor Agreement, if applicable, duly executed by Seller or Manager, as applicable;

7.3.14.Construction Warranties. A written agreement assigning all of Seller’s right, title and interest in and to any unexpired Construction Warranties to Purchaser pursuant to the terms of the GC Contract, and, if obtained, the General Contractor’s consent to such assignment.

7.3.15.Additional Documents. Any additional documents that Escrow Agent or the Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement (provided, however, that except for any such provisions contained in the closing affidavits approved, executed and delivered by Seller at Closing, no such additional document shall materially expand any obligation, covenant, representation or warranty of Seller or result in any new or additional material obligation, covenant, representation or warranty of Seller under this Agreement beyond those expressly set forth in this Agreement).

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Section 7.4Purchaser’s Deliveries in Escrow. As of or prior to the Closing Date, Purchaser shall deliver in escrow to Escrow Agent the following:

7.4.1.Assignment and Assumption Agreement. The Assignment and Assumption Agreement, in the form of Exhibit C-2 hereto, executed by Purchaser;

7.4.2.Conveyancing or Transfer Tax Forms or Returns. Such conveyancing or transfer tax forms or returns, if any, as are required to be delivered or signed by Purchaser by applicable state and local law in connection with the conveyance of Real Property;

7.4.3.Authority. Evidence of the existence, organization and authority of Purchaser and of the authority of the persons executing documents on behalf of Purchaser reasonably satisfactory to the Title Company;

7.4.4.Purchaser’s Certificate. A certificate in the form attached hereto as Exhibit G evidencing the reaffirmation of the truth and accuracy of Purchaser’s representations and warranties as of the Closing Date (subject to any exceptions noted in the certificate) and the compliance in all material respects with all covenants to be complied with prior to Closing;

7.4.5.Holdback Escrow Agreement. The Holdback Escrow Agreement in the form of Exhibit H, duly executed by Purchaser;

7.4.6.Interim Liquor Agreement. The Interim Liquor Agreement, if applicable, duly executed by Purchaser or Manager, as applicable; and

7.4.7.Additional Documents. Any additional documents that Escrow Agent or the Title Company may reasonably require for the proper consummation of the transaction contemplated by this Agreement (provided, however, no such additional document shall materially expand any obligation, covenant, representation or warranty of Purchaser or result in any new or additional material obligation, covenant, representation or warranty of Purchaser under this Agreement beyond those expressly set forth in this Agreement).

Section 7.5Closing Statements. As of or prior to the Closing Date, Seller and Purchaser shall deposit with Escrow Agent executed closing statements consistent with this Agreement in the form approved by Escrow Agent and the parties.

Section 7.6Purchase Price. At or before 12:00 p.m. Central time on the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase Price, less the Earnest Money that is applied to the Purchase Price, plus or minus applicable prorations and credits as provided in this Agreement, in immediate, same-day U.S. federal funds wired for credit into Escrow Agent’s escrow account, which funds must be delivered in a manner to permit Escrow Agent to deliver good funds to Seller or its designee on the Closing Date by wire transfer (or by such other reasonable method as requested by Seller).

Section 7.7Possession. Seller shall deliver possession of the Property to Purchaser at the Closing, subject only to the Permitted Exceptions.

Section 7.8Delivery of Books and Records. Immediately after the Closing, Seller shall deliver to the offices of Purchaser or Manager or to the Real Property, to the extent in Seller’s possession or control, and not retained by Manager, all Books and Records, including but not limited to maintenance records and warranties, plans and specifications, licenses, permits and certificates of occupancy, copies or originals of all Books and Records, Assumed Service Contracts, Leases, License Agreements, and copies of correspondence with suppliers, all advertising materials, booklets, and keys.

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Section 7.9Seller Post-Closing Obligation Regarding Construction Warranties.Seller shall use reasonably commercial efforts to cause the General Contractor to reissue any Construction Warranties in respect to the Property previously issued to entities other than Seller. This covenant and agreement shall survive the Closing.

ARTICLE 8
PRORATIONS, DEPOSITS, COMMISSIONS

Section 8.1Prorations. At Closing, the following items shall be prorated as of the Closing Date with all items of income and expense for the Property being borne by Purchaser from and after (and including) 12:01 A.M. on the Closing Date (the “Cut Off Time”):

8.1.1.Prepaid Room Fees. All prepaid room rental fees or rents or any other prepayments for any other use of facilities at Hotel or any other payment for the use thereof and all other prepayments and concessions, any of which are applicable to periods beginning with the Closing Date as hereinafter set forth, shall be credited to the Purchaser.

8.1.2.Taxes. All state, county and municipal ad valorem taxes and all other ad valorem taxes, assessments, and similar charges, whether due and payable or not and whether payable in installments with respect to any or all of the Real Property, Tangible Personal Property, and Inventory (the “Taxes”) shall be prorated as of the Closing Date. Taxes for all periods prior to the year in which Closing occurs shall be paid by Seller on or before the Closing Date. If the amount of Taxes is not known at Closing, proration of taxes will be made upon the basis of the previous year’s Taxes with Purchaser receiving a credit against the portion of the Purchase Price payable to Seller for Seller’s share thereof; provided, however, that after the Closing, Seller and Purchaser shall reprorate the Taxes and pay any deficiency in the original prorations to the party to which such deficiency is owed promptly upon receipt of the actual bill for the relevant billing periods, which obligation shall survive Closing. In the event that any assessments on the Property are payable in installments, then the installment for the current tax year shall be prorated in the manner set forth in this Article 8. For Real Property Taxes, because the 2022 tax statement will not be available until October, 2022, Seller and Purchaser agree to prorate Real Estate Taxes as of the Cut Off Time based on an amount equal to one hundred forty percent (140%) of 2021 Real Property Taxes. That is, if 2021 Real Property Taxes are $905,000, with Seller owning the Property in 2022 prior to the Cut-Off Time (86 out of 365 days = 24%) for 24% of the calendar days in 2022, Seller would be responsible for an additional $86,800 (140% x $905,000 = $1,267,000; $1,267,000 - $905,000 = $362,000; 24% of $362,000 = $86,880) in Real Property Taxes at Closing. Purchaser shall be responsible for any 2022 Real Property Taxes in excess of the amount allocable to Seller pursuant to this Section 8.1.2.

8.1.3.Guest Ledger Receivables. Guest ledger receivables shall be pro-rated between Seller and Purchaser. Seller shall receive a credit for all revenues (net of any Taxes, travel agent commissions, credit card commissions or other similar costs to collect such revenues) for all guest ledger receivables for (i) consecutive room nights up to (but not including) the night during which the Cut Off Time occurs and (ii) one-half (1/2) of all amounts (room revenue only, net of any Taxes, travel agent commissions, credit card commissions or other similar costs to collect such revenues) charged to the guest ledger for the room night which includes the Cut Off Time (other than any restaurant and bar charges on the guest ledger which shall be prorated in accordance with Section 8.1.13). Purchaser shall be entitled to the amounts of the guest ledger receivables for (i) one-half (1/2) of all amounts charged to the guest ledger for the room night which includes the Cut Off Time (other than any restaurant, bar and other charges on the guest ledger which shall be prorated in accordance with Section 8.1.13) and (ii) all room nights on and after the Closing Date.

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8.1.4.Utilities. Seller shall be responsible for all utilities and similar charges, including water and sewer charges, for the Hotel (“Utilities”) prior to the Closing Date and shall cause any and all meters to be read on the Closing Date. Purchaser will, if possible, arrange for Utilities to be billed to the name of Purchaser on the Closing Date, including the posting of any required deposits. All Utilities for the month in which Closing occurs shall be prorated as of the Closing Date. Utilities for all periods prior to the month in which Closing occurs shall be paid by Seller on or before the Closing Date. If the amount of Utilities is not known at Closing, proration of Utilities will be made upon the basis of the previous month’s Utilities with Purchaser receiving a credit against the portion of the Purchase Price payable to Seller for Seller’s share thereof. Should the actual Utilities for the month of Closing be more or less than the amount used as a basis for proration at Closing, then as an obligation of the parties which shall survive Closing, Purchaser and Seller within thirty (30) days after the final Utilities for the month of Closing is determined make the proper adjustment so that such proration will be accurate based upon the actual amount of Utilities, and payment will be made promptly to the Seller or to Purchaser, whichever shall be entitled to such payment, by the other party. Seller shall be entitled to receive a refund of all current utility deposits. Purchaser shall post any utility deposits required to enable the return of Seller’s deposits. The covenants and agreements in this Section shall survive the Closing.

8.1.5.Permits and License Agreement Fees. Permit and license fees of assignable permits and License Agreements, if any, shall be pro-rated between Seller and Purchaser as of the Cut Off Time.

8.1.6.Rents. Rents and any other amounts payable by tenants or licensees under any Leases or License Agreements shall be prorated as of the Closing Date and adjusted against the Purchase Price on the basis of a schedule which shall be prepared by Seller and delivered to and acceptable to Purchaser at Closing. The proration of rent and any other amounts payable by tenants shall be made on the basis of actual rent collected and there shall be no proration for uncollected rent or other amounts. At Closing, Purchaser shall receive a credit for any leasing commissions and tenant improvements costs and allowances which Purchaser will be required to pay after Closing with respect to any existing Leases.

8.1.7.Prepaid Items. Prepaid items (including pre-paid advertising, to the extent the advertising services run after the Closing Date, but excluding production costs for advertising incurred prior to the Closing Date) being assumed by Purchaser and attributable to a period after Closing shall be pro-rated between Seller and Purchaser as of the Cut Off Time.

8.1.8.Commissions. Tour/travel agent’s commissions shall be pro-rated between Seller and Purchaser as of the Cut Off Time.

8.1.9.Management Agreement. All fees, expenses, reimbursements and charges payable under the Management Agreement (without duplication of any other proration herein), including the Base Fee and Incentive Fee (to the extent attributed to and payable in the period prior to the Cut Off Time, with no post-Closing Date lookback), and any Reimbursable Expenses (each as defined in the Management Agreement), provided that Seller and Purchaser shall each be solely responsible for one half (1/2) of any Reimbursable Expenses arising in connection with the transactions contemplated by this Agreement. Purchaser shall be solely responsible for any post-Cut Off Time Reimbursable Expenses imposed in the Management Agreement.

8.1.10.Service Contracts. Payments due, prepaid expenses, and other obligations under the Assumed Service Contracts (other than for utilities which proration is addressed separately in Section 8.1.4 hereof) shall be pro-rated between Seller and Purchaser as of the Cut Off Time, with Seller being credited for amounts prepaid for periods following

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Closing, and Purchaser being credited for amounts accrued and unpaid. Purchaser shall receive a credit for all deposits held by Seller under the Assumed Service Contracts (together with any interest thereon) which are not transferred to Purchaser. At Closing, Seller shall receive a credit for all deposits made by Seller under the Assumed Service Contracts (together with any interest earned thereon) which are transferred to Purchaser or remain on deposit for the benefit of Purchaser. In no event shall Purchaser be responsible for costs or expenses related to construction, capital improvement and other similar work performed prior to the Closing Date, all of which shall be paid by Seller on or prior to the Closing Date.

8.1.11.Personal Property. Seller shall receive a credit for gift shop and alcoholic beverage Inventory as recorded by the Manager on the balance sheet consistent with past practice. Seller shall not receive a credit for the value of any other item of Tangible Personal Property, Intangible Personal Property, or Inventory.

8.1.12.Vouchers. On the day which is five (5) days prior to the Closing Date, Seller will provide Purchaser with a complete schedule of all outstanding (i) gift certificates, vouchers, donations and other similar obligations which have been issued by Seller or Manager, (ii) trade credits, trade-out or barter arrangements payable by Seller to any other party for services rendered in the past or to be rendered in the future, in each case which may be used in full or partial payment for any Hotel service, including room rentals, food and beverage service, or any other item (collectively, the “Vouchers”). Purchaser shall receive a credit at Closing for the value of all outstanding Vouchers. Seller shall indemnify, defend, and hold Purchaser and its agents harmless against any liability arising prior to the Closing Date out of or with respect to any Vouchers not credited to Purchaser at Closing. This Section shall survive the Closing.

8.1.13.Restaurants and Bars; Other Venues. Seller shall close out the transactions in the restaurants, bars and other income producing venues in the Hotel as of the regular closing time for each venue during the night in which the Cut Off Time occurs and retain all monies collected as of such closing, and Purchaser shall be entitled to any monies collected from those venues thereafter.

8.1.14.Vending Machines. Seller shall remove all monies from all vending machines, laundry machines, pay telephones and other coin operated equipment as of the Cut Off Time and shall retain all monies collected therefrom as of the Cut Off Time, and Purchaser shall be entitled to any monies collected therefrom after the Cut Off Time.

8.1.15.Bookings. Purchaser shall receive a credit for all prepaid (advance) deposits for bookings at the Hotel scheduled to occur on or after the Closing Date, except to the extent such deposits are transferred to Purchaser.

8.1.16.Trade Payables. Except to the extent an adjustment or proration is made under another subsection of this Article 8, (a) Seller shall pay in full prior to the Closing all amounts payable to vendors or other suppliers of goods or services for the Hotel (the “Trade Payables”) which are due and payable as of the Closing Date for which goods or services have been delivered to the Hotel prior to the Closing; and (b) Purchaser shall receive a credit for the amount of such Trade Payables which have accrued, but are not yet due and payable as of the Closing Date, and which have been delivered to the Hotel prior to the Closing Date, and Purchaser shall pay all such Trade Payables accrued as of the Closing Date when such Trade Payables become due and payable; provided, however, Seller and Purchaser shall reprorate the amount of credit for any Trade Payables and pay any deficiency in the original proration to the other Party promptly upon receipt of the actual bill for such goods or services.

8.1.17.Function Revenues. Revenues from conferences, receptions, catering, meetings and other functions occurring in any conference, banquet or meeting rooms at the

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Hotel, including usage charges and related taxes, food and beverage sales, valet parking charges, equipment rentals and telecommunications charges, shall be allocated between Seller and Purchaser, based on when the function therein commenced, with (a) one-day functions commencing prior to the Cut-Off Time being allocated to Seller; (b) one-day functions commencing after the Cut-Off Time being allocated to Purchaser; and (c) multi-day functions being allocated between Seller and Purchaser according to the number of days of the function occurring before the Cut-Off Time and the number of days of the function occurring after the Cut-Off Time.

8.1.18.Employment Expenses.

(a)Seller shall be solely responsible and liable for payment of all wages, salaries, bonuses and retirement, health, welfare and any other employee benefits of Hotel employees, whether provided under the Management Agreement or otherwise, up to and including the Cut-Off Time, and there shall be a credit against the Purchase Price equal to the amount of the amount of any such wages, salaries, bonuses and retirement, health, welfare and any other employee benefits of Hotel employees that are earned or accrued, but unpaid, as of the Closing Date. Purchaser shall be solely responsible and liable for payment of all wages, salaries, bonuses and retirement, health, welfare and any other employee benefits of Hotel employees, whether provided under the Management Agreement or otherwise following the Cut-Off Time.

(b)To the extent that Hotel employees have, as of the Closing Date, any accrued but unused vacation days, holidays, sick leave, personal days and any other form of paid time off or leave (whether under the Management Agreement or otherwise) or will be entitled to an annual or other bonus at the end of the annual or other period in which the Closing Date occurs, (i) there shall be a credit against the Purchase Price equal to the amount of the value of any such days or time (and the anticipated amounts of any such bonuses based on budgeted performance as of the Cut-Off Time, if applicable, to the extent attributable to the period prior to the Cut-Off Time (except to the extent that bonuses have been paid with respect to periods ending prior to the Cut-Off Time), such bonuses to be trued-up during the post-Closing prorations reconciliation period based on actual performance), and (ii) Purchaser shall be solely responsible and liable for payment of all such amounts to the extent of such credit.

8.1.19.Other Adjustments and Prorations. All other items of income and expense as are customarily adjusted or prorated upon the sale and purchase of a hotel property similar to the Property shall be adjusted and prorated between Seller and Purchaser accordingly.

Section 8.2Final Determination of Adjustments and Prorations. Closing adjustments and prorations, as provided for in this Article 8, shall be tentatively determined by Seller and Purchaser as of the Cut Off Time and payment of the net figure resulting therefrom shall be paid by adjusting the Purchase Price, except as otherwise provided herein. Notwithstanding anything herein to the contrary, Seller shall prepare a draft prorations schedule to be delivered to Purchaser no later than five (5) days prior to the Closing Date. A final closing adjustment shall be made by Purchaser and Seller within ninety (90) days after the Closing, and to the extent that any additional payment or repayment is indicated on the final closing adjustment, the payment or repayment shall be made within thirty (30) days after the final adjustment is made; provided, however, that a final adjustment for Taxes shall be made by Purchaser and Seller within thirty (30) days of receipt of the tax bills for the tax year in which the Closing occurs.

It is specifically understood and agreed that Purchaser is not buying accounts receivable of Seller which are more than thirty (30) days old (“Over 30 Receivables”) as of the Cut Off

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Time. Purchaser shall purchase accounts receivable which are less than thirty (30) days old (“Under 30 Receivables”) as of the Cut Off Time. At Closing, Seller shall deliver to Purchaser a true and accurate schedule of Seller’s accounts receivables itemized by invoice (the “AR Schedule”). All payments received by Purchaser after Closing from any invoice listed on the AR Schedule for Over 30 Receivables shall be the property of Seller and delivered to Seller by Purchaser. Any payments received by Purchaser after the Closing due to Seller but not listed on the AR Schedule shall be applied first for the account of Purchaser for amounts due to Purchaser from that debtor for any obligation incurred subsequent to Closing; and second, for any and all amounts due to Seller for periods prior to Closing. Purchaser agrees to promptly remit any payments to Seller upon receipt of the same to the address of Seller listed herein, or as otherwise directed by Seller. Purchaser shall not be liable to Seller for any amounts not collected. Additionally, Seller agrees, that in the event Seller should receive any accounts receivable due Purchaser following Closing, it will promptly remit the same to Purchaser at the address of Purchaser listed herein, or as otherwise directed by Purchaser.

The sale contemplated herein does not include cash, checks and other funds, including till money, held at the Hotel as of the Closing Date (all of the above collectively referred to as “House Banks”). Seller shall retain all checks and amounts contained in all Hotel bank accounts. The cash and other funds held in House Banks, including till money, shall be turned over to Purchaser and credited to Seller. To avoid doubt, checks in House Banks, cash in Seller’s operating accounts, cash in Seller’s escrow accounts for taxes, insurance, and FF&E reserves or other reserves, including interest payment reserves, shall remain Seller’s property. For purposes of this Section, any accounts receivable of Seller for which checks have been received but have not been deposited or otherwise cleared payment shall be deemed paid and shall not be purchased by Purchaser and Seller shall receive no credit for the same at Closing.

Section 8.3Safes and Baggage. On the Closing Date, Seller shall cause the delivery to Purchaser of all Seller’s keys (or electronic key equipment in lieu of keys) to the safes and rooms in the Hotel. On the Closing Date, Seller shall give written notice to those persons who have deposited items in the house safe, advising them of the sale of the Hotel to Purchaser and requesting the removal and verification of their contents in the house safe. All such removals and verifications on the Closing Date shall be under the supervision of Seller and Purchaser’s respective representatives. All contents that are to remain in the house safe shall be inventoried and recorded and shall thereafter be the responsibility of the Purchaser. Items belonging to the guests who have not responded to such written notice by so removing and verifying their safe contents on the Closing Date shall be inventoried and recorded in the presence of the respective representatives. Any such contents so recorded and thereafter remaining in the hands of Purchaser shall be the responsibility of Purchaser. On the Closing Date, representatives of Purchaser and Seller shall take an inventory of all baggage, valises, and trunks (collectively “baggage”) checked or left in the care of Seller. From and after the Closing Date, Purchaser shall be responsible for all baggage listed in said inventory. Purchaser shall be responsible for, and shall indemnify and hold harmless the Seller from and against any indemnification loss incurred by Seller with respect to, any theft, loss or damage to the contents of any safe deposit box or baggage from and after the time such safe deposit box or baggage have inventoried pursuant to this Section 8.3. Seller shall be responsible for, and shall indemnify and hold harmless Purchaser from and against any indemnification loss incurred by Purchaser with respect to, any theft, loss or damage to the contents of any safe deposit box or baggage prior to the time such safe deposit box or baggage has been inventoried. This Section 8.3 shall survive the Closing.

Section 8.4Closing Costs. Closing costs shall be allocated between Seller and Purchaser in accordance with Section 1.2.

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Section 8.5Tenant Deposits. All tenant and licensee security deposits collected and not applied by Seller (and interest thereon if required by law or contract) shall be transferred or credited to Purchaser at Closing; provided, however, Seller shall not apply any such security deposits except in the ordinary course of business. If Seller applies any such security deposit to a rental or other payment delinquency, such delinquency must have existed for 10 or more days prior to such application. As of the Closing, Purchaser shall assume Seller’s obligations related to tenant and licensee security deposits, but only to the extent they are credited or transferred to Purchaser.

Section 8.6Commissions. Seller and Purchaser each represent and warrant to the other that no real estate brokerage commission is payable to any person or entity in connection with the transaction contemplated hereby, and each agrees to and does hereby indemnify and hold the other harmless against the payment of any commission to any other person or entity claiming by, through or under Seller or Purchaser, as applicable. This indemnification shall extend to any and all claims, liabilities, costs and expenses (including reasonable attorneys’ fees and litigation costs) arising as a result of such claims and shall survive the Closing.

Section 8.7Music Venue Improvements Credit. The Music Venue facility that is part of the Hotel is unimproved and unrented. Purchaser shall receive a credit against the Purchase Price equal to $1,250,000, being the parties’ estimate of the cost reasonably likely to be required to improve the Music Venue to “white box” condition or better, as compared to similar upscale venues in the local market area, for use of Purchaser, or a third party tenant.

Section 8.8Allocation of Purchase Price. Seller and Purchaser shall use reasonable efforts to agree, prior to Closing, upon an allocation of the Purchase Price, including among the Land, the Improvements, the Tangible Personal Property and the Intangible Personal Property, for federal, state and local tax purposes. If the parties cannot agree upon such allocation of the Purchase Price, each party shall file federal, state and local tax returns based on each party’s own determination of the proper allocation of the Purchase Price, each bearing its own consequences with respect to any discrepancies; provided, however, that Purchaser’s allocation shall control for purposes of paying any transfer and recordation taxes.

Section 8.9Survive Closing. The provisions of this Article 8 shall survive Closing and the delivery of the Deed for one (1) year; provided, however, that the provisions of Section 8.6 shall survive Closing and the delivery of the Deed indefinitely.

ARTICLE 9
REPRESENTATIONS AND WARRANTIES

Section 9.1Seller’s Representations and Warranties. Seller represents and warrants to Purchaser that:

9.1.1.Organization and Authority; Conflicts and Pending Action. Seller is duly organized, validly existing, and in good standing in the State of Delaware, and is duly qualified to do business and in good standing in the State of Tennessee. Seller has the full right and authority and has obtained any and all consents required to enter into this Agreement and to consummate or cause to be consummated the transactions contemplated hereby. This Agreement has been, and all of the documents to be delivered by Seller at the Closing will be, duly authorized and executed and constitute, or will constitute, as appropriate, the valid and binding obligation of Seller, enforceable in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization, receivership, fraudulent conveyance or transfer moratorium and other similar laws affecting creditors rights and remedies generally. There is no agreement to which Seller is a party or, to Seller’s knowledge, that is binding on Seller which is in conflict with this Agreement. There is no action or proceeding pending or, to Seller’s

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knowledge, threatened against Seller or relating to the Property, which challenges or impairs Seller’s ability to execute or perform its obligations under this Agreement.

9.1.2.Violations of Applicable Law. Neither Seller nor, to Seller’s knowledge, Manager has received from any Governmental Authority written notice of, and Seller has no knowledge of, any violation of any laws applicable (or alleged to be applicable) to the Property, the employment of the Hotel employees or the operation of the Hotel, or any part thereof, that has not been corrected. “Governmental Authority” means any foreign, domestic, federal, territorial, state, county, city, township or other local governmental authority, or any legislature, executive, regulatory, administrative or other agency, instrumentality, court, government organization, quasi-governmental organization, mediator, arbitrator or arbitral forum, commission, tribunal thereof, or any political or other subdivision, department or branch of any of the foregoing, or any private body exercising any Tax, regulatory or governmental or quasi-governmental authority.

9.1.3.Condemnation. Neither Seller nor, to Seller’s knowledge, Manager has received written notice of, and Seller has no knowledge of, any threatened or pending condemnation of any part of the Property.

9.1.4.Claims. Except as set forth in Schedule 9.1.4, (i) Seller is not aware of nor has either Seller nor, to Seller’s knowledge, Manager received any filing in any litigation, arbitration, administrative or other adjudicatory proceeding or legal action with respect to the Property, and (ii) neither Seller nor, to Seller’s knowledge, Manager has received written notice of any actual or threatened claim, charge or complaint with respect to the Property.

9.1.5.No Union Representation. Neither Seller nor, to Seller’s knowledge, Manager, has any agreements with any labor union which apply to the operation and/or management of the Property. To Seller’s knowledge, no Hotel employees are represented by a labor union. Seller is not aware of nor has Seller or, to Seller’s knowledge, Manager received any written notice of any union organization activities at the Property or with respect to the employees of the Hotel.

9.1.6.Employment Agreements. All of the employees employed at the Hotel are employees of Manager. Seller is not, and to Seller’s knowledge Manager is not, a party to any written employment or compensation agreements with any employees.

9.1.7.Management and other Agreements. Except for the Management Agreement, and the agreements listed in Exhibit D, Seller is not a party to any management, franchise, license or similar agreements with respect to the Hotel. To Seller’s knowledge, there are no uncured defaults by Manager or Seller under the Management Agreement.

9.1.8.ERISA. No pension, retirement, profit-sharing or similar plan or fund, ERISA qualified or otherwise, has been established by or on behalf of Seller in connection with the Property and no liabilities for pension or retirement payments exist in connection therewith. Neither Seller nor the Property, nor any portion thereof, is the asset of an employee benefit plan as defined in Section 3(3) of ERISA covered under Title I, Part 4 of ERISA or a plan or arrangement covered by Section 4975 of the Code as determined for purposes of the U.S. Department of Labor regulations under ERISA (“Plan Assets” ), and no Plan Assets have been used in connection with the financing, refinancing, or purchase by Seller of all or any portion of the Property.

9.1.9.Bankruptcy. No bankruptcy, insolvency, rearrangement, assignment for the benefit of creditors or similar action involving any portion of the Property, whether voluntary or involuntary, is pending or, to Seller’s knowledge, threatened in writing, and Seller has never:

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(i)filed a voluntary petition in bankruptcy;

(ii)been adjudicated bankrupt or insolvent or filed a petition or action seeking any reorganization, arrangement, recapitalization, readjustment, liquidation, dissolution or similar relief under any Federal bankruptcy act or any other laws;

(iii)sought or acquiesced in the appointment of any trustee, receiver or liquidator of all or any substantial part of Seller’s properties, the Property, personal property or any portion thereof; or

(iv)made an assignment for the benefit of creditors or admitted in writing Seller’s inability to pay Seller’s debts generally as the same become due.

Seller is not anticipating or contemplating any of the actions set forth in (i) through (iv) of this subsection.

9.1.10.Service Contracts. Subject to Section 6.1.2, the Service Contracts delivered to Purchaser as a part of the Property Documents are the only Service Contracts affecting the Property as of the Effective Date. To Seller’s knowledge, Exhibit D sets forth a true and accurate list of all Service Contracts. Neither Seller nor, to Seller’s knowledge, Manager has received or given any written notice of default under any Service Contract with respect to a default that remains uncured as of the Effective Date and, to Seller’s knowledge, no such default exists and there are no events that, with notice or the passage of time or both, would constitute a default by Seller or the applicable counterparty under any of the Service Contracts. Seller has delivered or made available to Purchaser true and complete copies of all Service Contracts (including all amendments, modifications and other written agreements with respect thereto) known to Seller.

9.1.11.Leases. Subject to Section 6.1.2, the Leases delivered to Purchaser as a part of the Property Documents are the only Leases affecting the Property as of the Effective Date. Exhibit D sets forth a true and accurate list of all Leases. Neither Seller nor, to Seller’s knowledge, Manager has received or given any written notice of default under any Leases with respect to a default that remains uncured as of the Effective Date and, to Seller’s knowledge, no such default exists and there are no events that, with notice or the passage of time or both, would constitute a default by Seller or the applicable counterparty under any of the Leases. Seller has delivered or made available to Purchaser true and complete copies of all Leases (including all amendments, modifications and other written agreements with respect thereto).

9.1.12.License Agreements. Subject to Section 6.1.2, the License Agreements delivered to Purchaser as a part of the Property Documents are the only License Agreements affecting the Property as of the Effective Date. Exhibit D sets forth a true and accurate list all License Agreements. Neither Seller nor, to Seller’s knowledge, Manager has received or given any written notice of default under any License Agreements with respect to a default that remains uncured as of the Effective Date and, to Seller’s knowledge, no such default exists and there are no events that, with notice or the passage of time or both, would constitute a default by Seller or the applicable counterparty under any of the License Agreements. Seller has delivered or made available to Purchaser true and complete copies of all License Agreements (including all amendments, modifications and other written agreements with respect thereto). With respect to the NOHO License: (a) the “Effective Date” thereof is January 15, 2018; (b) the first Restaurant (as defined in the NOHO License), “The Dutch,” opened on October 6, 2021; (c) the second Restaurant, “Carne Mare”, opened on November 12, 2021; and (d) as of the Effective Date, Developer Fees (as defined in the NOHO License) in the amount of $125,000 remain unpaid to Licensor (as defined in the NOHO License), which Developer Fees will be fully paid prior to the

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Closing, and there are no other amounts owing to Licensor, other than monthly amounts accrued, but not yet due and payable, pursuant to the NOHO License. With respect to the Barista License: (a) the Coffee Venue (as defined in the Barista License) opened on October 6, 2021; and (b) as of the Effective Date, all Developer Fees (as defined in the Barista License) and other amounts owing to Licensor (as defined in the Barista License) have been paid in full, other than monthly amounts accrued, but not yet due and payable, pursuant to the Barista License. As used herein, “NOHO License” means that certain License and Services Agreement among Nashville F&B LLC, a Tennessee limited liability company, NOHO Hospitality LLC, a New York limited liability company, and Seller (as assignee of 12th Avenue Realty Holding Company, LLC, a Delaware limited liability company), and “Barista License” means that certain License and Services Agreement, between Barista Parlor LLC, a Tennessee limited liability company, and Seller, dated December 5, 2018.

9.1.13.Tangible Personal Property. Seller owns the Tangible Personal Property, the landlord’s interest in the Leases, and the owner’s interest in the Service Contracts, free and clear of any liens or encumbrances, except for the Permitted Exceptions and any liens or encumbrances that will be removed as of the Closing.

9.1.14.Third-Party Rights. Other than this Agreement, no person or entity has been granted any rights of first refusal to purchase all or any part of the Property, options to purchase all or any part of the Property or other rights whereby any individual or entity has the right to purchase all or any part of the Property.

9.1.15.Special Taxing District. Seller has not submitted any pending or unresolved application for the creation of any special taxing district affecting the Property, or annexation thereby, or inclusion therein.  Seller has not received written notice that any Governmental Authority has commenced or intends to commence construction of any special or off-site improvements that would be assessed against the Property or has imposed or increased or intends to impose or increase any special or other assessment against the Property or any part thereof, including assessments attributable to revaluations of the Property. 

9.1.16.Taxes. To Seller’s knowledge, after due inquiry based on Seller’s review of reports from Manager (except for Real Property Taxes), all business, occupation, sales, use, gross receipts, excise, VAT, employer withholding, rental, real and personal property and other similar taxes imposed with respect to all or any portion of the Property or the operation thereof, which are currently due and payable by Seller have been paid in full and all required reports and returns relating thereto have been timely filed.  The Property has not been the subject of a sales tax audit since opening for business in 2021. Neither Seller nor, to Seller’s knowledge, Manager, has received any written notice of any proposed special taxes or assessments relating to the Property or any part thereof or any planned public improvements that will result in a special tax or assessment against the Property for any period prior to or on or after the Closing Date. Neither Seller nor, to Seller’s knowledge, Manager, has received written notice of any special tax assessment relating to the Hotel, the Property or any portion thereof, and there are no tax agreements in place affecting the Hotel or the Property.

9.1.17.OFAC. Neither Seller nor, to Seller’s knowledge, any of its Affiliates is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated Nationals and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and will not engage in any dealings or transactions or be otherwise associated with such persons or entities. The term “Affiliate” is defined as any person that controls Seller, which, for purposes of this Agreement means Seller’s

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upstream owners: Nashville Gulch Hotel Owner LLC, a Delaware limited liability company, and 12th Avenue Realty Holding Company LLC, a Delaware limited liability company. For purposes of this Section 9.1.17 and 9.2.4 the term “Control” (and derivative terms) is defined as the power to direct or cause the direction of the management and policies of the applicable entity through ownership of voting securities or beneficial interests, by contract or otherwise, and persons or entities having control include any general partner, managing member, manager or executive officer of the applicable entity, and any direct or indirect holder of a ten percent (10%) or greater ownership interest in such applicable entity.

9.1.18.Gift Certificates. To Seller’s knowledge, and in reliance on Manager provided information, Schedule 9.1.18 contains a true and accurate list of all unexpired Vouchers, and the aggregate value for such Vouchers as of the Effective Date.

9.1.19.Americans With Disabilities Act. Seller is not aware of nor has Seller or, to Seller’s knowledge, Manager received written notice that the Hotel is not in compliance with the Americans With Disabilities Act or any state analogue thereof.

9.1.20.Financial Statements. The financial statements included in the Property Documents or otherwise provided by Seller to Purchaser are true, correct and complete copies of such financial statements delivered to Seller by Manager and, to Seller’s knowledge, present accurately, in all material respects, the results of operations and cash flows of the Hotel for the periods set forth therein.

9.1.21.Hazardous Materials. Seller is not aware of nor has Seller or, to Seller’s knowledge, Manager received from any person, entity or Governmental Authority written notice of any uncured violation of any provision of applicable law pertaining to Hazardous Materials, and to Seller’s knowledge, based solely on third party reports from consultants which have been provided to Purchaser, the Property is in compliance with all Environmental Laws. As used herein, the term “Hazardous Materials” means any substance, chemical, waste or material that is or becomes regulated by any federal, state or local governmental authority because of its toxicity, infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or reactivity, including asbestos or asbestos containing material, the group of compounds known as polychlorinated biphenyls, flammable explosives, oil, petroleum or any refined petroleum product, fungi or bacterial matter which reproduces through the release of spores or the splitting of cells, including mold, mildew and viruses, whether or not living. “Environmental Laws” means (i) any laws which regulate the manufacture, generation, formulation, processing, use, treatment, handling, storage, disposal, distribution or transportation, or an actual or potential spill, leak, emission, discharge or release of any Hazardous Materials, pollution, contamination or radiation into any water, soil, sediment, air or other environmental media, including (A) the Comprehensive Environmental Response, Compensation and Liability Act, (B) the Resource Conservation and Recovery Act, (C) the Federal Water Pollution Control Act, (D) the Toxic Substances Control Act, (E) the Clean Water Act, (F) the Clean Air Act, and (G) the Hazardous Materials Transportation Act, and similar state and local laws, as amended as of the time in question, and (ii) any requirements relating to Hazardous Materials contained in any reciprocal easement agreements, operating easement agreements, covenants, conditions and restrictions or notices of record, affecting all or any portion of the Property (including that certain Notice of Land Use Restrictions recorded on April 5, 2021 as Document 20210404-0044086, in the Davidson County Register of Deeds).

9.1.22.Vehicles. Except as set forth in Schedule 9.1.22, Seller does not own or lease any vehicles in connection with the operation of the Hotel.

9.1.23.Privacy and Data Security. To Seller’s knowledge, (a) no Person has obtained unauthorized access to personally identifiable information (“Personal Information”) in

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the possession of Seller or its Affiliates, nor has there been any other compromise of the security, confidentiality or integrity of such information or data; (b) Seller and its Affiliates have complied in all material respects with (i) all applicable laws relating to privacy, personal data security and protection, and the collection, processing and use of Personal Information (collectively, “Privacy Laws”), (ii) the Payment Card Industry Data Security Standards (the “PCI DSS”), and (iii) their own internal employee-facing and external customer-facing privacy and data security policies and guidelines; and (c) the operation of the Hotel does not violate, and has not violated, any right to privacy or publicity of any third person in any material respect, including through the violation of any applicable Privacy Laws or the PCI DSS. Neither Seller nor its Affiliates have received any written notice, claim or demand from (i) a Governmental Authority asserting or claiming that Seller or its Affiliates have violated or have failed to comply with any Privacy Law or (ii) any person asserting a breach of a Privacy Law or seeking compensation for breach of a Privacy Law. Neither Seller nor its Affiliates has notified, or to Seller’s knowledge has been required or obligated to notify, any person with respect to a breach of privacy or security, or unauthorized misappropriation, access or use of, any Personal Information.

9.1.24.Foreign Person. Seller is a “United States person” (as defined in Section 7701(a)(30)(B) or (C) of the Code) for the purposes of the provisions of Section 1445(a) of the Code.

9.1.25.Fire Life Safety. To Seller’s knowledge, all fire life safety systems (“FLS”) at the Property are operable and meet any Governmental Authority codes.

9.1.26.Zoning Actions. Seller has received no notice of, and has no other knowledge of any pending or contemplated zoning action with respect to the Real Property. Seller has not received written notice of any pending or threatened judicial or administrative action against Seller or the Property, which would result in a change in the condition of the Property or any part thereof, or in any way prevent or limit the operation of the Property or any part thereof.

9.1.27.Improvements. Except for Punch List Reserve Obligations, all construction contracts for the performance of any work on, improvement at or for the benefit of, the Hotel entered into by Seller shall be terminated or completed and fully paid on or before Closing, and, except as set forth on any of the exhibits attached hereto, there is no amount remaining to be paid under any such construction contracts (other than routine end-of-contract negotiations with the general contractor, including payment of any retainage), nor any liability or obligation with respect thereto that is reasonably likely to be or become, or give rise to a claim of, a lien against the Property. Other than the Punch List Reserve Obligations, there are no ongoing capital improvement projects at the Hotel that have commenced on or before the Effective Date that are not scheduled to be completed prior to Closing.

Section 9.2Purchaser’s Representations and Warranties. Purchaser represents and warrants to Seller that:

9.2.1.Organization and Authority. Purchaser has been duly organized and is validly existing as a limited liability company in good standing in its state of formation and shall be qualified at Closing to do business in the State of Tennessee, to the extent required under applicable law. Purchaser has the full right and authority and has obtained any and all consents required to enter into this Agreement and to consummate or cause to be consummated the transactions contemplated hereby. This Agreement has been, and all of the documents to be delivered by Purchaser at the Closing will be, authorized and properly executed and constitute, or will constitute, as appropriate, the valid and binding obligation of Purchaser, enforceable in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization,

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receivership, fraudulent conveyance or transfer moratorium and other similar laws affecting creditors rights and remedies generally.

9.2.2.Conflicts and Pending Action. There is no agreement to which Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is in conflict with this Agreement. There is no action or proceeding pending or, to Purchaser’s knowledge, threatened against Purchaser in writing which challenges or impairs Purchaser’s ability to execute or perform its obligations under this Agreement.

9.2.3.ERISA. Purchaser is not a “benefit plan investor” within the meaning of Section 3(42) of Employee Retirement Income Security Act of 1974 (“ERISA”) and the regulations thereunder.

9.2.4.Prohibited Persons and Transactions. Neither Purchaser nor to Purchaser’s knowledge any of its Affiliates is, nor will they become, a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the OFAC of the Department of the Treasury (including those named on OFAC’s Specially Designated Nationals and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and will not engage in any dealings or transactions or be otherwise associated with such persons or entities.

Section 9.3Survival of Representations and Warranties. The representations and warranties set forth in this Article 9 are made as of the Effective Date and are remade as of the Closing Date and shall not be deemed to be merged into or waived by the instruments of Closing, but shall survive the Closing for a period of nine (9) months (the “Survival Period”). Terms such as “to Seller’s knowledge,” “to the best of Seller’s knowledge” or like phrases mean the actual present and conscious awareness or knowledge of David Tessier and David Carlins (“Seller’s Representatives”), without any duty of inquiry or investigation other than as noted below, provided, that Seller shall inquire of Manager to confirm the truth and accuracy of the representations and warranties that are qualified by Seller’s knowledge and, provided further that Seller represents and warrants Seller’s Representatives have significant knowledge regarding the Property; provided that so qualifying Seller’s knowledge shall in no event give rise to any personal liability on the part of Seller’s Representatives, or any of them, or any other officer or employee of Seller, on account of any breach of any representation or warranty made by Seller herein. Terms such as “to Purchaser’s knowledge,” “to the best of Purchaser’s knowledge” or like phrases mean the actual present and conscious awareness or knowledge of Shamir Kanji (“Purchaser’s Representative”), without any duty of inquiry or investigation other than as noted below, provided, that Purchaser represents and warrants Purchaser’s Representative has significant knowledge regarding the Purchaser and the transaction contemplated by this Agreement; provided that so qualifying Purchaser’s knowledge shall in no event give rise to any personal liability on the part of Purchaser’s Representative, or any of them, or any other officer or employee of Purchaser, on account of any breach of any representation or warranty made by Purchaser herein. These “knowledge” terms do not include constructive knowledge, imputed knowledge, or knowledge Seller or Purchaser or such persons do not have but could have obtained through further investigation or inquiry, subject to Seller’s duty to make inquiry of Manager as provided in this Section. No broker, agent, or party other than Seller’s Representatives are authorized to make any representation or warranty for or on behalf of Seller. Each party shall have the right to bring an action against the other on the breach of a representation or warranty hereunder, but only on the following conditions: (a) the party bringing the action for breach files such action within the Survival Period, and (b) neither party shall have the right to bring a cause of action for a breach of a representation or warranty unless the damage to such party on account of such breach (individually or when combined with damages from

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other breaches) equals or exceeds $100,000 (“Threshold”); provided that once the Threshold is exceeded the recovery shall be from first dollar. Notwithstanding the foregoing, the Threshold shall not apply to any true-ups pursuant to 8.1.19. Notwithstanding any other provision of this Agreement, any document or instrument delivered at Closing, any agreement contemplated by this Agreement, or any rights which Purchaser might otherwise have at law, equity, or by statute, whether based on contract or some other claim, Purchaser agrees that any liability of Seller to Purchaser will be limited to $6,500,000.00 (the “Liability Cap”). The provisions of this Section 9.3 shall survive the Closing. Any breach of a representation or warranty that occurs prior to Closing shall be governed by Article 10.

Section 9.4Punch List; Holdback Escrow.

9.1.1.Punch List. To the extent that any of the punch list items disclosed on Schedule 9.4.1 (the “Punch List Reserve Obligations”) have not been completed to Purchaser’s reasonable satisfaction prior to the Closing Date (including receipt of final and unconditional lien waivers against the Property from all contractors and subcontractors), following the Closing Date, Seller shall continue to manage and perform the Punch List Reserve Obligations in accordance with Seller’s past practice and applicable law and Purchaser shall provide Seller and Seller’s employees, agents and contractors reasonable access to the Property from and after the Closing to complete the Punch List Reserve Obligations in accordance with the terms hereof. Seller shall indemnify, defend and hold Purchaser, Purchaser’s affiliates, Manager and any of their contractors, agents and employees harmless from and against any mechanics’ liens, personal injury (including death), physical property damage, losses, costs, actual damages, liens, claims, liabilities or expenses (including, but not limited to, reasonable out-of-pocket attorneys’ fees, court costs and disbursements) incurred or caused by Seller or any of its agents, employees or contractors in connection with completion of the Punch List Reserve Obligations after the Closing Date. Provided, in all indemnification circumstances, lost profits, and consequential, incidental, punitive, special, treble (or other multiple), or other extraordinary damages shall not be recoverable except to the extent payable to a third party. The provisions of this Section 9.4.1 shall survive the Closing.

9.1.2.Holdback Escrow.

(i)To secure Seller’s Punch List Reserve Obligations at Closing, if any, (i) Purchaser, Seller and Escrow Agent shall execute and deliver a Holdback Escrow Agreement substantially in the form of Exhibit H attached hereto, relating to any unfinished Punch List Reserve Obligations (the “Holdback Escrow Agreement”) and (ii) the amount of unfinished Punch List Reserve Obligations otherwise payable to Seller at Closing shall be retained from Seller’s proceeds at Closing and held in escrow by Escrow Agent pursuant to the Holdback Escrow Agreement (the “Punch List Holdback Amount”). Additionally, to secure Seller’s payment and performance of its obligations under Section 9.3 which survive Closing, an amount equal to $3,000,000.00 (such amount, the “Liability Cap Holdback Amount” and, together with the Punch List Holdback Amount, the “Holdback Amount” ) otherwise payable to Seller at Closing shall be retained from Seller’s proceeds at Closing and held in escrow by Escrow Agent pursuant to the Holdback Escrow Agreement; provided, however, unless Purchaser elects in its sole and absolute discretion, the Post-Closing Holdback Amount shall not be used to pay amounts prorated as an obligation of Seller under this Agreement or any other Retained Liability which exists as of the Closing.

(ii)The Punch List Holdback Amount shall be held in escrow for the Survival Period; provided, however, if Seller completes its Punch List

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Reserve Obligations to Purchaser’s reasonable satisfaction, including receipt of lien waivers from all contractors and subcontractors, prior to the Closing Date, there will be no need to escrow the Punch List Holdback Amount. If, however, Seller has not satisfied its Punch List Reserve Obligation to Purchaser’s reasonable satisfaction prior to Closing, in whole or part, pursuant to the amounts scheduled in Exhibit I, the remaining value of unresolved Punch List Reserve Obligation shall be the Punch List Holdback Amount, which shall be deposited pursuant the Holdback Escrow Agreement. After the end of the Survival Period, (i) to the extent any Punch List Reserve Obligations have not been satisfied by Seller, any remaining amount held in escrow shall be released to Purchaser (unless such amount is the subject of any pending claim at such time) and (ii) any remaining Post-Closing Holdback Amount funds held in escrow shall be released to Seller (unless such amount is the subject of any pending claim at such time).

ARTICLE 10
DEFAULT AND REMEDIES

Section 10.1Seller’s Remedies. If Purchaser fails to consummate the purchase of the Property pursuant to this Agreement after the Inspection Period for any reason except failure by Seller to perform hereunder, Seller shall be entitled, as its sole and exclusive remedy (except as provided in Section 8.6, Section 10.3, Section 10.4 hereof and in the indemnification provisions of the Access Agreement) to terminate this Agreement and recover the Earnest Money as liquidated damages and not as penalty, in full satisfaction of claims against Purchaser hereunder. Seller and Purchaser agree that Seller’s damages resulting from Purchaser’s default are difficult, if not impossible, to determine and the Earnest Money is a fair estimate of those damages, which has been agreed to in an effort to cause the amount of damages to be certain. If Closing is consummated, Seller shall have all remedies available at law or in equity in the event Purchaser fails to perform any obligation of Purchaser under this Agreement that survives Closing. IN NO EVENT SHALL PURCHASER’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, MANAGER EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE. SELLER WAIVES CONSEQUENTIAL, EXEMPLARY, AND SPECIAL DAMAGES AGAINST PURCHASER UNLESS SUCH DAMAGES ARE PAID BY SELLER TO A THIRD PARTY.

Section 10.2    Purchaser’s Remedies. If Seller fails to consummate the sale of the Property pursuant to this Agreement or otherwise defaults in any material respects on its obligations hereunder at or prior to Closing for any reason except failure by Purchaser to perform hereunder, in any material respect, and such default or breach is not cured by the earlier of the fifth (5th) business day after written notice thereof from Purchaser or the Closing Date (except no notice or cure period shall apply if Seller fails to consummate the sale of the Property hereunder), Purchaser shall elect, as its sole and exclusive remedy (except as provided in Section 8.6, Section 10.3 and Section 10.4 hereof), either to (a) terminate this Agreement by giving Seller timely written notice of such election prior to or at Closing and recover the Earnest Money and, in addition to the Earnest Money, payment from Seller of Purchaser’s reasonable out-of-pocket costs and expenses based upon supporting back-up documentation (including reasonable attorneys’ fees incurred in connection with the transaction), but not to exceed $500,000.00, and, thereafter neither Purchaser nor Seller shall have any further rights or obligations hereunder, except those that expressly survive the termination of this Agreement, (b) enforce specific performance to consummate the sale of the Property hereunder, or (c) waive said failure or breach and proceed to Closing without any reduction in the Purchase Price. If Closing is

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consummated, Purchaser retains its rights to seek all remedies available at law or in equity (subject to Section 9.3 of this Agreement and only during the Survival Period with respect to breaches of Seller’s representations and warranties), in the event that Seller fails to perform its post-closing obligations hereunder that expressly survive Closing. Notwithstanding anything herein to the contrary, Purchaser shall be deemed to have elected to terminate this Agreement if Purchaser fails to file a lawsuit asserting such claim or cause of action in the county in which the Property is located within three (3) months following the scheduled Closing Date. IN NO EVENT SHALL SELLER’S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, MEMBERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, MANAGER, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE. PURCHASER WAIVES CONSEQUENTIAL, EXEMPLARY AND SPECIAL DAMAGES AGAINST SELLER UNLESS SUCH DAMAGES ARE PAID BY PURCHASER TO A THIRD PARTY.

Section 10.3    Attorneys’ Fees. In the event either party hereto employs an attorney in connection with claims by one party against the other arising from the operation of this Agreement, the non-prevailing party shall pay the prevailing party all reasonable fees and expenses, including attorneys’ fees, incurred in connection with such claims.

Section 10.4    Other Expenses. If this Agreement is terminated due to the default of a party, then the defaulting party shall pay any fees or charges due to Escrow Agent for holding the Earnest Money as well as any escrow cancellation fees or charges and any fees or charges due to the Title Company for preparation and/or cancellation of the Title Commitment.

ARTICLE 11
DISCLAIMERS, RELEASE AND INDEMNITY

Section 11.1    Disclaimers By Seller. Except as expressly set forth in this Agreement or in the Seller Closing Documents, it is understood and agreed that Seller and Seller’s agents or employees have not at any time made and are not now making, and they specifically disclaim, any warranties, representations or guaranties of any kind or character, express or implied, with respect to the Property, including, but not limited to, warranties, representations or guaranties as to (a) matters of title (other than Seller’s limited warranty of title to be contained in the Deed), (b) environmental matters relating to the Property or any portion thereof, including, without limitation, the presence of Hazardous Materials in, on, under or in the vicinity of the Property, (c) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water, and geologic faults and the resulting damage of past and/or future faulting, (d) whether, and to the extent to which the Property or any portion thereof is affected by any stream (surface or underground), body of water, wetlands, flood prone area, flood plain, floodway or special flood hazard, (e) drainage, (f) soil conditions, including the existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (g) the presence of endangered species or any environmentally sensitive or protected areas, (h) zoning or building entitlements to which the Property or any portion thereof may be subject, (i) the availability of any utilities to the Property or any portion thereof including, without limitation, water, sewage, gas and electric, (j) usages of adjoining property, (k) access to the Property or any portion thereof, (l) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural integrity, operation, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, (m) the condition or use of the Property or compliance of the

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Property with any or all past, present or future federal, state or local ordinances, rules, regulations or laws, building, fire or zoning ordinances, codes or other similar laws, (n) the existence or non-existence of underground storage tanks, surface impoundments, or landfills, (o) any other matter affecting the stability and integrity of the Property, (p) the potential for further development of the Property, (q) the merchantability of the Property or fitness of the Property for any particular purpose, (r) the truth, accuracy or completeness of the Property Documents, (s) tax consequences, or (t) any other matter or thing with respect to the Property.

Section 11.2    Sale “As Is, Where Is”. Purchaser acknowledges and agrees that upon Closing, Seller shall sell and convey to Purchaser and Purchaser shall accept the Property “AS IS, WHERE IS, WITH ALL FAULTS,” except to the extent expressly provided otherwise in this Agreement and any Seller Closing Documents, and except for the limited warranty of title to the Property conveyed by the Deed at Closing. Except as expressly set forth in this Agreement or any Seller Closing Documents, Purchaser has not relied and will not rely on, and Seller has not made and is not liable for or bound by, any express or implied warranties, guarantees, statements, representations or information pertaining to the Property or relating thereto (including specifically, without limitation, Property Documents packages distributed with respect to the Property) made or furnished by Seller, or any property manager, real estate broker, agent or third party representing or purporting to represent Seller, to whomever made or given, directly or indirectly, orally or in writing. Purchaser represents that it is a knowledgeable, experienced and sophisticated purchaser of real estate and that, except as expressly set forth in this Agreement, it is relying solely on its own expertise and that of Purchaser’s consultants in purchasing the Property and shall make an independent verification of the accuracy of any documents and information provided by Seller. Purchaser will conduct such inspections and investigations of the Property as Purchaser deems necessary, including, but not limited to, the physical and environmental conditions thereof, and shall rely upon same. By failing to terminate this Agreement prior to the expiration of the Inspection Period, Purchaser acknowledges that Seller has afforded Purchaser a full opportunity to conduct such investigations of the Property as Purchaser deemed necessary to satisfy itself as to the condition of the Property and the existence or non-existence or curative action to be taken with respect to any Hazardous Materials on or discharged from the Property, and will rely solely upon same and not upon any information provided by or on behalf of Seller or its agents or employees with respect thereto, other than such representations, warranties and covenants of Seller as are expressly set forth in this Agreement and in the Seller Closing Documents. Upon Closing, Purchaser shall assume the risk that adverse matters, including, but not limited to, adverse physical or construction defects or adverse environmental, health or safety conditions, may not have been revealed by Purchaser’s inspections and investigations. Purchaser hereby represents and warrants to Seller that: (a) Purchaser is represented by legal counsel in connection with the transaction contemplated by this Agreement; and (b) Purchaser is purchasing the Property for business, commercial, investment or other similar purpose and not for use as Purchaser’s residence. Purchaser waives any and all rights or remedies it may have or be entitled to, deriving from disparity in size or from any significant disparate bargaining position in relation to Seller.

Section 11.3    Seller Released from Liability. Purchaser acknowledges that it will have the opportunity to inspect the Property during the Inspection Period, and during such period, observe its physical characteristics and existing conditions and the opportunity to conduct such investigation and study on and of the Property and adjacent areas as Purchaser deems necessary, and Purchaser hereby FOREVER RELEASES AND DISCHARGES Seller from all responsibility and liability, including without limitation, liabilities under the Comprehensive Environmental Response, Compensation and Liability Act Of 1980 (42 U.S.C. Sections 9601 et seq.), as amended (“CERCLA”), the Resource Conservation and Recovery Act (42 U.S.C. Section 9601 et seq.), as amended, and the Oil Pollution Act (33 U.S.C. Section 2701 et seq.) regarding the condition, valuation, salability or utility of the Property, or its suitability for any purpose whatsoever (including, but not limited to, with respect to the presence in the soil, air,

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structures and surface and subsurface waters, of Hazardous Materials or other materials or substances that have been or may in the future be determined to be toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Property under current or future federal, state and local laws, regulations or guidelines, and any structural and geologic conditions, subsurface soil and water conditions and solid and hazardous waste and Hazardous Materials on, under, adjacent to or otherwise affecting the Property). Purchaser further hereby WAIVES (and by Closing this transaction will be deemed to have WAIVED) any and all objections and complaints (including, but not limited to, federal, state and local statutory and common law based actions, and any private right of action under any federal, state or local laws, regulations or guidelines to which the Property is or may be subject, including, but not limited to, CERCLA) concerning the physical characteristics and any existing conditions of the Property. Purchaser further hereby assumes the risk of changes in applicable laws and regulations relating to past, present and future environmental conditions on the Property and the risk that adverse physical characteristics and conditions, including, without limitation, the presence of Hazardous Materials or other contaminants, may not have been revealed by its investigation. Notwithstanding the foregoing, the foregoing release and waiver is not intended and shall not be construed as affecting or impairing any rights or remedies that Purchaser may have against Seller with respect to (i) a breach of any of Seller’s representations, warranties or covenants pursuant to the terms hereof and the Seller Closing Documents, or (ii) any fraud or fraudulent concealment by any Seller Parties, or (iii) any third party claims for Retained Liabilities. Nothing in this Section is intended to or shall be deemed to release any claims which Purchaser, the owners of any direct or indirect beneficial interest in Purchaser, and their respective agents, employees, representatives, officers, directors, attorneys, related and affiliated entities, and successors and assigns may have against any potentially liable party other than Seller, nor shall anything in this Agreement prohibit Purchaser from raising as a defense with respect to any claim or action that it was not the owner of the Property at the time the matter that is the subject of such claim or action arose or occurred.

Section 11.4    Intentionally Omitted.

Section 11.5    Indemnity.

11.5.1.Survival. If this Agreement is terminated, those representations, warranties, covenants, liabilities, indemnities and obligations of the parties under this Agreement that expressly survive the termination of this Agreement shall survive such termination, and all others shall not survive such termination. If the Closing occurs, those representations and warranties of the parties under this Agreement that expressly survive the Closing shall survive the Closing as provided in Section 9.3 and all other covenants, liabilities, indemnities and obligations of the parties that expressly survive the Closing shall survive for the time periods provided herein or if no time period is specified, for two (2) years. This Section 11.5 and all rights and obligations of defense and indemnification as expressly set forth in this Agreement shall survive the Closing or termination of this Agreement. In the event of any conflict between this Section 11.5 and the documents executed by Seller and Purchaser and delivered to the other party at Closing (collectively, the “Closing Documents”), the Closing Documents shall control.

11.5.2.Indemnification by Seller. Subject to the limitations set forth in Section 9.3(with respect to breaches of representations and warranties only), 11.5.1, 11.5.4 and 11.5.5, and any other express provision in this Agreement, Seller shall defend, indemnify and hold harmless Purchaser and its Affiliates from and against any indemnification loss incurred by any of them to the extent resulting from (i) any breach by Seller of any of its representations, warranties, covenants or obligations under this Agreement which expressly survives the Closing or termination of this Agreement (as the case may be), and (ii) any Retained Liabilities.

33

11.5.3.Indemnification by Purchaser. Subject to the limitations set forth in Section 9.3 (with respect to breaches of representations and warranties only), 11.5.1, 11.5.4 and 11.5.5, Purchaser shall defend, indemnify and hold harmless Seller and its Affiliates from and against any indemnification loss incurred by any of them to the extent resulting from (i) any breach by Purchaser of any of its representations, warranties, covenants or obligations under this Agreement which expressly survives the Closing or termination of this Agreement (as the case may be), and (ii) any Assumed Liabilities.

11.5.4.Limitations on Indemnification Obligations.

(a)Failure to Provide Timely Notice of Indemnification Claim. Notwithstanding anything to the contrary in this Agreement, an Indemnitee shall not be entitled to defense or indemnification to the extent the Indemnitee’s failure to promptly notify the Indemnitor in accordance with Section 11.5.5(a), (i) materially prejudices the Indemnitor’s ability to defend against any third-party claim on which such Indemnification Claim is based, or (ii) materially increases the amount of indemnification loss incurred in respect of such indemnification obligation of the Indemnitor.

(b)WAIVER OF CERTAIN DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR UNDER APPLICABLE LAW, SELLER (FOR ITSELF AND ITS AFFILIATES) AND PURCHASER (FOR ITSELF AND ALL ITS AFFILIATES) HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM ALL RIGHTS TO CLAIM OR SEEK ANY CONSEQUENTIAL, PUNITIVE, EXEMPLARY, STATUTORY OR TREBLE DAMAGES AND ACKNOWLEDGE AND AGREE THAT THE RIGHTS AND REMEDIES IN THIS AGREEMENT WILL BE ADEQUATE IN ALL CIRCUMSTANCES FOR ANY CLAIMS THE PARTIES (OR ANY INDEMNITEE) MIGHT HAVE WITH RESPECT THERETO; PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT LIMIT THE INDEMNIFICATION OBLIGATIONS OF SELLER OR PURCHASER WITH RESPECT TO ANY THIRD-PARTY CLAIM FOR CONSEQUENTIAL, PUNITIVE, EXEMPLARY, STATUTORY OR TREBLE DAMAGES.

11.5.5.Indemnification Procedure

(a)Notice of Indemnification Claim. If Seller or Purchaser (as the case may be) (each, an “Indemnitee”) is entitled to defense or indemnification under the Access Agreement or Section 8.3, 8.6, 8.1.12 11.5.2, 11.5.3, 12.18, or Article 13, or any other express provision in this Agreement (each, an “Indemnification Claim”), the Party required to provide defense or indemnification to such Indemnitee (the “Indemnitor”) shall not be obligated to defend, indemnify and hold harmless such Indemnitee unless and until such Indemnitee provides written notice to such Indemnitor promptly after such Indemnitee has actual knowledge of any facts or circumstances on which such Indemnification Claim is based or a third-party claim is made on which such Indemnification Claim is based, describing in reasonable detail such facts and circumstances or third-party claim with respect to such Indemnification Claim.

(b)Resolution of Indemnification Claim Not Involving Third-Party Claim. If the Indemnification Claim does not involve a third-party claim and is disputed by the Indemnitor, the dispute shall be resolved by litigation or other means of alternative dispute resolution as the parties may agree in writing.

(c)Resolution of Indemnification Claim Involving Third-Party Claim. If the Indemnification Claim involves a third-party claim, the Indemnitor shall

34

have the right (but not the obligation) to assume the defense of such third-party claim, at its cost and expense, and shall use good faith efforts consistent with prudent business judgment to defend such third-party claim, provided that (i) the counsel for the Indemnitor who shall conduct the defense of the third-party claim shall be reasonably satisfactory to the Indemnitee unless selected by Indemnitor’s insurance company without any right of approval by Indemnitor, (ii) the Indemnitee, at its cost and expense, may participate in, but shall not control, the defense of such third-party claim, and (iii) the Indemnitor shall not enter into any settlement or other agreement which requires any performance by the Indemnitee, other than the payment of money which shall be paid by the Indemnitor. The Indemnitee shall not enter into any settlement or other agreement with respect to the Indemnification Claim, without the Indemnitor’s prior written consent, which consent may not be unreasonably withheld, conditioned or delayed. If the Indemnitor elects not to assume the defense of such third-party claim, the Indemnitee shall have the right to retain the defense of such third-party claim and shall use good faith efforts consistent with prudent business judgment to defend such third-party claim in an effective and cost efficient manner, and Indemnitor shall reimburse indemnitee for the cost of such defense promptly following written request therefor, together with reasonable backup documentation, including reasonable attorneys’ fees, court costs, witness’ fees, and other out-of-pocket costs and expenses.

Exclusive Remedy for Indemnification Loss. The indemnification provisions in this Section 11.5 shall be the sole and exclusive remedy of any Indemnitee with respect to any claim for indemnification loss arising from or in connection with this Agreement, other than with respect to any fraud claims or intentional misrepresentation or any other express provision in this Agreement or in the Closing Documents.

Section 11.6    Survival. The terms and conditions of this Article 11 shall expressly survive the Closing, not merge with the provisions of any Closing Documents and shall be incorporated into the Deed.

Purchaser acknowledges and agrees that the disclaimers and other agreements set forth herein are an integral part of this Agreement and that Seller would not have agreed to sell the Property to Purchaser for the Purchase Price without the disclaimers and other agreements set forth above.

ARTICLE 12
MISCELLANEOUS

Section 12.1    Parties Bound; Assignment. This Agreement, and the terms, covenants, and conditions herein contained, shall inure to the benefit of and be binding upon the successors, and assigns of each of the parties hereto. Purchaser may assign its rights under this Agreement and/or designate one or more entities as its nominee to receive title to all or a portion of the Property without the consent of Seller upon the following conditions: (a) the assignee or nominee(s) of Purchaser must be an entity controlling, controlled by, or under common control with Purchaser or its principals, affiliates or venture partners, (b) all of the Earnest Money must have been delivered in accordance herewith, (c) the assignee of Purchaser shall assume all obligations of Purchaser hereunder (including, but not limited to Purchaser’s ERISA representation set forth in Section 9.2.3 hereof), but Purchaser shall remain primarily liable for the performance of Purchaser’s obligations unless and until the Closing occurs, and (d) a notice

35

of the assignment and assumption agreement and of any nominee to receive title to all or a portion of the Property shall be delivered to Seller at least five (5) business days prior to Closing.

Section 12.2    Headings. The article, section, subsection, paragraph and/or other headings of this Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the language hereof.

Section 12.3    Invalidity and Waiver. If any portion of this Agreement is held invalid or inoperative, then so far as is reasonable and possible the remainder of this Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The failure by either party to enforce against the other any term or provision of this Agreement shall not be deemed to be a waiver of such party’s right to enforce against the other party the same or any other such term or provision in the future.

Section 12.4    Governing Law. This Agreement shall, in all respects, be governed, construed, applied, and enforced in accordance with the law of the State of Tennessee, without regard to its conflict of law principles.

Section 12.5    Survival. The provisions of this Agreement that contemplate performance after the Closing and the obligations of the parties not fully performed at the Closing (other than any unfulfilled closing conditions which have been waived or deemed waived by the other party) shall survive the Closing and shall not be deemed to be merged into or waived by the instruments of Closing.

Section 12.6    Entirety and Amendments. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the Property. This Agreement may be amended or supplemented only by an instrument in writing executed by the party against whom enforcement is sought. All Exhibits attached hereto are incorporated herein by this reference for all purposes.

Section 12.7    Time. Time is of the essence in the performance of this Agreement.

Section 12.8    Confidentiality; Press Releases. (a) Seller shall not make a public announcement, press release or disclosure of the transactions contemplated under this Agreement, nor any information related to this Agreement, to outside brokers, media or third parties, before or after the Closing, without the prior written specific consent of Purchaser and (b) Purchaser shall not make a public announcement, press release or disclosure of the transactions contemplated under this Agreement, nor any information related to this Agreement, to outside brokers, media or third parties, before the Closing, without the prior written specific consent of Seller; provided, however, that (i) both Seller and Purchaser may, subject to the provisions of Section 4.6, make disclosure of this Agreement to its permitted outside parties as necessary to perform its obligations hereunder and as may be required under applicable laws, by the Securities Exchange Commission, federal securities law requirements, or regulations applicable to Seller or Purchaser, as applicable, (ii) Purchaser and Seller may disclose information which is otherwise required by the foregoing to be kept confidential (A) on a need-to-know basis to their respective affiliates, the employees of such parties or their respective affiliates, or members of professional firms serving such parties or their respective affiliates, (B) to the extent that such information is a matter of public record, (C) in connection with any dispute or litigation between the parties, or (D) in the case of Purchaser, Purchaser may make a public announcement, press release or otherwise disclose the transaction (including publicly filing a copy of this Agreement with the Securities Exchange Commission) to the extent consistent with Purchaser’s or its affiliates’ standard business practice in connection with public filings or other public disclosures, including, without limitation, in connection with a quarterly

36

earnings report, earnings call or a press release in conjunction therewith. Each party, stipulates that the breach of the requirements of this Section 12.8 will cause irreparable harm to the other party for which damages may not constitute an adequate remedy. Accordingly, each party agrees, that any breach of the requirements of this Section 12.8 may be enjoined by an appropriate court order or judgment. Each party’s remedies are not limited to injunctive relief for a breach of the requirements of this Section 12.8, and all legal and equitable remedies will continue to be available to such party. Seller shall instruct its manager, partners, lenders, brokers, agents, employees, officers, directors, attorneys and representatives (collectively, the “Seller Parties”) not to disclose the Purchase Price, even after the Closing. Seller Parties shall not, at any time, before or after the Closing, without the prior written consent of Purchaser, which consent may be withheld or conditioned in Purchaser’s sole and absolute discretion, issue any public press releases that include the Purchase Price. “Purchaser Parties” shall mean any of Purchaser’s partners, lenders, brokers, agents, employees, officers, directors, attorneys and representatives. The provisions of this Section 12.8 shall survive Closing.

Section 12.9    Electronic Transactions. Subject to the provisions of Section 12.13 and Section 12.10, the parties hereby acknowledge and agree that, notwithstanding any statutory or decisional law to the contrary, a document signed and transmitted by a document sent by email such as an Adobe Acrobat PDF file, or an electronic signature service such as Docusign or AdobeSign, shall be deemed to be, and be treated as, an original document for all purposes under this Agreement, and it shall have the same binding legal effect as an original signature or original document.

Section 12.10    Notices. All notices required or permitted hereunder shall be in writing and shall be served on the parties at the addresses and email addresses set forth in Section 1.3. Any such notices shall, unless otherwise provided herein, be given or served (a) by depositing the same in the United States mail, postage paid, certified and addressed to the party to be notified, with return receipt requested, (b) by overnight delivery using a nationally recognized overnight courier, (c) by personal delivery, or (d) by electronic mail addressed to the electronic mail address set forth in Section 1.3 for the party to be notified with a confirmation copy delivered by another method permitted under this Section 12.10 within one (1) business day thereafter. Notice given in accordance herewith for all permitted forms of notice other than by electronic mail, shall be effective upon the earlier to occur of actual delivery to the address of the addressee or refusal of receipt by the addressee. Notice given by electronic mail shall be effective when sent to the recipient’s electronic mail address and provided the sender did not receive a failed delivery notification. Except for electronic mail notices as described above, no notice hereunder shall be effective if sent or delivered by electronic means. In no event shall this Agreement be altered, amended or modified by electronic mail or electronic record. A party’s address or email address may be changed by written notice to the other party; provided, however, that no notice of a change of address or email address shall be effective until actual receipt of such notice. Notices given by counsel to Purchaser shall be deemed given by Purchaser and notices given by counsel to Seller shall be deemed given by Seller.

Section 12.11    Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and agree that the normal rule of construction - to the effect that any ambiguities are to be resolved against the drafting party - shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

Section 12.12    Calculation of Time Periods. Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday for national banks in the location where the Property is located, in which event the period shall run until the end of the

37

next day which is neither a Saturday, Sunday, or legal holiday. The last day of any period of time described herein shall be deemed to end at 5:00 p.m. Central time in the State of Tennessee.

Section 12.13    Execution in Counterparts. Notwithstanding anything in Section 12.9 to the contrary, this Agreement and the documents to be executed and delivered under Section 7.3 and Section 7.4 (other than the Deed) may be executed or amended by any number of counterparts, exchanged via email or .pdf or other electronic transmission, which, when taken together, shall be deemed to be one and the same instrument.

Section 12.14    No Recordation. Without the prior written consent of Seller, there shall be no recordation of either this Agreement or any memorandum hereof, or any affidavit pertaining hereto, and any such recordation of this Agreement or memorandum or affidavit by Purchaser without the prior written consent of Seller shall constitute a default hereunder by Purchaser, whereupon Seller shall have the remedies set forth in Section 10.1 hereof. In addition to any such remedies, Purchaser shall be obligated to execute an instrument in recordable form releasing this Agreement or memorandum or affidavit, and Purchaser’s obligations pursuant to this Section 12.14 shall survive any termination of this Agreement as a surviving obligation. Notwithstanding the foregoing, if the same is permitted pursuant to applicable laws, Purchaser shall be entitled to record a notice of lis pendens if Purchaser is entitled to seek (and is actually seeking) specific performance of this Agreement by Seller in accordance with the terms of Section 10.2. This Section shall survive the Closing (and not be merged therein) or the earlier termination of this Agreement.

Section 12.15    Further Assurances. In addition to the acts and deeds recited herein and contemplated to be performed, executed and/or delivered by either party at Closing, each party agrees to perform, execute and deliver, but without any obligation to incur any additional liability or expense, on or after the Closing any further deliveries and assurances as may be reasonably necessary to consummate the transactions contemplated hereby or to further perfect the conveyance, transfer and assignment of the Property to Purchaser.

Section 12.16    No Third Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.

Section 12.17    Reporting Person. Purchaser and Seller hereby designate the Title Company as the “reporting person” pursuant to the provisions of Section 6045(e) of the Code.

Section 12.18    Bulk Sales. Seller and Purchaser waive compliance with any bulk sale requirement, statues, laws, ordinances and any regulations promulgated with respect thereto, in any state, or by any Governmental Authority having jurisdiction with respect thereto. The parties acknowledge that Tennessee does not have a bulk sale law.

ARTICLE 13
MANAGER EMPLOYEES

Seller has no employees at the Hotel due to the fact that the employees currently at the Hotel are employees of Manager; provided, however, pursuant to the Management Agreement, Seller is responsible for the compensation and benefits of those employees. Seller hereby covenants and agrees that it shall be responsible for all wages, salary, benefits and any other compensation due and owing to the employees currently employed at the Hotel through the Cut Off Time. As Purchaser will assume the Management Agreement as of the Closing Date, Purchaser shall be responsible for all wages, salary, benefits and any other compensation from the Cut Off Time

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forward. Notwithstanding anything in the foregoing which may be construed to the contrary, in the event and to the extent the WARN Act applies to the Hotel and the transaction contemplated by this Agreement, Purchaser agrees to or cause Manager to offer continuation of employment on substantially similar terms and conditions to such numbers of full time or part time employees at the Hotel as will avoid a “mass layoff” or “plant closing” as defined in the WARN Act. To the extent the WARN Act applies to the transaction contemplated by this Agreement, Purchaser represents and agrees that it has no intention to cause Manager to terminate (or permit to be terminated) within ninety (90) days after the Closing such number of employees as would result in a “mass layoff” or “plant closing” as defined in the WARN Act. During the ninety (90) day period following Closing, Purchaser shall not (and shall not instruct Manager to) terminate the employment of a number of the employees sufficient to require notice of a “mass layoff” or “plant closing” pursuant to the WARN Act, to the extent the WARN Act applies to the Hotel and the transaction contemplated by this Agreement. Notwithstanding anything herein to the contrary, nothing within this Article 13 shall prohibit the Purchaser or Manager from subsequently terminating any employees for cause in accordance with the WARN Act. Seller and Purchaser acknowledge that Purchaser or Manager may, but is not obligated to, offer employment to the general manager and other management level employees, so long as Purchaser or Manager otherwise hires a sufficient number of employees so as not to trigger the WARN Act. Purchaser shall indemnify, defend and hold harmless Seller for any claims, losses, liabilities, costs and expenses, including without limitation, reasonable attorney’s fees, arising out of Purchaser’s violation of this Article 13. “WARN Act” shall mean the Worker’s Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq., as well as the rules and regulations thereto, set forth in 20 CFR 639, et seq., and any similar state and local laws, as amended from time to time, and any regulations, rules and guidance issued pursuant thereto. The provisions of this Article 13 shall survive the Closing.

[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]

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    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

SELLER:	NASHVILLE GULCH HOTEL LLC, a Delaware limited liability company By:    /s/ David TessierName:    David TessierTitle:    President
PURCHASER:	XHR ACQUISITIONS, LLC, a Delaware limited liability company By:    /s/ Shamir Kanji Name:    Shamir KanjiTitle:    Senior Vice President - Investments

40

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Marcel Verbaas, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Xenia Hotels & Resorts, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2022

/s/ MARCEL VERBAAS

Marcel Verbaas

Chairman and Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Atish Shah, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Xenia Hotels & Resorts, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2022

/s/    ATISH SHAH        

Atish Shah

Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant To 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Xenia Hotels & Resorts, Inc. (“XHR”) on Form 10-Q for the period ended March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officers of XHR certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officers' knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of XHR.

Date: May 3, 2022

/s/    MARCEL VERBAAS        

Marcel Verbaas

Chairman and Chief Executive Officer
(Principal Executive Officer)

/s/    ATISH SHAH     

Atish Shah

Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to XHR and will be retained by XHR and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as a part of the Report or on a separate disclosure document.

XML

Cover - shares	3 Months Ended
	Mar. 31, 2022	Apr. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-36594
Entity Registrant Name	Xenia Hotels & Resorts, Inc.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-0141677
Entity Address, Address Line One	200 S. Orange Avenue
Entity Address, Address Line Two	Suite 2700
Entity Address, City or Town	Orlando
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32801
City Area Code	407
Local Phone Number	246-8100
Title of 12(b) Security	Common Stock
Trading Symbol	XHR
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		114,353,273
Entity Central Index Key	0001616000
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Investment properties:
Land	$ 467,708	$ 431,427
Buildings and other improvements	3,160,421	2,856,671
Total	3,628,129	3,288,098
Less: accumulated depreciation	(919,045)	(888,717)
Net investment properties	2,709,084	2,399,381
Cash and cash equivalents	179,077	517,377
Restricted cash and escrows	40,158	36,854
Accounts and rents receivable, net of allowance for doubtful accounts	36,242	28,528
Intangible assets, net of accumulated amortization of $2,352 and $2,231, respectively	5,414	5,446
Other assets	70,112	65,109
Assets held for sale	0	34,621
Total assets	3,040,087	3,087,316
Liabilities
Debt, net of loan premiums, discounts and unamortized deferred financing costs (Note 5)	1,429,616	1,494,231
Accounts payable and accrued expenses	92,818	84,051
Other liabilities	79,248	68,648
Liabilities associated with assets held for sale	0	2,305
Total liabilities	1,601,682	1,649,235
Commitments and Contingencies (Note 12)
Stockholders' equity
Common stock, $0.01 par value, 500,000,000 shares authorized, 114,353,273 and 114,306,727 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively	1,144	1,143
Additional paid in capital	2,090,627	2,090,393
Accumulated other comprehensive loss	(837)	(4,089)
Accumulated distributions in excess of net earnings	(661,785)	(656,461)
Total Company stockholders' equity	1,429,149	1,430,986
Non-controlling interests	9,256	7,095
Total equity	1,438,405	1,438,081
Total liabilities and equity	$ 3,040,087	$ 3,087,316

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Intangible assets, accumulated amortization	$ 2,352	$ 2,231
Common stock, par value (in dollars per shares)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	114,353,273	114,306,727
Common stock, outstanding (in shares)	114,353,273	114,306,727

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Revenues	$ 210,347	$ 87,852
Expenses:
Total hotel operating expenses	141,607	77,084
Depreciation and amortization	30,565	33,197
Real estate taxes, personal property taxes and insurance	10,855	10,540
Ground lease expense	517	403
General and administrative expenses	7,786	6,922
Gain on business interruption insurance	0	(1,116)
Impairment and other losses	1,278	0
Total expenses	192,608	127,030
Operating income (loss)	17,739	(39,178)
Other (loss) income	(777)	116
Interest expense	(20,538)	(18,750)
Loss on extinguishment of debt	(294)	0
Net loss before income taxes	(3,870)	(57,812)
Income tax expense	(1,607)	(165)
Net loss	(5,477)	(57,977)
Net loss attributable to non-controlling interests	153	1,626
Net loss attributable to common stockholders	$ (5,324)	$ (56,351)
Basic and diluted loss per share
Net loss per share available to common stockholders - basic (in dollars per share)	$ (0.05)	$ (0.50)
Net loss per share available to common stockholders - diluted (in dollars per share)	$ (0.05)	$ (0.50)
Weighted average number of common shares, basic (in shares)	114,326,406	113,780,388
Weighted average number of common shares, diluted (in shares)	114,326,406	113,780,388
Comprehensive Loss:
Net loss	$ (5,477)	$ (57,977)
Other comprehensive income (loss):
Unrealized gain on interest rate derivative instruments	2,517	104
Reclassification adjustment for amounts recognized in net loss (interest expense)	1,152	2,330
Comprehensive loss including portion attributable to noncontrolling interest	(1,808)	(55,543)
Comprehensive (gain) loss attributable to non-controlling interests (Note 1)	(264)	1,558
Comprehensive loss attributable to the Company	(2,072)	(53,985)
Rooms
Revenues:
Revenues	123,198	55,646
Expenses:
Expenses	29,217	15,537
Food and beverage
Revenues:
Revenues	67,735	21,592
Expenses:
Expenses	45,610	18,178
Other
Revenues:
Revenues	19,414	10,614
Other direct
Expenses:
Other expenses	5,294	3,198
Other indirect
Expenses:
Other expenses	53,860	37,327
Management and franchise fees
Expenses:
Expenses	$ 7,626	$ 2,844

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Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Common stock	Additional paid in capital	Accumulated other comprehensive income (loss)	Distributions in excess of retained earnings	Non-controlling interests of Operating Partnership
Beginning balance (in shares) at Dec. 31, 2020		113,755,513
Beginning balance at Dec. 31, 2020	$ 1,566,863	$ 1,138	$ 2,080,364	$ (14,425)	$ (513,002)	$ 12,788
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(57,977)				(56,351)	(1,626)
Share-based compensation (in shares)		67,554
Share-based compensation	2,685		1,045			1,640
Shares redeemed to satisfy tax withholding on vested share based compensation (in shares)		(18,993)
Shares redeemed to satisfy tax withholding on vested share-based compensation	(318)		(318)
Unrealized gain on interest rate derivative instruments	104			101		3
Gain reclassified from accumulated other comprehensive loss to net loss	2,330			2,265		65
Ending balance (in shares) at Mar. 31, 2021		113,804,074
Ending balance at Mar. 31, 2021	1,513,687	$ 1,138	2,081,091	(12,059)	(569,353)	12,870
Beginning balance (in shares) at Dec. 31, 2021		114,306,727
Beginning balance at Dec. 31, 2021	1,438,081	$ 1,143	2,090,393	(4,089)	(656,461)	7,095
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(5,477)				(5,324)	(153)
Share-based compensation (in shares)		63,024
Share-based compensation	2,435	$ 1	537			1,897
Shares redeemed to satisfy tax withholding on vested share based compensation (in shares)		(16,478)
Shares redeemed to satisfy tax withholding on vested share-based compensation	(303)		(303)
Unrealized gain on interest rate derivative instruments	2,517			2,133		384
Gain reclassified from accumulated other comprehensive loss to net loss	1,152			1,119		33
Ending balance (in shares) at Mar. 31, 2022		114,353,273
Ending balance at Mar. 31, 2022	$ 1,438,405	$ 1,144	$ 2,090,627	$ (837)	$ (661,785)	$ 9,256

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net loss	$ (5,477)	$ (57,977)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	30,429	32,929
Non-cash ground rent and amortization of other intangibles	136	268
Amortization of debt premiums, discounts, and financing costs	1,286	1,767
Loss on extinguishment of debt	294	0
Gain on insurance recoveries	(994)	0
Share-based compensation expense	2,207	2,295
Deferred interest expense	(409)	0
Changes in assets and liabilities:
Accounts and rents receivable	(7,599)	(5,604)
Other assets	(5,315)	(8,286)
Accounts payable and accrued expenses	8,234	212
Other liabilities	9,780	3,236
Net cash provided by (used in) operating activities	32,572	(31,160)
Cash flows from investing activities:
Purchase of investment properties	(328,493)	0
Capital expenditures	(7,499)	(7,242)
Proceeds from sale of investment properties	32,820	0
Proceeds from property insurance	1,168	0
Performance guaranty payments	912	695
Net cash used in investing activities	(301,092)	(6,547)
Cash flows from financing activities:
Payoff of mortgage debt	(65,000)	0
Principal payments of mortgage debt	(932)	(1,357)
Shares redeemed to satisfy tax withholding on vested share-based compensation	(490)	(443)
Dividends and dividend equivalents	(54)	(54)
Net cash used in financing activities	(66,476)	(1,854)
Net decrease in cash and cash equivalents and restricted cash	(334,996)	(39,561)
Cash and cash equivalents and restricted cash, at beginning of period	554,231	428,786
Cash and cash equivalents and restricted cash, at end of period	219,235	389,225
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amount shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	179,077	354,597
Restricted cash	40,158	34,628
Total cash and cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	219,235	389,225
The following represent cash paid during the periods presented for the following:
Cash paid for interest, net of capitalized interest	21,433	24,814
Cash recovered for taxes	0	(72)
Supplemental schedule of non-cash investing and financing activities:
Accrued capital expenditures	$ 2,891	$ 368

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Organization

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Xenia Hotels & Resorts, Inc. (the "Company" or "Xenia") is a Maryland corporation that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on the top 25 lodging markets as well as key leisure destinations in the United States.

Substantially all of the Company's assets are held by, and all the operations are conducted through, XHR LP (the "Operating Partnership"). XHR GP, Inc. is the sole general partner of XHR LP and is wholly-owned by the Company. As of March 31, 2022, the Company collectively owned 97.1% of the common limited partnership units issued by the Operating Partnership ("Operating Partnership Units"). The remaining 2.9% of the Operating Partnership Units are owned by the other limited partners comprised of certain of our current executive officers and members of our Board of Directors and includes vested and unvested long-term incentive plan ("LTIP") partnership units. LTIP partnership units may or may not vest based on the passage of time and whether certain market-based performance objectives are met.

Xenia operates as a real estate investment trust ("REIT"). To qualify as a REIT the Company cannot operate or manage its hotels. Therefore, the Operating Partnership and its subsidiaries lease the hotel properties to XHR Holding, Inc. and its subsidiaries (collectively with its subsidiaries, "XHR Holding"), the Company's taxable REIT subsidiary ("TRS"), which engages third-party eligible independent contractors to manage the hotels.

As of March 31, 2022 and 2021, the Company owned 34 and 35 lodging properties, respectively.

Ongoing Impact of COVID-19

We began to see improvements in leisure demand during the second half of 2020, a trend that accelerated in 2021 and has continued into 2022. During the first quarter of 2022, operations continued to improve due to a re-acceleration in leisure travel and higher levels of business transient and group demand beginning in mid-February.

Despite this improvement, there remains significant uncertainty regarding the pace of recovery and whether and when business travel and larger group meetings will return to pre-pandemic levels. We may be impacted by, among other things, the distribution and acceptance of COVID-19 vaccines and boosters, breakthrough cases, and new variants of COVID-19, as well as the ongoing local and national response to the virus. As the recovery continues, we expect that the pace will vary from market to market and may be uneven in nature.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The unaudited interim condensed consolidated financial statements and related notes have been prepared on an accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. The unaudited condensed consolidated financial statements include normal recurring adjustments, which management considers necessary for the fair presentation of the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of changes in equity and condensed consolidated statements of cash flows for the periods presented. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2021, included in the Company's Annual Report on Form 10-K filed with the SEC on March 1, 2022. Operating results for the three months ended March 31, 2022 are not necessarily indicative of actual operating results for the entire year.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and XHR Holding. The Company's subsidiaries generally consist of limited liability companies, limited partnerships and the TRS. The effects of all inter-company transactions have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management's best judgment, after considering past, current and expected future economic conditions. Actual results could differ from these estimates.

Risks and Uncertainties

As a result of the COVID-19 pandemic, the majority of the Company's hotels and resorts temporarily suspended operations for certain periods of time during 2020. All of the Company's hotels had resumed operations by the end of May 2021. The Company's portfolio consists of luxury and upper upscale hotels and resorts, which generally offer restaurant and bar venues, large meeting facilities and event space, and amenities, including spas and golf courses, some of which may have limited operations or may not be able to operate during the recovery in order to comply with implemented safety measures, ongoing or reimplemented restrictions and to accommodate reduced levels of demand. The Company continues to monitor the evolving situation and guidance from federal, state and local governmental and public health authorities and additional actions may be taken or required based on their recommendations and regulations in place. Under these circumstances, there may be developments that require further adjustments to operations.

The Company cannot predict with certainty whether and when business levels will return to normalized levels after the effects of the pandemic subside or whether hotels will be forced to suspend operations or impose additional restrictions due to future variants of COVID-19. Although it is improving, the lodging industry, particularly with respect to business transient and group business, has continued to lag behind the recovery of other industries. Factors such as public health (including a significant increase in variant strains of COVID-19 cases), availability and effectiveness of COVID-19 vaccines/boosters and therapeutics, the level of acceptance of the vaccine by the general population and the economic and geopolitical environments may impact the timing, extent and pace of such recovery. Additionally, the effects of the pandemic could materially and adversely affect the Company's ability to consummate acquisitions and dispositions of hotel properties in the near term.

The Company cannot predict with certainty the full extent and duration of the effects of the COVID-19 pandemic on its business, operating margins, results of operations, cash flows, financial condition, the market price of its common stock, its ability to make distributions to its shareholders, its access to equity and credit markets or its ability to service its indebtedness. Further, the Company continues to monitor and evaluate the challenges associated with inflationary pressures, the evolving workforce landscape, particularly related to industry-wide labor shortages and expected increases in wages, as well as ongoing supply chain issues which may continue to impact the hotels' ability to source operating supplies and other materials.

For the three months ended March 31, 2022, the Company had a geographical concentration of revenues generated from hotels in the Orlando, Florida and Phoenix, Arizona markets that exceeded 10% of total revenues for the period then ended. For the three months ended March 31, 2021, the Company had a geographical concentration of revenues generated from hotels in the Phoenix, Arizona, Orlando, Florida and Houston, Texas markets that exceeded 10% of total revenues for the period then ended. To the extent adverse changes continue in these markets, or the industry sectors that operate in these markets, our business and operating results could continue to be negatively impacted.

Consolidation

The Company evaluates its investments in partially owned entities to determine whether such entities may be a variable interest entity ("VIE") or voting interest entity. If the entity is a VIE, the determination of whether the Company is the primary beneficiary must be made. The primary beneficiary determination is based on a qualitative assessment as to whether the entity has (i) power to direct significant activities of the VIE and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The Company will consolidate a VIE if it is deemed to be the primary beneficiary. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary, or the entity is not a VIE and over which the Company does not have effective control but can exercise influence over the entity with respect to its operations and major decisions.

The Operating Partnership is a VIE. The Company's significant asset is its investment in the Operating Partnership, as described in Note 1, and consequently, substantially all of the Company's assets and liabilities represent those assets and liabilities of the Operating Partnership.

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased, and similar accounts with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at various financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant as the Company does not anticipate non-performance by the financial institutions.

Restricted Cash and Escrows

Restricted cash primarily relates to FF&E reserves as required per the terms of the Company's management and franchise agreements, cash held in restricted escrows for real estate taxes and insurance, capital spending reserves and, at times, disposition-related holdback escrows.

Acquisition of Real Estate

Investments in hotel properties, including land and land improvements, building and building improvements, furniture, fixtures and equipment, and identifiable intangibles assets, will generally be accounted for as asset acquisitions. Acquired assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related to finding, analyzing and negotiating a transaction.

The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture and fixtures, inventory, acquired above market and below market leases, in-place lease value (if applicable), advance bookings, and any assumed financing that is determined to be above or below market terms. Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.

Impairment

Long-lived assets and intangibles

The Company assesses the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Events or circumstances that may cause a review include, but are not limited to, when (1) a hotel property experiences a significant decrease in the market price of the long-lived asset, (2) a hotel property experiences a current or projected loss from operations combined with a history of operating or cash flow losses, (3) it becomes more likely than not that a hotel property will be sold before the end of its useful life, (4) an accumulation of costs is significantly in excess of the amount originally expected for the acquisition, construction or renovation of a long-lived asset, (5) adverse changes in demand occur for lodging at a specific property due to declining national or local economic conditions and/or new hotel construction in markets where the hotel is located, (6) there is a significant adverse change in legal factors or in the business climate that could affect the value of the long-lived asset and/or (7) there is a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed carrying value, the Company records an impairment charge to the extent that the carrying value exceeds fair value.

Involuntary Conversion

In August 2021, Hurricane Ida impacted Loews New Orleans Hotel located in New Orleans, Louisiana. During the three months ended March 31, 2022, the Company recorded additional hurricane-related repair and cleanup costs of $1.3 million which is included in impairment and other losses on the condensed consolidated statement of operations and comprehensive loss for the period then ended. The Company also has various other ongoing claims for damage sustained during winter storms in Texas in early 2021.

Insurance Recoveries

Insurance proceeds received in excess of recognized losses are treated as gain and are not recorded until contingencies are resolved. During the three months ended March 31, 2022, the Company received insurance proceeds related to damage sustained at Loews New Orleans Hotel during Hurricane Ida. These insurance proceeds were in excess of recognized losses and resulted in a gain on insurance recovery of $1.0 million which is included in other (loss) income on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

The Company may also be entitled to business interruption proceeds for losses occurring at certain properties; however, an insurance recovery receivable will not be recorded until a final settlement has been reached with the insurance company. The Company is currently seeking business interruption proceeds related to properties impacted by storms under the Company's various insurance policies. During the three months ended March 31, 2021, the Company recognized $1.1 million in business interruption insurance proceeds for a portion of lost revenues associated with cancellations related to the COVID-19 pandemic. These amounts are included in gain on business interruption insurance on the condensed consolidated statement of operations and comprehensive loss for the period then ended. No business interruption insurance recovery receivables were recognized during the three months ended March 31, 2022.

Disposition of Real Estate

The Company accounts for dispositions of real estate in accordance with ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets ("Subtopic 610-20") for the transactions between the Company and unrelated third-parties that are not considered a customer in the ordinary course of business. Typically, the real estate assets disposed of do not represent the transfer of a business or contain a material amount of financial assets, if any. The real estate assets promised in a sales contract are typically nonfinancial assets (i.e. land or a leasehold interest in land, building, furniture, fixtures and equipment) or in substance nonfinancial assets. The Company recognizes a gain or loss in full when the real estate is sold, provided (a) there is a valid contract and (b) transfer of control has occurred.

Revenues

Revenues consist of amounts derived from hotel operations, including the sale of rooms for lodging accommodations, food and beverage, and other ancillary revenue generated by hotel amenities including spa, parking, golf, resort fees and other services.

Revenues are generated from various distribution channels including but not limited to direct bookings, global distribution systems and Internet travel sites. Room transaction prices are based on an individual hotel's location, room type and the bundle of services included in the reservation and are set by the hotel daily. Any discounts, including advance purchase, loyalty point redemptions or promotions are recognized at the discounted rate whereas rebates and incentives are recorded as a reduction in rooms revenues when earned. Revenues from online channels are generally recognized net of commission fees, unless the end price paid by the guest is known. Rooms revenue is recognized over the length of stay that the hotel room is occupied by the guest. Cash received from a guest prior to check-in is recorded as an advance deposit and is generally recognized as rooms revenue at the time the room reservation has become non-cancellable, upon occupancy or upon expiration of the re-booking date. Advance deposits are included in other liabilities on the condensed consolidated balance sheets. Payment of any remaining balance is typically due from the guest upon check-out. Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenues).

Food and beverage transaction prices are based on the stated price for the specific food or beverage and varies depending on type, venue and hotel location. Service charges are typically a percentage of food and beverage prices and meeting space rental. Food and beverage revenue is recognized at the point in time in which the goods and/or services are rendered to the guest. Cash received in advance of an event is recorded as either a security or advance deposit. Security and advance deposits are recognized as revenue when it becomes non-cancellable or at the time the food and beverage goods and services are rendered to the guest. Payment for the remaining balance of food and beverage goods and services is due upon delivery and completion of such goods and services.

Parking and audio visual fees are recognized at the time services are provided to the guest at the stated price for the service or goods. In parking and audio visual contracts in which the Company has control over the services provided, the Company is considered the principal in the agreement and recognize the related revenues gross of associated costs. If the Company does not have control over the services in the contract, the Company is considered the agent and record the related revenues net of associated costs.

Resort and amenity fees, spa, golf and other ancillary amenity revenues are recognized at the point in time the goods or services have been rendered to the guest at the stated price for the service or amenity.

Share-Based Compensation

The Company maintains a share-based incentive plan that provides for the grant of stock options, stock awards, restricted stock units, LTIP units and other equity-based awards. Share-based compensation is measured at the estimated fair value of the award on the date of grant, adjusted for forfeitures as they occur, and recognized as an expense on a straight-line basis over the longest vesting period for each grant for the entire award. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of the Company's share price, expected dividend yield, expected term and assumptions of whether certain of these awards will achieve performance thresholds. Share-based compensation is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss and capitalized in buildings and other improvements in the condensed consolidated balance sheets for certain employees that manage property developments, renovations and capital improvements.

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Revenues

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

The following represents total revenues disaggregated by primary geographical markets (as defined by STR, Inc. ("STR")) for the three months ended March 31, 2022 and 2021 (in thousands):

	Three Months Ended
Primary Markets	March 31, 2022
Orlando, FL	$	36,207
Phoenix, AZ	30,707
Houston, TX	20,996
San Diego, CA	19,188
Dallas, TX	12,846
Atlanta, GA	10,965
San Francisco/San Mateo, CA	9,578
Florida Keys	9,365
Denver, CO	9,052
Washington, DC-MD-VA	7,461
Other	43,982
Total	$	210,347

	Three Months Ended
Primary Markets	March 31, 2021
Phoenix, AZ	$	14,255
Orlando, FL	11,957
Houston, TX	10,517
Florida Keys	6,094
Denver, CO	5,812
Atlanta, GA	5,432
San Diego, CA	5,263
Dallas, TX	3,767
Savannah, GA	3,572
Washington, DC-MD-VA	3,354
Other	17,829
Total	$	87,852

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Investment Properties

3 Months Ended

Mar. 31, 2022

Asset Acquisition and Disposition [Abstract]

Investment Properties

Investment Properties

From time to time, the Company evaluates acquisition opportunities based on our investment criteria and/or the opportunistic disposition of our hotels in order to take advantage of market conditions or in situations where the hotels no longer fit within our strategic objectives.

Acquisitions

On March 29, 2022, the Company acquired a fee-simple interest in the 346-room W Nashville located in Nashville, Tennessee for a purchase price of $328.5 million including acquisition costs and a $1.3 million credit related to an unfinished portion of the hotel provided by seller at closing.

The acquisition of W Nashville was funded with cash on hand and was accounted for as an asset acquisition resulting in the related acquisition costs being capitalized as part of the purchase price. The results of operations for W Nashville have been included in the Company’s condensed consolidated statements of operations and comprehensive loss since its acquisition date.

The Company recorded the identifiable assets and liabilities, including intangible assets and liabilities, acquired in the asset acquisition at the acquisition date relative fair value, which is based on the total accumulated costs of the acquisition. The following represents the purchase price allocation of the hotel acquired during the three months ended March 31, 2022 (in thousands):

	March 31, 2022
Land	$	36,364
Building and improvements	264,766
Furniture, fixtures, and equipment	31,091
Intangible and other assets(1)	232
Intangible liability(2)	(3,960)
Total purchase price(3)	$	328,493

(1)As part of the purchase price allocation for W Nashville, the Company allocated $0.1 million to advance bookings that will be amortized over 1.3 years as well as $0.1 million allocated to food inventory.

(2)As part of the purchase price allocation for W Nashville, the Company allocated $4.0 million to a liability associated with key money received by the seller from the third-party hotel manager. This liability will be amortized over 29.8 years and in the event of early termination is payable to the third-party hotel manager on a pro rata basis for the remaining portion of the term of the hotel management agreement.

(3)The total cost capitalized includes acquisition costs as the transaction was accounted for an an asset acquisition.

Dispositions

In November 2021, the Company entered into an agreement to sell the 191-room Kimpton Hotel Monaco Chicago in Chicago, Illinois for a sale price of $36.0 million. The sale closed in January 2022 and did not result in a gain or loss after previously recording an impairment of $15.7 million during the year ended December 31, 2021. Proceeds from the sale were used for general corporate purposes.

The operating results of the hotel that was sold during the three months ended March 31, 2022 are included in the Company's condensed consolidated financial statements as part of continuing operations as the disposition did not represent a strategic shift nor did it have a major impact on the Company's results of operations.

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Debt

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt Debt as of March 31, 2022 and December 31, 2021 consisted of the following (dollar amounts in thousands):

						Balance Outstanding as of
	Rate Type	Rate(1)			Maturity Date	March 31, 2022		December 31, 2021
Mortgage Loans
Renaissance Atlanta Waverly Hotel & Convention Center	Fixed (2)	4.45	%		8/14/2024	$	100,000	$	100,000
Andaz Napa	Fixed (3)	2.98	%		9/13/2024	55,460		55,640
The Ritz-Carlton, Pentagon City	Fixed (4)	—	%		1/31/2025	—		65,000
Grand Bohemian Hotel Orlando, Autograph Collection	Fixed	4.53	%		3/1/2026	56,523		56,796
Marriott San Francisco Airport Waterfront	Fixed	4.63	%		5/1/2027	111,623		112,102
Total Mortgage Loans		4.27	%	(5)		$	323,606	$	389,538
Corporate Credit Facilities
Corporate Credit Facility Term Loan $125M	Fixed (6)	3.92	%		9/13/2024	125,000		125,000
Revolving Credit Facility (7)	Variable	3.00	%		2/28/2024	—		—
Total Corporate Credit Facilities						$	125,000	$	125,000
2020 Senior Notes $500M	Fixed	6.38	%		8/15/2025	500,000		500,000
2021 Senior Notes $500M	Fixed	4.88	%		6/1/2029	500,000		500,000
Loan premiums, discounts and unamortized deferred financing costs, net (8)						(18,990)		(20,307)
Total Debt, net of loan premiums, discounts and unamortized deferred financing costs		5.18	%	(5)		$	1,429,616	$	1,494,231

(1)The rates shown represent the annual interest rates as of March 31, 2022. The variable index for the Renaissance Atlanta Waverly Hotel & Convention Center mortgage loan is daily SOFR and for the Andaz Napa mortgage loan is one-month LIBOR. The variable index for the corporate credit facilities reflects a 25 basis point LIBOR floor which is applicable for the value of all corporate credit facilities not subject to an interest rate hedge.

(2)A variable interest rate loan for which the interest rate has been fixed through October 2022, after which the rate reverts to variable.

(3)A variable interest loan for which the interest rate has been fixed on $25 million of the balance through October 2022, after which the rate reverts to variable.

(4)A variable interest rate loan for which the interest rate was fixed through January 2023. The outstanding balance of this mortgage loan was repaid in January 2022 and the two interest rate swaps associated with this loan were terminated in connection with the repayment.

(5)Represents the weighted-average interest rate as of March 31, 2022.

(6)A variable interest loan for which LIBOR has been fixed through September 2022. The spread to LIBOR may vary, as it is determined by the Company's leverage ratio. The applicable interest rate has been set to the highest level of grid-based pricing during the covenant waiver period.

(7)Commitments under the revolving credit facility totaled $523 million through February 2022, after which the total commitments decreased to $450 million through maturity in February 2024.

(8)Includes loan premiums, discounts and deferred financing costs, net of accumulated amortization.

Mortgage Loans

Of the total outstanding debt at March 31, 2022, none of the mortgage loans were recourse to the Company. As of March 31, 2022, the Company was not in compliance with its debt covenants on one mortgage loan which did not result in an event of default but allows the lender the option to institute a cash sweep until covenant compliance is achieved for a period of time specified in the loan agreement. The cash sweep permits the lender to withdraw excess cash generated by the property into a separate bank account that they control, which may be used to reduce the outstanding loan balance. The mortgage loan agreements require contributions to be made to FF&E reserves. In addition, certain quarterly financial covenants have been waived for a period of time specified in the respective amended loan agreements and certain financial covenants have been adjusted following the waiver periods.

In January 2022, the Company repaid in full the $65.0 million outstanding balance on the mortgage loan collateralized by The Ritz-Carlton, Pentagon City.

Corporate Credit Facilities

Certain financial covenants related to the Company's amended corporate credit facilities have been suspended until the date that financial statements are required to be delivered thereunder for the fiscal quarter ending June 30, 2022 (such period, unless

earlier terminated by the Operating Partnership in accordance with the terms of the corporate credit facilities, the "covenant waiver period") and, once quarterly testing resumes, certain financial covenants have been modified through the second quarter in 2023. In addition, the amended corporate credit facilities have certain restrictions and covenants which are applicable during the covenant waiver period, including (i) mandatory prepayment requirements, (ii) affirmative covenants related to the pledge of equity of certain subsidiaries and (iii) negative covenants restricting certain acquisitions, investments, capital expenditures, ground leases and distributions. A minimum liquidity covenant also applies during the covenant waiver period.

As of March 31, 2022, there was no outstanding balance on the revolving credit facility. During the three months ended March 31, 2022, the Company incurred unused commitment fees of approximately $0.4 million and did not incur interest expense. During the three months ended March 31, 2021, the Company incurred unused commitment fees of approximately $0.3 million and interest expense of $1.2 million.

Senior Notes

The indentures governing the Senior Notes contain customary covenants that limit the Operating Partnership's ability and, in certain circumstances, the ability of its subsidiaries, to borrow money, create liens on assets, make distributions and pay dividends, redeem or repurchase stock, make certain types of investments, sell stock in certain subsidiaries, enter into agreements that restrict dividends or other payments from subsidiaries, enter into transactions with affiliates, issue guarantees of indebtedness and sell assets or merge with other companies. These limitations are subject to a number of important exceptions and qualifications set forth in the indentures.

Debt Outstanding

Total debt outstanding as of March 31, 2022 and December 31, 2021 was $1,449 million and $1,515 million, respectively, and had a weighted-average interest rate of 5.18% per annum for the periods then ended. The following table shows scheduled principal payments and debt maturities for the next five years and thereafter (in thousands):

	As of March 31, 2022		Weighted-  average interest rate
2022	$	3,632	4.08%
2023	5,537		4.13%
2024	280,160		3.94%
2025	503,512		6.36%
2026	54,379		4.53%
Thereafter	601,386		4.83%
Total Debt	$	1,448,606	5.18%
Revolving Credit Facility (matures in 2024)	—		3.00%
Loan premiums, discounts and unamortized deferred financing costs, net	(18,990)		—
Debt, net of loan premiums, discounts and unamortized deferred financing costs	$	1,429,616	5.18%

In connection with the repayment of one mortgage loan during the three months ended March 31, 2022, the Company wrote-off the related unamortized deferred financing costs of $0.3 million, which is included in loss on extinguishment of debt on the condensed consolidated statements of operations and comprehensive loss for the period then ended.

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Derivatives

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives The Company primarily uses interest rate swaps as part of its interest rate risk management strategy for variable rate debt. As of March 31, 2022, all interest rate swaps were designated as cash flow hedges and involve the receipt of variable rate payments from a counterparty in exchange for making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. Unrealized gains and losses of hedging instruments are reported in other comprehensive income or loss on the condensed consolidated statements of operations and comprehensive loss. Amounts reported in accumulated other comprehensive loss related to currently outstanding derivatives are recognized as an adjustment to income or loss through interest expense as interest payments are made on the Company’s variable rate debt. During the three months ended March 31, 2022, the Company terminated two interest rate swaps prior to their maturity and incurred swap termination costs of

$1.6 million which is included in other (loss) income on the condensed consolidated statements of operations and comprehensive loss for the period then ended.

Derivative instruments held by the Company with the right of offset in a net liability position were included in other liabilities on the condensed consolidated balance sheets.

The following table summarizes the terms of the derivative financial instruments held by the Company as of March 31, 2022 and December 31, 2021, respectively (in thousands):

						March 31, 2022				December 31, 2021
Hedged Debt	Type	Fixed Rate	Index	Effective Date	Maturity	Notional Amounts		Estimated Fair Value		Notional Amounts		Estimated Fair Value
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	$	50,000	$	(160)	$	50,000	$	(591)
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(295)
Mortgage Debt	Swap	1.84%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(297)
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(296)
$125M Term Loan	Swap	1.91%	1-Month LIBOR	10/13/2017	9/13/2022	40,000		(147)		40,000		(445)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	40,000		(148)		40,000		(446)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	25,000		(93)		25,000		(279)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	20,000		(74)		20,000		(223)
Mortgage Debt(1)	Swap	2.80%	1-Month LIBOR	6/1/2018	2/1/2023	—		—		24,000		(598)
Mortgage Debt(1)	Swap	2.89%	1-Month LIBOR	1/17/2019	2/1/2023	—		—		41,000		(1,061)
						$	250,000	$	(862)	$	315,000	$	(4,531)

(1)    The Company terminated two interest rate swaps prior to maturity in connection with the repayment of the mortgage loan collateralized by The Ritz-Carlton, Pentagon City in January 2022.

The table below details the location in the condensed consolidated financial statements of the gains and losses recognized on derivative financial instruments designated as cash flow hedges for the three months ended March 31, 2022 and 2021 (in thousands):

		Three Months Ended March 31,
		2022		2021
Effect of derivative instruments:	Location in Statements of Operations and Comprehensive Loss:
Gain recognized in other comprehensive loss	Unrealized gain on interest rate derivative instruments	$	2,517	$	104
Gain reclassified from accumulated other comprehensive loss to net loss	Reclassification adjustment for amounts recognized in net loss (interest expense)	$	1,152	$	2,330
Total interest expense in which effects of cash flow hedges are recorded	Interest expense	$	20,538	$	18,750
Realized loss on termination of derivative instruments	Other (loss) income	$	(1,555)	$	—

The Company expects approximately $0.8 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense in the next 12 months.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

•Level 1 - Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access.

•Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.

For assets and liabilities measured at fair value on a recurring basis and non-recurring basis, quantitative disclosure of their fair values are included in the condensed consolidated balance sheets as of as of March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurement Date
	March 31, 2022				December 31, 2021
Location on Condensed Consolidated Balance Sheets/Description of Instrument	Observable Inputs  (Level 2)		Significant Unobservable Inputs  (Level 3)		Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)
Recurring measurements
Liabilities
Interest rate swaps(1)	$	(862)	$	—	$	(4,531)	$	—
Non-recurring measurements
Net investment properties
Kimpton Hotel Monaco Chicago	$	—	$	—	$	34,093	$	—

(1)Interest rate swap fair values are netted as applicable per the terms of the respective master netting agreements.

Recurring Measurements

The fair value of each derivative instrument is based on a discounted cash flow analysis of the expected cash flows under each arrangement. This analysis reflects the contractual terms of the derivative instrument, including the period to maturity, and utilizes observable market-based inputs, including interest rate curves and implied volatilities, which are classified within Level 2 of the fair value hierarchy. The Company also incorporates credit value adjustments to appropriately reflect each parties’ nonperformance risk in the fair value measurement, which utilizes Level 3 inputs such as estimates of current credit spreads. However, the Company has assessed that the credit valuation adjustments are not significant to the overall valuation of the derivatives and, as a result, its derivative valuations in their entirety are classified within Level 2 of the fair value hierarchy.

Non-Recurring Measurements

Investment Properties

In November 2021, the Company entered into an agreement to sell the 191-room Kimpton Hotel Monaco Chicago for $36.0 million. Management estimated the future undiscounted cash flows for the scenario of a shortened hold period and for holding the asset long-term. Based on the results of the probability weighted-average undiscounted cash flow analysis, management determined the hotel was impaired as the estimated undiscounted cash flows were less than the carrying value of the hotel as of December 31, 2021. Management determined the impairment loss as the difference between the carrying value and the estimated fair value. The fair value was estimated using Level 2 assumptions, including values from market participants. As a result, for the year ended December 31, 2021, the Company recorded an impairment loss of $15.7 million, which is included in impairment and other losses on the consolidated statement of operations and comprehensive (loss) income for the period then ended. The sale closed in January 2022.

Financial Instruments Not Measured at Fair Value

The table below represents the fair value of financial instruments presented at carrying values in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Total Mortgage and Corporate Credit Facility Term Loan	$	448,606	$	434,669	$	514,538	$	503,265
Senior Notes	1,000,000		1,012,823		1,000,000		1,055,323
Revolving Credit Facility	—		—		—		—
Total	$	1,448,606	$	1,447,492	$	1,514,538	$	1,558,588

The Company estimated the fair value of its total debt, net of discounts, using a weighted-average effective interest rate of 5.59% and 5.23% per annum as of March 31, 2022 and December 31, 2021, respectively. The assumptions reflect the terms currently available to borrowers with credit profiles similar to the Company's. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy.

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Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company estimated the TRS income tax expense for the three months ended March 31, 2022 using an estimated federal and state combined effective tax rate of 16.00% and recognized an income tax expense of $1.6 million.

The Company estimated the TRS income tax expense for the three months ended March 31, 2021 using an estimated federal and state combined effective tax rate of 2.45% and recognized an income tax expense of $0.2 million. The income tax expense for three months ended March 31, 2021 was primarily attributed to state taxes levied on gross receipts.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Common Stock

The Company maintains an "At-the-Market" ("ATM") program pursuant to an Equity Distribution Agreement ("ATM Agreement") with Wells Fargo Securities, LLC, Robert W. Baird & Co. Incorporated, Jefferies LLC, KeyBanc Capital Markets Inc. and Raymond James & Associates, Inc. In accordance with the terms of the ATM Agreement, the Company may from time to time offer and sell shares of its common stock having an aggregate offering price of up to $200 million. In May 2021, the Company upsized the ATM Agreement and, as a result, had $200 million available for sale as of March 31, 2022. No shares were sold under the ATM Agreement during the three months ended March 31, 2022 and 2021. As of March 31, 2022, and December 31, 2021, the Company had accumulated offering related costs included in other assets on the condensed consolidated balance sheets of $0.8 million and $0.7 million, respectively. These amounts will be reclassified to additional paid in capital to offset proceeds from the sale of common stock. Any remaining accumulated offering costs will be written off when the existing registration statement expires in August 2023.

The Board of Directors has authorized a stock repurchase program pursuant to which the Company is authorized to purchase up to $175 million of the Company’s outstanding common stock in the open market, in privately negotiated transactions or otherwise, including pursuant to Rule 10b5-1 plans (the "Repurchase Program"). The Repurchase Program does not have an expiration date. This Repurchase Program may be suspended or discontinued at any time and does not obligate the Company to acquire any particular amount of shares. As of March 31, 2022, the Company had approximately $94.7 million remaining under its share repurchase authorization.

No shares were purchased as part of the Repurchase Program during the three months ended March 31, 2022 and 2021. The Company is prohibited under the terms of the amended corporate credit facilities from making repurchases of the Company's common stock until the Company achieves compliance with applicable debt covenants and the Company's covenant waiver period ends.

Distributions

The Company has suspended its quarterly dividend in order to preserve liquidity and did not declare any dividends during the three months ended March 31, 2022 and 2021. The Company's ability to make distributions is currently limited by the

provisions of the Company's amended corporate credit facilities. The Company will evaluate if and when to resume paying dividends in the future based on business and economic conditions and the requirement to distribute 90% of REIT taxable income in order to remain qualified as a REIT.

Non-Controlling Interest of Common Units in Operating Partnership

As of March 31, 2022, the Operating Partnership had 3,385,789 LTIP Units outstanding, representing a 2.9% partnership interest held by the limited partners. Of the 3,385,789 LTIP Units outstanding at March 31, 2022, 1,057,195 units had vested and had yet to be converted or redeemed. Only vested LTIP Units may be converted to common units of the Operating Partnership, which in turn can be tendered for redemption per the terms of the partnership agreement of the Operating Partnership.

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Earnings Per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per common share is calculated by dividing net income or loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated by dividing net income or loss available to common stockholders by the weighted-average number of common shares outstanding during the period plus any shares that could potentially be outstanding during the period. Any anti-dilutive shares have been excluded from the diluted earnings per share calculation.

Unvested share-based awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Accordingly, distributed and undistributed earnings attributable to unvested share-based compensation have been excluded, as applicable, from net income or loss available to common stockholders used in the basic and diluted earnings per share calculations.

Income or loss allocated to non-controlling interests in the Operating Partnership has been excluded from the numerator and Operating Partnership Units and LTIP Units in the Operating Partnership have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact.

The following table reconciles net loss attributable to common stockholders to basic and diluted earnings per share (in thousands, except share and per share data):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net loss available to common stockholders	$	(5,324)	$	(56,351)
Denominator:
Weighted-average shares outstanding - Basic	114,326,406		113,780,388
Effect of dilutive share-based compensation(1)	—		—
Weighted-average shares outstanding - Diluted	114,326,406		113,780,388
Basic and diluted loss per share:
Net loss per share available to common stockholders - basic and diluted	$	(0.05)	$	(0.50)

(1)During the three months ended March 31, 2022 and 2021, the Company excluded 423,043 and 546,124 anti-dilutive shares from its calculation of diluted earnings per share, respectively.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

2015 Incentive Award Plan

Restricted Stock Unit Grants

The Compensation Committee of the Board of Directors approved the following grants of restricted stock units to certain Company employees:

Grant Date	Grant Description	Time-Based Grants	Performance-Based Grants	Weighted-Average Grant Date Fair Value
February 2022	2022 Restricted Stock Units	91,272	47,944	$	16.09

Each award of time-based Restricted Stock Units will vest as follows, subject to continued employment with the Company or its affiliates through each applicable vesting date: 33% on the first anniversary of the vesting commencement date, 33% on the second anniversary of the vesting commencement date, and 34% on the third anniversary of the vesting commencement date.

The performance-based Restricted Stock Units are designated twenty-five percent (25%) as absolute total stockholder return ("TSR") units and seventy-five percent (75%) as relative TSR share units. The absolute TSR share units vest based on achievement of varying levels of the Company's TSR over the three-year performance period. The relative TSR share units vest based on the ranking of the Company's TSR as compared to a defined peer group over the three-year performance period. Vesting of performance-based Restricted Stock Units is also subject to continued employment with the Company or its affiliates through the applicable vesting date.

In March 2022, pursuant to the Company's Director Compensation Program, 451 fully vested shares of common stock with a grant date fair value of $18.50 per share were granted to a non-employee director in connection with such non-employee director's appointment to the Company's Board of Directors.

LTIP Unit Grants

The Compensation Committee of the Board of Directors approved the issuance of the following awards under the 2015 Incentive Award Plan:

Grant Date	Grant Description	Time-Based LTIP Units	Performance-Based Class A LTIP Units	Weighted-Average Grant Date Fair Value
February 2022	2022 LTIP Units	101,474	816,843	$	10.49

Each award of time-based LTIP Units will vest as follows, subject to continued employment with the Company or its affiliates through each applicable vesting date: 33% on the first anniversary of the vesting commencement date, 33% on the second anniversary of the vesting commencement date, and 34% on the third anniversary of the vesting commencement date.

A portion of each award of Class A LTIP Units are designated as a number of "base units". The base units are designated twenty-five percent (25%) as absolute TSR base units, and vest based on achievement of varying levels of the Company's TSR over the three-year performance period. The other seventy-five percent (75%) of the base units are designated as relative TSR base units and vest based on the ranking of the Company's TSR as compared to a defined peer group over the three-year performance period. Vesting of Class A LTIP Units is also subject to continued employment with the Company or its affiliates through the vesting date.

LTIP Units (other than unvested Class A LTIP Units), whether vested or unvested, receive the same quarterly per-unit distributions as common units in the Operating Partnership, which equal the per-share distributions on the common stock of the Company. Class A LTIP Units that have not vested receive a quarterly per-unit distribution equal to 10% of the distribution paid on common units in the Operating Partnership.

The following is a summary of the unvested incentive awards under the 2015 Incentive Award Plan as of March 31, 2022:

	2015 Incentive Award Plan Restricted Stock Units		2015 Incentive Award Plan LTIP Units(1)		Total
Unvested as of December 31, 2021	261,727		1,500,317		1,762,044
Granted	139,667		918,317		1,057,984
Vested(2)	(63,024)		(90,040)		(153,064)
Forfeited	—		—		—
Unvested as of March 31, 2022	338,370		2,328,594		2,666,964
Weighted-average fair value of unvested shares/units	$	14.94	$	11.42	$	11.86

(1)    Includes time-based LTIP Units and performance-based Class A LTIP Units.

(2)    During the three months ended March 31, 2022 and 2021, 16,478 and 18,993 shares of common stock, respectively, were withheld by the Company upon the settlement of the applicable awards in order to satisfy minimum tax withholding requirements with respect to Restricted Stock Units granted under the 2015 Incentive Award Plan.

The grant date fair values of the vested common stock, time-based Restricted Stock Units and time-based LTIP Units were determined based on the closing price of the Company’s common stock on the grant date and compensation expense is recognized on a straight-line basis over the vesting period. The grant date fair values of performance-based awards are determined based on a Monte Carlo simulation method with the following assumptions and compensation expense is recognized on a straight-line basis over the performance period:

Performance Award Grant Date	Percentage of Total Award	Grant Date Fair Value by Component (in dollars)	Volatility	Interest Rate	Dividend Yield
February 25, 2022
Absolute TSR Restricted Stock Units	25%	$9.72	41.28%	0.68% - 1.72%	—%
Relative TSR Restricted Stock Units	75%	$11.70	41.28%	0.68% - 1.72%	—%
Absolute TSR Class A LTIP Units	25%	$9.62	41.28%	0.68% - 1.72%	—%
Relative TSR Class A LTIP Units	75%	$11.33	41.28%	0.68% - 1.72%	—%

The absolute and relative total stockholder returns are market conditions as defined by Accounting Standard Codification ("ASC") 718, Compensation - Stock Compensation. Market conditions include provisions wherein the vesting condition is met through the achievement of a specific value of the Company’s common stock, which is total stockholder return in this case. Market conditions differ from other performance awards under ASC 718 in that the probability of attaining the condition (and thus vesting of the units or shares) is reflected in the initial grant date fair value of the award.

Accordingly, it is not appropriate to reconsider the probability of vesting in the award subsequent to the initial measurement of the award, nor is it appropriate to reverse any of the expense if the condition is not met. As such, once the expense for these awards is measured, the expense must be recognized over the vesting period regardless of whether the target is met, or at what level the target is met. Expense may only be reversed if the holder of the instrument forfeits the award as a result of the holder's termination of service to the Company prior to vesting.

For the three months ended March 31, 2022, the Company recognized approximately $2.2 million of share-based compensation expense (net of forfeitures) related to fully vested Restricted Stock Units and LTIP Units provided to its executive officers and certain corporate employees. In addition, for the three months ended March 31, 2022, the Company capitalized approximately $0.2 million related to Restricted Stock Units provided to certain other employees who oversee development and capital projects on behalf of the Company. As of March 31, 2022, there was $20.7 million of total unrecognized compensation costs related to unvested Restricted Stock Units, Class A LTIP Units and Time-Based LTIP Units issued under the 2015 Incentive Award Plan, which are expected to be recognized over a remaining weighted-average period of 2.15 additional years.

For the three months ended March 31, 2021, the Company recognized approximately $2.3 million of share-based compensation expense (net of forfeitures) related to Restricted Stock Units and LTIP Units provided to certain of its executive officers and other members of management. In addition, for the three months ended March 31, 2021, the Company capitalized approximately $0.4 million related to Restricted Stock Units provided to certain members of management who oversee development and capital projects on behalf of the Company.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Leases

The Company is a lessee to long-term ground, parking, and its corporate office leases, which are accounted for as operating leases. The following is a summary of the Company's leases as of and for the three months ended March 31, 2022 (dollar amounts in thousands):

	March 31, 2022
Weighted-average remaining lease term, including reasonably certain extension options(1)	21 years
Weighted-average discount rate	5.70%
ROU asset(2)	$	19,366
Lease liability(3)	$	20,637
Operating lease rent expense	$	537
Variable lease costs	812
Total rent and variable lease costs	$	1,349

(1)The weighted-average remaining lease term including all available extension options is approximately 56 years.

(2)The ROU asset is included in other assets on the condensed consolidated balance sheet as of March 31, 2022.

(3)The lease liability is included in other liabilities on the condensed consolidated balance sheet as of March 31, 2022.

The following table shows the remaining lease payments, which includes reasonably certain extension options, for the next five years and thereafter reconciled to the lease liability as of March 31, 2022 (in thousands):

	Year Ending December 31, 2022
2022 (excluding the three months ended March 31, 2022)	$	1,596
2023	2,142
2024	2,157
2025	2,172
2026	2,188
Thereafter	26,648
Total undiscounted lease payments	$	36,903
Less imputed interest	(16,266)
Lease liability(1)	$	20,637

(1)The lease liability is included in other liabilities on the condensed consolidated balance sheet as of March 31, 2022.

Management and Franchise Agreements

In order to maintain its qualification as a REIT, the Company cannot directly or indirectly operate any of its hotels. The Company leases each hotel to TRS lessees, which in turn engage property managers to manage the hotels. Each hotel is operated pursuant to a hotel management agreement with an independent third-party hotel management company.

Pursuant to the hotel management agreements, the management company controls the day-to-day operation of each hotel, and the Company is granted limited approval rights with respect to certain of the management company’s actions. The hotel management agreements typically contain a two-tiered fee structure, wherein the management company receives a base management fee and, if certain financial thresholds are met or exceeded, an incentive management fee. Many hotel management agreements also require the maintenance of a capital reserve fund based on a percentage of hotel revenues to be used for capital expenditures to maintain the quality of the hotels.

Management agreements for brand-managed hotels have terms generally ranging from 5 to 32 years and allow for one or more renewal periods at the option of the hotel manager. Assuming all renewal periods are exercised, the average remaining term is 26 years. Management agreements for franchised hotels generally contain initial terms between 10 and 15 years with an average remaining initial term of approximately two years.

The Company is generally limited in its ability to sell, lease or otherwise transfer hotels unless the transferee assumes the related hotel management agreement. However, most agreements include owner rights to terminate the agreements on the basis of the manager’s failure to meet certain performance-based metrics. Typically, these criteria are subject to the manager’s ability to ‘cure’ and avoid termination by payment to the Company of specified deficiency amounts (or, in some instances, waiver of the right to receive specified future management fees).

Franchise agreements contain initial terms of 15 to 20 years, with an average remaining initial term of approximately eight years. The franchise agreements require royalty fees based on a percentage of gross rooms revenue and, for certain hotels, an additional fee based on a percentage of gross food and beverage revenue. In addition, franchise agreements require fees for marketing, reservation or other program fees based on a percentage of gross rooms revenue. Many franchise agreements also require the maintenance of a capital reserve fund based on a percentage of hotel revenues to be used for capital expenditures to maintain the quality of the hotels.

The Company incurred management and franchise expenses of $7.6 million and $2.8 million for the three months ended March 31, 2022 and 2021, respectively, which are included on the condensed consolidated statements of operations and comprehensive loss for the periods then ended.

Reserve Requirements

Certain franchise and management agreements require the Company to reserve funds relating to replacements and renewals of the hotels' furniture, fixtures and equipment. As of March 31, 2022 and December 31, 2021, the Company had a balance of $33.4 million and $29.3 million, respectively, in reserves for such future improvements. This amount is included in restricted cash and escrows on the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively.

Renovation and Construction Commitments

As of March 31, 2022, the Company had various contracts outstanding with third-parties in connection with the renovation of certain of its hotel properties. The remaining commitments under these contracts as of March 31, 2022 totaled $6.9 million.

Legal

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of these matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material adverse effect on the financial condition of the Company.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of Accounting

The unaudited interim condensed consolidated financial statements and related notes have been prepared on an accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP" or "GAAP") and in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC. The unaudited condensed consolidated financial statements include normal recurring adjustments, which management considers necessary for the fair presentation of the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of changes in equity and condensed consolidated statements of cash flows for the periods presented. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2021, included in the Company's Annual Report on Form 10-K filed with the SEC on March 1, 2022. Operating results for the three months ended March 31, 2022 are not necessarily indicative of actual operating results for the entire year.

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and XHR Holding. The Company's subsidiaries generally consist of limited liability companies, limited partnerships and the TRS. The effects of all inter-company transactions have been eliminated.

Use of Estimates

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management's best judgment, after considering past, current and expected future economic conditions. Actual results could differ from these estimates.

Risks and Uncertainties

Risks and Uncertainties

As a result of the COVID-19 pandemic, the majority of the Company's hotels and resorts temporarily suspended operations for certain periods of time during 2020. All of the Company's hotels had resumed operations by the end of May 2021. The Company's portfolio consists of luxury and upper upscale hotels and resorts, which generally offer restaurant and bar venues, large meeting facilities and event space, and amenities, including spas and golf courses, some of which may have limited operations or may not be able to operate during the recovery in order to comply with implemented safety measures, ongoing or reimplemented restrictions and to accommodate reduced levels of demand. The Company continues to monitor the evolving situation and guidance from federal, state and local governmental and public health authorities and additional actions may be taken or required based on their recommendations and regulations in place. Under these circumstances, there may be developments that require further adjustments to operations.

The Company cannot predict with certainty whether and when business levels will return to normalized levels after the effects of the pandemic subside or whether hotels will be forced to suspend operations or impose additional restrictions due to future variants of COVID-19. Although it is improving, the lodging industry, particularly with respect to business transient and group business, has continued to lag behind the recovery of other industries. Factors such as public health (including a significant increase in variant strains of COVID-19 cases), availability and effectiveness of COVID-19 vaccines/boosters and therapeutics, the level of acceptance of the vaccine by the general population and the economic and geopolitical environments may impact the timing, extent and pace of such recovery. Additionally, the effects of the pandemic could materially and adversely affect the Company's ability to consummate acquisitions and dispositions of hotel properties in the near term.

The Company cannot predict with certainty the full extent and duration of the effects of the COVID-19 pandemic on its business, operating margins, results of operations, cash flows, financial condition, the market price of its common stock, its ability to make distributions to its shareholders, its access to equity and credit markets or its ability to service its indebtedness. Further, the Company continues to monitor and evaluate the challenges associated with inflationary pressures, the evolving workforce landscape, particularly related to industry-wide labor shortages and expected increases in wages, as well as ongoing supply chain issues which may continue to impact the hotels' ability to source operating supplies and other materials.

Consolidation

Consolidation

The Company evaluates its investments in partially owned entities to determine whether such entities may be a variable interest entity ("VIE") or voting interest entity. If the entity is a VIE, the determination of whether the Company is the primary beneficiary must be made. The primary beneficiary determination is based on a qualitative assessment as to whether the entity has (i) power to direct significant activities of the VIE and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The Company will consolidate a VIE if it is deemed to be the primary beneficiary. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary, or the entity is not a VIE and over which the Company does not have effective control but can exercise influence over the entity with respect to its operations and major decisions.

The Operating Partnership is a VIE. The Company's significant asset is its investment in the Operating Partnership, as described in Note 1, and consequently, substantially all of the Company's assets and liabilities represent those assets and liabilities of the Operating Partnership.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased, and similar accounts with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at various financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant as the Company does not anticipate non-performance by the financial institutions.

Restricted Cash and Escrows

Restricted Cash and Escrows

Restricted cash primarily relates to FF&E reserves as required per the terms of the Company's management and franchise agreements, cash held in restricted escrows for real estate taxes and insurance, capital spending reserves and, at times, disposition-related holdback escrows.

Acquisition of Real Estate

Acquisition of Real Estate

Investments in hotel properties, including land and land improvements, building and building improvements, furniture, fixtures and equipment, and identifiable intangibles assets, will generally be accounted for as asset acquisitions. Acquired assets are recorded at their relative fair value based on total accumulated costs of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. This includes all costs related to finding, analyzing and negotiating a transaction.

The allocation of the purchase price is an area that requires judgment and significant estimates. Tangible and intangible assets include land, building and improvements, furniture and fixtures, inventory, acquired above market and below market leases, in-place lease value (if applicable), advance bookings, and any assumed financing that is determined to be above or below market terms. Acquisition-date fair values of assets and assumed liabilities are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers and that use appropriate discount and/or capitalization rates and available market information.

Long-lived assets and intangibles

Long-lived assets and intangibles

The Company assesses the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Events or circumstances that may cause a review include, but are not limited to, when (1) a hotel property experiences a significant decrease in the market price of the long-lived asset, (2) a hotel property experiences a current or projected loss from operations combined with a history of operating or cash flow losses, (3) it becomes more likely than not that a hotel property will be sold before the end of its useful life, (4) an accumulation of costs is significantly in excess of the amount originally expected for the acquisition, construction or renovation of a long-lived asset, (5) adverse changes in demand occur for lodging at a specific property due to declining national or local economic conditions and/or new hotel construction in markets where the hotel is located, (6) there is a significant adverse change in legal factors or in the business climate that could affect the value of the long-lived asset and/or (7) there is a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed carrying value, the Company records an impairment charge to the extent that the carrying value exceeds fair value.

Insurance Recoveries

Insurance Recoveries

Insurance proceeds received in excess of recognized losses are treated as gain and are not recorded until contingencies are resolved. During the three months ended March 31, 2022, the Company received insurance proceeds related to damage sustained at Loews New Orleans Hotel during Hurricane Ida. These insurance proceeds were in excess of recognized losses and resulted in a gain on insurance recovery of $1.0 million which is included in other (loss) income on the condensed consolidated statement of operations and comprehensive loss for the period then ended.

The Company may also be entitled to business interruption proceeds for losses occurring at certain properties; however, an insurance recovery receivable will not be recorded until a final settlement has been reached with the insurance company. The Company is currently seeking business interruption proceeds related to properties impacted by storms under the Company's various insurance policies. During the three months ended March 31, 2021, the Company recognized $1.1 million in business interruption insurance proceeds for a portion of lost revenues associated with cancellations related to the COVID-19 pandemic. These amounts are included in gain on business interruption insurance on the condensed consolidated statement of operations and comprehensive loss for the period then ended. No business interruption insurance recovery receivables were recognized during the three months ended March 31, 2022.

Disposition of Real Estate

Disposition of Real Estate

The Company accounts for dispositions of real estate in accordance with ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets ("Subtopic 610-20") for the transactions between the Company and unrelated third-parties that are not considered a customer in the ordinary course of business. Typically, the real estate assets disposed of do not represent the transfer of a business or contain a material amount of financial assets, if any. The real estate assets promised in a sales contract are typically nonfinancial assets (i.e. land or a leasehold interest in land, building, furniture, fixtures and equipment) or in substance nonfinancial assets. The Company recognizes a gain or loss in full when the real estate is sold, provided (a) there is a valid contract and (b) transfer of control has occurred.

Revenues

Revenues

Revenues consist of amounts derived from hotel operations, including the sale of rooms for lodging accommodations, food and beverage, and other ancillary revenue generated by hotel amenities including spa, parking, golf, resort fees and other services.

Revenues are generated from various distribution channels including but not limited to direct bookings, global distribution systems and Internet travel sites. Room transaction prices are based on an individual hotel's location, room type and the bundle of services included in the reservation and are set by the hotel daily. Any discounts, including advance purchase, loyalty point redemptions or promotions are recognized at the discounted rate whereas rebates and incentives are recorded as a reduction in rooms revenues when earned. Revenues from online channels are generally recognized net of commission fees, unless the end price paid by the guest is known. Rooms revenue is recognized over the length of stay that the hotel room is occupied by the guest. Cash received from a guest prior to check-in is recorded as an advance deposit and is generally recognized as rooms revenue at the time the room reservation has become non-cancellable, upon occupancy or upon expiration of the re-booking date. Advance deposits are included in other liabilities on the condensed consolidated balance sheets. Payment of any remaining balance is typically due from the guest upon check-out. Sales, use, occupancy, and similar taxes are collected and presented on a net basis (excluded from revenues).

Food and beverage transaction prices are based on the stated price for the specific food or beverage and varies depending on type, venue and hotel location. Service charges are typically a percentage of food and beverage prices and meeting space rental. Food and beverage revenue is recognized at the point in time in which the goods and/or services are rendered to the guest. Cash received in advance of an event is recorded as either a security or advance deposit. Security and advance deposits are recognized as revenue when it becomes non-cancellable or at the time the food and beverage goods and services are rendered to the guest. Payment for the remaining balance of food and beverage goods and services is due upon delivery and completion of such goods and services.

Parking and audio visual fees are recognized at the time services are provided to the guest at the stated price for the service or goods. In parking and audio visual contracts in which the Company has control over the services provided, the Company is considered the principal in the agreement and recognize the related revenues gross of associated costs. If the Company does not have control over the services in the contract, the Company is considered the agent and record the related revenues net of associated costs.

Resort and amenity fees, spa, golf and other ancillary amenity revenues are recognized at the point in time the goods or services have been rendered to the guest at the stated price for the service or amenity.

Share-Based Compensation

Share-Based Compensation

The Company maintains a share-based incentive plan that provides for the grant of stock options, stock awards, restricted stock units, LTIP units and other equity-based awards. Share-based compensation is measured at the estimated fair value of the award on the date of grant, adjusted for forfeitures as they occur, and recognized as an expense on a straight-line basis over the longest vesting period for each grant for the entire award. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of the Company's share price, expected dividend yield, expected term and assumptions of whether certain of these awards will achieve performance thresholds. Share-based compensation is included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss and capitalized in buildings and other improvements in the condensed consolidated balance sheets for certain employees that manage property developments, renovations and capital improvements.

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Revenues (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue by Primary Geographical Markets

The following represents total revenues disaggregated by primary geographical markets (as defined by STR, Inc. ("STR")) for the three months ended March 31, 2022 and 2021 (in thousands):

	Three Months Ended
Primary Markets	March 31, 2022
Orlando, FL	$	36,207
Phoenix, AZ	30,707
Houston, TX	20,996
San Diego, CA	19,188
Dallas, TX	12,846
Atlanta, GA	10,965
San Francisco/San Mateo, CA	9,578
Florida Keys	9,365
Denver, CO	9,052
Washington, DC-MD-VA	7,461
Other	43,982
Total	$	210,347

	Three Months Ended
Primary Markets	March 31, 2021
Phoenix, AZ	$	14,255
Orlando, FL	11,957
Houston, TX	10,517
Florida Keys	6,094
Denver, CO	5,812
Atlanta, GA	5,432
San Diego, CA	5,263
Dallas, TX	3,767
Savannah, GA	3,572
Washington, DC-MD-VA	3,354
Other	17,829
Total	$	87,852

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Investment Properties (Tables)

3 Months Ended

Mar. 31, 2022

Asset Acquisition and Disposition [Abstract]

Schedule of Purchase Price Allocation for Asset Acquisitions

The following represents the purchase price allocation of the hotel acquired during the three months ended March 31, 2022 (in thousands):

	March 31, 2022
Land	$	36,364
Building and improvements	264,766
Furniture, fixtures, and equipment	31,091
Intangible and other assets(1)	232
Intangible liability(2)	(3,960)
Total purchase price(3)	$	328,493

(1)As part of the purchase price allocation for W Nashville, the Company allocated $0.1 million to advance bookings that will be amortized over 1.3 years as well as $0.1 million allocated to food inventory.

(2)As part of the purchase price allocation for W Nashville, the Company allocated $4.0 million to a liability associated with key money received by the seller from the third-party hotel manager. This liability will be amortized over 29.8 years and in the event of early termination is payable to the third-party hotel manager on a pro rata basis for the remaining portion of the term of the hotel management agreement.

(3)The total cost capitalized includes acquisition costs as the transaction was accounted for an an asset acquisition.

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Debt (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of Debt Instruments

Debt as of March 31, 2022 and December 31, 2021 consisted of the following (dollar amounts in thousands):

						Balance Outstanding as of
	Rate Type	Rate(1)			Maturity Date	March 31, 2022		December 31, 2021
Mortgage Loans
Renaissance Atlanta Waverly Hotel & Convention Center	Fixed (2)	4.45	%		8/14/2024	$	100,000	$	100,000
Andaz Napa	Fixed (3)	2.98	%		9/13/2024	55,460		55,640
The Ritz-Carlton, Pentagon City	Fixed (4)	—	%		1/31/2025	—		65,000
Grand Bohemian Hotel Orlando, Autograph Collection	Fixed	4.53	%		3/1/2026	56,523		56,796
Marriott San Francisco Airport Waterfront	Fixed	4.63	%		5/1/2027	111,623		112,102
Total Mortgage Loans		4.27	%	(5)		$	323,606	$	389,538
Corporate Credit Facilities
Corporate Credit Facility Term Loan $125M	Fixed (6)	3.92	%		9/13/2024	125,000		125,000
Revolving Credit Facility (7)	Variable	3.00	%		2/28/2024	—		—
Total Corporate Credit Facilities						$	125,000	$	125,000
2020 Senior Notes $500M	Fixed	6.38	%		8/15/2025	500,000		500,000
2021 Senior Notes $500M	Fixed	4.88	%		6/1/2029	500,000		500,000
Loan premiums, discounts and unamortized deferred financing costs, net (8)						(18,990)		(20,307)
Total Debt, net of loan premiums, discounts and unamortized deferred financing costs		5.18	%	(5)		$	1,429,616	$	1,494,231

(1)The rates shown represent the annual interest rates as of March 31, 2022. The variable index for the Renaissance Atlanta Waverly Hotel & Convention Center mortgage loan is daily SOFR and for the Andaz Napa mortgage loan is one-month LIBOR. The variable index for the corporate credit facilities reflects a 25 basis point LIBOR floor which is applicable for the value of all corporate credit facilities not subject to an interest rate hedge.

(2)A variable interest rate loan for which the interest rate has been fixed through October 2022, after which the rate reverts to variable.

(3)A variable interest loan for which the interest rate has been fixed on $25 million of the balance through October 2022, after which the rate reverts to variable.

(4)A variable interest rate loan for which the interest rate was fixed through January 2023. The outstanding balance of this mortgage loan was repaid in January 2022 and the two interest rate swaps associated with this loan were terminated in connection with the repayment.

(5)Represents the weighted-average interest rate as of March 31, 2022.

(6)A variable interest loan for which LIBOR has been fixed through September 2022. The spread to LIBOR may vary, as it is determined by the Company's leverage ratio. The applicable interest rate has been set to the highest level of grid-based pricing during the covenant waiver period.

(7)Commitments under the revolving credit facility totaled $523 million through February 2022, after which the total commitments decreased to $450 million through maturity in February 2024.

(8)Includes loan premiums, discounts and deferred financing costs, net of accumulated amortization.

Schedule of Principal Payments and Debt Maturities

The following table shows scheduled principal payments and debt maturities for the next five years and thereafter (in thousands):

	As of March 31, 2022		Weighted-  average interest rate
2022	$	3,632	4.08%
2023	5,537		4.13%
2024	280,160		3.94%
2025	503,512		6.36%
2026	54,379		4.53%
Thereafter	601,386		4.83%
Total Debt	$	1,448,606	5.18%
Revolving Credit Facility (matures in 2024)	—		3.00%
Loan premiums, discounts and unamortized deferred financing costs, net	(18,990)		—
Debt, net of loan premiums, discounts and unamortized deferred financing costs	$	1,429,616	5.18%

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of the Terms of the Derivative Financial Instruments

The following table summarizes the terms of the derivative financial instruments held by the Company as of March 31, 2022 and December 31, 2021, respectively (in thousands):

						March 31, 2022				December 31, 2021
Hedged Debt	Type	Fixed Rate	Index	Effective Date	Maturity	Notional Amounts		Estimated Fair Value		Notional Amounts		Estimated Fair Value
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	$	50,000	$	(160)	$	50,000	$	(591)
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(295)
Mortgage Debt	Swap	1.84%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(297)
Mortgage Debt	Swap	1.83%	1-Month LIBOR	1/15/2016	10/22/2022	25,000		(80)		25,000		(296)
$125M Term Loan	Swap	1.91%	1-Month LIBOR	10/13/2017	9/13/2022	40,000		(147)		40,000		(445)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	40,000		(148)		40,000		(446)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	25,000		(93)		25,000		(279)
$125M Term Loan	Swap	1.92%	1-Month LIBOR	10/13/2017	9/13/2022	20,000		(74)		20,000		(223)
Mortgage Debt(1)	Swap	2.80%	1-Month LIBOR	6/1/2018	2/1/2023	—		—		24,000		(598)
Mortgage Debt(1)	Swap	2.89%	1-Month LIBOR	1/17/2019	2/1/2023	—		—		41,000		(1,061)
						$	250,000	$	(862)	$	315,000	$	(4,531)

(1)    The Company terminated two interest rate swaps prior to maturity in connection with the repayment of the mortgage loan collateralized by The Ritz-Carlton, Pentagon City in January 2022.

Schedule of Gain (Loss) Recognized on Derivative Financial Instruments

The table below details the location in the condensed consolidated financial statements of the gains and losses recognized on derivative financial instruments designated as cash flow hedges for the three months ended March 31, 2022 and 2021 (in thousands):

		Three Months Ended March 31,
		2022		2021
Effect of derivative instruments:	Location in Statements of Operations and Comprehensive Loss:
Gain recognized in other comprehensive loss	Unrealized gain on interest rate derivative instruments	$	2,517	$	104
Gain reclassified from accumulated other comprehensive loss to net loss	Reclassification adjustment for amounts recognized in net loss (interest expense)	$	1,152	$	2,330
Total interest expense in which effects of cash flow hedges are recorded	Interest expense	$	20,538	$	18,750
Realized loss on termination of derivative instruments	Other (loss) income	$	(1,555)	$	—

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets and Liabilities Measured on Recurring and Nonrecurring Basis

For assets and liabilities measured at fair value on a recurring basis and non-recurring basis, quantitative disclosure of their fair values are included in the condensed consolidated balance sheets as of as of March 31, 2022 and December 31, 2021 (in thousands):

	Fair Value Measurement Date
	March 31, 2022				December 31, 2021
Location on Condensed Consolidated Balance Sheets/Description of Instrument	Observable Inputs  (Level 2)		Significant Unobservable Inputs  (Level 3)		Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)
Recurring measurements
Liabilities
Interest rate swaps(1)	$	(862)	$	—	$	(4,531)	$	—
Non-recurring measurements
Net investment properties
Kimpton Hotel Monaco Chicago	$	—	$	—	$	34,093	$	—

(1)Interest rate swap fair values are netted as applicable per the terms of the respective master netting agreements.

Schedule of Fair Value of Financial Instruments

The table below represents the fair value of financial instruments presented at carrying values in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 (in thousands):

	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Total Mortgage and Corporate Credit Facility Term Loan	$	448,606	$	434,669	$	514,538	$	503,265
Senior Notes	1,000,000		1,012,823		1,000,000		1,055,323
Revolving Credit Facility	—		—		—		—
Total	$	1,448,606	$	1,447,492	$	1,514,538	$	1,558,588

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table reconciles net loss attributable to common stockholders to basic and diluted earnings per share (in thousands, except share and per share data):

	Three Months Ended March 31,
	2022		2021
Numerator:
Net loss available to common stockholders	$	(5,324)	$	(56,351)
Denominator:
Weighted-average shares outstanding - Basic	114,326,406		113,780,388
Effect of dilutive share-based compensation(1)	—		—
Weighted-average shares outstanding - Diluted	114,326,406		113,780,388
Basic and diluted loss per share:
Net loss per share available to common stockholders - basic and diluted	$	(0.05)	$	(0.50)

(1)During the three months ended March 31, 2022 and 2021, the Company excluded 423,043 and 546,124 anti-dilutive shares from its calculation of diluted earnings per share, respectively.

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Restricted Stock Units

The Compensation Committee of the Board of Directors approved the following grants of restricted stock units to certain Company employees:

Grant Date	Grant Description	Time-Based Grants	Performance-Based Grants	Weighted-Average Grant Date Fair Value
February 2022	2022 Restricted Stock Units	91,272	47,944	$	16.09

Schedule of Incentive Plan Awards

The Compensation Committee of the Board of Directors approved the issuance of the following awards under the 2015 Incentive Award Plan:

Grant Date	Grant Description	Time-Based LTIP Units	Performance-Based Class A LTIP Units	Weighted-Average Grant Date Fair Value
February 2022	2022 LTIP Units	101,474	816,843	$	10.49

Schedule of Unvested Incentive Awards

The following is a summary of the unvested incentive awards under the 2015 Incentive Award Plan as of March 31, 2022:

	2015 Incentive Award Plan Restricted Stock Units		2015 Incentive Award Plan LTIP Units(1)		Total
Unvested as of December 31, 2021	261,727		1,500,317		1,762,044
Granted	139,667		918,317		1,057,984
Vested(2)	(63,024)		(90,040)		(153,064)
Forfeited	—		—		—
Unvested as of March 31, 2022	338,370		2,328,594		2,666,964
Weighted-average fair value of unvested shares/units	$	14.94	$	11.42	$	11.86

(1)    Includes time-based LTIP Units and performance-based Class A LTIP Units.

(2)    During the three months ended March 31, 2022 and 2021, 16,478 and 18,993 shares of common stock, respectively, were withheld by the Company upon the settlement of the applicable awards in order to satisfy minimum tax withholding requirements with respect to Restricted Stock Units granted under the 2015 Incentive Award Plan.

Schedule of Assumptions for Performance Awards

The grant date fair values of performance-based awards are determined based on a Monte Carlo simulation method with the following assumptions and compensation expense is recognized on a straight-line basis over the performance period:

Performance Award Grant Date	Percentage of Total Award	Grant Date Fair Value by Component (in dollars)	Volatility	Interest Rate	Dividend Yield
February 25, 2022
Absolute TSR Restricted Stock Units	25%	$9.72	41.28%	0.68% - 1.72%	—%
Relative TSR Restricted Stock Units	75%	$11.70	41.28%	0.68% - 1.72%	—%
Absolute TSR Class A LTIP Units	25%	$9.62	41.28%	0.68% - 1.72%	—%
Relative TSR Class A LTIP Units	75%	$11.33	41.28%	0.68% - 1.72%	—%

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Summary of Leases

The following is a summary of the Company's leases as of and for the three months ended March 31, 2022 (dollar amounts in thousands):

	March 31, 2022
Weighted-average remaining lease term, including reasonably certain extension options(1)	21 years
Weighted-average discount rate	5.70%
ROU asset(2)	$	19,366
Lease liability(3)	$	20,637
Operating lease rent expense	$	537
Variable lease costs	812
Total rent and variable lease costs	$	1,349

(1)The weighted-average remaining lease term including all available extension options is approximately 56 years.

(2)The ROU asset is included in other assets on the condensed consolidated balance sheet as of March 31, 2022.

(3)The lease liability is included in other liabilities on the condensed consolidated balance sheet as of March 31, 2022.

Schedule of Remaining Lease Payments

The following table shows the remaining lease payments, which includes reasonably certain extension options, for the next five years and thereafter reconciled to the lease liability as of March 31, 2022 (in thousands):

	Year Ending December 31, 2022
2022 (excluding the three months ended March 31, 2022)	$	1,596
2023	2,142
2024	2,157
2025	2,172
2026	2,188
Thereafter	26,648
Total undiscounted lease payments	$	36,903
Less imputed interest	(16,266)
Lease liability(1)	$	20,637

(1)The lease liability is included in other liabilities on the condensed consolidated balance sheet as of March 31, 2022.

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Organization (Details)	Mar. 31, 2022 market property	Mar. 31, 2021 property
Organization [Line Items]
Number of top lodging markets for investing activity | market	25
Number of hotels operated | property	34	35
XHR LP (Operating Partnership)
Organization [Line Items]
Ownership by Company (percent)	97.10%
Ownership by noncontrolling owners (percent)	2.90%

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Summary of Significant Accounting Policies - Risks and Uncertainties (Details) - Revenue - Geographic concentration risk - Minimum	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Orlando, FL
Concentration Risk [Line Items]
Concentration risk (percent)	10.00%	10.00%
Phoenix, AZ
Concentration Risk [Line Items]
Concentration risk (percent)	10.00%	10.00%
San Diego, CA
Concentration Risk [Line Items]
Concentration risk (percent)	10.00%
Houston, TX
Concentration Risk [Line Items]
Concentration risk (percent)	10.00%	10.00%

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Summary of Significant Accounting Policies - Involuntary Conversion and Insurance Recoveries (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Business Interruption Loss [Line Items]
Gain on business interruption insurance	$ 0	$ 1,116,000
COVID-19 pandemic
Business Interruption Loss [Line Items]
Gain on business interruption insurance		$ 1,100,000
Hurricane
Business Interruption Loss [Line Items]
Expense for hurricane-related cleanup	1,300,000
Gain on business interruption insurance	1,000,000
Business interruption insurance recovery receivables	$ 0

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Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 210,347	$ 87,852
Orlando, FL
Disaggregation of Revenue [Line Items]
Revenues	36,207	11,957
Phoenix, AZ
Disaggregation of Revenue [Line Items]
Revenues	30,707	14,255
Houston, TX
Disaggregation of Revenue [Line Items]
Revenues	20,996	10,517
San Diego, CA
Disaggregation of Revenue [Line Items]
Revenues	19,188	5,263
Dallas, TX
Disaggregation of Revenue [Line Items]
Revenues	12,846	3,767
Atlanta, GA
Disaggregation of Revenue [Line Items]
Revenues	10,965	5,432
San Francisco/San Mateo, CA
Disaggregation of Revenue [Line Items]
Revenues	9,578
Florida Keys
Disaggregation of Revenue [Line Items]
Revenues	9,365	6,094
Denver, CO
Disaggregation of Revenue [Line Items]
Revenues	9,052	5,812
Washington, DC-MD-VA
Disaggregation of Revenue [Line Items]
Revenues	7,461	3,354
Savannah, GA
Disaggregation of Revenue [Line Items]
Revenues		3,572
Other
Disaggregation of Revenue [Line Items]
Revenues	$ 43,982	$ 17,829

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Investment Properties - Narrative (Details) $ in Millions		12 Months Ended
	Mar. 29, 2022 USD ($) room	Dec. 31, 2021 USD ($)	Nov. 30, 2021 USD ($) room
Kimpton Hotel Monaco Chicago | Disposed of by sale
Disposition of Properties
Number of rooms in property | room			191
Sale price per agreement			$ 36.0
Impairment on write-down of property		$ 15.7
W Nashville Located in Nashville
Disposition of Properties
Number of rooms in property | room	346
Purchase price	$ 328.5
Credit against purchase price	$ 1.3

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Investment Properties - Purchase Price Allocation for Properties Acquired (Details) - W Nashville Located in Nashville $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Schedule of Asset Acquisition [Line Items]
Land	$ 36,364
Building and improvements	264,766
Furniture, fixtures, and equipment	31,091
Intangible and other assets	232
Intangible liability	(3,960)
Total purchase price	328,493
Allocated to inventory	100
Customer Contracts
Schedule of Asset Acquisition [Line Items]
Intangible and other assets	$ 100
Amortization period (years)	1 year 3 months 18 days
Service Agreements
Schedule of Asset Acquisition [Line Items]
Intangible liability	$ (4,000)
Amortization period (years)	29 years 9 months 18 days

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Debt - Debt Instruments (Details)	1 Months Ended
	Jan. 31, 2022 derivative_instrument	Mar. 31, 2022 USD ($)	Mar. 01, 2022 USD ($)	Feb. 28, 2022 USD ($)	Dec. 31, 2021 USD ($)
Debt Instrument [Line Items]
Balance outstanding		$ 1,448,606,000
Revolving credit facility		0
Loan premiums, discounts and unamortized deferred financing costs, net		(18,990,000)			$ (20,307,000)
Debt, net of loan discounts and unamortized deferred financing costs		$ 1,429,616,000			1,494,231,000
Weighted average interest rate (percent)		5.18%
Number of interest rate swaps terminated | derivative_instrument	2
Corporate Credit Facilities
Debt Instrument [Line Items]
Balance outstanding		$ 125,000,000			125,000,000
Basis point LIBOR floor (percent)		0.25%
Mortgage loans
Debt Instrument [Line Items]
Balance outstanding		$ 323,606,000			389,538,000
Weighted average interest rate (percent)		4.27%
Mortgage loans | Renaissance Atlanta Waverly Hotel & Convention Center
Debt Instrument [Line Items]
Balance outstanding		$ 100,000,000			100,000,000
Weighted average interest rate (percent)		4.45%
Mortgage loans | Andaz Napa
Debt Instrument [Line Items]
Balance outstanding		$ 55,460,000			55,640,000
Weighted average interest rate (percent)		2.98%
Component of variable rate loan with fixed rate		$ 25,000,000
Mortgage loans | The Ritz-Carlton, Pentagon City
Debt Instrument [Line Items]
Balance outstanding		$ 0			65,000,000
Weighted average interest rate (percent)		0.00%
Mortgage loans | Grand Bohemian Hotel Orlando, Autograph Collection
Debt Instrument [Line Items]
Balance outstanding		$ 56,523,000			56,796,000
Weighted average interest rate (percent)		4.53%
Mortgage loans | Marriott San Francisco Airport Waterfront
Debt Instrument [Line Items]
Balance outstanding		$ 111,623,000			112,102,000
Weighted average interest rate (percent)		4.63%
Term loans | Corporate Credit Facility Term Loan $125M
Debt Instrument [Line Items]
Balance outstanding		$ 125,000,000			125,000,000
Aggregate principal		$ 125,000,000
Weighted average interest rate (percent)		3.92%
Credit facility | Revolving Credit Facility
Debt Instrument [Line Items]
Revolving credit facility		$ 0			0
Weighted average interest rate (percent)		3.00%
Borrowing capacity commitment			$ 450,000,000	$ 523,000,000
Secured debt | 2020 Senior Notes $500M
Debt Instrument [Line Items]
Balance outstanding		$ 500,000,000			500,000,000
Aggregate principal		$ 500,000,000
Weighted average interest rate (percent)		6.38%
Secured debt | 2021 Senior Notes $500M
Debt Instrument [Line Items]
Balance outstanding		$ 500,000,000			$ 500,000,000
Aggregate principal		$ 500,000,000
Weighted average interest rate (percent)		4.88%

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Debt - Mortgage Loans Narrative (Details) - Mortgage loans	1 Months Ended
	Jan. 31, 2022 USD ($)	Mar. 31, 2022 USD ($) loan
Debt Instrument [Line Items]
Mortgage loans not in compliance with covenants that do not lead to default | loan		1
The Ritz-Carlton, Pentagon City
Debt Instrument [Line Items]
Repayments of loan	$ 65,000,000
Recourse
Debt Instrument [Line Items]
Aggregate principal		$ 0

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Debt - Corporate Credit Facilities Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Revolving credit facility	$ 0
Credit facility | Revolving Credit Facility
Debt Instrument [Line Items]
Revolving credit facility	0		$ 0
Credit facility unused borrowing capacity fee	$ 400,000	$ 300,000
Interest expense		$ 1,200,000

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Debt - Debt Outstanding Narrative (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($)
Debt Disclosure [Abstract]
Debt outstanding	$ 1,449.0	$ 1,515.0
Weighted average interest rate (percent)	5.18%
Number of mortgage loans repaid | loan	1
Write off of unamortized deferred financing cost	$ 0.3

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Debt - Scheduled Principal Payments and Debt Maturities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Principal payments and debt maturities
2022	$ 3,632
2023	5,537
2024	280,160
2025	503,512
2026	54,379
Thereafter	601,386
Total Debt	1,448,606
Revolving Credit Facility	0
Loan premiums, discounts and unamortized deferred financing costs, net	(18,990)	$ (20,307)
Debt, net of loan discounts and unamortized deferred financing costs	$ 1,429,616	$ 1,494,231
Weighted-  average interest rate
2022 (percent)	4.08%
2023 (percent)	4.13%
2024 (percent)	3.94%
2025 (percent)	6.36%
2026 (percent)	4.53%
Thereafter (percent)	4.83%
Total Debt (percent)	5.18%
Revolving Credit Facility (percent)	3.00%
Debt, net of loan discounts and unamortized deferred financing costs (percent)	5.18%

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Derivatives - Narrative (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2022 derivative_instrument	Mar. 31, 2022 USD ($) derivative_instrument	Mar. 31, 2021 USD ($)
Derivative [Line Items]
Number of interest rate swaps terminated | derivative_instrument	2
Realized loss on termination of derivative instruments | $		$ (1,555)	$ 0
Expected reclassification from accumulated OCI to interest expense in next twelve months | $		$ 800
Interest rate swap
Derivative [Line Items]
Number of interest rate swaps terminated | derivative_instrument		2

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Derivatives - Derivative Financial Instruments (Details)	1 Months Ended	3 Months Ended
	Jan. 31, 2022 derivative_instrument	Mar. 31, 2022 USD ($) derivative_instrument	Dec. 31, 2021 USD ($)
Derivative [Line Items]
Number of interest rate swaps terminated | derivative_instrument	2
Interest rate swap
Derivative [Line Items]
Number of interest rate swaps terminated | derivative_instrument		2
Cash flow hedge | Interest rate swap
Derivative [Line Items]
Notional amounts		$ 250,000,000	$ 315,000,000
Estimated fair value		$ (862,000)	(4,531,000)
Cash flow hedge | Interest rate swap | Mortgage Debt one
Derivative [Line Items]
Fixed rate (percent)		1.83%
Notional amounts		$ 50,000,000	50,000,000
Estimated fair value		$ (160,000)	(591,000)
Cash flow hedge | Interest rate swap | Mortgage Debt two
Derivative [Line Items]
Fixed rate (percent)		1.83%
Notional amounts		$ 25,000,000	25,000,000
Estimated fair value		$ (80,000)	(295,000)
Cash flow hedge | Interest rate swap | Mortgage Debt three
Derivative [Line Items]
Fixed rate (percent)		1.84%
Notional amounts		$ 25,000,000	25,000,000
Estimated fair value		$ (80,000)	(297,000)
Cash flow hedge | Interest rate swap | Mortgage Debt four
Derivative [Line Items]
Fixed rate (percent)		1.83%
Notional amounts		$ 25,000,000	25,000,000
Estimated fair value		(80,000)	(296,000)
Cash flow hedge | Interest rate swap | 125M Term Loan one
Derivative [Line Items]
Hedged debt		$ 125,000,000
Fixed rate (percent)		1.91%
Notional amounts		$ 40,000,000	40,000,000
Estimated fair value		(147,000)	(445,000)
Cash flow hedge | Interest rate swap | 125M Term Loan two
Derivative [Line Items]
Hedged debt		$ 125,000,000
Fixed rate (percent)		1.92%
Notional amounts		$ 40,000,000	40,000,000
Estimated fair value		(148,000)	(446,000)
Cash flow hedge | Interest rate swap | 125M Term Loan three
Derivative [Line Items]
Hedged debt		$ 125,000,000
Fixed rate (percent)		1.92%
Notional amounts		$ 25,000,000	25,000,000
Estimated fair value		(93,000)	(279,000)
Cash flow hedge | Interest rate swap | 125M Term Loan four
Derivative [Line Items]
Hedged debt		$ 125,000,000
Fixed rate (percent)		1.92%
Notional amounts		$ 20,000,000	20,000,000
Estimated fair value		$ (74,000)	(223,000)
Cash flow hedge | Interest rate swap | Mortgage Debt five
Derivative [Line Items]
Fixed rate (percent)		2.80%
Notional amounts		$ 0	24,000,000
Estimated fair value		$ 0	(598,000)
Cash flow hedge | Interest rate swap | Mortgage Debt six
Derivative [Line Items]
Fixed rate (percent)		2.89%
Notional amounts		$ 0	41,000,000
Estimated fair value		$ 0	$ (1,061,000)

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Derivatives - Recognized Gain (Loss) on Cash Flow Hedges (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Unrealized gain on interest rate derivative instruments	$ 2,517	$ 104
Gain reclassified from accumulated other comprehensive loss to net loss	(1,152)	(2,330)
Interest expense	20,538	18,750
Realized loss on termination of derivative instruments	$ (1,555)	$ 0

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Fair Value Measurements - Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Recurring | Level 2 | Interest rate swap
Liabilities
Interest rate swap	$ (862)	$ (4,531)
Recurring | Level 3 | Interest rate swap
Liabilities
Interest rate swap	0	0
Nonrecurring | Level 2
Net investment properties
Kimpton Hotel Monaco Chicago	0	34,093
Nonrecurring | Level 3
Net investment properties
Kimpton Hotel Monaco Chicago	$ 0	$ 0

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Fair Value Measurements - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)	Mar. 31, 2022	Nov. 30, 2021 USD ($) room
Level 2 | Measurement Input, Discount Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Weighted average effective interest rate (percent)	0.0523	0.0559
Disposed of by sale | Kimpton Hotel Monaco Chicago IL
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Number of rooms in property | room			191
Sale price per agreement			$ 36.0
Impairment on write-down of property	$ 15.7

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Fair Value Measurements - Financial Instruments Presented at Carrying Value (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Mortgage and Corporate Credit Facility Term Loan	$ 448,606	$ 514,538
Senior Notes	1,000,000	1,000,000
Revolving Credit Facility	0	0
Total	1,448,606	1,514,538
Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total Mortgage and Corporate Credit Facility Term Loan	434,669	503,265
Senior Notes	1,012,823	1,055,323
Revolving Credit Facility	0	0
Total	$ 1,447,492	$ 1,558,588

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Estimated federal and state combined effective rate (percent)	16.00%	2.45%
Income tax expense (benefit)	$ 1,607	$ 165

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Stockholders' Equity (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Class of Stock [Line Items]
Aggregate offering price of common stock authorized under ATM agreement	$ 200.0
Aggregate offering price of common stock currently available under ATM agreements	$ 200.0
Number of shares issued (in shares)	0	0
Shares repurchased (in shares)	0	0
XHR LP (Operating Partnership)
Class of Stock [Line Items]
Ownership by noncontrolling owners (percent)	2.90%
Number of vested units (in shares)	1,057,195
Time-Based LTIP Units and Performance-Based Class A LTIP Units
Class of Stock [Line Items]
Number of units outstanding, vested and nonvested (in shares)	3,385,789
Repurchase Program
Class of Stock [Line Items]
Stock repurchase program authorized amount	$ 175.0
Remaining share repurchase authorization	94.7
Other Assets
Class of Stock [Line Items]
Offering costs	$ 0.8		$ 0.7

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator:
Net loss available to common stockholders	$ (5,324)	$ (56,351)
Net loss available to common stockholders	$ (5,324)	$ (56,351)
Denominator:
Weighted average shares outstanding - Basic (in shares)	114,326,406	113,780,388
Effect of dilutive share-based compensation (in shares)	0	0
Weighted average shares outstanding - Diluted (in shares)	114,326,406	113,780,388
Basic and diluted loss per share:
Net loss per share available to common stockholders - basic (in dollars per share)	$ (0.05)	$ (0.50)
Net loss per share available to common stockholders - diluted (in dollars per share)	$ (0.05)	$ (0.50)
Anti-dilutive shares excluded from calculation of diluted earnings per share (in shares)	423,043	546,124

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Share-Based Compensation - Restricted Stock Unit Grants (Details) - $ / shares		1 Months Ended		3 Months Ended
	Feb. 25, 2022	Mar. 31, 2022	Feb. 28, 2022	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				1,057,984
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				139,667
Weighted average grant date fair value (in dollars per share)			$ 16.09
Time-based restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			91,272
Time-based restricted stock units | Vesting tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights (percent)		33.00%
Time-based restricted stock units | Vesting tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights (percent)		33.00%
Time-based restricted stock units | Vesting tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights (percent)		34.00%
Performance-based restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			47,944
Absolute TSR Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Component of total award (percent)	25.00%	25.00%
Award vesting period (in years)		3 years
Relative TSR Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Component of total award (percent)	75.00%	75.00%
Award vesting period (in years)		3 years
Fully vested stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		451
Weighted average grant date fair value (in dollars per share)		$ 18.50

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Share-Based Compensation - LTIP Unit Grants (Details) - $ / shares		1 Months Ended		3 Months Ended
	Feb. 25, 2022	Feb. 28, 2022	Mar. 31, 2021	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				1,057,984
Time-Based LTIP Units and Performance-Based Class A LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)				918,317
Weighted average grant date fair value (in dollars per share)		$ 10.49
Time-Based LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		101,474
Time-Based LTIP Units | Vesting tranche one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights (percent)			33.00%
Time-Based LTIP Units | Vesting tranche two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights (percent)			33.00%
Time-Based LTIP Units | Vesting tranche three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights (percent)			34.00%
Performance-Based Class A LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		816,843
Quarterly per-unit distribution on non-vested awards as percentage of distribution on common units in the Operating Partnership			10.00%
Absolute TSR Class A LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Component of total award (percent)	25.00%		25.00%
Award vesting period (in years)			3 years
Relative TSR Class A LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Component of total award (percent)	75.00%		75.00%
Award vesting period (in years)			3 years

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Share-Based Compensation - Unvested Incentive Awards (Details)	3 Months Ended
	Mar. 31, 2022 $ / shares shares	Mar. 31, 2021 shares
Unvested incentive awards
Unvested as of beginning of period (in shares)	1,762,044
Granted (in shares)	1,057,984
Vested (in shares)	(153,064)
Forfeited (in shares)	0
Unvested as of end of period (in shares)	2,666,964
Weighted average fair value of unvested shares/units (in dollars per share) | $ / shares	$ 11.86
Common stock
Unvested incentive awards
Shares withheld upon settlement of awards to satisfy minimum tax withholding requirements (in shares)	16,478	18,993
Restricted Stock Units
Unvested incentive awards
Unvested as of beginning of period (in shares)	261,727
Granted (in shares)	139,667
Vested (in shares)	(63,024)
Forfeited (in shares)	0
Unvested as of end of period (in shares)	338,370
Weighted average fair value of unvested shares/units (in dollars per share) | $ / shares	$ 14.94
LTIP Units
Unvested incentive awards
Unvested as of beginning of period (in shares)	1,500,317
Granted (in shares)	918,317
Vested (in shares)	(90,040)
Forfeited (in shares)	0
Unvested as of end of period (in shares)	2,328,594
Weighted average fair value of unvested shares/units (in dollars per share) | $ / shares	$ 11.42

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Share-Based Compensation - Assumptions Used in Fair Value of Performance Awards (Details) - $ / shares		1 Months Ended
	Feb. 25, 2022	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant Date Fair Value by Component (in dollars per share)		$ 11.86
Absolute TSR Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of Total Award	25.00%	25.00%
Grant Date Fair Value by Component (in dollars per share)	$ 9.72
Volatility	41.28%
Interest Rate, minimum	0.68%
Interest Rate, maximum	1.72%
Dividend Yield	0.00%
Relative TSR Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of Total Award	75.00%	75.00%
Grant Date Fair Value by Component (in dollars per share)	$ 11.70
Volatility	41.28%
Interest Rate, minimum	0.68%
Interest Rate, maximum	1.72%
Dividend Yield	0.00%
Absolute TSR Class A LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of Total Award	25.00%		25.00%
Grant Date Fair Value by Component (in dollars per share)	$ 9.62
Volatility	41.28%
Interest Rate, minimum	0.68%
Interest Rate, maximum	1.72%
Dividend Yield	0.00%
Relative TSR Class A LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of Total Award	75.00%		75.00%
Grant Date Fair Value by Component (in dollars per share)	$ 11.33
Volatility	41.28%
Interest Rate, minimum	0.68%
Interest Rate, maximum	1.72%
Dividend Yield	0.00%

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Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation costs	$ 20.7
Unrecognized compensation costs period for recognition	2 years 1 month 24 days
Executive officers and management | Restricted Stock Units and LTIP Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 2.2	$ 2.3
Management | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation capitalized amount	$ 0.2	$ 0.4

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Commitments and Contingencies - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) renewal_period	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Other Commitments [Line Items]
Restricted cash and escrows	$ 40,158	$ 34,628	$ 36,854
Renovations at certain hotel properties
Other Commitments [Line Items]
Commitments outstanding with third parties	6,900
Hotel furniture, fixtures, and equipment reserves
Other Commitments [Line Items]
Restricted cash and escrows	33,400		$ 29,300
Management and franchise fees
Other Commitments [Line Items]
Management and franchise fees	$ 7,626	$ 2,844
Management agreements for brand-managed hotels
Other Commitments [Line Items]
Agreement average remaining term assuming all renewal periods exercised (in years)	26 years
Management agreements for brand-managed hotels | Minimum
Other Commitments [Line Items]
Agreement term (in years)	5 years
Number of renewal periods | renewal_period	1
Management agreements for brand-managed hotels | Maximum
Other Commitments [Line Items]
Agreement term (in years)	32 years
Management agreements for franchised hotels
Other Commitments [Line Items]
Agreement average remaining initial term (in years)	2 years
Management agreements for franchised hotels | Minimum
Other Commitments [Line Items]
Agreement term (in years)	10 years
Management agreements for franchised hotels | Maximum
Other Commitments [Line Items]
Agreement term (in years)	15 years
Franchise agreements
Other Commitments [Line Items]
Agreement average remaining initial term (in years)	8 years
Franchise agreements | Minimum
Other Commitments [Line Items]
Agreement term (in years)	15 years
Franchise agreements | Maximum
Other Commitments [Line Items]
Agreement term (in years)	20 years

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Commitments and Contingencies - Leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Leases
Weighted-average remaining lease term, including reasonably certain extension options	21 years
Weighted-average discount rate (percent)	5.70%
ROU asset	$ 19,366
Lease liability	20,637
Operating lease rent expense	537
Variable lease costs	812
Total rent and variable lease costs	$ 1,349
Weighted-average remaining lease term including available extension options	56 years
ROU asset, consolidated balance sheet line item	Other assets
Lease liability, consolidated balance sheet line item	Other liabilities

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Commitments and Contingencies - Remaining Lease Payments (Details) $ in Thousands	Mar. 31, 2022 USD ($)
Remaining Lease Payments
2022 (excluding the three months ended March 31, 2022)	$ 1,596
2023	2,142
2024	2,157
2025	2,172
2026	2,188
Thereafter	26,648
Total undiscounted lease payments	36,903
Less imputed interest	(16,266)
Lease liability	$ 20,637