10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2023

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

Commission File Number 001-37389

APPLE HOSPITALITY REIT, INC.

(Exact name of registrant as specified in its charter)

Virginia	26-1379210
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
814 East Main Street Richmond, Virginia	23219
(Address of principal executive offices)	(Zip Code)

(804) 344-8121

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, no par value	APLE	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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

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

Number of registrant’s common shares outstanding as of November 3, 2023: 228,807,202

Apple Hospitality REIT, Inc.

Form 10-Q

Index

			Page Number
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)	3
		Consolidated Balance Sheets – September 30, 2023 and December 31, 2022	3
		Consolidated Statements of Operations and Comprehensive Income – three and nine months ended September 30, 2023 and 2022	4
		Consolidated Statements of Shareholders’ Equity – three and nine months ended September 30, 2023 and 2022	5
		Consolidated Statements of Cash Flows – nine months ended September 30, 2023 and 2022	6
		Notes to Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
	Item 4.	Controls and Procedures	35
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	36
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
	Item 5.	Other Information	36
	Item 6.	Exhibits	37
Signatures			38

This Form 10-Q includes references to certain trademarks or service marks. The AC Hotels by Marriott®, Aloft Hotels®, Courtyard by Marriott®, Fairfield by Marriott®, Marriott® Hotels, Residence Inn by Marriott®, SpringHill Suites by Marriott® and TownePlace Suites by Marriott® trademarks are the property of Marriott International, Inc. or one of its affiliates. The Embassy Suites by Hilton®, Hampton by Hilton®, Hilton Garden Inn®, Home2 Suites by Hilton®, Homewood Suites by Hilton® and Motto by Hilton® trademarks are the property of Hilton Worldwide Holdings Inc. or one of its affiliates. The Hyatt®, Hyatt House® and Hyatt Place® trademarks are the property of Hyatt Hotels Corporation or one of its affiliates. For convenience, the applicable trademark or service mark symbol has been omitted but will be deemed to be included wherever the above referenced terms are used.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Apple Hospitality REIT, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

	September 30,			December 31,
	2023			2022
	(unaudited)
Assets
Investment in real estate, net of accumulated depreciation and amortization of    $1,629,340 and $1,492,097, respectively	$	4,548,787		$	4,610,962
Cash and cash equivalents		35,366			4,077
Restricted cash-furniture, fixtures and other escrows		33,697			39,435
Due from third-party managers, net		60,801			43,331
Other assets, net		85,391			74,909
Total Assets	$	4,764,042		$	4,772,714
Liabilities
Debt, net	$	1,373,268		$	1,366,249
Finance lease liabilities		111,943			112,006
Accounts payable and other liabilities		104,920			116,064
Total Liabilities		1,590,131			1,594,319
Shareholders’ Equity
Preferred stock, authorized 30,000,000 shares; none issued and outstanding		-			-
Common stock, no par value, authorized 800,000,000 shares; issued and outstanding   228,807,202 and 228,644,861 shares, respectively		4,580,193			4,577,022
Accumulated other comprehensive income		37,411			36,881
Distributions greater than net income		(1,443,693	)		(1,435,508	)
Total Shareholders’ Equity		3,173,911			3,178,395
Total Liabilities and Shareholders’ Equity	$	4,764,042		$	4,772,714

See notes to consolidated financial statements.

3

Apple Hospitality REIT, Inc.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Revenues:
Room	$	327,121		$	315,940		$	943,684		$	866,286
Food and beverage		13,576			11,870			42,032			32,353
Other		17,563			13,340			45,628			40,657
Total revenue		358,260			341,150			1,031,344			939,296
Expenses:
Hotel operating expense:
Operating		85,829			81,320			249,403			221,715
Hotel administrative		29,172			27,516			85,933			78,711
Sales and marketing		30,770			28,533			89,406			78,494
Utilities		13,797			13,383			36,271			34,226
Repair and maintenance		16,336			15,632			48,452			43,468
Franchise fees		15,895			14,949			45,407			41,015
Management fees		11,911			11,734			34,516			31,955
Total hotel operating expense		203,710			193,067			589,388			529,584
Property taxes, insurance and other		21,678			19,052			61,347			56,510
General and administrative		11,079			10,271			34,640			30,216
Depreciation and amortization		45,498			45,135			137,398			135,781
Total expense		281,965			267,525			822,773			752,091
Gain on sale of real estate		-			1,785			-			1,785
Operating income		76,295			75,410			208,571			188,990
Interest and other expense, net		(17,470	)		(14,933	)		(50,973	)		(44,785	)
Income before income taxes		58,825			60,477			157,598			144,205
Income tax expense		(313	)		(1,331	)		(874	)		(1,712	)
Net income	$	58,512		$	59,146		$	156,724		$	142,493
Other comprehensive income:
Interest rate derivatives		1,412			16,024			530			53,862
Comprehensive income	$	59,924		$	75,170		$	157,254		$	196,355
Basic and diluted net income per common share	$	0.26		$	0.26		$	0.68		$	0.62
Weighted average common shares outstanding - basic and diluted		228,877			228,991			229,103			228,992

See notes to consolidated financial statements.

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Apple Hospitality REIT, Inc.

Consolidated Statements of Shareholders' Equity

(Unaudited)

(in thousands, except per share data)

Three Months Ended September 30, 2023 and 2022
	Common Stock						Accumulated Other			Distributions
	Number of Shares			Amount			Comprehensive Income (Loss)			Greater Than Net Income			Total
Balance at June 30, 2023		228,799		$	4,579,405		$	35,999		$	(1,447,349	)	$	3,168,055
Share based compensation, net		12			870			-			-			870
Equity issuance costs		-			(33	)		-			-			(33	)
Common shares repurchased		(4	)		(49	)		-			-			(49	)
Interest rate derivatives		-			-			1,412			-			1,412
Net income		-			-			-			58,512			58,512
Distributions declared to shareholders ($0.24   per share)		-			-			-			(54,856	)		(54,856	)
Balance at September 30, 2023		228,807		$	4,580,193		$	37,411		$	(1,443,693	)	$	3,173,911
Balance at June 30, 2022		228,886		$	4,579,590		$	22,330		$	(1,380,294	)	$	3,221,626
Share based compensation, net		45			996			-			-			996
Equity issuance costs		-			(12	)		-			-			(12	)
Common shares repurchased		(97	)		(1,376	)		-			-			(1,376	)
Interest rate derivatives		-			-			16,024			-			16,024
Net income		-			-			-			59,146			59,146
Distributions declared to shareholders ($0.19   per share)		-			-			-			(43,408	)		(43,408	)
Balance at September 30, 2022		228,834		$	4,579,198		$	38,354		$	(1,364,556	)	$	3,252,996
Nine Months Ended September 30, 2023 and 2022
	Common Stock						Accumulated Other			Distributions
	Number of Shares			Amount			Comprehensive Income (Loss)			Greater Than Net Income			Total
Balance at December 31, 2022		228,645		$	4,577,022		$	36,881		$	(1,435,508	)	$	3,178,395
Share based compensation, net		642			10,145			-			-			10,145
Equity issuance costs		-			(94	)		-			-			(94	)
Common shares repurchased		(480	)		(6,880	)		-			-			(6,880	)
Interest rate derivatives		-			-			530			-			530
Net income		-			-			-			156,724			156,724
Distributions declared to shareholders ($0.72   per share)		-			-			-			(164,909	)		(164,909	)
Balance at September 30, 2023		228,807		$	4,580,193		$	37,411		$	(1,443,693	)	$	3,173,911
Balance at December 31, 2021		228,256		$	4,569,352		$	(15,508	)	$	(1,406,523	)	$	3,147,321
Share based compensation, net		685			11,585			-			-			11,585
Equity issuance costs		-			(218	)		-			-			(218	)
Common shares repurchased		(107	)		(1,521	)		-			-			(1,521	)
Interest rate derivatives		-			-			53,862			-			53,862
Net income		-			-			-			142,493			142,493
Distributions declared to shareholders ($0.44   per share)		-			-			-			(100,526	)		(100,526	)
Balance at September 30, 2022		228,834		$	4,579,198		$	38,354		$	(1,364,556	)	$	3,252,996

See notes to consolidated financial statements.

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Apple Hospitality REIT, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Nine Months Ended
	September 30,
	2023			2022
Cash flows from operating activities:
Net income	$	156,724		$	142,493
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		137,398			135,781
Gain on sale of real estate		-			(1,785	)
Other non-cash expenses, net		6,611			6,582
Changes in operating assets and liabilities:
Increase in due from third-party managers, net		(17,514	)		(25,058	)
Increase in other assets, net		(6,862	)		(4,069	)
Increase in accounts payable and other liabilities		25,807			19,257
Net cash provided by operating activities		302,164			273,201
Cash flows from investing activities:
Acquisition of hotel properties, net		(30,980	)		-
Disbursements for potential acquisitions, net		(5,779	)		(1,602	)
Capital improvements		(49,336	)		(34,921	)
Net proceeds from sale of real estate		-			8,293
Net cash used in investing activities		(86,095	)		(28,230	)
Cash flows from financing activities:
Repurchases of common shares		(6,880	)		(1,521	)
Repurchases of common shares to satisfy employee withholding requirements		(5,742	)		(4,415	)
Distributions paid to common shareholders		(183,119	)		(86,792	)
Equity issuance costs		(72	)		(218	)
Net payments on revolving credit facility		-			(76,000	)
Proceeds from term loans and senior notes		50,000			125,000
Payments of mortgage debt and other loans		(43,968	)		(166,243	)
Principal payments on finance leases		(231	)		(108	)
Financing costs		(506	)		(10,229	)
Net cash used in financing activities		(190,518	)		(220,526	)
Net change in cash, cash equivalents and restricted cash		25,551			24,445
Cash, cash equivalents and restricted cash, beginning of period		43,512			39,949
Cash, cash equivalents and restricted cash, end of period	$	69,063		$	64,394
Supplemental cash flow information:
Interest paid	$	49,583		$	42,651
Supplemental disclosure of noncash investing and financing activities:
Accrued distribution to common shareholders	$	18,280		$	15,981
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	$	4,077		$	3,282
Restricted cash-furniture, fixtures and other escrows, beginning of period		39,435			36,667
Cash, cash equivalents and restricted cash, beginning of period	$	43,512		$	39,949
Cash and cash equivalents, end of period	$	35,366		$	25,573
Restricted cash-furniture, fixtures and other escrows, end of period		33,697			38,821
Cash, cash equivalents and restricted cash, end of period	$	69,063		$	64,394

See notes to consolidated financial statements.

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Apple Hospitality REIT, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization and Summary of Significant Accounting Policies

Organization

Apple Hospitality REIT, Inc., formed in November 2007 as a Virginia corporation, together with its wholly-owned subsidiaries (the “Company”), is a self-advised real estate investment trust (“REIT”) that invests in income-producing real estate, primarily in the lodging sector, in the United States (“U.S.”). The Company’s fiscal year end is December 31. The Company has no foreign operations or assets, and its operating structure includes only one reportable segment. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Although the Company has interests in potential variable interest entities through its purchase commitments, it is not the primary beneficiary as the Company does not have any elements of power in the decision-making process of these entities; therefore, the Company does not consolidate the entities. As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in 37 states as well as one property leased to third parties. The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “APLE.”

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2023.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Net Income Per Common Share

Basic net income per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted net income per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Basic and diluted net income per common share were the same for each of the periods presented.

2. Investment in Real Estate

The Company’s investment in real estate consisted of the following (in thousands):

	September 30,			December 31,
	2023			2022
Land	$	805,837		$	802,625
Building and improvements		4,706,750			4,656,343
Furniture, fixtures and equipment		543,310			522,082
Finance ground lease assets		102,084			102,084
Franchise fees		20,146			19,925
		6,178,127			6,103,059
Less accumulated depreciation and amortization		(1,629,340	)		(1,492,097	)
Investment in real estate, net	$	4,548,787		$	4,610,962

As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in 37 states. In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel's 210 hotel rooms (“non-hotel property”). Lease revenue from this property is recorded in other revenue in the Company's consolidated statements of operations and comprehensive income. As

7

a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 through the end of the lease term.

The Company leases all of its 220 hotels to its wholly-owned taxable REIT subsidiary (or a subsidiary thereof) under a master hotel lease agreement.

Hotel Acquisitions

The Company completed the acquisition of one hotel during the nine months ended September 30, 2023, for a gross purchase price of $31.0 million. The hotel, which was purchased on June 30, 2023, is a 154-room Courtyard in Cleveland, Ohio, managed by Concord Hospitality Enterprises Company, LLC (“Concord”).

During the year ended December 31, 2022, the Company acquired two hotels, neither of which were acquired during the nine months ended September 30, 2022. The following table sets forth the location, brand, manager, date acquired, number of rooms and gross purchase price, excluding transaction costs, for each hotel. All dollar amounts are in thousands.
 

City	State	Brand	Manager	Date Acquired	Rooms		Gross Purchase Price
Louisville	KY	AC Hotels	Concord	10/25/2022		156	$	51,000
Pittsburgh	PA	AC Hotels	Concord	10/25/2022		134		34,000
						290	$	85,000

In 2023, the Company utilized its available cash and borrowings under its Revolving Credit Facility (as defined below) to purchase the Cleveland, Ohio hotel. In 2022, the Company utilized its available cash on hand and a $50 million draw on its $575 million term loan facility (as defined below) to purchase both of the above-referenced hotels. The acquisitions of these hotel properties were accounted for as acquisitions of asset groups, whereby costs incurred to effect the acquisitions (which were not significant) were capitalized as part of the cost of the assets acquired. For the one hotel acquired during the nine months ended September 30, 2023, the amount of revenue and operating income included in the Company’s consolidated statement of operations from the date of acquisition through September 30, 2023 was approximately $2.1 million and $0.4 million, respectively.

Purchase Contract Commitments

As of September 30, 2023, the Company had separate outstanding contracts for the potential purchase of six hotels as well as one free-standing parking garage for a total combined purchase price of approximately $359.0 million. Five of the seven properties under contract are existing. The Company completed the purchase of four of the existing properties, including two hotels and one free-standing parking garage in Salt Lake City, Utah and one hotel in Renton, Washington on October 11, 2023 and October 18, 2023, respectively (see Note 9 titled “Subsequent Events” for more information). The Company plans to complete the purchase of the one remaining existing property in the fourth quarter of 2023. The other two purchase contracts are for hotels under development, with the Madison, Wisconsin hotel currently planned to be completed and opened for business in mid-2024 and the Nashville, Tennessee hotel currently planned to be completed and opened for business in 2025, at which respective times the Company expects to complete the purchases of these hotels. Although the Company is working towards completing the acquisitions of the three remaining properties, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these properties will occur under the outstanding purchase contracts. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts and acquire these properties.

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The following table summarizes the location, expected franchise brand, date of purchase contract, expected number of rooms upon completion, refundable (if the seller does not meet its obligations under the contract) deposits paid and gross purchase price for each of the contracts outstanding as of September 30, 2023. All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Madison, WI (1)	Embassy Suites	7/27/2021		260	$	893	$	78,598
Nashville, TN (1)	Motto	5/16/2023		256		1,058		96,683
Salt Lake City, UT (2)	Courtyard	8/10/2023		175		920		48,110
Salt Lake City, UT (2)	Hyatt House	8/10/2023		159		655		34,250
Salt Lake City, UT (2)(3)	N/A	8/10/2023	N/A			175		9,140
Renton, WA (2)	Residence Inn	8/10/2023		146		850		55,500
South Jordan, UT	Embassy Suites	9/5/2023		192		300		36,750
				1,188	$	4,851	$	359,031

(1)These hotels are currently under development. The table shows the expected number of rooms upon hotel completion and the expected franchise brand. Assuming all conditions to closing are met, the purchase of the hotel in Madison, Wisconsin is expected to close in mid-2024 and the purchase of the Nashville, Tennessee hotel is expected to close in 2025. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts. As these properties are under development, at this time, the sellers have not met all of the conditions to closing.

(2)The Company completed the purchase of these properties in October 2023. See Note 9 for additional information concerning these four acquisitions.

(3)This property is a free-standing parking garage which serves both the Courtyard and Hyatt House hotels in Salt Lake City, Utah and the surrounding area, however, it is not affiliated with any brand.

3. Dispositions

There were no dispositions during the nine months ended September 30, 2023. During the year ended December 31, 2022, the Company sold one hotel, a 55-room independent boutique hotel in Richmond, Virginia, to an unrelated party for a gross sales price of approximately $8.5 million, resulting in a gain on sale of approximately $1.8 million, net of transaction costs, which is included in the Company’s consolidated statement of operations for the year ended December 31, 2022. The hotel had a total carrying value of approximately $6.5 million at the time of the sale.

Excluding gains on sale of real estate, the Company’s consolidated statements of operations include operating income of approximately $0.1 million and $0.3 million for the three and nine months ended September 30, 2022, respectively, relating to the results of operations of the one hotel sold in 2022 noted above for the period of ownership. The sale of this property does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results; therefore, the operating results for the period of ownership of this property are included in income from continuing operations for the three and nine months ended September 30, 2022. The net proceeds from the sale of the one hotel in 2022 were used for general corporate purposes.

4. Debt

Summary

As of September 30, 2023 and December 31, 2022, the Company’s debt consisted of the following (in thousands):

	September 30, 2023		December 31, 2022
Revolving credit facility	$	-	$	-
Term loans and senior notes, net		1,088,407		1,037,384
Mortgage debt, net		284,861		328,865
Debt, net	$	1,373,268	$	1,366,249

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The aggregate amounts of principal payable under the Company’s total debt obligations as of September 30, 2023 (including the Revolving Credit Facility (if any) (as defined below), term loans, senior notes and mortgage debt), for the remainder of this fiscal year, each of the next four fiscal years and thereafter are as follows (in thousands):

2023 (October - December)	$	2,245
2024		113,597
2025		295,140
2026		74,649
2027		278,602
Thereafter		616,014
		1,380,247
Unamortized fair value adjustment of assumed debt		609
Unamortized debt issuance costs		(7,588	)
Total	$	1,373,268

The Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual Secured Overnight Financing Rate (“SOFR”) for a one-month term (“one-month SOFR”) plus a 0.10% SOFR spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt instruments. See Note 5 for more information on the interest rate swap agreements. The Company’s total fixed-rate and variable-rate debt, after giving effect to its interest rate swaps in effect as of September 30, 2023 and December 31, 2022, is set forth below. All dollar amounts are in thousands.

	September 30, 2023			Percentage			December 31, 2022			Percentage
Fixed-rate debt (1)	$	1,105,247			80	%	$	1,149,215			84	%
Variable-rate debt		275,000			20	%		225,000			16	%
Total	$	1,380,247					$	1,374,215
Weighted-average interest rate of debt		4.34	%					3.93	%

(1)Fixed-rate debt includes the portion of variable-rate debt where the interest payments have been effectively fixed by interest rate swaps as of the respective balance sheet date. See Note 5 for more information on the interest rate swap agreements.

Credit Facilities

$1.2 Billion Credit Facility

On July 25, 2022, the Company entered into a credit facility (the “$1.2 billion credit facility”) that is comprised of (i) a $650 million revolving credit facility with an initial maturity date of July 25, 2026 (the “Revolving Credit Facility”), (ii) a $275 million term loan with a maturity date of July 25, 2027, funded at closing, and (iii) a $300 million term loan with a maturity date of January 31, 2028 (including a $150 million delayed draw option until 180 days from closing), of which $200 million was funded at closing, $50 million was funded on October 24, 2022 and the remaining $50 million was funded on January 17, 2023 (clauses (ii) and (iii) are referred to together as the “$575 million term loan facility”).

Subject to certain conditions, including covenant compliance and additional fees, the Revolving Credit Facility maturity date may be extended up to one year. The credit agreement for the $1.2 billion credit facility contains mandatory prepayment requirements, customary affirmative and negative covenants (as described below), restrictions on certain investments and events of default. The Company may make voluntary prepayments, in whole or in part, at any time. Interest payments on the $1.2 billion credit facility are due monthly, and the interest rate, subject to certain exceptions, is equal to the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.35% to 2.25%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement. As of September 30, 2023, the Company had availability of $650 million under the Revolving Credit Facility. The Company is also required to pay quarterly an unused facility fee at an annual rate of 0.20% or 0.25% on the unused portion of the Revolving Credit Facility, based on the amount of borrowings outstanding during the quarter.

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$225 Million Term Loan Facility

The Company also has an unsecured $225 million term loan facility that is comprised of (i) a $50 million term loan with an initial maturity date of August 2, 2023, which was funded on August 2, 2018, and (ii) a $175 million term loan with a maturity date of August 2, 2025, of which $100 million was funded on August 2, 2018, and the remaining $75 million was funded on January 29, 2019 (clauses (i) and (ii) are referred to together as the “$225 million term loan facility”). On July 19, 2023, the Company entered into an amendment of its $225 million term loan facility, which extended the maturity date of the existing $50 million term loan by two years to August 2, 2025. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions. Interest payments on the $225 million term loan facility are due monthly and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.35% to 2.50%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.

2017 $85 Million Term Loan Facility

On July 25, 2017, the Company entered into an unsecured $85 million term loan facility with a maturity date of July 25, 2024, consisting of one term loan (the “2017 $85 million term loan facility”) that was funded at closing. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions. Interest payments on the 2017 $85 million term loan facility are due monthly, and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.30% to 2.10%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.

2019 $85 Million Term Loan Facility

On December 31, 2019, the Company entered into an unsecured $85 million term loan facility with a maturity date of December 31, 2029, consisting of one term loan funded at closing (the “2019 $85 million term loan facility”). Net proceeds from the 2019 $85 million term loan facility were used to pay down borrowings under the Company’s then-existing $425 million revolving credit facility. The Company may make voluntary prepayments, in whole or in part, subject to certain conditions. Interest payments on the 2019 $85 million term loan facility are due monthly, and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.70% to 2.55%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.

$50 Million Senior Notes Facility

On March 16, 2020, the Company entered into an unsecured $50 million senior notes facility with a maturity date of March 31, 2030, consisting of senior notes totaling $50 million funded at closing (the “$50 million senior notes facility”). Net proceeds from the $50 million senior notes facility were available to provide funding for general corporate purposes. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions, including make-whole provisions. Interest payments on the $50 million senior notes facility are due quarterly, and the interest rate, subject to certain exceptions, ranges from an annual rate of 3.60% to 4.35% depending on the Company’s leverage ratio, as calculated under the terms of the note agreement.

$75 Million Senior Notes Facility

On June 2, 2022, the Company entered into an unsecured $75 million senior notes facility with a maturity date of June 2, 2029, consisting of senior notes totaling $75 million funded at closing (the “$75 million senior notes facility”, and collectively with the $1.2 billion credit facility, the $225 million term loan facility, the 2017 $85 million term loan facility, the 2019 $85 million term loan facility and the $50 million senior notes facility, the “unsecured credit facilities”). Net proceeds from the $75 million senior notes facility were available to provide funding for general corporate purposes, including the repayment of borrowings under the Company’s then-existing $425 million revolving credit facility and repayment of mortgage debt. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions, including make-whole provisions. Interest payments on the $75 million senior notes facility are due quarterly, and the interest rate, subject to certain exceptions, ranges from an annual rate of 4.88% to 5.63% depending on the Company’s leverage ratio, as calculated under the terms of the note agreement.

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As of September 30, 2023 and December 31, 2022, the details of the Company’s unsecured credit facilities were as set forth in the table below. All dollar amounts are in thousands.

			Outstanding Balance
	Interest Rate	Maturity Date	September 30, 2023			December 31, 2022
Revolving credit facility (1)	SOFR + 0.10% + 1.40% - 2.25%	7/25/2026	$	-		$	-
Term loans and senior notes
$275 million term loan	SOFR + 0.10% + 1.35% - 2.20%	7/25/2027		275,000			275,000
$300 million term loan	SOFR + 0.10% + 1.35% - 2.20%	1/31/2028		300,000			250,000
$50 million term loan	SOFR + 0.10% + 1.35% - 2.20%	8/2/2025 (3)		50,000			50,000
$175 million term loan	SOFR + 0.10% + 1.65% - 2.50%	8/2/2025		175,000			175,000
2017 $85 million term loan	SOFR + 0.10% + 1.30% - 2.10%	7/25/2024		85,000			85,000
2019 $85 million term loan	SOFR + 0.10% + 1.70% - 2.55%	12/31/2029		85,000			85,000
$50 million senior notes	3.60% - 4.35%	3/31/2030		50,000			50,000
$75 million senior notes	4.88% - 5.63%	6/2/2029		75,000			75,000
Term loans and senior notes at stated   value				1,095,000			1,045,000
Unamortized debt issuance costs				(6,593	)		(7,616	)
Term loans and senior notes, net				1,088,407			1,037,384
Credit facilities, net (1)			$	1,088,407		$	1,037,384
Weighted-average interest rate (2)				4.45	%		3.92	%

(1)Excludes unamortized debt issuance costs related to the Revolving Credit Facility totaling approximately $3.8 million and $4.8 million as of September 30, 2023 and December 31, 2022, respectively, which are included in other assets, net in the Company’s consolidated balance sheets.

(2)Interest rate represents the weighted-average effective annual interest rate at the balance sheet date which includes the effect of interest rate swaps in effect on $695.0 million of the outstanding variable-rate debt as of September 30, 2023 and December 31, 2022. See Note 5 for more information on the interest rate swap agreements. The one-month SOFR on September 30, 2023 and December 31, 2022 was 5.32% and 4.36%, respectively.

(3)On July 19, 2023, the Company entered into an amendment of its $225 million term loan facility, which extended the maturity date of the existing $50 million term loan by two years to August 2, 2025.

Credit Facilities Covenants

The credit agreements governing the unsecured credit facilities (collectively, the “credit agreements”) contain mandatory prepayment requirements, customary affirmative and negative covenants, restrictions on certain investments and events of default, including the following financial and restrictive covenants (capitalized terms not defined below are defined in the credit agreements):

•A ratio of Consolidated Total Indebtedness to Consolidated EBITDA (“Maximum Consolidated Leverage Ratio”) of not more than 7.25 to 1.00;

•A ratio of Consolidated Secured Indebtedness to Consolidated Total Assets (“Maximum Secured Leverage Ratio”) of not more than 45%;

•A minimum Consolidated Tangible Net Worth of approximately $3.4 billion plus an amount equal to 75% of the Net Cash Proceeds from issuances and sales of Equity Interests occurring after the Closing Date, July 25, 2022, subject to adjustment;

•A ratio of Adjusted Consolidated EBITDA to Consolidated Fixed Charges (“Minimum Fixed Charge Coverage Ratio”) of not less than 1.50 to 1.00 for the trailing four full quarters;

•A ratio of Unencumbered Adjusted NOI to Consolidated Implied Interest Expense for Consolidated Unsecured Indebtedness (“Minimum Unsecured Interest Coverage Ratio”) of not less than 2.00 to 1.00 for the trailing four full quarters;

•A ratio of Consolidated Unsecured Indebtedness to Unencumbered Asset Value (“Maximum Unsecured Leverage Ratio”) of not more than 60% (subject to a higher level in certain circumstances); and

•A ratio of Consolidated Secured Recourse Indebtedness to Consolidated Total Assets (“Maximum Secured Recourse Indebtedness”) of not more than 10%.

The Company was in compliance with the applicable covenants as of September 30, 2023.

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Mortgage Debt

As of September 30, 2023, the Company had approximately $285.2 million in outstanding mortgage debt secured by 15 properties with maturity dates ranging from August 2024 to May 2038, stated interest rates ranging from 3.40% to 4.46% and effective interest rates ranging from 3.40% to 4.37%. The loans generally provide for monthly payments of principal and interest on an amortized basis and defeasance or prepayment penalties if prepaid. The following table sets forth the hotel properties securing each loan, the interest rate, loan assumption or origination date, maturity date, the principal amount assumed or originated, and the outstanding balance prior to any fair value adjustments or debt issuance costs as of September 30, 2023 and December 31, 2022 for each of the Company’s mortgage debt obligations. All dollar amounts are in thousands.

Location	Brand	Interest Rate (1)			Loan Assumption or Origination Date	Maturity Date	Principal Assumed or Originated		Outstanding balance as of September 30, 2023			Outstanding balance as of December 31, 2022
Miami, FL	Homewood Suites		4.02	%	3/1/2014	(2)	$	16,677	$	-		$	12,440
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	(3)		8,306		-			6,193
Prattville, AL	Courtyard		4.12	%	3/1/2014	(3)		6,596		-			4,918
San Diego, CA	Residence Inn		3.97	%	3/1/2014	(4)		18,600		-			13,827
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024		27,000		20,522			21,161
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025		10,000		7,793			8,024
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025		34,118		27,608			28,400
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025		13,655		11,786			12,019
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025		22,681		19,577			19,963
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026		24,000		20,815			21,194
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026		25,564		20,729			21,326
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026		25,473		20,655			21,250
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026		18,963		15,377			15,819
Burbank, CA	SpringHill Suites		3.94	%	3/9/2018	4/1/2028		28,470		24,445			25,057
Santa Ana, CA	Courtyard		3.94	%	3/9/2018	4/1/2028		15,530		13,334			13,668
Richmond, VA	Courtyard		3.40	%	2/12/2020	3/11/2030		14,950		13,911			14,144
Richmond, VA	Residence Inn		3.40	%	2/12/2020	3/11/2030		14,950		13,911			14,144
Portland, ME	Residence Inn		3.43	%	3/2/2020	3/1/2032		33,500		30,500			30,500
San Jose, CA	Homewood Suites		4.22	%	12/22/2017	5/1/2038		30,000		24,284			25,168
							$	389,033		285,247			329,215
Unamortized fair value adjustment of    assumed debt										609			819
Unamortized debt issuance costs										(995	)		(1,169	)
Total									$	284,861		$	328,865

(1)Interest rates are the rates per the loan agreement. For loans assumed, the Company adjusted the interest rates per the loan agreement to market rates and is amortizing the adjustments to interest expense over the life of the loan.

(2)Loan was repaid in full on January 3, 2023.

(3)Loan was repaid in full on February 6, 2023.

(4)Loan was repaid in full on March 6, 2023.

5. Fair Value of Financial Instruments

Except as described below, the carrying value of the Company’s financial instruments approximates fair value due to the short-term nature of these financial instruments.

Debt

The Company estimates the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity of a debt obligation with similar credit terms and credit characteristics, which are Level 3 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. As of September 30, 2023, the carrying value and the estimated fair value of the Company’s debt were approximately $1.4 billion and $1.3 billion, respectively. As of December 31, 2022, the carrying value and estimated fair value of the Company’s debt were approximately $1.4 billion and $1.3 billion, respectively. Both the carrying value and the estimated fair value of the Company’s debt (as discussed above) are net of unamortized debt issuance costs related to term loans, senior notes and mortgage debt for each specific year.

Derivative Instruments

Currently, the Company uses interest rate swaps to manage its interest rate risk on variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the one-month SOFR plus a 0.10% SOFR spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt

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instruments. These swap instruments are recorded at fair value and, if in an asset position, are included in other assets, net, and, if in a liability position, are included in accounts payable and other liabilities in the Company’s consolidated balance sheets. The fair values of the Company’s interest rate swap agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The following table sets forth information for each of the Company’s interest rate swap agreements outstanding as of September 30, 2023 and December 31, 2022. All dollar amounts are in thousands.

						Fair Value Asset (Liability)
Notional Amount at September 30, 2023		Origination Date	Effective Date	Maturity Date	Swap Fixed Interest Rate	September 30, 2023		December 31, 2022
Active interest rate swaps designated as cash flow hedges at September 30, 2023:
$	50,000	12/7/2018	5/18/2020	1/31/2024	2.71%	$	466	$	1,163
	75,000	5/31/2017	7/31/2017	6/30/2024	1.95%		1,951		3,026
	10,000	8/10/2017	8/10/2017	6/30/2024	2.02%		254		386
	50,000	7/2/2019	7/5/2019	7/18/2024	1.64%		1,507		2,298
	50,000	8/21/2019	8/23/2019	8/18/2024	1.31%		1,820		2,675
	50,000	8/21/2019	8/23/2019	8/30/2024	1.32%		1,873		2,703
	75,000	8/21/2019	5/18/2020	5/18/2025	1.26%		4,633		5,225
	50,000	6/1/2018	1/31/2019	6/30/2025	2.88%		1,882		1,655
	25,000	12/6/2018	1/31/2020	6/30/2025	2.74%		999		909
	75,000	8/21/2019	5/18/2021	5/18/2026	1.29%		6,499		6,506
	50,000	3/17/2023	3/20/2023	3/18/2028	3.50%		1,941		-
	50,000	3/17/2023	3/20/2023	3/20/2028	3.49%		1,919		-
	85,000	12/31/2019	12/31/2019	12/31/2029	1.87%		11,667		9,511
	695,000						37,411		36,057
Matured interest rate swap at September 30, 2023:
$	100,000	4/7/2016	9/30/2016	3/31/2023	1.30%		-		824
						$	37,411	$	36,881

The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges. As of September 30, 2023, all of the 13 active interest rate swap agreements listed above were designated as cash flow hedges. The change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.

Amounts reported in accumulated other comprehensive income will be reclassified to interest and other expense, net as interest payments are made or received on the Company’s variable-rate derivatives. The Company estimates that approximately $20.9 million of net unrealized gains included in accumulated other comprehensive income at September 30, 2023 will be reclassified as a decrease to interest and other expense, net within the next 12 months.

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The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022 (in thousands):
 

	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Three Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022
Interest rate derivatives in cash flow    hedging relationships	$	7,264	$	17,130	$	5,852	$	1,106
	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest rate derivatives in cash flow    hedging relationships	$	16,682	$	50,649	$	16,152	$	(3,213	)

6. Related Parties

The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed to be at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties. There have been no changes to the contracts and relationships discussed in the 2022 Form 10-K. Below is a summary of the significant related party relationships in effect during the nine months ended September 30, 2023 and 2022.

Glade M. Knight, Executive Chairman of the Company, owns Apple Realty Group, Inc. (“ARG”), which receives support services from the Company and reimburses the Company for the cost of these services as discussed below. Mr. Knight is also currently a partner and Chief Executive Officer of Energy 11 GP, LLC and Energy Resources 12 GP, LLC, which are the respective general partners of Energy 11, L.P. and Energy Resources 12, L.P., each of which receives support services from ARG.

The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these services. Under this cost sharing structure, amounts reimbursed to the Company include both compensation for personnel and office related costs (including office rent, utilities, office supplies, etc.) used by ARG. The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG. Total reimbursed costs allocated by the Company to ARG for the nine month periods ended September 30, 2023 and 2022 totaled approximately $0.8 million and $0.6 million, respectively, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations.

As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under this cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies. As of September 30, 2023 and December 31, 2022, total amounts due from ARG for reimbursements under the cost sharing structure totaled approximately $0.3 million and $0.4 million, respectively, and are included in other assets, net in the Company’s consolidated balance sheets.

The Company, through its wholly-owned subsidiary, Apple Air Holding, LLC, owns a Learjet used primarily for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes. The aircraft is also leased to affiliates of the Company based on third-party rates. Lease activity was not significant during the reporting periods.

From time to time, the Company utilizes aircraft, owned by an entity which is owned by the Company’s Executive Chairman, for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes, and reimburses this entity at third-party rates. Total costs incurred for the use of the aircraft during the nine months ended September 30, 2023 and 2022 were less than $0.1 million and are included in general and administrative expenses in the Company’s consolidated statements of operations.

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7. Shareholders’ Equity

Distributions

For the three and nine months ended September 30, 2023, the Company paid distributions of $0.24 and $0.80, per common share, respectively, for a total of $54.8 million and $183.1 million, respectively. During the three and nine months ended September 30, 2022, the Company paid distributions of $0.17 and $0.38 per common share, respectively, for a total of $38.8 million and $86.8 million, respectively. Additionally, in September 2023, the Company declared a monthly cash distribution of $0.08 per common share, totaling $18.3 million, which was recorded as a payable as of September 30, 2023 and paid on October 16, 2023. In addition to the regular monthly cash distribution of $0.08 per common share for December 2022, the Board of Directors approved a special one-time distribution of $0.08 per common share for a combined distribution of $0.16 per common share, totaling $36.6 million, which was recorded as a payable as of December 31, 2022 and paid in January 2023. These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

Issuance of Shares

On August 12, 2020, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares under an at-the-market offering program (the “ATM Program”) under the Company’s prior shelf registration statement and the current shelf registration statement. Since inception of the ATM Program in August 2020 through September 30, 2023, the Company sold approximately 4.7 million common shares under its ATM Program at a weighted-average market sales price of approximately $16.26 per common share and received aggregate gross proceeds of approximately $76.0 million and proceeds net of offering costs, which included $0.9 million of commissions, of approximately $75.1 million. The Company used the net proceeds from the sale of these shares (all during 2021) primarily to pay down borrowings under its then-existing $425 million revolving credit facility and used the corresponding increased availability under the $425 million revolving credit facility for general corporate purposes, including acquisitions of hotel properties. As of September 30, 2023, approximately $224.0 million remained available for issuance under the ATM Program. No shares were sold under the Company’s ATM Program during the nine months ended September 30, 2023. The Company plans to use future net proceeds from the sale of shares under the ATM Program for general corporate purposes which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the net proceeds to acquire another REIT or other company that invests in income producing properties.

Share Repurchases

In May 2023, the Company’s Board of Directors approved a one-year extension of its existing share repurchase program, authorizing share repurchases up to an aggregate of $338.7 million (the “Share Repurchase Program”). The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier. During the nine months ended September 30, 2023, the Company purchased, under its Share Repurchase Program, approximately 0.5 million of its common shares at a weighted-average market purchase price of approximately $14.34 per common share for an aggregate purchase price, including commissions, of approximately $6.9 million. The shares were repurchased in open market transactions under the Share Repurchase Program, including pursuant to written trading plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of September 30, 2023, approximately $335.4 million remained available for purchase under the Share Repurchase Program.

8. Compensation Plans

The Company annually establishes an incentive plan for its executive management team. Under the incentive plan for 2023 (the “2023 Incentive Plan”), participants are eligible to receive incentive compensation based on the achievement of certain 2023 performance measures, with one-half (50%) of incentive compensation based on operational performance goals and metrics and one-half (50%) of incentive compensation based on shareholder return metrics. With respect to the shareholder return metrics, 75% of the target will be based on shareholder return relative to a peer group and 25% will be based on total shareholder return metrics over one-year, two-year, and three-year periods. With respect to the operational performance goals and metrics, 25% of the target will be based on modified funds from operations per share (as defined within this Quarterly Report on Form 10-Q), 25% of the target will be based on total revenues of the Company and 50% of the target will be based on operational performance goals, including management of capital structure; evaluation and pursuit of accretive transactions; management of labor costs and improvement of employee productivity; enhancement of environmental, social and governance reporting; and enhancement of internal business intelligence tools.

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At September 30, 2023, the range of potential aggregate payouts under the 2023 Incentive Plan was $0 - $27.1 million. Based on performance through September 30, 2023, the Company has accrued approximately $14.9 million as a liability for potential executive incentive compensation payments under the 2023 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of September 30, 2023. Compensation expense recognized by the Company under the 2023 Incentive Plan is included in general and administrative expenses in the Company’s consolidated statement of operations and totaled approximately $4.9 million and $14.9 million for the three and nine months ended September 30, 2023, respectively. Approximately 25% of target awards under the 2023 Incentive Plan, if any, will be paid in cash, and 75% will be issued in common shares under the Company’s 2014 Omnibus Incentive Plan, approximately two-thirds of which will be unrestricted and one-third of which will vest in December 2024.

Under the incentive plan for 2022 (the “2022 Incentive Plan”), the Company recorded approximately $4.0 million and $12.0 million, respectively, in general and administrative expenses in its consolidated statement of operations for the three and nine months ended September 30, 2022.

Share-Based Compensation Awards

The following table sets forth information pertaining to the share-based compensation issued under the 2022 Incentive Plan and the incentive plan for 2021 (the “2021 Incentive Plan”).

	2022 Incentive Plan			2021 Incentive Plan
Period common shares issued	First Quarter 2023			First Quarter 2022
Common shares earned under each incentive plan		935,189			868,079
Common shares surrendered on issuance date to    satisfy tax withholding obligations		263,026			245,597
Common shares earned and issued under each    incentive plan, net of common shares surrendered on    issuance date to satisfy tax withholding obligations		672,163			622,482
Average of the high and low stock price on issuance date	$	16.70		$	17.79
Total share-based compensation earned, including the    surrendered shares (in millions)	$	15.6	(1)	$	15.4	(2)
Of the total common shares earned and issued, total    common shares unrestricted at time of issuance		360,176			338,032
Of the total common shares earned and issued, total    common shares restricted at time of issuance		311,987			284,450
Restricted common shares vesting date	December 8, 2023			December 9, 2022
Common shares surrendered on vesting date to satisfy    tax withholding requirements resulting from vesting    of restricted common shares	n/a				114,147

(1)Of the total 2022 share-based compensation, approximately $12.5 million was recorded as a liability as of December 31, 2022 and is included in accounts payable and other liabilities in the Company’s consolidated balance sheet at December 31, 2022. Another $2.6 million, which is subject to vesting on December 8, 2023 and excludes any restricted shares forfeited or vested prior to that date, will be recognized as share-based compensation expense proportionately throughout 2023. For the three and nine months ended September 30, 2023, the Company recognized approximately $0.7 million and $2.0 million, respectively, of share-based compensation expense related to restricted share awards.

(2)Of the total 2021 share-based compensation, approximately $2.5 million, which vested on December 9, 2022, was recognized as share-based compensation expense proportionately throughout 2022. For the three and nine months ended September 30, 2022, the Company recognized approximately $0.6 million and $1.9 million, respectively, of share-based compensation expense related to restricted share awards.

Additionally, in conjunction with the appointment of five new officers of the Company on April 1, 2020, the Company issued to the new officer group a total of approximately 200,000 restricted common shares with an aggregate grant date fair value of approximately $1.8 million. For each grantee, the restricted shares vested on March 31, 2023. The expense associated with the awards was amortized over the 3-year vesting period. For the nine months ended September 30, 2023 and 2022, the Company recognized approximately $0.1 million and $0.4 million, respectively, of share-based compensation expense related to these awards. Upon vesting on March 31, 2023, approximately 83,000 shares were surrendered to satisfy tax withholding obligations.

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9. Subsequent Events

On October 11, 2023, the Company completed the purchase of two existing hotels and an existing free-standing parking garage in Salt Lake City, Utah, including a 175-room Courtyard and a 159-room Hyatt House, for a combined gross purchase price of approximately $91.5 million. The Company utilized its available cash on hand and borrowings under its Revolving Credit Facility to purchase the properties.

On October 16, 2023, the Company paid approximately $18.3 million, or $0.08 per common share, in distributions to shareholders of record as of September 29, 2023.

On October 18, 2023, the Company completed the purchase of the existing 146-room Residence Inn in Renton, Washington for a total gross purchase price of $55.5 million. The Company utilized its available cash on hand and borrowings under its Revolving Credit Facility to purchase the hotel.

On October 19, 2023, the Company declared a monthly cash distribution of $0.08 per common share. The distribution is payable on November 15, 2023, to shareholders of record as of October 31, 2023.

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Forward-looking statements are typically identified by use of statements that include phrases such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “should,” “will,” “predict,” “potential,” “outlook,” “strategy,” and similar expressions that convey the uncertainty of future events or outcomes. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties and redeploy proceeds; the anticipated timing and frequency of shareholder distributions; the ability of the Company to fund capital obligations; the ability of the Company to successfully integrate pending transactions and implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions (including the potential effects of inflation or a recessionary environment); reduced business and leisure travel due to geopolitical uncertainty, including terrorism, travel-related health concerns, including COVID-19 or other widespread outbreaks of infectious or contagious diseases in the U.S.; inclement weather conditions, including natural disasters such as hurricanes, earthquakes and wildfires; government shutdowns, airline strikes or other disruptions; adverse changes in the real estate and real estate capital markets; financing risks; changes in interest rates; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a REIT. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this Quarterly Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved. In addition, the Company’s qualification as a REIT involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Readers should carefully review the risk factors described in the Company’s filings with the Securities and Exchange Commission (“SEC”), including but not limited to those discussed in the section titled “Risk Factors” in the 2022 Form 10-K. Any forward-looking statement that the Company makes speaks only as of the date of this Quarterly Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law.

The following discussion and analysis should be read in conjunction with the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the information contained in the 2022 Form 10-K.

Overview

The Company is a Virginia corporation that has elected to be treated as a REIT for federal income tax purposes. The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the U.S. As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in urban, high-end suburban and developing markets throughout 37 states and one property leased to third parties. Substantially all of the Company’s hotels operate under Marriott or Hilton brands. The hotels are operated and managed under separate management agreements with 16 hotel management companies, none of which are affiliated with the Company. The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.”

2023 Hotel Portfolio Activities

The Company continually monitors market conditions and attempts to maximize shareholder value by investing in properties that it believes provide superior value over the long term. Consistent with this strategy and the Company’s focus on investing in rooms-focused hotels, during the nine months ended September 30, 2023, the Company completed the acquisition of an existing 154-room Courtyard in Cleveland, Ohio for a gross purchase price of $31.0 million, utilizing its available cash and borrowings under its Revolving Credit Facility.

As of September 30, 2023, the Company had separate outstanding contracts for the potential purchase of six hotels as well as one free-standing parking garage for a total combined purchase price of approximately $359.0 million. Five of the seven properties under contract are existing. The Company completed the purchase of four of the existing properties, including two hotels and one free-standing parking garage in Salt Lake City, Utah and one hotel in Renton, Washington on October 11, 2023 and October 18, 2023, respectively. See Note 9 titled “Subsequent Events” in the Company’s Unaudited Consolidated Financial Statements and Notes

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thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for more information. The Company plans to complete the purchase of the one remaining existing property in the fourth quarter of 2023. The other two purchase contracts are for hotels under development, with the Madison, Wisconsin hotel currently planned to be completed and opened for business in mid-2024 and the Nashville, Tennessee hotel currently planned to be completed and opened for business in 2025, at which respective times the Company expects to complete the purchases of these hotels. Although the Company is working towards completing the acquisitions of the three remaining properties, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these properties will occur under the outstanding purchase contracts. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts and acquire these properties. The Company plans to utilize its available cash or borrowings under its unsecured credit facilities available at closing to purchase the properties under contract if closings occur.

For its existing portfolio, the Company monitors each property’s profitability, market conditions and capital requirements and attempts to maximize shareholder value by disposing of properties when it believes that superior value can be provided from the sale of the property. The Company did not dispose of any properties during the nine months ended September 30, 2023.

New York Independent Boutique Hotel Lease

During the nine months ended September 30, 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel's 210 hotel rooms. Lease revenue from this property is recorded in other revenue in the Company's consolidated statements of operations and comprehensive income. As a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 and is considered a non-hotel property through the end of the lease term.

Hotel Operations

As of September 30, 2023, the Company owned 220 hotels with a total of 28,929 rooms as compared to 218 hotels with a total of 28,693 rooms as of September 30, 2022. Results of operations are included only for the period of ownership for hotels acquired or disposed of during the current reporting period and prior year. During the nine months ended September 30, 2023, the Company acquired one existing hotel on June 30, 2023 and did not dispose of any properties. During the same period of 2022, the Company sold one hotel and did not acquire any properties. Results of the hotel operations for the Company’s independent boutique hotel in New York, New York are included only for the period prior to the lease agreement becoming effective in May 2023.

In evaluating financial condition and operating performance, the most important indicators on which the Company focuses are revenue measurements, such as average occupancy, average daily rate (“ADR”) and revenue per available room (“RevPAR”), and expenses, such as hotel operating expenses, general and administrative expenses and other expenses described below. RevPAR and operating results may be impacted by regional and local economies as well as changes in lodging demand due to macroeconomic factors including inflationary pressures or a recessionary environment.

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The following is a summary of the results from operations of the Company’s hotels for their respective periods of ownership by the Company:

	Three Months Ended September 30,															Nine Months Ended September 30,
(in thousands, except   statistical data)	2023			Percent of Revenue			2022			Percent of Revenue			Percent Change			2023			Percent of Revenue			2022			Percent of Revenue			Percent Change
Total revenue	$	358,260			100.0	%	$	341,150			100.0	%		5.0	%	$	1,031,344			100.0	%	$	939,296			100.0	%		9.8	%
Hotel operating   expense		203,710			56.9	%		193,067			56.6	%		5.5	%		589,388			57.1	%		529,584			56.4	%		11.3	%
Property taxes,   insurance and other   expense		21,678			6.1	%		19,052			5.6	%		13.8	%		61,347			5.9	%		56,510			6.0	%		8.6	%
General and   administrative   expense		11,079			3.1	%		10,271			3.0	%		7.9	%		34,640			3.4	%		30,216			3.2	%		14.6	%
Depreciation and   amortization expense		45,498						45,135						0.8	%		137,398						135,781						1.2	%
Gain on sale of real   estate		-						1,785					n/a				-						1,785					n/a
Interest and other   expense, net		17,470						14,933						17.0	%		50,973						44,785						13.8	%
Income tax expense		313						1,331						-76.5	%		874						1,712						-48.9	%
Net income		58,512						59,146						-1.1	%		156,724						142,493						10.0	%
Adjusted Hotel   EBITDA (1)		132,161						129,166						2.3	%		380,154						353,617						7.5	%
Number of hotels   owned at end of   period		220						218						0.9	%		220						218						0.9	%
ADR	$	159.36					$	157.91						0.9	%	$	157.61					$	150.02						5.1	%
Occupancy		77.1	%					75.7	%					1.8	%		75.8	%					73.6	%					3.0	%
RevPAR	$	122.91					$	119.52						2.8	%	$	119.48					$	110.40						8.2	%

(1)See reconciliation of Adjusted Hotel EBITDA to net income in “Non-GAAP Financial Measures” below.

Comparable Hotels Operating Results

The following table reflects certain operating statistics for the Company’s 220 hotels owned as of September 30, 2023 (“Comparable Hotels”). The Company defines metrics from Comparable Hotels as results generated by the 220 hotels owned as of the end of the reporting period. For the hotels acquired during the reporting periods shown, the Company has included, as applicable, results of those hotels for periods prior to the Company’s ownership using information provided by the properties’ prior owners at the time of acquisition and not adjusted by the Company. This information has not been audited, either for the periods owned or prior to ownership by the Company. For dispositions, results have been excluded for the Company’s period of ownership.

	Three Months Ended September 30,									Nine Months Ended September 30,
	2023			2022			Percent Change			2023			2022			Percent Change
ADR	$	159.36		$	157.65			1.1	%	$	157.54		$	149.98			5.0	%
Occupancy		77.1	%		75.7	%		1.8	%		75.8	%		73.5	%		3.1	%
RevPAR	$	122.91		$	119.31			3.0	%	$	119.34		$	110.23			8.3	%

Same Store Operating Results

The following table reflects certain operating statistics for the 217 hotels owned by the Company as of January 1, 2022 and during the entirety of the reporting periods being compared (“Same Store Hotels”). This information has not been audited.

	Three Months Ended September 30,									Nine Months Ended September 30,
	2023			2022			Percent Change			2023			2022			Percent Change
ADR	$	158.92		$	157.34			1.0	%	$	157.16		$	149.67			5.0	%
Occupancy		77.2	%		75.7	%		2.0	%		75.8	%		73.6	%		3.0	%
RevPAR	$	122.64		$	119.08			3.0	%	$	119.18		$	110.15			8.2	%

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As discussed above, hotel performance is impacted by many factors, including the economic conditions in the U.S. as well as each individual locality. The Company’s Same Store Hotels revenue and operating results improved during the three and nine months ended September 30, 2023, compared to the three and nine months ended September 30, 2022, which is consistent with the overall lodging industry. Hotel occupancy was negatively impacted in many markets by the Omicron variant of COVID-19 during the first quarter of 2022, contributing to an increase of the Company’s Same Store Hotels RevPAR of approximately 8.2% for the nine months ended September 30, 2023, compared to the same period in 2022.

Revenues

The Company’s principal source of revenue is hotel revenue consisting of room, food and beverage, and other related revenue. For the three months ended September 30, 2023 and 2022, the Company had total revenue of $358.3 million and $341.2 million, respectively. For the nine months ended September 30, 2023 and 2022, the Company had total revenue of $1.0 billion and $939.3 million, respectively. For the three months ended September 30, 2023 and 2022, respectively, Comparable Hotels achieved combined average occupancy of 77.1% and 75.7%, ADR of $159.36 and $157.65 and RevPAR of $122.91 and $119.31. For the nine months ended September 30, 2023 and 2022, respectively, Comparable Hotels achieved combined average occupancy of 75.8% and 73.5%, ADR of $157.54 and $149.98 and RevPAR of $119.34 and $110.23. ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.

Compared to the same periods in 2022, during the three and nine months ended September 30, 2023, the Company experienced increases in ADR and occupancy, resulting in increases of 3.0% and 8.3%, respectively, in RevPAR for Comparable Hotels. Revenue growth in the three and nine months ended September 30, 2023, as compared to the same periods of 2022, was led by continued strength in leisure transient and small group demand, with increased demand from corporate business. Additionally, occupancy during the first quarter of 2022 was negatively impacted in many markets by the Omicron variant of COVID-19. For the three and nine months ended September 30, 2023, the Company’s suburban markets continued to see strong demand with urban markets recovering more meaningfully as compared to the same periods in 2022. The Company expects revenue trends to continue, however, future year-over-year revenue growth will likely be at a lower rate given the favorable first nine months of the year comparison between 2023 and 2022 due, in large part, to the Omicron variant of COVID-19 negatively impacting the first quarter of 2022. Furthermore, future revenues could be negatively impacted by, among other things, historical seasonal trends, deterioration of consumer sentiment, a recessionary macroeconomic environment or inflationary pressures.

Hotel Operating Expense

Hotel operating expense consists of direct room operating expense, hotel administrative expense, sales and marketing expense, utilities expense, repair and maintenance expense, franchise fees and management fees. Hotel operating expense for the three months ended September 30, 2023 and 2022 totaled $203.7 million and $193.1 million, respectively, or 56.9% and 56.6% of total revenue for the respective periods, and for the nine months ended September 30, 2023 and 2022 totaled $589.4 million and $529.6 million, respectively, or 57.1% and 56.4% of total revenue for the respective periods, which is consistent with the increases in Comparable Hotels hotel operating expense as a percentage of revenue for the same periods. The increase in hotel operating expense for the three and nine months ended September 30, 2023, as compared to the same periods in 2022, was due to increased labor, repairs and maintenance and utility costs driven by increased staff and inflationary pressures throughout the overall economy. Occupancy increased for the nine months ended September 30, 2023, as compared to the same period of 2022, in part due to negative impacts from the Omicron variant of COVID-19 throughout most markets during the first quarter of 2022. Adding staff to meet increased demand has been challenging, and the Company’s hotels have often done so at higher wage rates or with more expensive contract labor as compared to 2022. Likewise, broader inflationary pressures throughout the overall economy and global tensions have driven shortages and cost increases for materials and supplies such as food and equipment. The Company continues to work with its management companies to realize operational efficiencies and mitigate the impact of cost pressures resulting from inflation and staffing challenges. The Company will continue to evaluate and work with its management companies to implement adjustments to the hotel operating model in response to continued changes in the operating environment and guest preferences, including evaluating staffing levels at its hotels to maximize efficiency.

Property Taxes, Insurance and Other Expense

Property taxes, insurance and other expense for the three months ended September 30, 2023 and 2022 was $21.7 million and $19.1 million, respectively, or 6.1% and 5.6% of total revenue for the respective periods. For the nine months ended September 30, 2023 and 2022, property taxes, insurance and other expense totaled $61.3 million and $56.5 million, respectively, or 5.9% and 6.0% of total revenue for the respective periods. The increases in property taxes, insurance, and other expense were primarily due to increases in insurance premiums and increases in property taxes in certain locations due to the reassessment of property values by localities related to the improved economy, partially offset by decreases at other locations due to successful appeals of tax assessments. The Company will continue to aggressively appeal tax assessments in certain jurisdictions in an attempt to minimize tax increases, as warranted.

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General and Administrative Expense

General and administrative expense for the three months ended September 30, 2023 and 2022 was $11.1 million and $10.3 million, respectively, or 3.1% and 3.0% of total revenue for the respective periods. For the nine months ended September 30, 2023 and 2022, general and administrative expense was $34.6 million and $30.2 million, respectively, or 3.4% and 3.2% of total revenue for the respective periods. The principal components of general and administrative expense are payroll and related benefit costs, executive incentive compensation, legal fees, accounting fees and reporting expenses. The increase in general and administrative expense for the three and nine months ended September 30, 2023, compared to the same periods in 2022, was primarily due to increased accruals for anticipated performance under the Company’s executive incentive compensation plan as well as increased payroll and related benefit costs.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended September 30, 2023 and 2022 was $45.5 million and $45.1 million, respectively. For the nine months ended September 30, 2023 and 2022, depreciation and amortization expense was $137.4 million and $135.8 million, respectively. Depreciation and amortization expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for the respective periods owned. The increases of approximately $0.4 million and $1.6 million, respectively, for the three and nine months ended September 30, 2023, compared to the same periods in 2022, were primarily due to the acquisitions of one hotel in the second quarter of 2023 and two hotels in the fourth quarter of 2022, as well as renovations completed throughout 2022 and 2023, partially offset by the sale of one hotel in the third quarter of 2022.

Interest and Other Expense, net

Interest and other expense, net for the three months ended September 30, 2023 and 2022 was $17.5 million and $14.9 million, respectively. For the nine months ended September 30, 2023 and 2022, interest and other expense, net was $51.0 million and $44.8 million, respectively. Interest and other expense, net for the nine months ended September 30, 2023 and 2022, is net of approximately $0.7 million and $0.5 million, respectively, of interest capitalized associated with renovation projects.

Interest expense related to the Company’s debt instruments for the three and nine months ended September 30, 2023 increased compared to the same periods of 2022 as a result of higher average borrowings associated with variable-rate debt and higher average interest rates on the Company's variable-rate debt due to the high inflationary environment within the current economy. The Company anticipates interest expense for the remainder of 2023 will be greater than the interest expense for the same period of 2022 due to higher average borrowings associated with variable-rate debt and higher market interest rates.

Income Tax Expense

Income tax expense for the three months ended September 30, 2023 and 2022 was $0.3 million and $1.3 million, respectively. For the nine months ended September 30, 2023 and 2022, income tax expense was $0.9 million and $1.7 million, respectively. The decrease is primarily due to state income taxes that were higher than normal in several states in 2022 as a result of temporary limitations placed on the application of prior net operating losses.

Non-GAAP Financial Measures

The Company considers the following non-GAAP financial measures useful to investors as key supplemental measures of its operating performance: Funds from Operations (“FFO”), Modified Funds from Operations (“MFFO”), Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), Earnings Before Interest, Income Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”), Adjusted EBITDAre (“Adjusted EBITDAre”) and Adjusted Hotel EBITDA. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income (loss), cash flow from operations or any other operating GAAP measure. FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA are not necessarily indicative of funds available to fund the Company’s cash needs, including its ability to make cash distributions. Although FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA, as reported by other companies that do not define such terms exactly as the Company defines such terms, the Company believes these supplemental measures are useful to investors when comparing the Company’s results between periods and with other REITs.

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FFO and MFFO

The Company calculates and presents FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), which defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), extraordinary items as defined by GAAP, and the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated affiliates. 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 real estate industry investors consider FFO to be helpful in evaluating a real estate company’s operations. The Company further believes that by excluding the effects of these items, FFO is useful to investors in comparing its operating performance between periods and between REITs that report FFO using the Nareit definition. FFO as presented by the Company is applicable only to its common shareholders, but does not represent an amount that accrues directly to common shareholders.

The Company calculates MFFO by further adjusting FFO for the exclusion of amortization of finance ground lease assets, amortization of favorable and unfavorable operating leases, net and non-cash straight-line operating ground lease expense, as these expenses do not reflect the underlying performance of the related hotels. The Company presents MFFO when evaluating its performance because it believes that it provides further useful supplemental information to investors regarding its ongoing operating performance.

The following table reconciles the Company’s GAAP net income to FFO and MFFO for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023		2022			2023		2022
Net income	$	58,512	$	59,146		$	156,724	$	142,493
Depreciation of real estate owned		44,734		44,372			135,105		133,489
Gain on sale of real estate		-		(1,785	)		-		(1,785	)
Funds from operations		103,246		101,733			291,829		274,197
Amortization of finance ground lease assets		759		759			2,278		2,278
Amortization of favorable and unfavorable operating   leases, net		99		97			281		299
Non-cash straight-line operating ground lease expense		35		38			109		116
Modified funds from operations	$	104,139	$	102,627		$	294,497	$	276,890

EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA

EBITDA is a commonly used measure of performance in many industries and is defined as net income (loss) excluding interest, income taxes, depreciation and amortization. The Company believes EBITDA is useful to investors because it helps the Company and its investors evaluate the ongoing operating performance of the Company by removing the impact of its capital structure (primarily interest expense) and its asset base (primarily depreciation and amortization). In addition, certain covenants included in the agreements governing the Company’s indebtedness use EBITDA, as defined in the specific credit agreement, as a measure of financial compliance.

In addition to EBITDA, the Company also calculates and presents EBITDAre in accordance with standards established by Nareit, which defines EBITDAre as EBITDA, excluding gains and losses from the sale of certain real estate assets (including gains and losses from change in control), plus real estate related impairments, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. The Company presents EBITDAre because it believes that it provides further useful information to investors in comparing its operating performance between periods and between REITs that report EBITDAre using the Nareit definition.

The Company also considers the exclusion of non-cash straight-line operating ground lease expense from EBITDAre useful, as this expense does not reflect the underlying performance of the related hotels (Adjusted EBITDAre).

The Company further excludes actual corporate-level general and administrative expense for the Company as well as Adjusted EBITDAre from its non-hotel property from Adjusted EBITDAre (Adjusted Hotel EBITDA) to isolate property-level operational performance over which the Company’s hotel operators have direct control. The Company believes Adjusted Hotel EBITDA provides useful supplemental information to investors regarding operating performance and it is used by management to measure the performance of the Company’s hotels and effectiveness of the operators of the hotels.

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The following table reconciles the Company’s GAAP net income to EBITDA, EBITDAre, Adjusted EBITDAre and Adjusted Hotel EBITDA for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net income	$	58,512		$	59,146		$	156,724		$	142,493
Depreciation and amortization		45,498			45,135			137,398			135,781
Amortization of favorable and unfavorable operating   leases, net		99			97			281			299
Interest and other expense, net		17,470			14,933			50,973			44,785
Income tax expense		313			1,331			874			1,712
EBITDA		121,892			120,642			346,250			325,070
Gain on sale of real estate		-			(1,785	)		-			(1,785	)
EBITDAre		121,892			118,857			346,250			323,285
Non-cash straight-line operating ground lease expense		35			38			109			116
Adjusted EBITDAre		121,927			118,895			346,359			323,401
General and administrative expense		11,079			10,271			34,640			30,216
Adjusted EBITDAre from non-hotel property (1)		(845	)		-			(845	)		-
Adjusted Hotel EBITDA	$	132,161		$	129,166		$	380,154		$	353,617

(1)Non-hotel property only includes the results of one hotel in New York, New York that is leased to a third-party hotel operator. This property’s Adjusted EBITDAre results are not included in Adjusted Hotel EBITDA starting in the second half of 2023.

Hotels Owned

As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in 37 states. The following tables summarize the number of hotels and rooms by brand and by state:

Number of Hotels and Guest Rooms by Brand
	Number of		Number of
Brand	Hotels		Rooms
Hilton Garden Inn		40		5,593
Hampton		37		4,953
Courtyard		34		4,807
Homewood Suites		30		3,417
Residence Inn		29		3,548
Fairfield		10		1,213
Home2 Suites		10		1,146
SpringHill Suites		9		1,245
TownePlace Suites		9		931
AC Hotels		3		468
Hyatt Place		3		411
Marriott		2		619
Embassy Suites		2		316
Aloft		1		157
Hyatt House		1		105
Total		220		28,929

25

Number of Hotels and Guest Rooms by State
	Number of		Number of
State	Hotels		Rooms
Alabama		13		1,246
Alaska		2		304
Arizona		13		1,776
Arkansas		2		248
California		26		3,721
Colorado		4		567
Florida		22		2,844
Georgia		5		585
Idaho		1		186
Illinois		7		1,255
Indiana		4		479
Iowa		3		301
Kansas		3		320
Kentucky		1		156
Louisiana		3		422
Maine		3		514
Maryland		2		233
Massachusetts		3		330
Michigan		1		148
Minnesota		3		405
Mississippi		2		168
Missouri		4		544
Nebraska		4		621
New Jersey		5		629
New York		3		346
North Carolina		8		881
Ohio		3		406
Oklahoma		4		545
Oregon		1		243
Pennsylvania		4		525
South Carolina		5		590
Tennessee		11		1,337
Texas		27		3,328
Utah		3		393
Virginia		11		1,667
Washington		3		490
Wisconsin		1		176
Total		220		28,929

26

The following table summarizes the location, brand, manager, date acquired or completed and number of rooms for each of the 220 hotels and the non-hotel property that the Company owned as of September 30, 2023. As noted below, 14 of the Company’s properties are subject to ground leases and 15 of its hotels are encumbered by mortgage notes.

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Anchorage	AK	Embassy Suites	InnVentures	4/30/2010		169
Anchorage	AK	Home2 Suites	InnVentures	12/1/2017		135
Auburn	AL	Hilton Garden Inn	LBA	3/1/2014		101
Birmingham	AL	Courtyard	LBA	3/1/2014		84
Birmingham	AL	Hilton Garden Inn	LBA	9/12/2017		104
Birmingham	AL	Home2 Suites	LBA	9/12/2017		106
Birmingham	AL	Homewood Suites	McKibbon	3/1/2014		95
Dothan	AL	Hilton Garden Inn	LBA	6/1/2009		104
Dothan	AL	Residence Inn	LBA	3/1/2014		84
Huntsville	AL	Hampton	LBA	9/1/2016		98
Huntsville	AL	Hilton Garden Inn	LBA	3/1/2014		101
Huntsville	AL	Home2 Suites	LBA	9/1/2016		77
Huntsville	AL	Homewood Suites	LBA	3/1/2014		107
Mobile	AL	Hampton	McKibbon	9/1/2016		101	(2)
Prattville	AL	Courtyard	LBA	3/1/2014		84
Rogers	AR	Hampton	Raymond	8/31/2010		122
Rogers	AR	Homewood Suites	Raymond	4/30/2010		126
Chandler	AZ	Courtyard	North Central	11/2/2010		150
Chandler	AZ	Fairfield	North Central	11/2/2010		110
Phoenix	AZ	Courtyard	North Central	11/2/2010		164
Phoenix	AZ	Hampton	North Central	9/1/2016		125	(2)
Phoenix	AZ	Hampton	North Central	5/2/2018		210
Phoenix	AZ	Homewood Suites	North Central	9/1/2016		134	(2)
Phoenix	AZ	Residence Inn	North Central	11/2/2010		129
Scottsdale	AZ	Hilton Garden Inn	North Central	9/1/2016		122
Tempe	AZ	Hyatt House	Crestline	8/13/2020		105	(2)
Tempe	AZ	Hyatt Place	Crestline	8/13/2020		154	(2)
Tucson	AZ	Hilton Garden Inn	Western	7/31/2008		125
Tucson	AZ	Residence Inn	Western	3/1/2014		124
Tucson	AZ	TownePlace Suites	Western	10/6/2011		124
Agoura Hills	CA	Homewood Suites	Dimension	3/1/2014		125
Burbank	CA	Courtyard	Huntington	8/11/2015		190	(1)
Burbank	CA	Residence Inn	Marriott	3/1/2014		166
Burbank	CA	SpringHill Suites	Marriott	7/13/2015		170	(1)
Clovis	CA	Hampton	Dimension	7/31/2009		86
Clovis	CA	Homewood Suites	Dimension	2/2/2010		83
Cypress	CA	Courtyard	Dimension	3/1/2014		180
Cypress	CA	Hampton	Dimension	6/29/2015		110
Oceanside	CA	Courtyard	Marriott	9/1/2016		142	(1)
Oceanside	CA	Residence Inn	Marriott	3/1/2014		125
Rancho Bernardo/San Diego	CA	Courtyard	InnVentures	3/1/2014		210
Sacramento	CA	Hilton Garden Inn	Dimension	3/1/2014		153
San Bernardino	CA	Residence Inn	InnVentures	2/16/2011		95
San Diego	CA	Courtyard	Huntington	9/1/2015		245	(1)
San Diego	CA	Hampton	Dimension	3/1/2014		177	(1)
San Diego	CA	Hilton Garden Inn	InnVentures	3/1/2014		200
San Diego	CA	Residence Inn	Dimension	3/1/2014		121
San Jose	CA	Homewood Suites	Dimension	3/1/2014		140	(1)

27

City	State	Brand	Manager	Date Acquired or Completed	Rooms
San Juan Capistrano	CA	Residence Inn	Marriott	9/1/2016		130	(2)
Santa Ana	CA	Courtyard	Dimension	5/23/2011		155	(1)
Santa Clarita	CA	Courtyard	Dimension	9/24/2008		140
Santa Clarita	CA	Fairfield	Dimension	10/29/2008		66
Santa Clarita	CA	Hampton	Dimension	10/29/2008		128
Santa Clarita	CA	Residence Inn	Dimension	10/29/2008		90
Tustin	CA	Fairfield	Marriott	9/1/2016		145
Tustin	CA	Residence Inn	Marriott	9/1/2016		149
Colorado Springs	CO	Hampton	Chartwell	9/1/2016		101
Denver	CO	Hilton Garden Inn	InnVentures	9/1/2016		221	(1)
Highlands Ranch	CO	Hilton Garden Inn	Dimension	3/1/2014		128
Highlands Ranch	CO	Residence Inn	Dimension	3/1/2014		117
Boca Raton	FL	Hilton Garden Inn	Dimension	9/1/2016		149
Cape Canaveral	FL	Hampton	LBA	4/30/2020		116
Cape Canaveral	FL	Homewood Suites	LBA	9/1/2016		153
Cape Canaveral	FL	Home2 Suites	LBA	4/30/2020		108
Fort Lauderdale	FL	Hampton	Dimension	6/23/2015		156
Fort Lauderdale	FL	Residence Inn	LBA	9/1/2016		156
Gainesville	FL	Hilton Garden Inn	McKibbon	9/1/2016		104
Gainesville	FL	Homewood Suites	McKibbon	9/1/2016		103
Jacksonville	FL	Homewood Suites	McKibbon	3/1/2014		119
Jacksonville	FL	Hyatt Place	Crestline	12/7/2018		127
Miami	FL	Courtyard	Dimension	3/1/2014		118	(2)
Miami	FL	Hampton	HHM	4/9/2010		121
Miami	FL	Homewood Suites	Dimension	3/1/2014		162
Orlando	FL	Fairfield	Marriott	7/1/2009		200
Orlando	FL	Home2 Suites	LBA	3/19/2019		128
Orlando	FL	SpringHill Suites	Marriott	7/1/2009		200
Panama City	FL	Hampton	LBA	3/12/2009		95
Panama City	FL	TownePlace Suites	LBA	1/19/2010		103
Pensacola	FL	TownePlace Suites	McKibbon	9/1/2016		97
Tallahassee	FL	Fairfield	LBA	9/1/2016		97
Tallahassee	FL	Hilton Garden Inn	LBA	3/1/2014		85	(2)
Tampa	FL	Embassy Suites	HHM	11/2/2010		147
Atlanta/Downtown	GA	Hampton	McKibbon	2/5/2018		119
Atlanta/Perimeter Dunwoody	GA	Hampton	LBA	6/28/2018		132
Atlanta	GA	Home2 Suites	McKibbon	7/1/2016		128
Macon	GA	Hilton Garden Inn	LBA	3/1/2014		101	(2)
Savannah	GA	Hilton Garden Inn	Newport	3/1/2014		105	(2)
Cedar Rapids	IA	Hampton	Aimbridge	9/1/2016		103	(4)
Cedar Rapids	IA	Homewood Suites	Aimbridge	9/1/2016		95	(4)
Davenport	IA	Hampton	Aimbridge	9/1/2016		103	(4)
Boise	ID	Hampton	Raymond	4/30/2010		186	(1)
Des Plaines	IL	Hilton Garden Inn	Raymond	9/1/2016		253
Hoffman Estates	IL	Hilton Garden Inn	HHM	9/1/2016		184
Mettawa	IL	Hilton Garden Inn	HHM	11/2/2010		170
Mettawa	IL	Residence Inn	HHM	11/2/2010		130
Rosemont	IL	Hampton	Raymond	9/1/2016		158
Skokie	IL	Hampton	Raymond	9/1/2016		225
Warrenville	IL	Hilton Garden Inn	HHM	11/2/2010		135
Indianapolis	IN	SpringHill Suites	HHM	11/2/2010		130

28

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Merrillville	IN	Hilton Garden Inn	HHM	9/1/2016		124
Mishawaka	IN	Residence Inn	HHM	11/2/2010		106
South Bend	IN	Fairfield	HHM	9/1/2016		119
Overland Park	KS	Fairfield	Raymond	3/1/2014		110
Overland Park	KS	Residence Inn	Raymond	3/1/2014		120
Wichita	KS	Courtyard	Aimbridge	3/1/2014		90	(4)
Louisville	KY	AC Hotels	Concord	10/25/2022		156
Lafayette	LA	Hilton Garden Inn	LBA	7/30/2010		153	(2)
Lafayette	LA	SpringHill Suites	LBA	6/23/2011		103
New Orleans	LA	Homewood Suites	Dimension	3/1/2014		166	(1)
Marlborough	MA	Residence Inn	Crestline	3/1/2014		112
Westford	MA	Hampton	Crestline	3/1/2014		110
Westford	MA	Residence Inn	Crestline	3/1/2014		108	(1)
Annapolis	MD	Hilton Garden Inn	Crestline	3/1/2014		126
Silver Spring	MD	Hilton Garden Inn	Crestline	7/30/2010		107
Portland	ME	AC Hotels	Crestline	8/20/2021		178
Portland	ME	Aloft	Crestline	9/10/2021		157
Portland	ME	Residence Inn	Crestline	10/13/2017		179	(1)
Novi	MI	Hilton Garden Inn	HHM	11/2/2010		148
Maple Grove	MN	Hilton Garden Inn	North Central	9/1/2016		121
Rochester	MN	Hampton	Raymond	8/3/2009		124
St. Paul	MN	Hampton	Raymond	3/4/2019		160
Kansas City	MO	Hampton	Raymond	8/31/2010		122
Kansas City	MO	Residence Inn	Raymond	3/1/2014		106
St. Louis	MO	Hampton	Raymond	8/31/2010		190
St. Louis	MO	Hampton	Raymond	4/30/2010		126
Hattiesburg	MS	Courtyard	LBA	3/1/2014		84
Hattiesburg	MS	Residence Inn	LBA	12/11/2008		84
Carolina Beach	NC	Courtyard	Crestline	3/1/2014		144
Charlotte	NC	Fairfield	Newport	9/1/2016		94
Durham	NC	Homewood Suites	McKibbon	12/4/2008		122
Fayetteville	NC	Home2 Suites	LBA	2/3/2011		118
Greensboro	NC	SpringHill Suites	Newport	3/1/2014		82
Jacksonville	NC	Home2 Suites	LBA	9/1/2016		105
Wilmington	NC	Fairfield	Crestline	3/1/2014		122
Winston-Salem	NC	Hampton	McKibbon	9/1/2016		94
Omaha	NE	Courtyard	Marriott	3/1/2014		181
Omaha	NE	Hampton	HHM	9/1/2016		139
Omaha	NE	Hilton Garden Inn	HHM	9/1/2016		178	(1)
Omaha	NE	Homewood Suites	HHM	9/1/2016		123
Cranford	NJ	Homewood Suites	Dimension	3/1/2014		108
Mahwah	NJ	Homewood Suites	Dimension	3/1/2014		110
Mount Laurel	NJ	Homewood Suites	Newport	1/11/2011		118
Somerset	NJ	Courtyard	Newport	3/1/2014		162	(2)
West Orange	NJ	Courtyard	Newport	1/11/2011		131
Islip/Ronkonkoma	NY	Hilton Garden Inn	Crestline	3/1/2014		166
New York	NY	(non-hotel)	N/A	3/1/2014		-	(2)(3)
Syracuse	NY	Courtyard	Crestline	10/16/2015		102
Syracuse	NY	Residence Inn	Crestline	10/16/2015		78
Cleveland	OH	Courtyard	Concord	6/30/2023		154
Mason	OH	Hilton Garden Inn	Raymond	9/1/2016		110

29

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Twinsburg	OH	Hilton Garden Inn	Aimbridge	10/7/2008		142	(5)
Oklahoma City	OK	Hampton	Raymond	5/28/2010		200
Oklahoma City	OK	Hilton Garden Inn	Raymond	9/1/2016		155
Oklahoma City	OK	Homewood Suites	Raymond	9/1/2016		100
Oklahoma City (West)	OK	Homewood Suites	Chartwell	9/1/2016		90
Portland	OR	Hampton	Raymond	11/17/2021		243
Collegeville/Philadelphia	PA	Courtyard	Newport	11/15/2010		132
Malvern/Philadelphia	PA	Courtyard	Newport	11/30/2010		127
Pittsburgh	PA	AC Hotels	Concord	10/25/2022		134
Pittsburgh	PA	Hampton	Newport	12/31/2008		132
Charleston	SC	Home2 Suites	LBA	9/1/2016		122
Columbia	SC	Hilton Garden Inn	Newport	3/1/2014		143
Columbia	SC	TownePlace Suites	Newport	9/1/2016		91
Greenville	SC	Hyatt Place	Crestline	9/1/2021		130
Hilton Head	SC	Hilton Garden Inn	McKibbon	3/1/2014		104
Chattanooga	TN	Homewood Suites	LBA	3/1/2014		76
Franklin	TN	Courtyard	Chartwell	9/1/2016		126
Franklin	TN	Residence Inn	Chartwell	9/1/2016		124
Knoxville	TN	Homewood Suites	McKibbon	9/1/2016		103
Knoxville	TN	SpringHill Suites	McKibbon	9/1/2016		103
Knoxville	TN	TownePlace Suites	McKibbon	9/1/2016		97
Memphis	TN	Hampton	Crestline	2/5/2018		144
Memphis	TN	Hilton Garden Inn	Crestline	10/28/2021		150
Nashville	TN	Hilton Garden Inn	Dimension	9/30/2010		194
Nashville	TN	Home2 Suites	Dimension	5/31/2012		119
Nashville	TN	TownePlace Suites	Chartwell	9/1/2016		101
Addison	TX	SpringHill Suites	Marriott	3/1/2014		159
Arlington	TX	Hampton	Western	12/1/2010		98
Austin	TX	Courtyard	HHM	11/2/2010		145
Austin	TX	Fairfield	HHM	11/2/2010		150
Austin	TX	Hampton	Dimension	4/14/2009		124
Austin	TX	Hilton Garden Inn	HHM	11/2/2010		117
Austin	TX	Homewood Suites	Dimension	4/14/2009		97
Austin/Round Rock	TX	Hampton	Dimension	3/6/2009		94
Austin/Round Rock	TX	Homewood Suites	Dimension	9/1/2016		115
Dallas	TX	Homewood Suites	Western	9/1/2016		130
Denton	TX	Homewood Suites	Chartwell	9/1/2016		107
El Paso	TX	Homewood Suites	Western	3/1/2014		114
Fort Worth	TX	Courtyard	LBA	2/2/2017		124
Fort Worth	TX	Hilton Garden Inn	Raymond	11/17/2021		157
Fort Worth	TX	Homewood Suites	Raymond	11/17/2021		112
Fort Worth	TX	TownePlace Suites	Western	7/19/2010		140
Frisco	TX	Hilton Garden Inn	Western	12/31/2008		102
Grapevine	TX	Hilton Garden Inn	Western	9/24/2010		110
Houston	TX	Courtyard	LBA	9/1/2016		124
Houston	TX	Marriott	Western	1/8/2010		206
Houston	TX	Residence Inn	Western	3/1/2014		129
Houston	TX	Residence Inn	Western	9/1/2016		120
Lewisville	TX	Hilton Garden Inn	Aimbridge	10/16/2008		165	(6)
San Antonio	TX	TownePlace Suites	Western	3/1/2014		106
Shenandoah	TX	Courtyard	LBA	9/1/2016		124

30

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Stafford	TX	Homewood Suites	Western	3/1/2014		78
Texarkana	TX	Hampton	Aimbridge	1/31/2011		81	(6)
Provo	UT	Residence Inn	Dimension	3/1/2014		114
Salt Lake City	UT	Residence Inn	Huntington	10/20/2017		136
Salt Lake City	UT	SpringHill Suites	HHM	11/2/2010		143
Alexandria	VA	Courtyard	Marriott	3/1/2014		178
Alexandria	VA	SpringHill Suites	Marriott	3/28/2011		155
Charlottesville	VA	Courtyard	Crestline	3/1/2014		139
Manassas	VA	Residence Inn	Crestline	2/16/2011		107
Richmond	VA	Courtyard	White Lodging	12/8/2014		135	(1)
Richmond	VA	Marriott	White Lodging	3/1/2014		413	(2)
Richmond	VA	Residence Inn	White Lodging	12/8/2014		75	(1)
Suffolk	VA	Courtyard	Crestline	3/1/2014		92
Suffolk	VA	TownePlace Suites	Crestline	3/1/2014		72
Virginia Beach	VA	Courtyard	Crestline	3/1/2014		141
Virginia Beach	VA	Courtyard	Crestline	3/1/2014		160
Kirkland	WA	Courtyard	InnVentures	3/1/2014		150
Seattle	WA	Residence Inn	InnVentures	3/1/2014		234
Tukwila	WA	Homewood Suites	Dimension	3/1/2014		106
Madison	WI	Hilton Garden Inn	Raymond	2/18/2021		176
Total						28,929

(1)Hotel is encumbered by mortgage.

(2)Property is subject to ground lease.

(3)In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel's 210 hotel rooms. Lease revenue from this property is recorded in other revenue in the Company's consolidated statements of operations and comprehensive income. As a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 and is considered a non-hotel property through the end of the lease term.

(4)Manager noted as of September 30, 2023. Effective October 1, 2023, management responsibility of this property was transferred from Aimbridge Hospitality, LLC ("Aimbridge") to Chartwell Hospitality, LLC ("Chartwell").

(5)Manager noted as of September 30, 2023. Effective October 1, 2023, management responsibility of this property was transferred from Aimbridge to Concord.

(6)Manager noted as of September 30, 2023. Effective October 1, 2023, management responsibility of this property was transferred from Aimbridge to Texas Western Management Partners, LP ("Western").

Related Parties

The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed to be at arm’s length, and the results of the Company’s operations may be different if these transactions were conducted with non-related parties. See Note 6 titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for additional information concerning the Company’s related party transactions.

Liquidity and Capital Resources

Capital Resources

The Company’s principal short term sources of liquidity are the operating cash flows generated from the Company’s properties and availability under its Revolving Credit Facility. Over the long term, the Company may receive proceeds from strategic additional secured and unsecured debt financing, dispositions of its hotel properties and offerings of the Company’s common shares, including pursuant to the ATM Program. Macroeconomic pressures, including inflation, increases in interest rates and general market uncertainty, could impact the Company’s ability to raise debt or equity capital to fund long-term liquidity requirements in a cost-effective manner.

As of September 30, 2023, the Company had $1.4 billion of total outstanding debt consisting of $285.2 million of mortgage debt and $1.1 billion outstanding under its unsecured credit facilities, excluding unamortized debt issuance costs and fair value

31

adjustments. As of September 30, 2023, the Company had available corporate cash on hand of approximately $35.4 million, and unused borrowing capacity under its Revolving Credit Facility of approximately $650 million.

The credit agreements governing the unsecured credit facilities contain mandatory prepayment requirements, customary affirmative and negative covenants and events of default. The credit agreements require that the Company comply with various covenants, which include, among others, a minimum tangible net worth, maximum debt limits, minimum interest and fixed charge coverage ratios, and restrictions on certain investments. The Company was in compliance with the applicable covenants as of September 30, 2023.

See Note 4 titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for a description of the Company’s debt agreements as of September 30, 2023.

The Company has a universal shelf registration statement on Form S-3 (No. 333-262915) that was automatically effective upon filing on February 23, 2022. The Company may offer an indeterminate number or amount, as the case may be, of (1) common shares, no par value per share; (2) preferred shares, no par value per share; (3) depository shares representing the Company’s preferred shares; (4) warrants exercisable for the Company’s common shares, preferred shares or depository shares representing preferred shares; (5) rights to purchase common shares; and (6) unsecured senior or subordinate debt securities, all of which may be issued from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.

On August 12, 2020, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares under the ATM Program under the Company’s prior shelf registration statement and the current shelf registration statement described above. Since inception of the ATM Program in August 2020 through September 30, 2023, the Company sold approximately 4.7 million common shares under its ATM Program at a weighted-average market sales price of approximately $16.26 per common share and received aggregate gross proceeds of approximately $76.0 million and proceeds net of offering costs, which included $0.9 million of commissions, of approximately $75.1 million. The Company used the net proceeds from the sale of these shares (all during 2021) primarily to pay down borrowings under its then-existing $425 million revolving credit facility and used the corresponding increased availability under the $425 million revolving credit facility for general corporate purposes, including acquisitions of hotel properties. As of September 30, 2023, approximately $224.0 million remained available for issuance under the ATM Program. No shares were sold under the Company’s ATM Program during the nine months ended September 30, 2023. The Company plans to use future net proceeds from the sale of shares under the ATM Program for general corporate purposes which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the net proceeds to acquire another REIT or other company that invests in income producing properties. Future offerings will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company’s common shares and opportunities for uses of any proceeds.

Capital Uses

The Company anticipates that cash flow from operations, availability under its Revolving Credit Facility, additional borrowings, and proceeds from hotel dispositions and equity offerings will be adequate to meet its anticipated short-term and long-term liquidity requirements, including required distributions to shareholders, share repurchases, capital improvements, debt service, hotel acquisitions, lease commitments, and cash management activities.

Distributions

The Company generally must distribute annually at least 90% of its REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order to maintain its REIT status. On September 19, 2023, the Company declared a monthly cash distribution of $0.08 per common share, paid on October 16, 2023, to shareholders of record as of September 29, 2023. For the three and nine months ended September 30, 2023, the Company paid distributions of $0.24 and $0.80 per common share, respectively, for a total of $54.8 million and $183.1 million, respectively. Subsequent to quarter end, on October 19, 2023, the Company declared a monthly cash distribution of $0.08 per common share, payable on November 15, 2023 to shareholders of record as of October 31, 2023.

The Company, as it has done historically due to seasonality, may use its Revolving Credit Facility to maintain the consistency of distributions, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles. While management currently expects monthly cash distributions to continue at $0.08 per common share, any distribution will be subject to approval of the Company’s Board of Directors and there can be no assurance of the classification, timing or duration of distributions at any particular distribution rate. The Board of Directors monitors the Company’s distribution rate relative to the performance of its hotels on an ongoing basis and may make adjustments to the distribution rate as determined to be prudent in relation to other cash requirements of

32

the Company or to the extent required to maintain REIT status. If cash flows from operations and the Revolving Credit Facility are not adequate to meet liquidity requirements, the Company may utilize additional financing sources to make distributions. Although the Company has relatively low levels of debt, there can be no assurance it will be successful with this strategy, and it may need to reduce its distributions to minimum levels required to maintain its qualification as a real estate investment trust. If the Company were unable to extend its maturing debt in future periods or if it were to default on its debt, it may be unable to make distributions.

Share Repurchases

In May 2023, the Company’s Board of Directors approved a one-year extension of its existing share repurchase program, authorizing share repurchases up to an aggregate of $338.7 million. The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier. During the nine months ended September 30, 2023, the Company purchased, under its Share Repurchase Program, approximately 0.5 million of its common shares at a weighted-average market purchase price of approximately $14.34 per common share for an aggregate purchase price, including commissions, of approximately $6.9 million. The shares were repurchased in open market transactions under the Share Repurchase Program, including pursuant to written trading plans intended to comply with Rule 10b5-1 under the Exchange Act. Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of September 30, 2023, approximately $335.4 million remained available for purchase under the Share Repurchase Program.

Capital Improvements

Management routinely monitors the condition and operations of its hotels and plans renovations and other improvements as it deems prudent. The Company is committed to maintaining and enhancing each property’s competitive position in its market. The Company has invested in and plans to continue to reinvest in its hotels. Under certain loan and management agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishing of furniture, fixtures, and equipment, based on a percentage of gross revenues, provided that such amount may be used for the Company’s capital expenditures with respect to the hotels. As of September 30, 2023, the Company held approximately $30.3 million in reserves related to these properties. During the nine months ended September 30, 2023, the Company invested approximately $42.0 million in capital expenditures. The Company anticipates spending approximately $70 million to $80 million during 2023, which includes various renovation projects for approximately 20 to 25 properties, however, inflationary pressures or supply chain shortages, among other issues, may result in increased costs and delays for anticipated projects. The Company does not currently have any existing or planned projects for new property development.

Upcoming Debt Maturities and Debt Service Payments

As of September 30, 2023, the Company had approximately $175.4 million of principal and interest payments due on its debt over the next 12 months. Included in this total is an $85.0 million term loan and a mortgage loan of approximately $20.5 million, both maturing in the third quarter of 2024. The Company plans to pay outstanding amounts and service payments due upon the upcoming debt maturity dates using funds from operations, borrowings under its Revolving Credit Facility and/or proceeds from new financing, refinancing or loan extensions. Interest expense related to the Company’s unsecured credit facilities is expected to be higher over the next 12 months than it was during the previous 12 months as a result of increases in market interest rates on its variable-rate debt and increased borrowings on its Revolving Credit Facility. See Note 4 titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for more detail regarding future maturities of the Company’s debt instruments as of September 30, 2023.

Purchase Contract Commitments

As of September 30, 2023, the Company had separate outstanding contracts for the potential purchase of six hotels as well as one free-standing parking garage for a total combined purchase price of approximately $359.0 million. Five of the seven properties under contract are existing. The Company completed the purchase of four of the existing properties, including two hotels and one free-standing parking garage in Salt Lake City, Utah and one hotel in Renton, Washington on October 11, 2023 and October 18, 2023, respectively. See Note 9 titled “Subsequent Events” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for more information. The Company plans to complete the purchase of the one remaining existing property in the fourth quarter of 2023. The other two purchase contracts are for hotels under development, with the Madison, Wisconsin hotel currently planned to be completed and opened for business in mid-2024 and the Nashville, Tennessee hotel currently planned to be completed and opened for business in 2025, at which respective times the Company expects to complete the purchases of these hotels. Although the Company is working towards completing the acquisitions of the three remaining properties, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these properties will occur under the outstanding purchase contracts. If the sellers meet all of the

33

conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts and acquire these properties. The Company plans to utilize its available cash or borrowings under its unsecured credit facilities available at closing to purchase the hotels under contract if closings occur.

Cash Management Activities

As part of the cost sharing arrangements discussed in Note 6, titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under the cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies.

Business Interruption

Being in the real estate industry, the Company is exposed to natural disasters on both a local and national scale. Although management believes the Company has adequate insurance to cover this exposure, there can be no assurance that such events will not have a material adverse effect on the Company’s financial position or results of operations.

Seasonality

The hotel industry historically has been seasonal in nature. Seasonal variations in occupancy at the Company’s hotels may cause quarterly fluctuations in its revenues. Generally, occupancy rates and hotel revenues for the Company’s hotels are greater in the second and third quarters than in the first and fourth quarters. However, due to the effects of COVID-19, these typical seasonal patterns have been disrupted in recent years. In the first quarter of 2022, the Company experienced lower than expected operating results due to the Omicron variant of COVID-19 along with the typical seasonal decrease associated with the first quarter. Since that time, the seasonal variability has recovered to its pre-COVID-19 trend. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, the Company expects to utilize cash on hand or available financing sources to meet cash requirements.

Critical Accounting Policies and Estimates

The preparation of the Company’s financial statements in accordance with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Company’s financial statements, the reported amounts of revenues and expenses during the reporting periods and the related disclosures in the Company’s Unaudited Consolidated Financial Statements and Notes thereto. The Company has discussed those policies and estimates that it believes are critical and require the use of complex judgment in their application in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 21, 2023. There have been no material changes to the Company’s critical accounting policies or the methods or assumptions applied.

Subsequent Events

On October 11, 2023, the Company completed the purchase of two existing hotels and an existing free-standing parking garage in Salt Lake City, Utah, including a 175-room Courtyard and a 159-room Hyatt House, for a combined gross purchase price of approximately $91.5 million. The Company utilized its available cash on hand and borrowings under its Revolving Credit Facility to purchase the properties.

On October 16, 2023, the Company paid approximately $18.3 million, or $0.08 per common share, in distributions to shareholders of record as of September 29, 2023.

On October 18, 2023, the Company completed the purchase of the existing 146-room Residence Inn in Renton, Washington for a total gross purchase price of $55.5 million. The Company utilized its available cash on hand and borrowings under its Revolving Credit Facility to purchase the hotel.

On October 19, 2023, the Company declared a monthly cash distribution of $0.08 per common share. The distribution is payable on November 15, 2023, to shareholders of record as of October 31, 2023.

34

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2023, the Company’s financial instruments were not exposed to significant market risk due to foreign currency exchange risk, commodity price risk or equity price risk. However, the Company is exposed to interest rate risk due to possible changes in short term interest rates as it invests its cash or borrows on its Revolving Credit Facility and due to the portion of its variable-rate term debt that is not fixed by interest rate swaps. As of September 30, 2023, after giving effect to interest rate swaps, as described below, approximately $275.0 million, or approximately 20% of the Company’s total debt outstanding, was subject to variable interest rates. Based on the Company’s variable-rate debt outstanding as of September 30, 2023, every 100 basis points change in interest rates will impact the Company’s annual net income by approximately $2.8 million, all other factors remaining the same. With the exception of interest rate swap transactions, the Company has not engaged in transactions in derivative financial instruments or derivative commodity instruments.

As of September 30, 2023, the Company’s variable-rate debt consisted of its unsecured credit facilities, including borrowings outstanding under its Revolving Credit Facility and $1.0 billion of term loans. Currently, the Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. As of September 30, 2023, the Company had 13 interest rate swap agreements that effectively fix the interest payments on approximately $695.0 million of the Company’s variable-rate debt outstanding with swap maturity dates ranging from January 2024 to December 2029. Under the terms of all of the Company’s interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment. See Note 5 titled “Fair Value of Financial Instruments” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for a description of the Company’s interest rate swaps as of September 30, 2023.

In addition to its variable-rate debt and interest rate swaps discussed above, the Company has assumed or originated fixed interest rate mortgages payable to lenders under permanent financing arrangements as well as two fixed-rate senior notes facilities totaling $125 million. The following table summarizes the annual maturities and average interest rates of the Company’s mortgage debt and borrowings outstanding under its unsecured credit facilities at September 30, 2023. All dollar amounts are in thousands.

	October 1 - December 31, 2023			2024			2025			2026			2027			Thereafter			Total		Fair Market Value
Total debt:
Maturities	$	2,245		$	113,597		$	295,140		$	74,649		$	278,602		$	616,014		$	1,380,247	$	1,316,664
Average interest rates (1)		4.3	%		4.7	%		5.0	%		5.3	%		5.3	%		5.0	%
Variable-rate debt:
Maturities	$	-		$	85,000		$	225,000		$	-		$	275,000		$	385,000		$	970,000	$	967,526
Average interest rates (1)		4.5	%		4.9	%		5.5	%		5.8	%		5.9	%		5.6	%
Fixed-rate debt:
Maturities	$	2,245		$	28,597		$	70,140		$	74,649		$	3,602		$	231,014		$	410,247	$	349,138
Average interest rates		4.1	%		4.1	%		4.0	%		4.0	%		4.1	%		4.1	%

(1)The average interest rate gives effect to interest rate swaps, as applicable.

Item 4. Controls and Procedures

Senior management, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2023. There have been no changes in the Company’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is or may be a party to various legal proceedings that arise in the ordinary course of business. The Company is not currently involved in any litigation nor, to management’s knowledge, is any litigation threatened against the Company where the outcome would, in management’s judgment based on information currently available to the Company, have a material adverse effect on the Company’s consolidated financial position or results of operations.

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

The following is a summary of all share repurchases during the third quarter of 2023.

Issuer Purchases of Equity Securities
	(a)		(b)		(c)		(d)
Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (1)
July 1 - July 31, 2023		-	-			-	$	335,495
August 1 - August 31, 2023		3,374	$	14.49		3,374	$	335,446
September 1 - September 30, 2023		-	-			-	$	335,446
Total		3,374				3,374

(1)Represents amount outstanding under the Company’s authorized $338.7 million Share Repurchase Program. This program, which was announced in 2015 and most recently extended in May 2023, may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier.

Item 5. Other Information.

During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

36

Item 6. Exhibits

Exhibit Number	Description of Documents
3.1	Amended and Restated Articles of Incorporation of the Company, as amended (Incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q (SEC File No. 001-37389) filed August 6, 2018)
3.2	Third Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.2 to the Company’s quarterly report on Form 10-Q (SEC File No. 001-37389) filed May 18, 2020)
31.1	Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH)
31.2	Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH)
31.3	Certification of the Company’s Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (FILED HEREWITH)
32.1	Certification of the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (FURNISHED HEREWITH)
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these financial statements, tagged as blocks of text and in detail (FILED HEREWITH)
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted as Inline XBRL and contained in Exhibit 101.

37

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.

Apple Hospitality REIT, Inc.
By:	/s/ Justin G. Knight	Date: November 7, 2023
	Justin G. Knight,
	Chief Executive Officer (Principal Executive Officer)
By:	/s/ Elizabeth S. Perkins	Date: November 7, 2023
	Elizabeth S. Perkins,
	Chief Financial Officer (Principal Financial Officer)
By:	/s/ Rachel S. Labrecque	Date: November 7, 2023
	Rachel S. Labrecque,
	Chief Accounting Officer (Principal Accounting Officer)

38

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Justin G. Knight, certify that:

1. I have reviewed this report on Form 10-Q of Apple Hospitality REIT, 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 officers 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 officers 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: November 7, 2023	/s/ Justin G. Knight
	Justin G. Knight Chief Executive Officer
	Apple Hospitality REIT, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Elizabeth S. Perkins, certify that:

1. I have reviewed this report on Form 10-Q of Apple Hospitality REIT, 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 officers 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 officers 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: November 7, 2023	/s/ Elizabeth S. Perkins
	Elizabeth S. Perkins Chief Financial Officer Apple Hospitality REIT, Inc.

EX-31.3

Exhibit 31.3

CERTIFICATION

I, Rachel S. Labrecque, certify that:

1. I have reviewed this report on Form 10-Q of Apple Hospitality REIT, 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 officers 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 officers 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: November 7, 2023	/s/ Rachel S. Labrecque
	Rachel S. Labrecque Chief Accounting Officer Apple Hospitality REIT, Inc.

EX-32.1

Exhibit 32.1

CERTIFICATION 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 Apple Hospitality REIT, Inc., (the “Company”) on Form 10-Q for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of September 30, 2023 and for the period then ended.

Apple Hospitality REIT, Inc.

  /s/ Justin G. Knight

Justin G. Knight

Chief Executive Officer

 /s/ Elizabeth S. Perkins

Elizabeth S. Perkins

Chief Financial Officer

 /s/ Rachel S. Labrecque

Rachel S. Labrecque

Chief Accounting Officer

Date: November 7, 2023

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Nov. 03, 2023
Cover [Abstract]
Entity Registrant Name	APPLE HOSPITALITY REIT, INC.
Trading Symbol	APLE
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		228,807,202
Amendment Flag	false
Entity Central Index Key	0001418121
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-37389
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	26-1379210
Entity Address, Address Line One	814 East Main Street
Entity Address, City or Town	Richmond
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23219
City Area Code	804
Local Phone Number	344-8121
Title of 12(b) Security	Common Shares, no par value
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Assets
Investment in real estate, net of accumulated depreciation and amortization of $1,629,340 and $1,492,097, respectively	$ 4,548,787	$ 4,610,962
Cash and cash equivalents	35,366	4,077
Restricted cash-furniture, fixtures and other escrows	33,697	39,435
Due from third party managers, net	60,801	43,331
Other assets, net	85,391	74,909
Total Assets	4,764,042	4,772,714
Liabilities
Debt, net	1,373,268	1,366,249
Finance lease liabilities	111,943	112,006
Accounts payable and other liabilities	104,920	116,064
Total Liabilities	1,590,131	1,594,319
Shareholders' Equity
Preferred stock, authorized 30,000,000 shares; none issued and outstanding	0	0
Common stock, no par value, authorized 800,000,000 shares; issued and outstanding 228,807,202 and 228,644,861 shares, respectively	4,580,193	4,577,022
Accumulated other comprehensive income	37,411	36,881
Distributions greater than net income	(1,443,693)	(1,435,508)
Total Shareholders' Equity	3,173,911	3,178,395
Total Liabilities and Shareholders' Equity	$ 4,764,042	$ 4,772,714

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Investment in real estate accumulated depreciation (in Dollars)	$ 1,629,340	$ 1,492,097
Preferred stock, shares authorized	30,000,000	30,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	800,000,000	800,000,000
Common stock, shares issued	228,807,202	228,644,861
Common stock, shares outstanding	228,807,202	228,644,861

XML

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Total revenue	$ 358,260	$ 341,150	$ 1,031,344	$ 939,296
Expenses:
Total hotel operating expense	203,710	193,067	589,388	529,584
Property taxes, insurance and other	21,678	19,052	61,347	56,510
General and administrative	11,079	10,271	34,640	30,216
Depreciation and amortization	45,498	45,135	137,398	135,781
Total expense	281,965	267,525	822,773	752,091
Gain on sale of real estate		1,785		1,785
Operating income	76,295	75,410	208,571	188,990
Interest and other expense, net	(17,470)	(14,933)	(50,973)	(44,785)
Income before income taxes	58,825	60,477	157,598	144,205
Income tax expense	(313)	(1,331)	(874)	(1,712)
Net income	58,512	59,146	156,724	142,493
Other comprehensive income:
Interest rate derivatives	1,412	16,024	530	53,862
Comprehensive income	$ 59,924	$ 75,170	$ 157,254	$ 196,355
Basic net income per common share	$ 0.26	$ 0.26	$ 0.68	$ 0.62
Diluted net income per common share	$ 0.26	$ 0.26	$ 0.68	$ 0.62
Weighted average common shares outstanding - basic (in Shares)	228,877	228,991	229,103	228,992
Weighted average common shares outstanding - diluted (in Shares)	228,877	228,991	229,103	228,992
Room [Member]
Revenues:
Total revenue	$ 327,121	$ 315,940	$ 943,684	$ 866,286
Food and Beverage [Member]
Revenues:
Total revenue	13,576	11,870	42,032	32,353
Other [Member]
Revenues:
Total revenue	17,563	13,340	45,628	40,657
Direct Operating [Member]
Expenses:
Total hotel operating expense	85,829	81,320	249,403	221,715
Hotel Administrative [Member]
Expenses:
Total hotel operating expense	29,172	27,516	85,933	78,711
Sales and Marketing [Member]
Expenses:
Total hotel operating expense	30,770	28,533	89,406	78,494
Utilities [Member]
Expenses:
Total hotel operating expense	13,797	13,383	36,271	34,226
Repair and Maintenance [Member]
Expenses:
Total hotel operating expense	16,336	15,632	48,452	43,468
Royalty [Member]
Expenses:
Total hotel operating expense	15,895	14,949	45,407	41,015
Management Service [Member]
Expenses:
Total hotel operating expense	$ 11,911	$ 11,734	$ 34,516	$ 31,955

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Distributions Greater Than Net Income [Member]
Balance at Dec. 31, 2021	$ 3,147,321	$ 4,569,352	$ (15,508)	$ (1,406,523)
Balance (in Shares) at Dec. 31, 2021		228,256
Share based compensation, net	11,585	$ 11,585
Share based compensation, net (in Shares)		685
Equity issuance costs	(218)	$ (218)
Common shares repurchased	(1,521)	$ (1,521)
Common shares repurchased (in Shares)		(107)
Interest rate derivatives	53,862		53,862
Net income	142,493			142,493
Distributions declared to shareholders	(100,526)			(100,526)
Balance at Sep. 30, 2022	3,252,996	$ 4,579,198	38,354	(1,364,556)
Balance (in Shares) at Sep. 30, 2022		228,834
Balance at Jun. 30, 2022	3,221,626	$ 4,579,590	22,330	(1,380,294)
Balance (in Shares) at Jun. 30, 2022		228,886
Share based compensation, net	996	$ 996
Share based compensation, net (in Shares)		45
Equity issuance costs	(12)	$ (12)
Common shares repurchased	(1,376)	$ (1,376)
Common shares repurchased (in Shares)		(97)
Interest rate derivatives	16,024		16,024
Net income	59,146			59,146
Distributions declared to shareholders	(43,408)			(43,408)
Balance at Sep. 30, 2022	3,252,996	$ 4,579,198	38,354	(1,364,556)
Balance (in Shares) at Sep. 30, 2022		228,834
Balance at Dec. 31, 2022	3,178,395	$ 4,577,022	36,881	(1,435,508)
Balance (in Shares) at Dec. 31, 2022		228,645
Share based compensation, net	10,145	$ 10,145
Share based compensation, net (in Shares)		642
Equity issuance costs	(94)	$ (94)
Common shares repurchased	$ (6,880)	$ (6,880)
Common shares repurchased (in Shares)	(500,000)	(480)
Interest rate derivatives	$ 530		530
Net income	156,724			156,724
Distributions declared to shareholders	(164,909)			(164,909)
Balance at Sep. 30, 2023	3,173,911	$ 4,580,193	37,411	(1,443,693)
Balance (in Shares) at Sep. 30, 2023		228,807
Balance at Jun. 30, 2023	3,168,055	$ 4,579,405	35,999	(1,447,349)
Balance (in Shares) at Jun. 30, 2023		228,799
Share based compensation, net	870	$ 870
Share based compensation, net (in Shares)		12
Equity issuance costs	(33)	$ (33)
Common shares repurchased	(49)	$ (49)
Common shares repurchased (in Shares)		(4)
Interest rate derivatives	1,412		1,412
Net income	58,512			58,512
Distributions declared to shareholders	(54,856)			(54,856)
Balance at Sep. 30, 2023	$ 3,173,911	$ 4,580,193	$ 37,411	$ (1,443,693)
Balance (in Shares) at Sep. 30, 2023		228,807

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Consolidated Statements of Shareholders' Equity (Parentheticals) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Distributions declared to shareholders	$ 0.24	$ 0.19	$ 0.72	$ 0.44

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Cash flows from operating activities:
Net income		$ 58,512	$ 59,146	$ 156,724	$ 142,493
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		45,498	45,135	137,398	135,781
Gain on sale of real estate			(1,785)		(1,785)
Other non-cash expenses, net				6,611	6,582
Changes in operating assets and liabilities:
Increase in due from third party managers, net				(17,514)	(25,058)
Increase in other assets, net				(6,862)	(4,069)
Increase in accounts payable and other liabilities				25,807	19,257
Net cash provided by operating activities				302,164	273,201
Cash flows from investing activities:
Acquisition of hotel properties, net				(30,980)
Disbursements for potential acquisitions, net				(5,779)	(1,602)
Capital improvements				(49,336)	(34,921)
Net proceeds from sale of real estate					8,293
Net cash used in investing activities				(86,095)	(28,230)
Cash flows from financing activities:
Repurchases of common shares				(6,880)	(1,521)
Repurchases of common shares to satisfy employee withholding requirements				(5,742)	(4,415)
Distributions paid to common shareholders		(54,800)	(38,800)	(183,119)	(86,792)
Equity issuance costs				(72)	(218)
Net payments on revolving credit facility					(76,000)
Proceeds from term loans and senior notes	$ 50,000			50,000	125,000
Payments of mortgage debt and other loans				(43,968)	(166,243)
Principal payments on finance leases				(231)	(108)
Financing costs				(506)	(10,229)
Net cash used in financing activities				(190,518)	(220,526)
Net change in cash, cash equivalents and restricted cash				25,551	24,445
Cash, cash equivalents and restricted cash, beginning of period	64,394			43,512	39,949	$ 39,949
Cash, cash equivalents and restricted cash, end of period		69,063	64,394	69,063	64,394	43,512
Supplemental cash flow information:
Interest paid				49,583	42,651
Supplemental disclosure of noncash investing and financing activities:
Accrued distribution to common shareholders		18,280	15,981	18,280	15,981	36,600
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	25,573			4,077	3,282	3,282
Restricted cash-furniture, fixtures and other escrows, beginning of period	38,821			39,435	36,667	36,667
Cash, cash equivalents and restricted cash, beginning of period	$ 64,394			43,512	39,949	39,949
Cash and cash equivalents, end of period		35,366	25,573	35,366	25,573	4,077
Restricted cash-furniture, fixtures and other escrows, end of period		33,697	38,821	33,697	38,821	39,435
Cash, cash equivalents and restricted cash, end of period		$ 69,063	$ 64,394	$ 69,063	$ 64,394	$ 43,512

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 58,512	$ 59,146	$ 156,724	$ 142,493

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Insider Trading Arrangements	9 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Organization

Apple Hospitality REIT, Inc., formed in November 2007 as a Virginia corporation, together with its wholly-owned subsidiaries (the “Company”), is a self-advised real estate investment trust (“REIT”) that invests in income-producing real estate, primarily in the lodging sector, in the United States (“U.S.”). The Company’s fiscal year end is December 31. The Company has no foreign operations or assets, and its operating structure includes only one reportable segment. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Although the Company has interests in potential variable interest entities through its purchase commitments, it is not the primary beneficiary as the Company does not have any elements of power in the decision-making process of these entities; therefore, the Company does not consolidate the entities. As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in 37 states as well as one property leased to third parties. The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “APLE.”

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2023.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Net Income Per Common Share

Basic net income per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted net income per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Basic and diluted net income per common share were the same for each of the periods presented.

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Investment in Real Estate

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Investment in Real Estate

2. Investment in Real Estate

The Company’s investment in real estate consisted of the following (in thousands):

	September 30,			December 31,
	2023			2022
Land	$	805,837		$	802,625
Building and improvements		4,706,750			4,656,343
Furniture, fixtures and equipment		543,310			522,082
Finance ground lease assets		102,084			102,084
Franchise fees		20,146			19,925
		6,178,127			6,103,059
Less accumulated depreciation and amortization		(1,629,340	)		(1,492,097	)
Investment in real estate, net	$	4,548,787		$	4,610,962

As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in 37 states. In May 2023, the Company entered into an operating lease for an initial 15-year term with a third-party hotel operator at its independent boutique hotel in New York, New York for all hotel operations of the hotel's 210 hotel rooms (“non-hotel property”). Lease revenue from this property is recorded in other revenue in the Company's consolidated statements of operations and comprehensive income. As

a result of the lease agreement, this property is excluded from the Company’s hotel and room counts effective May 2023 through the end of the lease term.

The Company leases all of its 220 hotels to its wholly-owned taxable REIT subsidiary (or a subsidiary thereof) under a master hotel lease agreement.

Hotel Acquisitions

The Company completed the acquisition of one hotel during the nine months ended September 30, 2023, for a gross purchase price of $31.0 million. The hotel, which was purchased on June 30, 2023, is a 154-room Courtyard in Cleveland, Ohio, managed by Concord Hospitality Enterprises Company, LLC (“Concord”).

During the year ended December 31, 2022, the Company acquired two hotels, neither of which were acquired during the nine months ended September 30, 2022. The following table sets forth the location, brand, manager, date acquired, number of rooms and gross purchase price, excluding transaction costs, for each hotel. All dollar amounts are in thousands.
 

City	State	Brand	Manager	Date Acquired	Rooms		Gross Purchase Price
Louisville	KY	AC Hotels	Concord	10/25/2022		156	$	51,000
Pittsburgh	PA	AC Hotels	Concord	10/25/2022		134		34,000
						290	$	85,000

In 2023, the Company utilized its available cash and borrowings under its Revolving Credit Facility (as defined below) to purchase the Cleveland, Ohio hotel. In 2022, the Company utilized its available cash on hand and a $50 million draw on its $575 million term loan facility (as defined below) to purchase both of the above-referenced hotels. The acquisitions of these hotel properties were accounted for as acquisitions of asset groups, whereby costs incurred to effect the acquisitions (which were not significant) were capitalized as part of the cost of the assets acquired. For the one hotel acquired during the nine months ended September 30, 2023, the amount of revenue and operating income included in the Company’s consolidated statement of operations from the date of acquisition through September 30, 2023 was approximately $2.1 million and $0.4 million, respectively.

Purchase Contract Commitments

As of September 30, 2023, the Company had separate outstanding contracts for the potential purchase of six hotels as well as one free-standing parking garage for a total combined purchase price of approximately $359.0 million. Five of the seven properties under contract are existing. The Company completed the purchase of four of the existing properties, including two hotels and one free-standing parking garage in Salt Lake City, Utah and one hotel in Renton, Washington on October 11, 2023 and October 18, 2023, respectively (see Note 9 titled “Subsequent Events” for more information). The Company plans to complete the purchase of the one remaining existing property in the fourth quarter of 2023. The other two purchase contracts are for hotels under development, with the Madison, Wisconsin hotel currently planned to be completed and opened for business in mid-2024 and the Nashville, Tennessee hotel currently planned to be completed and opened for business in 2025, at which respective times the Company expects to complete the purchases of these hotels. Although the Company is working towards completing the acquisitions of the three remaining properties, in each case there are a number of conditions to closing that have not yet been satisfied, and there can be no assurance that closings on these properties will occur under the outstanding purchase contracts. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts and acquire these properties.

The following table summarizes the location, expected franchise brand, date of purchase contract, expected number of rooms upon completion, refundable (if the seller does not meet its obligations under the contract) deposits paid and gross purchase price for each of the contracts outstanding as of September 30, 2023. All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Madison, WI (1)	Embassy Suites	7/27/2021		260	$	893	$	78,598
Nashville, TN (1)	Motto	5/16/2023		256		1,058		96,683
Salt Lake City, UT (2)	Courtyard	8/10/2023		175		920		48,110
Salt Lake City, UT (2)	Hyatt House	8/10/2023		159		655		34,250
Salt Lake City, UT (2)(3)	N/A	8/10/2023	N/A			175		9,140
Renton, WA (2)	Residence Inn	8/10/2023		146		850		55,500
South Jordan, UT	Embassy Suites	9/5/2023		192		300		36,750
				1,188	$	4,851	$	359,031

(1)These hotels are currently under development. The table shows the expected number of rooms upon hotel completion and the expected franchise brand. Assuming all conditions to closing are met, the purchase of the hotel in Madison, Wisconsin is expected to close in mid-2024 and the purchase of the Nashville, Tennessee hotel is expected to close in 2025. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts. As these properties are under development, at this time, the sellers have not met all of the conditions to closing.

(2)The Company completed the purchase of these properties in October 2023. See Note 9 for additional information concerning these four acquisitions.

(3)This property is a free-standing parking garage which serves both the Courtyard and Hyatt House hotels in Salt Lake City, Utah and the surrounding area, however, it is not affiliated with any brand.

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Dispositions

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

3. Dispositions

There were no dispositions during the nine months ended September 30, 2023. During the year ended December 31, 2022, the Company sold one hotel, a 55-room independent boutique hotel in Richmond, Virginia, to an unrelated party for a gross sales price of approximately $8.5 million, resulting in a gain on sale of approximately $1.8 million, net of transaction costs, which is included in the Company’s consolidated statement of operations for the year ended December 31, 2022. The hotel had a total carrying value of approximately $6.5 million at the time of the sale.

Excluding gains on sale of real estate, the Company’s consolidated statements of operations include operating income of approximately $0.1 million and $0.3 million for the three and nine months ended September 30, 2022, respectively, relating to the results of operations of the one hotel sold in 2022 noted above for the period of ownership. The sale of this property does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results; therefore, the operating results for the period of ownership of this property are included in income from continuing operations for the three and nine months ended September 30, 2022. The net proceeds from the sale of the one hotel in 2022 were used for general corporate purposes.

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Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

4. Debt

Summary

As of September 30, 2023 and December 31, 2022, the Company’s debt consisted of the following (in thousands):

	September 30, 2023		December 31, 2022
Revolving credit facility	$	-	$	-
Term loans and senior notes, net		1,088,407		1,037,384
Mortgage debt, net		284,861		328,865
Debt, net	$	1,373,268	$	1,366,249

The aggregate amounts of principal payable under the Company’s total debt obligations as of September 30, 2023 (including the Revolving Credit Facility (if any) (as defined below), term loans, senior notes and mortgage debt), for the remainder of this fiscal year, each of the next four fiscal years and thereafter are as follows (in thousands):

2023 (October - December)	$	2,245
2024		113,597
2025		295,140
2026		74,649
2027		278,602
Thereafter		616,014
		1,380,247
Unamortized fair value adjustment of assumed debt		609
Unamortized debt issuance costs		(7,588	)
Total	$	1,373,268

The Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual Secured Overnight Financing Rate (“SOFR”) for a one-month term (“one-month SOFR”) plus a 0.10% SOFR spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt instruments. See Note 5 for more information on the interest rate swap agreements. The Company’s total fixed-rate and variable-rate debt, after giving effect to its interest rate swaps in effect as of September 30, 2023 and December 31, 2022, is set forth below. All dollar amounts are in thousands.

	September 30, 2023			Percentage			December 31, 2022			Percentage
Fixed-rate debt (1)	$	1,105,247			80	%	$	1,149,215			84	%
Variable-rate debt		275,000			20	%		225,000			16	%
Total	$	1,380,247					$	1,374,215
Weighted-average interest rate of debt		4.34	%					3.93	%

(1)Fixed-rate debt includes the portion of variable-rate debt where the interest payments have been effectively fixed by interest rate swaps as of the respective balance sheet date. See Note 5 for more information on the interest rate swap agreements.

Credit Facilities

$1.2 Billion Credit Facility

On July 25, 2022, the Company entered into a credit facility (the “$1.2 billion credit facility”) that is comprised of (i) a $650 million revolving credit facility with an initial maturity date of July 25, 2026 (the “Revolving Credit Facility”), (ii) a $275 million term loan with a maturity date of July 25, 2027, funded at closing, and (iii) a $300 million term loan with a maturity date of January 31, 2028 (including a $150 million delayed draw option until 180 days from closing), of which $200 million was funded at closing, $50 million was funded on October 24, 2022 and the remaining $50 million was funded on January 17, 2023 (clauses (ii) and (iii) are referred to together as the “$575 million term loan facility”).

Subject to certain conditions, including covenant compliance and additional fees, the Revolving Credit Facility maturity date may be extended up to one year. The credit agreement for the $1.2 billion credit facility contains mandatory prepayment requirements, customary affirmative and negative covenants (as described below), restrictions on certain investments and events of default. The Company may make voluntary prepayments, in whole or in part, at any time. Interest payments on the $1.2 billion credit facility are due monthly, and the interest rate, subject to certain exceptions, is equal to the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.35% to 2.25%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement. As of September 30, 2023, the Company had availability of $650 million under the Revolving Credit Facility. The Company is also required to pay quarterly an unused facility fee at an annual rate of 0.20% or 0.25% on the unused portion of the Revolving Credit Facility, based on the amount of borrowings outstanding during the quarter.

$225 Million Term Loan Facility

The Company also has an unsecured $225 million term loan facility that is comprised of (i) a $50 million term loan with an initial maturity date of August 2, 2023, which was funded on August 2, 2018, and (ii) a $175 million term loan with a maturity date of August 2, 2025, of which $100 million was funded on August 2, 2018, and the remaining $75 million was funded on January 29, 2019 (clauses (i) and (ii) are referred to together as the “$225 million term loan facility”). On July 19, 2023, the Company entered into an amendment of its $225 million term loan facility, which extended the maturity date of the existing $50 million term loan by two years to August 2, 2025. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions. Interest payments on the $225 million term loan facility are due monthly and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.35% to 2.50%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.

2017 $85 Million Term Loan Facility

On July 25, 2017, the Company entered into an unsecured $85 million term loan facility with a maturity date of July 25, 2024, consisting of one term loan (the “2017 $85 million term loan facility”) that was funded at closing. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions. Interest payments on the 2017 $85 million term loan facility are due monthly, and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.30% to 2.10%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.

2019 $85 Million Term Loan Facility

On December 31, 2019, the Company entered into an unsecured $85 million term loan facility with a maturity date of December 31, 2029, consisting of one term loan funded at closing (the “2019 $85 million term loan facility”). Net proceeds from the 2019 $85 million term loan facility were used to pay down borrowings under the Company’s then-existing $425 million revolving credit facility. The Company may make voluntary prepayments, in whole or in part, subject to certain conditions. Interest payments on the 2019 $85 million term loan facility are due monthly, and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month SOFR plus a 0.10% SOFR spread adjustment plus a margin ranging from 1.70% to 2.55%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.

$50 Million Senior Notes Facility

On March 16, 2020, the Company entered into an unsecured $50 million senior notes facility with a maturity date of March 31, 2030, consisting of senior notes totaling $50 million funded at closing (the “$50 million senior notes facility”). Net proceeds from the $50 million senior notes facility were available to provide funding for general corporate purposes. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions, including make-whole provisions. Interest payments on the $50 million senior notes facility are due quarterly, and the interest rate, subject to certain exceptions, ranges from an annual rate of 3.60% to 4.35% depending on the Company’s leverage ratio, as calculated under the terms of the note agreement.

$75 Million Senior Notes Facility

On June 2, 2022, the Company entered into an unsecured $75 million senior notes facility with a maturity date of June 2, 2029, consisting of senior notes totaling $75 million funded at closing (the “$75 million senior notes facility”, and collectively with the $1.2 billion credit facility, the $225 million term loan facility, the 2017 $85 million term loan facility, the 2019 $85 million term loan facility and the $50 million senior notes facility, the “unsecured credit facilities”). Net proceeds from the $75 million senior notes facility were available to provide funding for general corporate purposes, including the repayment of borrowings under the Company’s then-existing $425 million revolving credit facility and repayment of mortgage debt. The Company may make voluntary prepayments, in whole or in part, at any time, subject to certain conditions, including make-whole provisions. Interest payments on the $75 million senior notes facility are due quarterly, and the interest rate, subject to certain exceptions, ranges from an annual rate of 4.88% to 5.63% depending on the Company’s leverage ratio, as calculated under the terms of the note agreement.

As of September 30, 2023 and December 31, 2022, the details of the Company’s unsecured credit facilities were as set forth in the table below. All dollar amounts are in thousands.

			Outstanding Balance
	Interest Rate	Maturity Date	September 30, 2023			December 31, 2022
Revolving credit facility (1)	SOFR + 0.10% + 1.40% - 2.25%	7/25/2026	$	-		$	-
Term loans and senior notes
$275 million term loan	SOFR + 0.10% + 1.35% - 2.20%	7/25/2027		275,000			275,000
$300 million term loan	SOFR + 0.10% + 1.35% - 2.20%	1/31/2028		300,000			250,000
$50 million term loan	SOFR + 0.10% + 1.35% - 2.20%	8/2/2025 (3)		50,000			50,000
$175 million term loan	SOFR + 0.10% + 1.65% - 2.50%	8/2/2025		175,000			175,000
2017 $85 million term loan	SOFR + 0.10% + 1.30% - 2.10%	7/25/2024		85,000			85,000
2019 $85 million term loan	SOFR + 0.10% + 1.70% - 2.55%	12/31/2029		85,000			85,000
$50 million senior notes	3.60% - 4.35%	3/31/2030		50,000			50,000
$75 million senior notes	4.88% - 5.63%	6/2/2029		75,000			75,000
Term loans and senior notes at stated   value				1,095,000			1,045,000
Unamortized debt issuance costs				(6,593	)		(7,616	)
Term loans and senior notes, net				1,088,407			1,037,384
Credit facilities, net (1)			$	1,088,407		$	1,037,384
Weighted-average interest rate (2)				4.45	%		3.92	%

(1)Excludes unamortized debt issuance costs related to the Revolving Credit Facility totaling approximately $3.8 million and $4.8 million as of September 30, 2023 and December 31, 2022, respectively, which are included in other assets, net in the Company’s consolidated balance sheets.

(2)Interest rate represents the weighted-average effective annual interest rate at the balance sheet date which includes the effect of interest rate swaps in effect on $695.0 million of the outstanding variable-rate debt as of September 30, 2023 and December 31, 2022. See Note 5 for more information on the interest rate swap agreements. The one-month SOFR on September 30, 2023 and December 31, 2022 was 5.32% and 4.36%, respectively.

(3)On July 19, 2023, the Company entered into an amendment of its $225 million term loan facility, which extended the maturity date of the existing $50 million term loan by two years to August 2, 2025.

Credit Facilities Covenants

The credit agreements governing the unsecured credit facilities (collectively, the “credit agreements”) contain mandatory prepayment requirements, customary affirmative and negative covenants, restrictions on certain investments and events of default, including the following financial and restrictive covenants (capitalized terms not defined below are defined in the credit agreements):

•A ratio of Consolidated Total Indebtedness to Consolidated EBITDA (“Maximum Consolidated Leverage Ratio”) of not more than 7.25 to 1.00;

•A ratio of Consolidated Secured Indebtedness to Consolidated Total Assets (“Maximum Secured Leverage Ratio”) of not more than 45%;

•A minimum Consolidated Tangible Net Worth of approximately $3.4 billion plus an amount equal to 75% of the Net Cash Proceeds from issuances and sales of Equity Interests occurring after the Closing Date, July 25, 2022, subject to adjustment;

•A ratio of Adjusted Consolidated EBITDA to Consolidated Fixed Charges (“Minimum Fixed Charge Coverage Ratio”) of not less than 1.50 to 1.00 for the trailing four full quarters;

•A ratio of Unencumbered Adjusted NOI to Consolidated Implied Interest Expense for Consolidated Unsecured Indebtedness (“Minimum Unsecured Interest Coverage Ratio”) of not less than 2.00 to 1.00 for the trailing four full quarters;

•A ratio of Consolidated Unsecured Indebtedness to Unencumbered Asset Value (“Maximum Unsecured Leverage Ratio”) of not more than 60% (subject to a higher level in certain circumstances); and

•A ratio of Consolidated Secured Recourse Indebtedness to Consolidated Total Assets (“Maximum Secured Recourse Indebtedness”) of not more than 10%.

The Company was in compliance with the applicable covenants as of September 30, 2023.

Mortgage Debt

As of September 30, 2023, the Company had approximately $285.2 million in outstanding mortgage debt secured by 15 properties with maturity dates ranging from August 2024 to May 2038, stated interest rates ranging from 3.40% to 4.46% and effective interest rates ranging from 3.40% to 4.37%. The loans generally provide for monthly payments of principal and interest on an amortized basis and defeasance or prepayment penalties if prepaid. The following table sets forth the hotel properties securing each loan, the interest rate, loan assumption or origination date, maturity date, the principal amount assumed or originated, and the outstanding balance prior to any fair value adjustments or debt issuance costs as of September 30, 2023 and December 31, 2022 for each of the Company’s mortgage debt obligations. All dollar amounts are in thousands.

Location	Brand	Interest Rate (1)			Loan Assumption or Origination Date	Maturity Date	Principal Assumed or Originated		Outstanding balance as of September 30, 2023			Outstanding balance as of December 31, 2022
Miami, FL	Homewood Suites		4.02	%	3/1/2014	(2)	$	16,677	$	-		$	12,440
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	(3)		8,306		-			6,193
Prattville, AL	Courtyard		4.12	%	3/1/2014	(3)		6,596		-			4,918
San Diego, CA	Residence Inn		3.97	%	3/1/2014	(4)		18,600		-			13,827
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024		27,000		20,522			21,161
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025		10,000		7,793			8,024
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025		34,118		27,608			28,400
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025		13,655		11,786			12,019
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025		22,681		19,577			19,963
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026		24,000		20,815			21,194
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026		25,564		20,729			21,326
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026		25,473		20,655			21,250
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026		18,963		15,377			15,819
Burbank, CA	SpringHill Suites		3.94	%	3/9/2018	4/1/2028		28,470		24,445			25,057
Santa Ana, CA	Courtyard		3.94	%	3/9/2018	4/1/2028		15,530		13,334			13,668
Richmond, VA	Courtyard		3.40	%	2/12/2020	3/11/2030		14,950		13,911			14,144
Richmond, VA	Residence Inn		3.40	%	2/12/2020	3/11/2030		14,950		13,911			14,144
Portland, ME	Residence Inn		3.43	%	3/2/2020	3/1/2032		33,500		30,500			30,500
San Jose, CA	Homewood Suites		4.22	%	12/22/2017	5/1/2038		30,000		24,284			25,168
							$	389,033		285,247			329,215
Unamortized fair value adjustment of    assumed debt										609			819
Unamortized debt issuance costs										(995	)		(1,169	)
Total									$	284,861		$	328,865

(1)Interest rates are the rates per the loan agreement. For loans assumed, the Company adjusted the interest rates per the loan agreement to market rates and is amortizing the adjustments to interest expense over the life of the loan.

(2)Loan was repaid in full on January 3, 2023.

(3)Loan was repaid in full on February 6, 2023.

(4)Loan was repaid in full on March 6, 2023.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

Except as described below, the carrying value of the Company’s financial instruments approximates fair value due to the short-term nature of these financial instruments.

Debt

The Company estimates the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity of a debt obligation with similar credit terms and credit characteristics, which are Level 3 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. As of September 30, 2023, the carrying value and the estimated fair value of the Company’s debt were approximately $1.4 billion and $1.3 billion, respectively. As of December 31, 2022, the carrying value and estimated fair value of the Company’s debt were approximately $1.4 billion and $1.3 billion, respectively. Both the carrying value and the estimated fair value of the Company’s debt (as discussed above) are net of unamortized debt issuance costs related to term loans, senior notes and mortgage debt for each specific year.

Derivative Instruments

Currently, the Company uses interest rate swaps to manage its interest rate risk on variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the one-month SOFR plus a 0.10% SOFR spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt

instruments. These swap instruments are recorded at fair value and, if in an asset position, are included in other assets, net, and, if in a liability position, are included in accounts payable and other liabilities in the Company’s consolidated balance sheets. The fair values of the Company’s interest rate swap agreements are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The following table sets forth information for each of the Company’s interest rate swap agreements outstanding as of September 30, 2023 and December 31, 2022. All dollar amounts are in thousands.

						Fair Value Asset (Liability)
Notional Amount at September 30, 2023		Origination Date	Effective Date	Maturity Date	Swap Fixed Interest Rate	September 30, 2023		December 31, 2022
Active interest rate swaps designated as cash flow hedges at September 30, 2023:
$	50,000	12/7/2018	5/18/2020	1/31/2024	2.71%	$	466	$	1,163
	75,000	5/31/2017	7/31/2017	6/30/2024	1.95%		1,951		3,026
	10,000	8/10/2017	8/10/2017	6/30/2024	2.02%		254		386
	50,000	7/2/2019	7/5/2019	7/18/2024	1.64%		1,507		2,298
	50,000	8/21/2019	8/23/2019	8/18/2024	1.31%		1,820		2,675
	50,000	8/21/2019	8/23/2019	8/30/2024	1.32%		1,873		2,703
	75,000	8/21/2019	5/18/2020	5/18/2025	1.26%		4,633		5,225
	50,000	6/1/2018	1/31/2019	6/30/2025	2.88%		1,882		1,655
	25,000	12/6/2018	1/31/2020	6/30/2025	2.74%		999		909
	75,000	8/21/2019	5/18/2021	5/18/2026	1.29%		6,499		6,506
	50,000	3/17/2023	3/20/2023	3/18/2028	3.50%		1,941		-
	50,000	3/17/2023	3/20/2023	3/20/2028	3.49%		1,919		-
	85,000	12/31/2019	12/31/2019	12/31/2029	1.87%		11,667		9,511
	695,000						37,411		36,057
Matured interest rate swap at September 30, 2023:
$	100,000	4/7/2016	9/30/2016	3/31/2023	1.30%		-		824
						$	37,411	$	36,881

The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges. As of September 30, 2023, all of the 13 active interest rate swap agreements listed above were designated as cash flow hedges. The change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.

Amounts reported in accumulated other comprehensive income will be reclassified to interest and other expense, net as interest payments are made or received on the Company’s variable-rate derivatives. The Company estimates that approximately $20.9 million of net unrealized gains included in accumulated other comprehensive income at September 30, 2023 will be reclassified as a decrease to interest and other expense, net within the next 12 months.

The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022 (in thousands):
 

	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Three Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022
Interest rate derivatives in cash flow    hedging relationships	$	7,264	$	17,130	$	5,852	$	1,106
	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest rate derivatives in cash flow    hedging relationships	$	16,682	$	50,649	$	16,152	$	(3,213	)

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Related Parties

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Parties

6. Related Parties

The Company has engaged in, and is expected to continue to engage in, transactions with related parties. These transactions cannot be construed to be at arm’s length, and the results of the Company’s operations may have been different if these transactions were conducted with non-related parties. There have been no changes to the contracts and relationships discussed in the 2022 Form 10-K. Below is a summary of the significant related party relationships in effect during the nine months ended September 30, 2023 and 2022.

Glade M. Knight, Executive Chairman of the Company, owns Apple Realty Group, Inc. (“ARG”), which receives support services from the Company and reimburses the Company for the cost of these services as discussed below. Mr. Knight is also currently a partner and Chief Executive Officer of Energy 11 GP, LLC and Energy Resources 12 GP, LLC, which are the respective general partners of Energy 11, L.P. and Energy Resources 12, L.P., each of which receives support services from ARG.

The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these services. Under this cost sharing structure, amounts reimbursed to the Company include both compensation for personnel and office related costs (including office rent, utilities, office supplies, etc.) used by ARG. The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG. Total reimbursed costs allocated by the Company to ARG for the nine month periods ended September 30, 2023 and 2022 totaled approximately $0.8 million and $0.6 million, respectively, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations.

As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG. To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under this cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies. As of September 30, 2023 and December 31, 2022, total amounts due from ARG for reimbursements under the cost sharing structure totaled approximately $0.3 million and $0.4 million, respectively, and are included in other assets, net in the Company’s consolidated balance sheets.

The Company, through its wholly-owned subsidiary, Apple Air Holding, LLC, owns a Learjet used primarily for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes. The aircraft is also leased to affiliates of the Company based on third-party rates. Lease activity was not significant during the reporting periods.

From time to time, the Company utilizes aircraft, owned by an entity which is owned by the Company’s Executive Chairman, for acquisition, asset management, renovation, investor, corporate and public relations and other business purposes, and reimburses this entity at third-party rates. Total costs incurred for the use of the aircraft during the nine months ended September 30, 2023 and 2022 were less than $0.1 million and are included in general and administrative expenses in the Company’s consolidated statements of operations.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Stockholders' Equity Note [Abstract]

Shareholders' Equity

7. Shareholders’ Equity

Distributions

For the three and nine months ended September 30, 2023, the Company paid distributions of $0.24 and $0.80, per common share, respectively, for a total of $54.8 million and $183.1 million, respectively. During the three and nine months ended September 30, 2022, the Company paid distributions of $0.17 and $0.38 per common share, respectively, for a total of $38.8 million and $86.8 million, respectively. Additionally, in September 2023, the Company declared a monthly cash distribution of $0.08 per common share, totaling $18.3 million, which was recorded as a payable as of September 30, 2023 and paid on October 16, 2023. In addition to the regular monthly cash distribution of $0.08 per common share for December 2022, the Board of Directors approved a special one-time distribution of $0.08 per common share for a combined distribution of $0.16 per common share, totaling $36.6 million, which was recorded as a payable as of December 31, 2022 and paid in January 2023. These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

Issuance of Shares

On August 12, 2020, the Company entered into an equity distribution agreement pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares under an at-the-market offering program (the “ATM Program”) under the Company’s prior shelf registration statement and the current shelf registration statement. Since inception of the ATM Program in August 2020 through September 30, 2023, the Company sold approximately 4.7 million common shares under its ATM Program at a weighted-average market sales price of approximately $16.26 per common share and received aggregate gross proceeds of approximately $76.0 million and proceeds net of offering costs, which included $0.9 million of commissions, of approximately $75.1 million. The Company used the net proceeds from the sale of these shares (all during 2021) primarily to pay down borrowings under its then-existing $425 million revolving credit facility and used the corresponding increased availability under the $425 million revolving credit facility for general corporate purposes, including acquisitions of hotel properties. As of September 30, 2023, approximately $224.0 million remained available for issuance under the ATM Program. No shares were sold under the Company’s ATM Program during the nine months ended September 30, 2023. The Company plans to use future net proceeds from the sale of shares under the ATM Program for general corporate purposes which may include, among other things, acquisitions of additional properties, the repayment of outstanding indebtedness, capital expenditures, improvement of properties in its portfolio and working capital. The Company may also use the net proceeds to acquire another REIT or other company that invests in income producing properties.

Share Repurchases

In May 2023, the Company’s Board of Directors approved a one-year extension of its existing share repurchase program, authorizing share repurchases up to an aggregate of $338.7 million (the “Share Repurchase Program”). The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2024 if not terminated or extended earlier. During the nine months ended September 30, 2023, the Company purchased, under its Share Repurchase Program, approximately 0.5 million of its common shares at a weighted-average market purchase price of approximately $14.34 per common share for an aggregate purchase price, including commissions, of approximately $6.9 million. The shares were repurchased in open market transactions under the Share Repurchase Program, including pursuant to written trading plans intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with cash on hand or availability under its unsecured credit facilities, subject to applicable restrictions under the Company’s unsecured credit facilities (if any). The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will also depend upon prevailing market conditions, regulatory requirements and other factors. As of September 30, 2023, approximately $335.4 million remained available for purchase under the Share Repurchase Program.

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Compensation Plans

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Compensation Plans

8. Compensation Plans

The Company annually establishes an incentive plan for its executive management team. Under the incentive plan for 2023 (the “2023 Incentive Plan”), participants are eligible to receive incentive compensation based on the achievement of certain 2023 performance measures, with one-half (50%) of incentive compensation based on operational performance goals and metrics and one-half (50%) of incentive compensation based on shareholder return metrics. With respect to the shareholder return metrics, 75% of the target will be based on shareholder return relative to a peer group and 25% will be based on total shareholder return metrics over one-year, two-year, and three-year periods. With respect to the operational performance goals and metrics, 25% of the target will be based on modified funds from operations per share (as defined within this Quarterly Report on Form 10-Q), 25% of the target will be based on total revenues of the Company and 50% of the target will be based on operational performance goals, including management of capital structure; evaluation and pursuit of accretive transactions; management of labor costs and improvement of employee productivity; enhancement of environmental, social and governance reporting; and enhancement of internal business intelligence tools.

At September 30, 2023, the range of potential aggregate payouts under the 2023 Incentive Plan was $0 - $27.1 million. Based on performance through September 30, 2023, the Company has accrued approximately $14.9 million as a liability for potential executive incentive compensation payments under the 2023 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of September 30, 2023. Compensation expense recognized by the Company under the 2023 Incentive Plan is included in general and administrative expenses in the Company’s consolidated statement of operations and totaled approximately $4.9 million and $14.9 million for the three and nine months ended September 30, 2023, respectively. Approximately 25% of target awards under the 2023 Incentive Plan, if any, will be paid in cash, and 75% will be issued in common shares under the Company’s 2014 Omnibus Incentive Plan, approximately two-thirds of which will be unrestricted and one-third of which will vest in December 2024.

Under the incentive plan for 2022 (the “2022 Incentive Plan”), the Company recorded approximately $4.0 million and $12.0 million, respectively, in general and administrative expenses in its consolidated statement of operations for the three and nine months ended September 30, 2022.

Share-Based Compensation Awards

The following table sets forth information pertaining to the share-based compensation issued under the 2022 Incentive Plan and the incentive plan for 2021 (the “2021 Incentive Plan”).

	2022 Incentive Plan			2021 Incentive Plan
Period common shares issued	First Quarter 2023			First Quarter 2022
Common shares earned under each incentive plan		935,189			868,079
Common shares surrendered on issuance date to    satisfy tax withholding obligations		263,026			245,597
Common shares earned and issued under each    incentive plan, net of common shares surrendered on    issuance date to satisfy tax withholding obligations		672,163			622,482
Average of the high and low stock price on issuance date	$	16.70		$	17.79
Total share-based compensation earned, including the    surrendered shares (in millions)	$	15.6	(1)	$	15.4	(2)
Of the total common shares earned and issued, total    common shares unrestricted at time of issuance		360,176			338,032
Of the total common shares earned and issued, total    common shares restricted at time of issuance		311,987			284,450
Restricted common shares vesting date	December 8, 2023			December 9, 2022
Common shares surrendered on vesting date to satisfy    tax withholding requirements resulting from vesting    of restricted common shares	n/a				114,147

(1)Of the total 2022 share-based compensation, approximately $12.5 million was recorded as a liability as of December 31, 2022 and is included in accounts payable and other liabilities in the Company’s consolidated balance sheet at December 31, 2022. Another $2.6 million, which is subject to vesting on December 8, 2023 and excludes any restricted shares forfeited or vested prior to that date, will be recognized as share-based compensation expense proportionately throughout 2023. For the three and nine months ended September 30, 2023, the Company recognized approximately $0.7 million and $2.0 million, respectively, of share-based compensation expense related to restricted share awards.

(2)Of the total 2021 share-based compensation, approximately $2.5 million, which vested on December 9, 2022, was recognized as share-based compensation expense proportionately throughout 2022. For the three and nine months ended September 30, 2022, the Company recognized approximately $0.6 million and $1.9 million, respectively, of share-based compensation expense related to restricted share awards.

Additionally, in conjunction with the appointment of five new officers of the Company on April 1, 2020, the Company issued to the new officer group a total of approximately 200,000 restricted common shares with an aggregate grant date fair value of approximately $1.8 million. For each grantee, the restricted shares vested on March 31, 2023. The expense associated with the awards was amortized over the 3-year vesting period. For the nine months ended September 30, 2023 and 2022, the Company recognized approximately $0.1 million and $0.4 million, respectively, of share-based compensation expense related to these awards. Upon vesting on March 31, 2023, approximately 83,000 shares were surrendered to satisfy tax withholding obligations.

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Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

9. Subsequent Events

On October 11, 2023, the Company completed the purchase of two existing hotels and an existing free-standing parking garage in Salt Lake City, Utah, including a 175-room Courtyard and a 159-room Hyatt House, for a combined gross purchase price of approximately $91.5 million. The Company utilized its available cash on hand and borrowings under its Revolving Credit Facility to purchase the properties.

On October 16, 2023, the Company paid approximately $18.3 million, or $0.08 per common share, in distributions to shareholders of record as of September 29, 2023.

On October 18, 2023, the Company completed the purchase of the existing 146-room Residence Inn in Renton, Washington for a total gross purchase price of $55.5 million. The Company utilized its available cash on hand and borrowings under its Revolving Credit Facility to purchase the hotel.

On October 19, 2023, the Company declared a monthly cash distribution of $0.08 per common share. The distribution is payable on November 15, 2023, to shareholders of record as of October 31, 2023.

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Organization and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Organization

Organization

Apple Hospitality REIT, Inc., formed in November 2007 as a Virginia corporation, together with its wholly-owned subsidiaries (the “Company”), is a self-advised real estate investment trust (“REIT”) that invests in income-producing real estate, primarily in the lodging sector, in the United States (“U.S.”). The Company’s fiscal year end is December 31. The Company has no foreign operations or assets, and its operating structure includes only one reportable segment. The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Although the Company has interests in potential variable interest entities through its purchase commitments, it is not the primary beneficiary as the Company does not have any elements of power in the decision-making process of these entities; therefore, the Company does not consolidate the entities. As of September 30, 2023, the Company owned 220 hotels with an aggregate of 28,929 rooms located in 37 states as well as one property leased to third parties. The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “APLE.”

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include all of the information required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the twelve-month period ending December 31, 2023.

Use of Estimates

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Net Income Per Common Share

Net Income Per Common Share

Basic net income per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted net income per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Basic and diluted net income per common share were the same for each of the periods presented.

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Investment in Real Estate (Tables)

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Schedule of Investment in Real Estate

The Company’s investment in real estate consisted of the following (in thousands):

	September 30,			December 31,
	2023			2022
Land	$	805,837		$	802,625
Building and improvements		4,706,750			4,656,343
Furniture, fixtures and equipment		543,310			522,082
Finance ground lease assets		102,084			102,084
Franchise fees		20,146			19,925
		6,178,127			6,103,059
Less accumulated depreciation and amortization		(1,629,340	)		(1,492,097	)
Investment in real estate, net	$	4,548,787		$	4,610,962

Schedule of Hotel Acquisitions

The following table sets forth the location, brand, manager, date acquired, number of rooms and gross purchase price, excluding transaction costs, for each hotel. All dollar amounts are in thousands.

City	State	Brand	Manager	Date Acquired	Rooms		Gross Purchase Price
Louisville	KY	AC Hotels	Concord	10/25/2022		156	$	51,000
Pittsburgh	PA	AC Hotels	Concord	10/25/2022		134		34,000
						290	$	85,000

Schedule of Purchase Contract Outstanding

The following table summarizes the location, expected franchise brand, date of purchase contract, expected number of rooms upon completion, refundable (if the seller does not meet its obligations under the contract) deposits paid and gross purchase price for each of the contracts outstanding as of September 30, 2023. All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Madison, WI (1)	Embassy Suites	7/27/2021		260	$	893	$	78,598
Nashville, TN (1)	Motto	5/16/2023		256		1,058		96,683
Salt Lake City, UT (2)	Courtyard	8/10/2023		175		920		48,110
Salt Lake City, UT (2)	Hyatt House	8/10/2023		159		655		34,250
Salt Lake City, UT (2)(3)	N/A	8/10/2023	N/A			175		9,140
Renton, WA (2)	Residence Inn	8/10/2023		146		850		55,500
South Jordan, UT	Embassy Suites	9/5/2023		192		300		36,750
				1,188	$	4,851	$	359,031

(1)These hotels are currently under development. The table shows the expected number of rooms upon hotel completion and the expected franchise brand. Assuming all conditions to closing are met, the purchase of the hotel in Madison, Wisconsin is expected to close in mid-2024 and the purchase of the Nashville, Tennessee hotel is expected to close in 2025. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts. As these properties are under development, at this time, the sellers have not met all of the conditions to closing.

(2)The Company completed the purchase of these properties in October 2023. See Note 9 for additional information concerning these four acquisitions.

(3)This property is a free-standing parking garage which serves both the Courtyard and Hyatt House hotels in Salt Lake City, Utah and the surrounding area, however, it is not affiliated with any brand.

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Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Tables [Line Items]

Schedule of Future Minimum Debt Payments

The aggregate amounts of principal payable under the Company’s total debt obligations as of September 30, 2023 (including the Revolving Credit Facility (if any) (as defined below), term loans, senior notes and mortgage debt), for the remainder of this fiscal year, each of the next four fiscal years and thereafter are as follows (in thousands):

2023 (October - December)	$	2,245
2024		113,597
2025		295,140
2026		74,649
2027		278,602
Thereafter		616,014
		1,380,247
Unamortized fair value adjustment of assumed debt		609
Unamortized debt issuance costs		(7,588	)
Total	$	1,373,268

Schedule of Total Fixed-Rate and Variable Rate Debt

The Company uses interest rate swaps to manage its interest rate risk on a portion of its variable-rate debt. Throughout the terms of these interest rate swaps, the Company pays a fixed rate of interest and receives a floating rate of interest equal to the annual Secured Overnight Financing Rate (“SOFR”) for a one-month term (“one-month SOFR”) plus a 0.10% SOFR spread adjustment. The swaps are designed to effectively fix the interest payments on variable-rate debt instruments. See Note 5 for more information on the interest rate swap agreements. The Company’s total fixed-rate and variable-rate debt, after giving effect to its interest rate swaps in effect as of September 30, 2023 and December 31, 2022, is set forth below. All dollar amounts are in thousands.

	September 30, 2023			Percentage			December 31, 2022			Percentage
Fixed-rate debt (1)	$	1,105,247			80	%	$	1,149,215			84	%
Variable-rate debt		275,000			20	%		225,000			16	%
Total	$	1,380,247					$	1,374,215
Weighted-average interest rate of debt		4.34	%					3.93	%

(1)Fixed-rate debt includes the portion of variable-rate debt where the interest payments have been effectively fixed by interest rate swaps as of the respective balance sheet date. See Note 5 for more information on the interest rate swap agreements.

Summary [Member]

Debt Tables [Line Items]

Schedule of Long-term Debt Instruments

As of September 30, 2023 and December 31, 2022, the Company’s debt consisted of the following (in thousands):

	September 30, 2023		December 31, 2022
Revolving credit facility	$	-	$	-
Term loans and senior notes, net		1,088,407		1,037,384
Mortgage debt, net		284,861		328,865
Debt, net	$	1,373,268	$	1,366,249

Credit Facilities [Member]

Debt Tables [Line Items]

Schedule of Long-term Debt Instruments

As of September 30, 2023 and December 31, 2022, the details of the Company’s unsecured credit facilities were as set forth in the table below. All dollar amounts are in thousands.

			Outstanding Balance
	Interest Rate	Maturity Date	September 30, 2023			December 31, 2022
Revolving credit facility (1)	SOFR + 0.10% + 1.40% - 2.25%	7/25/2026	$	-		$	-
Term loans and senior notes
$275 million term loan	SOFR + 0.10% + 1.35% - 2.20%	7/25/2027		275,000			275,000
$300 million term loan	SOFR + 0.10% + 1.35% - 2.20%	1/31/2028		300,000			250,000
$50 million term loan	SOFR + 0.10% + 1.35% - 2.20%	8/2/2025 (3)		50,000			50,000
$175 million term loan	SOFR + 0.10% + 1.65% - 2.50%	8/2/2025		175,000			175,000
2017 $85 million term loan	SOFR + 0.10% + 1.30% - 2.10%	7/25/2024		85,000			85,000
2019 $85 million term loan	SOFR + 0.10% + 1.70% - 2.55%	12/31/2029		85,000			85,000
$50 million senior notes	3.60% - 4.35%	3/31/2030		50,000			50,000
$75 million senior notes	4.88% - 5.63%	6/2/2029		75,000			75,000
Term loans and senior notes at stated   value				1,095,000			1,045,000
Unamortized debt issuance costs				(6,593	)		(7,616	)
Term loans and senior notes, net				1,088,407			1,037,384
Credit facilities, net (1)			$	1,088,407		$	1,037,384
Weighted-average interest rate (2)				4.45	%		3.92	%

(1)Excludes unamortized debt issuance costs related to the Revolving Credit Facility totaling approximately $3.8 million and $4.8 million as of September 30, 2023 and December 31, 2022, respectively, which are included in other assets, net in the Company’s consolidated balance sheets.

(2)Interest rate represents the weighted-average effective annual interest rate at the balance sheet date which includes the effect of interest rate swaps in effect on $695.0 million of the outstanding variable-rate debt as of September 30, 2023 and December 31, 2022. See Note 5 for more information on the interest rate swap agreements. The one-month SOFR on September 30, 2023 and December 31, 2022 was 5.32% and 4.36%, respectively.

(3)On July 19, 2023, the Company entered into an amendment of its $225 million term loan facility, which extended the maturity date of the existing $50 million term loan by two years to August 2, 2025.

Mortgage Debt [Member]

Debt Tables [Line Items]

Schedule of Long-term Debt Instruments

As of September 30, 2023, the Company had approximately $285.2 million in outstanding mortgage debt secured by 15 properties with maturity dates ranging from August 2024 to May 2038, stated interest rates ranging from 3.40% to 4.46% and effective interest rates ranging from 3.40% to 4.37%. The loans generally provide for monthly payments of principal and interest on an amortized basis and defeasance or prepayment penalties if prepaid. The following table sets forth the hotel properties securing each loan, the interest rate, loan assumption or origination date, maturity date, the principal amount assumed or originated, and the outstanding balance prior to any fair value adjustments or debt issuance costs as of September 30, 2023 and December 31, 2022 for each of the Company’s mortgage debt obligations. All dollar amounts are in thousands.

Location	Brand	Interest Rate (1)			Loan Assumption or Origination Date	Maturity Date	Principal Assumed or Originated		Outstanding balance as of September 30, 2023			Outstanding balance as of December 31, 2022
Miami, FL	Homewood Suites		4.02	%	3/1/2014	(2)	$	16,677	$	-		$	12,440
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	(3)		8,306		-			6,193
Prattville, AL	Courtyard		4.12	%	3/1/2014	(3)		6,596		-			4,918
San Diego, CA	Residence Inn		3.97	%	3/1/2014	(4)		18,600		-			13,827
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024		27,000		20,522			21,161
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025		10,000		7,793			8,024
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025		34,118		27,608			28,400
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025		13,655		11,786			12,019
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025		22,681		19,577			19,963
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026		24,000		20,815			21,194
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026		25,564		20,729			21,326
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026		25,473		20,655			21,250
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026		18,963		15,377			15,819
Burbank, CA	SpringHill Suites		3.94	%	3/9/2018	4/1/2028		28,470		24,445			25,057
Santa Ana, CA	Courtyard		3.94	%	3/9/2018	4/1/2028		15,530		13,334			13,668
Richmond, VA	Courtyard		3.40	%	2/12/2020	3/11/2030		14,950		13,911			14,144
Richmond, VA	Residence Inn		3.40	%	2/12/2020	3/11/2030		14,950		13,911			14,144
Portland, ME	Residence Inn		3.43	%	3/2/2020	3/1/2032		33,500		30,500			30,500
San Jose, CA	Homewood Suites		4.22	%	12/22/2017	5/1/2038		30,000		24,284			25,168
							$	389,033		285,247			329,215
Unamortized fair value adjustment of    assumed debt										609			819
Unamortized debt issuance costs										(995	)		(1,169	)
Total									$	284,861		$	328,865

(1)Interest rates are the rates per the loan agreement. For loans assumed, the Company adjusted the interest rates per the loan agreement to market rates and is amortizing the adjustments to interest expense over the life of the loan.

(2)Loan was repaid in full on January 3, 2023.

(3)Loan was repaid in full on February 6, 2023.

(4)Loan was repaid in full on March 6, 2023.

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Interest Rate Swap Agreements

The following table sets forth information for each of the Company’s interest rate swap agreements outstanding as of September 30, 2023 and December 31, 2022. All dollar amounts are in thousands.

						Fair Value Asset (Liability)
Notional Amount at September 30, 2023		Origination Date	Effective Date	Maturity Date	Swap Fixed Interest Rate	September 30, 2023		December 31, 2022
Active interest rate swaps designated as cash flow hedges at September 30, 2023:
$	50,000	12/7/2018	5/18/2020	1/31/2024	2.71%	$	466	$	1,163
	75,000	5/31/2017	7/31/2017	6/30/2024	1.95%		1,951		3,026
	10,000	8/10/2017	8/10/2017	6/30/2024	2.02%		254		386
	50,000	7/2/2019	7/5/2019	7/18/2024	1.64%		1,507		2,298
	50,000	8/21/2019	8/23/2019	8/18/2024	1.31%		1,820		2,675
	50,000	8/21/2019	8/23/2019	8/30/2024	1.32%		1,873		2,703
	75,000	8/21/2019	5/18/2020	5/18/2025	1.26%		4,633		5,225
	50,000	6/1/2018	1/31/2019	6/30/2025	2.88%		1,882		1,655
	25,000	12/6/2018	1/31/2020	6/30/2025	2.74%		999		909
	75,000	8/21/2019	5/18/2021	5/18/2026	1.29%		6,499		6,506
	50,000	3/17/2023	3/20/2023	3/18/2028	3.50%		1,941		-
	50,000	3/17/2023	3/20/2023	3/20/2028	3.49%		1,919		-
	85,000	12/31/2019	12/31/2019	12/31/2029	1.87%		11,667		9,511
	695,000						37,411		36,057
Matured interest rate swap at September 30, 2023:
$	100,000	4/7/2016	9/30/2016	3/31/2023	1.30%		-		824
						$	37,411	$	36,881

Derivative Instruments, Gain (Loss) Recognized

The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2023 and 2022 (in thousands):
 

	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Three Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022
Interest rate derivatives in cash flow    hedging relationships	$	7,264	$	17,130	$	5,852	$	1,106
	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Interest rate derivatives in cash flow    hedging relationships	$	16,682	$	50,649	$	16,152	$	(3,213	)

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Compensation Plans (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Information Pertaining to Share-based Compensation Issued

The following table sets forth information pertaining to the share-based compensation issued under the 2022 Incentive Plan and the incentive plan for 2021 (the “2021 Incentive Plan”).

	2022 Incentive Plan			2021 Incentive Plan
Period common shares issued	First Quarter 2023			First Quarter 2022
Common shares earned under each incentive plan		935,189			868,079
Common shares surrendered on issuance date to    satisfy tax withholding obligations		263,026			245,597
Common shares earned and issued under each    incentive plan, net of common shares surrendered on    issuance date to satisfy tax withholding obligations		672,163			622,482
Average of the high and low stock price on issuance date	$	16.70		$	17.79
Total share-based compensation earned, including the    surrendered shares (in millions)	$	15.6	(1)	$	15.4	(2)
Of the total common shares earned and issued, total    common shares unrestricted at time of issuance		360,176			338,032
Of the total common shares earned and issued, total    common shares restricted at time of issuance		311,987			284,450
Restricted common shares vesting date	December 8, 2023			December 9, 2022
Common shares surrendered on vesting date to satisfy    tax withholding requirements resulting from vesting    of restricted common shares	n/a				114,147

(1)Of the total 2022 share-based compensation, approximately $12.5 million was recorded as a liability as of December 31, 2022 and is included in accounts payable and other liabilities in the Company’s consolidated balance sheet at December 31, 2022. Another $2.6 million, which is subject to vesting on December 8, 2023 and excludes any restricted shares forfeited or vested prior to that date, will be recognized as share-based compensation expense proportionately throughout 2023. For the three and nine months ended September 30, 2023, the Company recognized approximately $0.7 million and $2.0 million, respectively, of share-based compensation expense related to restricted share awards.

(2)Of the total 2021 share-based compensation, approximately $2.5 million, which vested on December 9, 2022, was recognized as share-based compensation expense proportionately throughout 2022. For the three and nine months ended September 30, 2022, the Company recognized approximately $0.6 million and $1.9 million, respectively, of share-based compensation expense related to restricted share awards.

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Organization and Summary of Significant Accounting Policies - Additional Information (Details)	9 Months Ended
	Sep. 30, 2023 Hotel State Segment Room Hotel_Property
Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Number of reportable segments | Segment	1
Number of hotels acquired | Hotel	220
Aggregate number of hotel rooms | Room	28,929
Number of states in which hotels are located | State	37
Number of properties leased to third-parties | Hotel_Property	1

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Investment In Real Estate - Schedule of Investment in Real Estate (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property Plant And Equipment [Line Items]
Real estate investment property, at cost	$ 6,178,127	$ 6,103,059
Less accumulated depreciation and amortization	(1,629,340)	(1,492,097)
Investment in real estate, net	4,548,787	4,610,962
Land [Member]
Property Plant And Equipment [Line Items]
Real estate investment property, at cost	805,837	802,625
Building and Improvements [Member]
Property Plant And Equipment [Line Items]
Real estate investment property, at cost	4,706,750	4,656,343
Furniture, Fixtures and Equipment [Member]
Property Plant And Equipment [Line Items]
Real estate investment property, at cost	543,310	522,082
Finance Ground Lease Assets [Member]
Property Plant And Equipment [Line Items]
Real estate investment property, at cost	102,084	102,084
Franchise Fees [Member]
Property Plant And Equipment [Line Items]
Real estate investment property, at cost	$ 20,146	$ 19,925

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Investment in Real Estate - Additional Information (Details) $ in Thousands		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
		May 31, 2023 Room	Oct. 31, 2022 USD ($)	Sep. 30, 2023 USD ($) Room Hotel State	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Room Hotel State	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) Hotel Room
Investment In Real Estate [Line Items]
Number of hotels acquired | Hotel				220		220
Proceeds from term loans and senior notes			$ 50,000			$ 50,000	$ 125,000
Term loan facility, maximum borrowing capacity								$ 575,000
Aggregate number of hotel rooms | Room				28,929		28,929
Number of states in which hotels are located | State				37		37
Lessor, Operating Lease, Term of Contract		15 years
Total revenue				$ 358,260	$ 341,150	$ 1,031,344	939,296
Operating income (loss)				76,295	$ 75,410	208,571	$ 188,990
Cash payment						30,980
Finance lease liabilities				$ 111,943		111,943		$ 112,006
Independent Boutique Hotel, New York [Member]
Investment In Real Estate [Line Items]
Number of hotel rooms under operating lease | Room		210
Hotel Acquisitions [Member]
Investment In Real Estate [Line Items]
Number of hotels acquired | Hotel								2
Aggregate number of hotel rooms | Room								290
Total revenue						2,100
Operating income (loss)						$ 400
Purchase price								$ 85,000
Hotel Acquisitions [Member] | Courtyard, Cleveland, Ohio [Member]
Investment In Real Estate [Line Items]
Number of hotels acquired | Hotel				1		1
Aggregate number of hotel rooms | Room				154		154
Purchase price						$ 31,000
Hotels Under Purchase Contract [Member]
Investment In Real Estate [Line Items]
Number of outstanding contracts | Hotel				6		6
Purchase price						$ 359,031
Purchase contract gross purchase price				$ 359,000		359,000
Hotels Under Purchase Contract [Member] | Embassy Suites Madison, WI [Member]
Investment In Real Estate [Line Items]
Purchase price	[1]					$ 78,598

[1] These hotels are currently under development. The table shows the expected number of rooms upon hotel completion and the expected franchise brand. Assuming all conditions to closing are met, the purchase of the hotel in Madison, Wisconsin is expected to close in mid-2024 and the purchase of the Nashville, Tennessee hotel is expected to close in 2025. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts. As these properties are under development, at this time, the sellers have not met all of the conditions to closing.

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Investment in Real Estate - Schedule of Hotel Acquisitions (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) Room	Sep. 30, 2023 Room
Real Estate Properties [Line Items]
Rooms		28,929
Hotel Acquisitions [Member]
Real Estate Properties [Line Items]
Rooms	290
Gross Purchase Price | $	$ 85,000
AC Hotels Louisville, KY [Member] | Hotel Acquisitions [Member]
Real Estate Properties [Line Items]
Manager	Concord
Date Acquired	Oct. 25, 2022
Rooms	156
Gross Purchase Price | $	$ 51,000
AC Hotels Pittsburgh, PA [Member] | Hotel Acquisitions [Member]
Real Estate Properties [Line Items]
Manager	Concord
Date Acquired	Oct. 25, 2022
Rooms	134
Gross Purchase Price | $	$ 34,000

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Investment in Real Estate - Schedule of Purchase Contract Outstanding (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) Room
Real Estate Properties [Line Items]
Rooms | Room	28,929
Hotels Under Purchase Contract [Member]
Real Estate Properties [Line Items]
Rooms | Room	1,188
Refundable Deposits	$ 4,851
Gross Purchase Price	$ 359,031
Hotels Under Purchase Contract [Member] | Embassy Suites Madison W I [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	Jul. 27, 2021	[1]
Rooms | Room	260	[1]
Refundable Deposits	$ 893	[1]
Gross Purchase Price	$ 78,598	[1]
Hotels Under Purchase Contract [Member] | Motto, Nashville, TN [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	May 16, 2023	[1]
Rooms | Room	256	[1]
Refundable Deposits	$ 1,058	[1]
Gross Purchase Price	$ 96,683	[1]
Hotels Under Purchase Contract [Member] | Courtyard, Salt Lake City, UT [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	Aug. 10, 2023	[2]
Rooms | Room	175	[2]
Refundable Deposits	$ 920	[2]
Gross Purchase Price	$ 48,110	[2]
Hotels Under Purchase Contract [Member] | Hyatt House, Salt Lake City, UT [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	Aug. 10, 2023	[2]
Rooms | Room	159	[2]
Refundable Deposits	$ 655	[2]
Gross Purchase Price	$ 34,250	[2]
Hotels Under Purchase Contract [Member] | Salt Lake City, UT [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	Aug. 10, 2023	[2],[3]
Refundable Deposits	$ 175	[2],[3]
Gross Purchase Price	$ 9,140	[2],[3]
Hotels Under Purchase Contract [Member] | Residence Inn, Renton, WA [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	Aug. 10, 2023	[2]
Rooms | Room	146	[2]
Refundable Deposits	$ 850	[2]
Gross Purchase Price	$ 55,500	[2]
Hotels Under Purchase Contract [Member] | Embassy Suites, South Jordan, UT [Member]
Real Estate Properties [Line Items]
Date of Purchase Contract	Sep. 05, 2023
Rooms | Room	192
Refundable Deposits	$ 300
Gross Purchase Price	$ 36,750

[1] These hotels are currently under development. The table shows the expected number of rooms upon hotel completion and the expected franchise brand. Assuming all conditions to closing are met, the purchase of the hotel in Madison, Wisconsin is expected to close in mid-2024 and the purchase of the Nashville, Tennessee hotel is expected to close in 2025. If the sellers meet all of the conditions to closing, the Company is obligated to specifically perform under the applicable purchase contracts. As these properties are under development, at this time, the sellers have not met all of the conditions to closing.

[2] The Company completed the purchase of these properties in October 2023. See Note 9 for additional information concerning these four acquisitions.

[3] This property is a free-standing parking garage which serves both the Courtyard and Hyatt House hotels in Salt Lake City, Utah and the surrounding area, however, it is not affiliated with any brand.

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Dispositions - Additional Information (Details) $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($) Hotel	Sep. 30, 2022 USD ($) Hotel	Dec. 31, 2022 USD ($) Room Hotel	Sep. 30, 2023 Room Hotel
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
Number of Real Estate Properties | Hotel				220
Number of hotels acquired | Hotel				220
Rooms | Room				28,929
Gain (Loss) on Disposition of Assets	$ 1,785	$ 1,785
Hotels Sold [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
Number of Real Estate Properties | Hotel	1	1	1	0
Number of hotels acquired | Hotel	1	1	1	0
Rooms | Room			55
Sale of Real Estate Assets, Gross Sales Price			$ 8,500
Gain (Loss) on Disposition of Assets			1,800
Real Estate Investment, Carrying Value			$ 6,500
Operating income, excluding gain (loss) on sale of real estate	$ 100	$ 300

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Term loans and senior notes, net	$ 1,088,407	$ 1,037,384
Mortgage debt, net	284,861	328,865
Debt, net	$ 1,373,268	$ 1,366,249

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Debt - Schedule of Future Minimum Debt Payments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023 (October - December)	$ 2,245
2024	113,597
2025	295,140
2026	74,649
2027	278,602
Thereafter	616,014
Debt, gross	1,380,247	$ 1,374,215
Unamortized fair value adjustment of assumed debt	609
Unamortized debt issuance costs	(7,588)
Debt, net	$ 1,373,268	$ 1,366,249

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Debt - Schedule of Total Fixed-Rate and Variable Rate Debt (Details) - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Fixed-rate debt	[1]	$ 1,105,247	$ 1,149,215
Variable-rate debt		275,000	225,000
Debt, gross		$ 1,380,247	$ 1,374,215
Weighted-average interest rate of debt		4.34%	3.93%
Fixed-rate debt, Percentage	[1]	80.00%	84.00%
Variable-rate debt, Percentage		20.00%	16.00%

[1] Fixed-rate debt includes the portion of variable-rate debt where the interest payments have been effectively fixed by interest rate swaps as of the respective balance sheet date. See Note 5 for more information on the interest rate swap agreements.

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Debt - Additional Information (Details)						1 Months Ended	9 Months Ended		14 Months Ended
		Jul. 19, 2023 USD ($)	Dec. 31, 2019 USD ($) Loan	Jan. 29, 2019 USD ($)	Jul. 25, 2017 USD ($) Loan	Oct. 31, 2022 USD ($)	Sep. 30, 2023 USD ($) Hotel_Property	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Jan. 17, 2023 USD ($)	Dec. 31, 2022 USD ($)	Oct. 24, 2022 USD ($)	Jul. 25, 2022 USD ($)	Jun. 02, 2022 USD ($)	Mar. 16, 2020 USD ($)	Aug. 02, 2018 USD ($)
Debt Details [Line Items]
Term loan facility, maximum borrowing capacity											$ 575,000,000
Debt instrument, description of variable rate basis							SOFR rate plus SOFR spread adjustment rate
Proceeds from term loans and senior notes						$ 50,000,000	$ 50,000,000	$ 125,000,000
SOFR spread adjustment rate							0.10%		0.10%
Outstanding Balance							$ 1,380,247,000		$ 1,380,247,000		$ 1,374,215,000
2017 $85 Million Unsecured Term Loan Facility [Member]
Debt Details [Line Items]
Number of term loans | Loan					1
Debt instrument, face amount					$ 85,000,000		$ 85,000,000		$ 85,000,000
Debt instrument, maturity date					Jul. 25, 2024
Debt instrument, description of variable rate basis							one-month SOFR plus a 0.10% SOFR spread adjustment
SOFR spread adjustment rate							0.10%		0.10%
2019 $85 Million Unsecured Term Loan Facility [Member]
Debt Details [Line Items]
Number of term loans | Loan			1
Debt instrument, face amount			$ 85,000,000				$ 85,000,000		$ 85,000,000
Debt instrument, maturity date			Dec. 31, 2029
Debt instrument, description of variable rate basis							one-month SOFR plus a 0.10% SOFR spread adjustment
SOFR spread adjustment rate							0.10%		0.10%
$50 Million Senior Notes [Member]
Debt Details [Line Items]
Debt instrument, face amount							$ 50,000,000		$ 50,000,000						$ 50,000,000
Debt instrument, maturity date							Mar. 31, 2030
$75 Million Senior Notes [Member]
Debt Details [Line Items]
Debt instrument, face amount							$ 75,000,000		75,000,000					$ 75,000,000
Debt instrument, maturity date							Jun. 02, 2029
$575 Million Unsecured Term Loan Facility [Member]
Debt Details [Line Items]
Line of credit facility, maximum borrowing capacity							$ 575,000,000		575,000,000
Mortgage Debt [Member]
Debt Details [Line Items]
Outstanding Balance							$ 285,200,000		285,200,000
Number of hotel properties used to secure debt | Hotel_Property							15
Debt instrument, maturity date, description							maturity dates ranging from August 2024 to May 2038,
$225 Million Unsecured Term Loan Facility [Member]
Debt Details [Line Items]
Term loan facility, maximum borrowing capacity		$ 225,000,000					$ 225,000,000		$ 225,000,000							$ 225,000,000
Debt instrument, description of variable rate basis							one-month SOFR plus a 0.10% SOFR spread adjustment
SOFR spread adjustment rate							0.10%		0.10%
$225 Million Unsecured Term Loan Facility [Member] | $50 Million Unsecured Term Loan [Member]
Debt Details [Line Items]
Debt instrument, face amount		$ 50,000,000														50,000,000
Debt instrument, maturity date							Aug. 02, 2023
Date of amended and restated credit facility							Aug. 02, 2018
Debt instrument extended maturity date		Aug. 02, 2025
Debt instrument extended maturity date term		2 years
$225 Million Unsecured Term Loan Facility [Member] | $175 Million Unsecured Term Loan [Member]
Debt Details [Line Items]
Debt instrument, face amount							$ 175,000,000		$ 175,000,000							$ 100,000,000
Debt instrument, maturity date							Aug. 02, 2025
Debt instrument, description							$100 million was funded on August 2, 2018, and the remaining $75 million was funded on January 29, 2019 (clauses (i) and (ii) are referred to together as the “$225 million term loan facility”)
Proceeds from term loans and senior notes				$ 75,000,000
Credit Facilities [Member]
Debt Details [Line Items]
Line of credit facility, covenant terms									The credit agreements governing the unsecured credit facilities (collectively, the “credit agreements”) contain mandatory prepayment requirements, customary affirmative and negative covenants, restrictions on certain investments and events of default, including the following financial and restrictive covenants (capitalized terms not defined below are defined in the credit agreements):•A ratio of Consolidated Total Indebtedness to Consolidated EBITDA (“Maximum Consolidated Leverage Ratio”) of not more than 7.25 to 1.00;•A ratio of Consolidated Secured Indebtedness to Consolidated Total Assets (“Maximum Secured Leverage Ratio”) of not more than 45%;•A minimum Consolidated Tangible Net Worth of approximately $3.4 billion plus an amount equal to 75% of the Net Cash Proceeds from issuances and sales of Equity Interests occurring after the Closing Date, July 25, 2022, subject to adjustment;•A ratio of Adjusted Consolidated EBITDA to Consolidated Fixed Charges (“Minimum Fixed Charge Coverage Ratio”) of not less than 1.50 to 1.00 for the trailing four full quarters;•A ratio of Unencumbered Adjusted NOI to Consolidated Implied Interest Expense for Consolidated Unsecured Indebtedness (“Minimum Unsecured Interest Coverage Ratio”) of not less than 2.00 to 1.00 for the trailing four full quarters;•A ratio of Consolidated Unsecured Indebtedness to Unencumbered Asset Value (“Maximum Unsecured Leverage Ratio”) of not more than 60% (subject to a higher level in certain circumstances); and•A ratio of Consolidated Secured Recourse Indebtedness to Consolidated Total Assets (“Maximum Secured Recourse Indebtedness”) of not more than 10%.The Company was in compliance with the applicable covenants as of September 30, 2023.
Unsecured Credit Facility
Debt Details [Line Items]
Minimum consolidated tangible net worth							$ 3,400,000,000		$ 3,400,000,000
Percentage of net cash proceeds from issuances and sales of equity interests							75.00%		75.00%
$1.2 Billion Credit Facility [Member]
Debt Details [Line Items]
Line of credit facility, maximum borrowing capacity							$ 1,200,000,000		$ 1,200,000,000				$ 1,200,000,000
Debt instrument, description of variable rate basis							one-month SOFR plus a 0.10% SOFR spread adjustment
SOFR spread adjustment rate							0.10%		0.10%
$1.2 Billion Credit Facility [Member] | $650 Million Revolving Credit Facility [Member]
Debt Details [Line Items]
Line of credit facility, maximum borrowing capacity							$ 650,000,000		$ 650,000,000
Line of credit facility, remaining borrowing capacity							$ 650,000,000		650,000,000
Debt instrument extended maturity date							Jul. 25, 2026
$1.2 Billion Credit Facility [Member] | $275 Million Term Loan Facility [Member]
Debt Details [Line Items]
Debt instrument, face amount							$ 275,000,000		275,000,000
Debt instrument extended maturity date							Jul. 25, 2027
$1.2 Billion Credit Facility [Member] | $300 Million Term Loan Facility [Member]
Debt Details [Line Items]
Term loan facility, maximum borrowing capacity							$ 300,000,000		300,000,000
Debt instrument extended maturity date							Jan. 31, 2028
$1.2 Billion Credit Facility [Member] | $300 Million Term Loan Facility [Member] | Loan Funded At Closing [Member]
Debt Details [Line Items]
Debt instrument, face amount													$ 200,000,000
$1.2 Billion Credit Facility [Member] | $300 Million Term Loan Facility [Member] | Delayed Draw Term Loan [Member]
Debt Details [Line Items]
Debt instrument, description							$150 million delayed draw option until 180 days from closing), of which $200 million was funded at closing, $50 million was funded on October 24, 2022 and the remaining $50 million was funded on January 17, 2023 (clauses (ii) and (iii) are referred to together as the “$575 million term loan facility”)
Term loan facility, remaining available capacity							$ 150,000,000		$ 150,000,000
$1.2 Billion Credit Facility [Member] | $300 Million Term Loan Facility [Member] | Loans Funded On October Twenty Four Two Thousand Twenty Two [Member]
Debt Details [Line Items]
Debt instrument, face amount												$ 50,000,000
$1.2 Billion Credit Facility [Member] | $300 Million Term Loan Facility [Member] | Loan Funded At January Seventeen Two Thousand Twenty Three [Member]
Debt Details [Line Items]
Debt instrument, face amount										$ 50,000,000
Revolving Credit Facility [Member]
Debt Details [Line Items]
Debt instrument, maturity date	[1]						Jul. 25, 2026
SOFR spread adjustment rate	[1]						0.10%		0.10%
Revolving Credit Facility [Member] | Prior To Refinancing [Member]
Debt Details [Line Items]
Line of credit facility, maximum borrowing capacity														$ 425,000,000
Revolving Credit Facility [Member] | 2019 $85 Million Unsecured Term Loan Facility [Member] | Prior To Refinancing [Member]
Debt Details [Line Items]
Line of credit facility, maximum borrowing capacity			$ 425,000,000
Minimum [Member] | 2017 $85 Million Unsecured Term Loan Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							1.30%
Minimum [Member] | 2019 $85 Million Unsecured Term Loan Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							1.70%
Minimum [Member] | $50 Million Senior Notes [Member]
Debt Details [Line Items]
Note payable, fixed annual interest rate							3.60%		3.60%
Minimum [Member] | $75 Million Senior Notes [Member]
Debt Details [Line Items]
Note payable, fixed annual interest rate							4.88%		4.88%
Minimum [Member] | Mortgage Debt [Member]
Debt Details [Line Items]
Note payable, fixed annual interest rate							3.40%		3.40%
Effective interest rates							3.40%		3.40%
Minimum [Member] | $225 Million Unsecured Term Loan Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							1.35%
Minimum [Member] | Unsecured Credit Facility
Debt Details [Line Items]
Ratio of adjusted consolidated EBITDA to consolidated fixed charges							1.50		1.50
Ratio of unencumbered adjusted NOI to consolidated implied interest expense							2.00		2.00
Minimum [Member] | $1.2 Billion Credit Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							1.35%
Minimum [Member] | $1.2 Billion Unsecured Credit Facility [Member] | $650 Million Revolving Credit Facility [Member]
Debt Details [Line Items]
Line of credit facility, unused capacity, commitment fee percentage							0.20%
Minimum [Member] | Revolving Credit Facility [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate	[1]						1.40%
Maximum [Member] | 2017 $85 Million Unsecured Term Loan Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							2.10%
Maximum [Member] | 2019 $85 Million Unsecured Term Loan Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							2.55%
Maximum [Member] | $50 Million Senior Notes [Member]
Debt Details [Line Items]
Note payable, fixed annual interest rate							4.35%		4.35%
Maximum [Member] | $75 Million Senior Notes [Member]
Debt Details [Line Items]
Note payable, fixed annual interest rate							5.63%		5.63%
Maximum [Member] | Mortgage Debt [Member]
Debt Details [Line Items]
Note payable, fixed annual interest rate							4.46%		4.46%
Effective interest rates							4.37%		4.37%
Maximum [Member] | $225 Million Unsecured Term Loan Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							2.50%
Maximum [Member] | Unsecured Credit Facility
Debt Details [Line Items]
Ratio of consolidated total indebtedness to consolidated EBITDA							7.25		7.25
Ratio of consolidated secured indebtedness to consolidated total assets							45.00%		45.00%
Ratio of un secured indebtedness to unencumbered asset value ("Maximum Unsecured Leverage Ratio")							60.00%		60.00%
Ratio of secured recourse indebtedness to consolidated total assets							10.00%		10.00%
Maximum [Member] | $1.2 Billion Credit Facility [Member] | SOFR Interest Rate Margin [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate							2.25%
Maximum [Member] | $1.2 Billion Unsecured Credit Facility [Member] | $650 Million Revolving Credit Facility [Member]
Debt Details [Line Items]
Line of credit facility, unused capacity, commitment fee percentage							0.25%
Maximum [Member] | Revolving Credit Facility [Member]
Debt Details [Line Items]
Debt instrument, basis spread on variable rate	[1]						2.25%

[1] Excludes unamortized debt issuance costs related to the Revolving Credit Facility totaling approximately $3.8 million and $4.8 million as of September 30, 2023 and December 31, 2022, respectively, which are included in other assets, net in the Company’s consolidated balance sheets.

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Debt - Schedule of Unsecured Credit Facilities (Details) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Outstanding Balance		$ 1,380,247	$ 1,374,215
Unamortized debt issuance costs		(7,588)
Term loans and senior notes, net		1,088,407	1,037,384
Credit facilities, net		$ 1,373,268	$ 1,366,249
Weighted-average interest rate		4.34%	3.93%
SOFR spread adjustment rate		0.10%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Interest Rate, Description	[1]	SOFR + 0.10% + 1.40% - 2.25%
Maturity Date	[1]	Jul. 25, 2026
SOFR spread adjustment rate	[1]	0.10%
Revolving Credit Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate	[1]	1.40%
Revolving Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate	[1]	2.25%
Million275 Term Loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description		SOFR + 0.10% + 1.35% - 2.20%
Maturity Date		Jul. 25, 2027
Outstanding Balance		$ 275,000	$ 275,000
SOFR spread adjustment rate		0.10%
Million275 Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		1.35%
Million275 Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		2.20%
Million300 Term Loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description		SOFR + 0.10% + 1.35% - 2.20%
Maturity Date		Jan. 31, 2028
Outstanding Balance		$ 300,000	250,000
SOFR spread adjustment rate		0.10%
Million300 Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		1.35%
Million300 Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		2.20%
$50 Million Term Loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description		SOFR + 0.10% + 1.35% - 2.20%
Maturity Date		Aug. 02, 2025
Outstanding Balance		$ 50,000	50,000
SOFR spread adjustment rate		0.10%
$50 Million Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		1.35%
$50 Million Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		2.20%
$175 Million Term Loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description		SOFR + 0.10% + 1.65% - 2.50%
Maturity Date		Aug. 02, 2025
Outstanding Balance		$ 175,000	175,000
SOFR spread adjustment rate		0.10%
$175 Million Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		1.65%
$175 Million Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		2.50%
2017 $85 Million Term Loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description		SOFR + 0.10% + 1.30% - 2.10%
Maturity Date		Jul. 25, 2024
Outstanding Balance		$ 85,000	85,000
SOFR spread adjustment rate		0.10%
2017 $85 Million Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		1.30%
2017 $85 Million Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		2.10%
2019 $85 Million Unsecured Term Loan Facility [Member]
Debt Instrument [Line Items]
Interest Rate, Description		SOFR + 0.10% + 1.70% - 2.55%
Maturity Date		Dec. 31, 2029
Outstanding Balance		$ 85,000	85,000
SOFR spread adjustment rate		0.10%
2019 $85 Million Unsecured Term Loan Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		1.70%
2019 $85 Million Unsecured Term Loan Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis Spread on Variable Rate		2.55%
$50 Million Senior Notes [Member]
Debt Instrument [Line Items]
Interest Rate, Description		3.60% - 4.35
Maturity Date		Mar. 31, 2030
$50 Million Senior Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate		3.60%
$50 Million Senior Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate		4.35%
$75 Million Senior Notes [Member]
Debt Instrument [Line Items]
Interest Rate, Description		4.88% - 5.63%
Maturity Date		Jun. 02, 2029
Outstanding Balance		$ 75,000	75,000
$75 Million Senior Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate		4.88%
$75 Million Senior Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate		5.63%
Term Loans and Senior Loans, Net [Member]
Debt Instrument [Line Items]
Outstanding Balance		$ 1,095,000	1,045,000
Unamortized debt issuance costs		(6,593)	(7,616)
Term loans and senior notes, net		1,088,407	1,037,384
Credit Facilities, Net [Member]
Debt Instrument [Line Items]
Credit facilities, net	[1]	$ 1,088,407	$ 1,037,384
Weighted-average interest rate	[2]	4.45%	3.92%

[1] Excludes unamortized debt issuance costs related to the Revolving Credit Facility totaling approximately $3.8 million and $4.8 million as of September 30, 2023 and December 31, 2022, respectively, which are included in other assets, net in the Company’s consolidated balance sheets.

[2] Interest rate represents the weighted-average effective annual interest rate at the balance sheet date which includes the effect of interest rate swaps in effect on $695.0 million of the outstanding variable-rate debt as of September 30, 2023 and December 31, 2022. See Note 5 for more information on the interest rate swap agreements. The one-month SOFR on September 30, 2023 and December 31, 2022 was 5.32% and 4.36%, respectively.

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Debt - Schedule of Unsecured Credit Facilities (Parentheticals) (Details) - USD ($)	Jul. 19, 2023	Sep. 30, 2023	Dec. 31, 2022	Jul. 25, 2022	Aug. 02, 2018
Debt Details [Line Items]
Debt issuance costs, net		$ 7,588,000
Term loan facility, maximum borrowing capacity			$ 575,000,000
Outstanding Balance		$ 1,380,247,000	$ 1,374,215,000
S O F R Spread Adjustment Rate		0.10%
Secured Overnight Financing Rate (SOFR) [Member]
Debt Details [Line Items]
Debt Instrument, Basis of Variable Rate		5.32%	4.36%
Outstanding Variable-Rate Debt Effectively Fixed By Interest Rate Swaps [Member]
Debt Details [Line Items]
Derivative, notional amount		$ 695,000,000.0	$ 695,000,000.0
Revolving Credit Facilities [Member]
Debt Details [Line Items]
Debt issuance costs, net		3,800,000	$ 4,800,000
$225 Million Unsecured Term Loan Facility [Member]
Debt Details [Line Items]
Term loan facility, maximum borrowing capacity	$ 225,000,000	$ 225,000,000			$ 225,000,000
S O F R Spread Adjustment Rate		0.10%
$225 Million Unsecured Term Loan Facility [Member] | $50 Million Unsecured Term Loan [Member]
Debt Details [Line Items]
Debt instrument, face amount	$ 50,000,000				$ 50,000,000
Debt instrument extended maturity date term	2 years
Debt instrument extended maturity date	Aug. 02, 2025
$1.2 Billion Credit Facility [Member]
Debt Details [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,200,000,000		$ 1,200,000,000
S O F R Spread Adjustment Rate		0.10%

XML

Debt - Schedule of Mortgage Debt Obligations (Details) - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Outstanding Balance		$ 1,380,247	$ 1,374,215
Unamortized fair value adjustment of assumed debt		609
Unamortized debt issuance costs		(7,588)
Total		$ 284,861	328,865
Homewood Suites Huntsville, AL [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.12%
Loan Assumption or Origination Date		Mar. 01, 2014
Note payable, principal assumed or originated	[2]	$ 8,306
Outstanding Balance	[2]		6,193
Courtyard Prattville, AL [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.12%
Loan Assumption or Origination Date		Mar. 01, 2014
Note payable, principal assumed or originated	[2]	$ 6,596
Outstanding Balance	[2]		4,918
Residence Inn San Diego, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.97%
Loan Assumption or Origination Date		Mar. 01, 2014
Note payable, principal assumed or originated	[3]	$ 18,600
Outstanding Balance	[3]		13,827
Homewood Suites Miami, FL [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.02%
Loan Assumption or Origination Date		Mar. 01, 2014
Note payable, principal assumed or originated	[4]	$ 16,677
Outstanding Balance	[4]		12,440
Homewood Suites New Orleans, LA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.36%
Loan Assumption or Origination Date		Jul. 17, 2014
Maturity Date		Aug. 11, 2024
Note payable, principal assumed or originated		$ 27,000
Outstanding Balance		$ 20,522	21,161
Residence Inn Westford, MA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.28%
Loan Assumption or Origination Date		Mar. 18, 2015
Maturity Date		Apr. 11, 2025
Note payable, principal assumed or originated		$ 10,000
Outstanding Balance		$ 7,793	8,024
Hilton Garden Inn Denver, CO [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.46%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Jun. 11, 2025
Note payable, principal assumed or originated		$ 34,118
Outstanding Balance		$ 27,608	28,400
Courtyard Oceanside, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.28%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Oct. 01, 2025
Note payable, principal assumed or originated		$ 13,655
Outstanding Balance		$ 11,786	12,019
Hilton Garden Inn Omaha, NE [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.28%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Oct. 01, 2025
Note payable, principal assumed or originated		$ 22,681
Outstanding Balance		$ 19,577	19,963
Hampton Boise, ID [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.37%
Loan Assumption or Origination Date		May 26, 2016
Maturity Date		Jun. 11, 2026
Note payable, principal assumed or originated		$ 24,000
Outstanding Balance		$ 20,815	21,194
Courtyard Burbank, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.55%
Loan Assumption or Origination Date		Nov. 03, 2016
Maturity Date		Dec. 01, 2026
Note payable, principal assumed or originated		$ 25,564
Outstanding Balance		$ 20,729	21,326
Courtyard San Diego, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.55%
Loan Assumption or Origination Date		Nov. 03, 2016
Maturity Date		Dec. 01, 2026
Note payable, principal assumed or originated		$ 25,473
Outstanding Balance		$ 20,655	21,250
Hampton San Diego, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.55%
Loan Assumption or Origination Date		Nov. 03, 2016
Maturity Date		Dec. 01, 2026
Note payable, principal assumed or originated		$ 18,963
Outstanding Balance		$ 15,377	15,819
SpringHill Suites Burbank, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.94%
Loan Assumption or Origination Date		Mar. 09, 2018
Maturity Date		Apr. 01, 2028
Note payable, principal assumed or originated		$ 28,470
Outstanding Balance		$ 24,445	25,057
Courtyard Santa Ana, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.94%
Loan Assumption or Origination Date		Mar. 09, 2018
Maturity Date		Apr. 01, 2028
Note payable, principal assumed or originated		$ 15,530
Outstanding Balance		$ 13,334	13,668
Courtyard Richmond, VA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.40%
Loan Assumption or Origination Date		Feb. 12, 2020
Maturity Date		Mar. 11, 2030
Note payable, principal assumed or originated		$ 14,950
Outstanding Balance		$ 13,911	14,144
Residence Inn Richmond, VA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.40%
Loan Assumption or Origination Date		Feb. 12, 2020
Maturity Date		Mar. 11, 2030
Note payable, principal assumed or originated		$ 14,950
Outstanding Balance		$ 13,911	14,144
Residence Inn Portland, ME [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	3.43%
Loan Assumption or Origination Date		Mar. 02, 2020
Maturity Date		Mar. 01, 2032
Note payable, principal assumed or originated		$ 33,500
Outstanding Balance		$ 30,500	30,500
Homewood Suites San Jose, CA [Member]
Debt Instrument [Line Items]
Interest Rate	[1]	4.22%
Loan Assumption or Origination Date		Dec. 22, 2017
Maturity Date		May 01, 2038
Note payable, principal assumed or originated		$ 30,000
Outstanding Balance		24,284	25,168
Aggregate Properties [Member]
Debt Instrument [Line Items]
Note payable, principal assumed or originated		389,033
Outstanding Balance		285,247	329,215
Unamortized fair value adjustment of assumed debt		609	819
Unamortized debt issuance costs		$ (995)	$ (1,169)

[1] Interest rates are the rates per the loan agreement. For loans assumed, the Company adjusted the interest rates per the loan agreement to market rates and is amortizing the adjustments to interest expense over the life of the loan.

[2] Loan was repaid in full on February 6, 2023.

[3] Loan was repaid in full on March 6, 2023.

[4] Loan was repaid in full on January 3, 2023.

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Fair Value of Financial Instruments - Additional Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) Derivative_Instrument	Dec. 31, 2022 USD ($)
Fair Value of Financial Instruments [Line Items]
Long-term debt, fair value	$ 1,300,000	$ 1,300,000
Long-term debt, carrying value	1,373,268	$ 1,366,249
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net	$ 20,900
Secured Overnight Financing Rate (SOFR) [Member]
Fair Value of Financial Instruments [Line Items]
Variable Rate	0.10%
Interest Rate, Description	one-month SOFR plus a 0.10% SOFR spread adjustment
Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments [Line Items]
Number of interest rate swap agreements | Derivative_Instrument	13

XML

Fair Value of Financial Instruments - Schedule of Interest Rate Swap Agreements (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Fair value asset (liability)	$ 37,411	$ 36,881
Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	695,000
Fair value asset (liability)	37,411	36,057
Interest Rate Swap #1 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Dec. 07, 2018
Effective Date	May 18, 2020
Maturity date	Jan. 31, 2024
Swap fixed interest rate	2.71%
Fair value asset (liability)	$ 466	1,163
Interest Rate Swap #2 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 75,000
Origination Date	May 31, 2017
Effective Date	Jul. 31, 2017
Maturity date	Jun. 30, 2024
Swap fixed interest rate	1.95%
Fair value asset (liability)	$ 1,951	3,026
Interest Rate Swap #3 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 10,000
Origination Date	Aug. 10, 2017
Effective Date	Aug. 10, 2017
Maturity date	Jun. 30, 2024
Swap fixed interest rate	2.02%
Fair value asset (liability)	$ 254	386
Interest Rate Swap #4 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Jul. 02, 2019
Effective Date	Jul. 05, 2019
Maturity date	Jul. 18, 2024
Swap fixed interest rate	1.64%
Fair value asset (liability)	$ 1,507	2,298
Interest Rate Swap #5 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Aug. 21, 2019
Effective Date	Aug. 23, 2019
Maturity date	Aug. 18, 2024
Swap fixed interest rate	1.31%
Fair value asset (liability)	$ 1,820	2,675
Interest Rate Swap #6 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Aug. 21, 2019
Effective Date	Aug. 23, 2019
Maturity date	Aug. 30, 2024
Swap fixed interest rate	1.32%
Fair value asset (liability)	$ 1,873	2,703
Interest Rate Swap #7 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 75,000
Origination Date	Aug. 21, 2019
Effective Date	May 18, 2020
Maturity date	May 18, 2025
Swap fixed interest rate	1.26%
Fair value asset (liability)	$ 4,633	5,225
Interest Rate Swap #8 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Jun. 01, 2018
Effective Date	Jan. 31, 2019
Maturity date	Jun. 30, 2025
Swap fixed interest rate	2.88%
Fair value asset (liability)	$ 1,882	1,655
Interest Rate Swap #9 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 25,000
Origination Date	Dec. 06, 2018
Effective Date	Jan. 31, 2020
Maturity date	Jun. 30, 2025
Swap fixed interest rate	2.74%
Fair value asset (liability)	$ 999	909
Interest Rate Swap #10 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 75,000
Origination Date	Aug. 21, 2019
Effective Date	May 18, 2021
Maturity date	May 18, 2026
Swap fixed interest rate	1.29%
Fair value asset (liability)	$ 6,499	6,506
Interest Rate Swap #11 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Mar. 17, 2023
Effective Date	Mar. 20, 2023
Maturity date	Mar. 18, 2028
Swap fixed interest rate	3.50%
Fair value asset (liability)	$ 1,941
Interest Rate Swap #12 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 50,000
Origination Date	Mar. 17, 2023
Effective Date	Mar. 20, 2023
Maturity date	Mar. 20, 2028
Swap fixed interest rate	3.49%
Fair value asset (liability)	$ 1,919
Interest Rate Swap #13 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 85,000
Origination Date	Dec. 31, 2019
Effective Date	Dec. 31, 2019
Maturity date	Dec. 31, 2029
Swap fixed interest rate	1.87%
Fair value asset (liability)	$ 11,667	9,511
Interest Rate Swap #14 [Member] | Not Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments Schedule of Interest Rate Swap Agreements [Line Items]
Derivative, notional amount	$ 100,000
Origination Date	Apr. 07, 2016
Effective Date	Sep. 30, 2016
Maturity date	Mar. 31, 2023
Swap fixed interest rate	1.30%
Fair value asset (liability)		$ 824

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Fair Value of Financial Instruments - Derivative Instruments, Gain (Loss) Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments Gain Loss Recognized [Abstract]
Net Unrealized Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$ 7,264	$ 17,130	$ 16,682	$ 50,649
Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) to Interest and Other Expense, net	$ 5,852	$ 1,106	$ 16,152	$ (3,213)

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Related Parties - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Aircraft Owned by Executive Officers [Member] | General and Administrative Expenses [Member]
Related Parties Details [Line Items]
Related Party Transaction, Amounts of Transaction	$ 100,000	$ 100,000
Reimbursement Received From Related Parties For Their Proportionate Share of Staffing and Office Related Costs Provided by Apple Hospitality [Member]
Related Parties Details [Line Items]
Related Party Transaction, Amounts of Transaction	800,000	$ 600,000
Reimbursement Received From Related Parties For Their Proportionate Share of Staffing and Office Related Costs Provided by Apple Hospitality [Member] | Apple Realty Group, Inc. [Member]
Related Parties Details [Line Items]
Other Receivables	$ 300,000		$ 400,000
Cost Sharing Arrangement [Member]
Related Parties Details [Line Items]
Related party transaction, Description of transaction	To efficiently manage cash disbursements, the Company or ARG may make payments for the other company. Under this cash management process, each company may advance or defer up to $1 million at any time. Each quarter, any outstanding amounts are settled between the companies. This process allows each company to minimize its cash on hand and reduces the cost for each company. The amounts outstanding at any point in time are not significant to either of the companies.
Cost Sharing Arrangement [Member] | Maximum [Member]
Related Parties Details [Line Items]
Related Party Transaction, Amounts of Transaction	$ 1,000,000

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Shareholders' Equity - Additional Information (Details) - USD ($)		1 Months Ended		3 Months Ended		9 Months Ended		38 Months Ended
	Oct. 16, 2023	Sep. 30, 2023	Jan. 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	May 31, 2023	Dec. 31, 2022	Aug. 12, 2020
Shareholders Equity Details [Line Items]
Common stock, dividends, per share, cash paid				$ 0.24	$ 0.17	$ 0.8	$ 0.38
Payments of ordinary dividends, common stock				$ 54,800,000	$ 38,800,000	$ 183,119,000	$ 86,792,000
Cash distribution, date declared		Jun. 30, 2023
Cash distribution declared		$ 0.08		$ 0.08		$ 0.08		$ 0.08		$ 0.08
Cash distribution, date to be paid	Oct. 16, 2023		Jan. 31, 2023
Accrued distribution		$ 18,280,000		$ 18,280,000	15,981,000	$ 18,280,000	15,981,000	$ 18,280,000		$ 36,600,000
Commissions and issuance costs				33,000	12,000	$ 94,000	218,000
Stock repurchase program, extended term						1 year
Stock repurchase program, authorized amount									$ 338,700,000
Share repurchase program, end period						2024-07
Number of shares repurchased						500,000
Stock repurchased value per share						$ 14.34
Stock repurchased value				49,000	$ 1,376,000	$ 6,880,000	$ 1,521,000
Stock repurchase program, remaining available for repurchase		335,400,000		335,400,000		$ 335,400,000		$ 335,400,000
Special One-time Distribution [Member]
Shareholders Equity Details [Line Items]
Cash distribution declared										$ 0.08
Combined Distribution [Member]
Shareholders Equity Details [Line Items]
Cash distribution declared										$ 0.16
ATM Program Executed August 12, 2020 [Member]
Shareholders Equity Details [Line Items]
Stock issuance program, authorized amount											$ 300,000,000
Stock issued during period, shares, new issues (in shares)						0		4,700,000
Shares issued weighted average market sales price per share (in dollars per share)								$ 16.26
Proceeds from issuance of common stock, gross								$ 76,000,000
Commissions and issuance costs								900,000
Proceeds from issuance of common stock, net								75,100,000
Stock issuance program, available for issuance		224,000,000		224,000,000		$ 224,000,000		224,000,000
ATM Program Executed August 12, 2020 [Member] | Prior to Refinancing [Member]
Shareholders Equity Details [Line Items]
Line of credit facility, maximum borrowing capacity		$ 425,000,000		$ 425,000,000		$ 425,000,000		$ 425,000,000

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Compensation Plans - Additional Information (Details)			3 Months Ended			9 Months Ended		12 Months Ended
		Apr. 01, 2020 USD ($) Officer shares	Sep. 30, 2023 USD ($)	Mar. 31, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2023 USD ($)
New Officer Share-based Payment Arrangement [Member]
Compensation Plans Details [Line Items]
Number of new officers | Officer		5
Share based compensation, net (in Shares) | shares		200,000
Total share-based compensation earned, including the surrendered shares (in millions)		$ 1,800,000
Restricted common shares vesting date		Mar. 31, 2023
Restriction period		3 years
Share-based compensation expense						$ 100,000	$ 400,000
Common shares surrendered on issuance date to satisfy tax withholding obligations | shares				83,000
2023 Executive Management Incentive Plan [Member]
Compensation Plans Details [Line Items]
Incentive compensation, description						one-half (50%) of incentive compensation based on operational performance goals and metrics and one-half (50%) of incentive compensation based on shareholder return metrics. With respect to the shareholder return metrics, 75% of the target will be based on shareholder return relative to a peer group and 25% will be based on total shareholder return metrics over one-year, two-year, and three-year periods.
Operational performance metrics accounted for total target incentive compensation, percentage						50.00%
Percentage of relative shareholder return metrics on shareholder return metrics						75.00%
Percentage of total shareholder return metrics on shareholder return metrics						25.00%
Shareholder return metrics accounted for total target incentive compensation, percentage						50.00%
Operational performance goals and metrics percentage of the target based on modified funds						25.00%
Percentage of operational performance goals on target operating performance metrics						50.00%
Accrued liability for potential executive bonus payments			$ 14,900,000			$ 14,900,000
Portion of awards paid in cash						25.00%
Portion of awards issued in equity						75.00%
Percentage of operational performance goals based on revenue						25.00%
2023 Executive Management Incentive Plan [Member] | General and Administrative Expenses [Member]
Compensation Plans Details [Line Items]
Labor and related expense			4,900,000			$ 14,900,000
2023 Executive Management Incentive Plan [Member] | Unrestricted Shares at Time of Issuance [Member] | Share Based Compensation [Member] | Equity Awards Issued in the First Quarter of 2023 [Member]
Compensation Plans Details [Line Items]
Share-based compensation arrangement, vesting description						two-thirds
2023 Executive Management Incentive Plan [Member] | Restricted Stock Vesting in December 2023 [Member] | Share Based Compensation [Member] | Equity Awards Issued in the First Quarter of 2023 [Member]
Compensation Plans Details [Line Items]
Share-based compensation arrangement, vesting description						one-third
2022 Executive Management Incentive Plan [Member] | General and Administrative Expenses [Member]
Compensation Plans Details [Line Items]
Labor and related expense					$ 4,000,000		$ 12,000,000
2022 Executive Management Incentive Plan [Member] | Share Based Compensation [Member] | Equity Awards Issued in the First Quarter of 2023 [Member]
Compensation Plans Details [Line Items]
Share based compensation, net (in Shares) | shares				672,163
Total share-based compensation earned, including the surrendered shares (in millions)	[1]			$ 15,600,000
Restricted common shares vesting date				Dec. 08, 2023
Share-based compensation expense			$ 700,000			$ 2,000,000		$ 2,600,000
Common shares surrendered on issuance date to satisfy tax withholding obligations | shares				263,026
Potential Aggregate Payout [Member] | 2023 Executive Management Incentive Plan [Member] | Minimum [Member]
Compensation Plans Details [Line Items]
Labor and related expense						0
Potential Aggregate Payout [Member] | 2023 Executive Management Incentive Plan [Member] | Maximum [Member]
Compensation Plans Details [Line Items]
Labor and related expense						$ 27,100,000

[1] Of the total 2022 share-based compensation, approximately $12.5 million was recorded as a liability as of December 31, 2022 and is included in accounts payable and other liabilities in the Company’s consolidated balance sheet at December 31, 2022. Another $2.6 million, which is subject to vesting on December 8, 2023 and excludes any restricted shares forfeited or vested prior to that date, will be recognized as share-based compensation expense proportionately throughout 2023. For the three and nine months ended September 30, 2023, the Company recognized approximately $0.7 million and $2.0 million, respectively, of share-based compensation expense related to restricted share awards.

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Compensation Plans - Information Pertaining to Share-based Compensation Issued (Details) - Share Based Compensation [Member] - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022
2022 Executive Management Incentive Plan [Member] | Equity Awards Issued in the First Quarter of 2023 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Period common shares issued		First Quarter 2023
Common shares earned under each incentive plan		935,189
Common shares surrendered on issuance date to satisfy tax withholding obligations		263,026
Common shares earned and issued under each incentive plan, net of common shares surrendered on issuance date to satisfy tax withholding obligations		672,163
Average of the high and low stock price on issuance date		$ 16.7
Total share-based compensation earned, including the surrendered shares (in millions)	[1]	$ 15.6
Of the total common shares earned and issued, total common shares unrestricted at time of issuance		360,176
Of the total common shares earned and issued, total common shares restricted at time of issuance		311,987
Restricted common shares vesting date		Dec. 08, 2023
2021 Executive Management Incentive Plan [Member] | Equity Awards Issued in the First Quarter of 2022 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Period common shares issued			First Quarter 2022
Common shares earned under each incentive plan			868,079
Common shares surrendered on issuance date to satisfy tax withholding obligations			245,597
Common shares earned and issued under each incentive plan, net of common shares surrendered on issuance date to satisfy tax withholding obligations			622,482
Average of the high and low stock price on issuance date			$ 17.79
Total share-based compensation earned, including the surrendered shares (in millions)	[2]		$ 15.4
Of the total common shares earned and issued, total common shares unrestricted at time of issuance			338,032
Of the total common shares earned and issued, total common shares restricted at time of issuance			284,450
Restricted common shares vesting date			Dec. 09, 2022
Common shares surrendered on vesting date to satisfy tax withholding requirements resulting from vesting of restricted common shares			114,147

[1] Of the total 2022 share-based compensation, approximately $12.5 million was recorded as a liability as of December 31, 2022 and is included in accounts payable and other liabilities in the Company’s consolidated balance sheet at December 31, 2022. Another $2.6 million, which is subject to vesting on December 8, 2023 and excludes any restricted shares forfeited or vested prior to that date, will be recognized as share-based compensation expense proportionately throughout 2023. For the three and nine months ended September 30, 2023, the Company recognized approximately $0.7 million and $2.0 million, respectively, of share-based compensation expense related to restricted share awards.

[2] Of the total 2021 share-based compensation, approximately $2.5 million, which vested on December 9, 2022, was recognized as share-based compensation expense proportionately throughout 2022. For the three and nine months ended September 30, 2022, the Company recognized approximately $0.6 million and $1.9 million, respectively, of share-based compensation expense related to restricted share awards.

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Compensation Plans - Information Pertaining to Share-based Compensation Issued (Parenthetical) (Details) - Share Based Compensation [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2023	Dec. 31, 2022
2022 Executive Management Incentive Plan [Member] | Equity Awards Issued in the First Quarter of 2023 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation recorded as liability						$ 12.5
Share-based compensation expense	$ 0.7		$ 2.0		$ 2.6
2021 Executive Management Incentive Plan [Member] | Equity Awards Issued in the First Quarter of 2022 [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense		$ 0.6		$ 1.9		$ 2.5

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Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands					1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 19, 2023 $ / shares	Oct. 18, 2023 USD ($) Room	Oct. 16, 2023 USD ($) $ / shares	Oct. 11, 2023 USD ($) Hotel Room ParkingStructure	Sep. 30, 2023 USD ($) Room Hotel $ / shares	Jan. 31, 2023	Sep. 30, 2023 USD ($) Room Hotel $ / shares	Sep. 30, 2022 USD ($) $ / shares	Sep. 30, 2023 USD ($) Room Hotel $ / shares	Sep. 30, 2022 USD ($) $ / shares	Dec. 31, 2022 $ / shares
Subsequent Event [Line Items]
Number of existing hotels purchased | Hotel					220		220		220
Payments of ordinary dividends, common stock							$ 54,800	$ 38,800	$ 183,119	$ 86,792
Common stock, dividends, per share, cash paid | $ / shares							$ 0.24	$ 0.17	$ 0.8	$ 0.38
Cash distribution declared | $ / shares					$ 0.08		$ 0.08		$ 0.08		$ 0.08
Cash distribution, date declared					Jun. 30, 2023
Cash distribution, date to be paid			Oct. 16, 2023			Jan. 31, 2023
Aggregate number of hotel rooms | Room					28,929		28,929		28,929
Hotels Under Purchase Contract [Member]
Subsequent Event [Line Items]
Gross Purchase Price									$ 359,031
Purchase contract gross purchase price					$ 359,000		$ 359,000		$ 359,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Payments of ordinary dividends, common stock			$ 18,300
Common stock, dividends, per share, cash paid | $ / shares			$ 0.08
Cash distribution, date of record	Oct. 31, 2023		Sep. 29, 2023
Cash distribution declared | $ / shares	$ 0.08
Cash distribution, date declared	Oct. 19, 2023
Cash distribution, date to be paid	Nov. 15, 2023
Subsequent Event [Member] | Salt Lake City, Utah [Member]
Subsequent Event [Line Items]
Number of existing hotels purchased | Hotel				2
Number of parking structure purchased | ParkingStructure				1
Gross Purchase Price				$ 91,500
Subsequent Event [Member] | Courtyard, Salt Lake City, Utah [Member]
Subsequent Event [Line Items]
Aggregate number of hotel rooms | Room				175
Subsequent Event [Member] | Hyatt House, Salt Lake City, Utah [Member]
Subsequent Event [Line Items]
Aggregate number of hotel rooms | Room				159
Subsequent Event [Member] | Residence Inn in Renton, Washington [Member]
Subsequent Event [Line Items]
Gross Purchase Price		$ 55,500
Aggregate number of hotel rooms | Room		146