10-Q

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2017

☐ 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)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  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   ¨ (Do not check if a smaller reporting company)	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 1, 2017: 223,060,840

Apple Hospitality REIT, Inc.

Form 10-Q

Index

			Page Number
PART I.  FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets – September 30, 2017 and December 31, 2016	3
		Consolidated Statements of Operations and Comprehensive Income - Three and nine months ended September 30, 2017 and 2016	4
		Consolidated Statements of Cash Flows - Nine months ended September 30, 2017 and 2016	5
		Notes to Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
	Item 4.	Controls and Procedures	35
PART II.  OTHER INFORMATION
	Item 1.	Legal Proceedings	36
	Item 1A.	Risk Factors	36
	Item 6.	Exhibits	36
Signatures			37

This Form 10-Q includes references to certain trademarks or service marks.  The Courtyard by Marriott®, Fairfield Inn by Marriott®, Fairfield Inn & Suites by Marriott®, Marriott® Hotels, Renaissance® 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® Hotels & Resorts, Hilton Garden Inn®, Home2 Suites by Hilton® and Homewood Suites by Hilton® trademarks are the property of Hilton Worldwide Holdings Inc. or one or more 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,
	2017			2016
	(unaudited)
Assets
Investment in real estate, net of accumulated depreciation of $686,787 and $557,597, respectively	$	4,742,590		$	4,823,489
Assets held for sale		40,626			39,000
Restricted cash-furniture, fixtures and other escrows		30,299			29,425
Due from third party managers, net		52,354			31,460
Other assets, net		48,018			56,509
Total Assets	$	4,913,887		$	4,979,883
Liabilities
Revolving credit facility	$	216,700		$	270,000
Term loans		655,988			570,934
Mortgage debt		432,783			497,029
Accounts payable and other liabilities		104,467			124,856
Total Liabilities		1,409,938			1,462,819
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 223,060,840 and 222,938,648 shares, respectively		4,455,390			4,453,205
Accumulated other comprehensive income		5,218			4,589
Distributions greater than net income		(956,659	)		(940,730	)
Total Shareholders' Equity		3,503,949			3,517,064
Total Liabilities and Shareholders' Equity	$	4,913,887		$	4,979,883

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,
	2017			2016			2017			2016
Revenues:
Room	$	302,298		$	255,269		$	877,974		$	698,759
Other		22,628			21,202			71,581			59,835
Total revenue		324,926			276,471			949,555			758,594
Expenses:
Operating		79,975			69,082			235,474			187,370
Hotel administrative		24,842			20,866			74,895			57,921
Sales and marketing		25,488			21,329			75,867			59,244
Utilities		12,036			10,543			31,982			25,862
Repair and maintenance		12,199			10,478			36,394			29,167
Franchise fees		13,974			11,834			40,611			32,212
Management fees		11,315			9,205			33,072			26,189
Property taxes, insurance and other		17,598			14,787			52,346			40,315
Ground lease		2,831			2,615			8,486			7,587
General and administrative		5,350			2,623			18,255			12,511
Transaction and litigation costs (reimbursements)		0			36,452			(2,586	)		37,861
Loss on impairment of depreciable real estate assets		0			5,471			7,875			5,471
Depreciation		44,110			37,343			131,770			104,651
Total expenses		249,718			252,628			744,441			626,361
Operating income		75,208			23,843			205,114			132,233
Interest and other expense, net		(12,024	)		(10,156	)		(35,590	)		(28,519	)
Gain (loss) on sale of real estate		(157	)		0			15,983			0
Income before income taxes		63,027			13,687			185,507			103,714
Income tax benefit (expense)		(203	)		7			(712	)		(616	)
Net income	$	62,824		$	13,694		$	184,795		$	103,098
Other comprehensive income (loss):
Interest rate derivatives		259			4,261			629			(7,934	)
Comprehensive income	$	63,083		$	17,955		$	185,424		$	95,164
Basic and diluted net income per common share	$	0.28		$	0.07		$	0.83		$	0.57
Weighted average common shares outstanding - basic and diluted		223,057			190,563			223,052			180,004

See notes to consolidated financial statements.

4

Apple Hospitality REIT, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Nine Months Ended
	September 30,
	2017			2016
Cash flows from operating activities:
Net income	$	184,795		$	103,098
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		131,770			104,651
Loss on impairment of depreciable real estate assets		7,875			5,471
Gain on sale of real estate		(15,983	)		0
Other non-cash expenses, net		5,372			4,806
Changes in operating assets and liabilities, net of amounts acquired or assumed with acquisitions:
Increase in due from third party managers, net		(20,883	)		(14,350	)
Decrease (increase) in other assets, net		8,507			(1,014	)
Increase (decrease) in accounts payable and other liabilities		(20,944	)		35,309
Net cash provided by operating activities		280,509			237,971
Cash flows from investing activities:
Cash consideration in Apple Ten merger		0			(93,590	)
Acquisition of hotel properties, net		(56,794	)		(23,994	)
Deposits and other disbursements for potential acquisitions		(1,810	)		0
Capital improvements		(41,370	)		(47,523	)
Decrease (increase) in capital improvement reserves		(1,351	)		2,459
Net proceeds from sale of real estate		28,374			0
Net cash used in investing activities		(72,951	)		(162,648	)
Cash flows from financing activities:
Repurchases of common shares		0			(361	)
Repurchases of common shares to satisfy employee withholding requirements		(432	)		(459	)
Equity issuance costs		0			(1,176	)
Distributions paid to common shareholders		(200,716	)		(161,940	)
Net proceeds from (payments on) revolving credit facility		(53,300	)		187,300
Payments on extinguished credit facility		0			(111,100	)
Proceeds from term loans		85,000			150,000
Proceeds from mortgage debt		0			24,000
Payments of mortgage debt		(37,219	)		(157,823	)
Financing costs		(891	)		(3,764	)
Net cash used in financing activities		(207,558	)		(75,323	)
Net change in cash and cash equivalents		0			0
Cash and cash equivalents, beginning of period		0			0
Cash and cash equivalents, end of period	$	0		$	0
Supplemental cash flow information:
Interest paid	$	35,049		$	30,192
Supplemental disclosure of noncash investing and financing activities:
Stock consideration in Apple Ten merger (see note 2)	$	0		$	956,086
Accrued distribution to common shareholders	$	22,302		$	22,325
Mortgage debt assumed by buyer upon sale of real estate	$	27,073		$	0

See notes to consolidated financial statements.

5

Apple Hospitality REIT, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1.  Organization and Summary of Significant Accounting Policies

Organization

Apple Hospitality REIT, Inc., together with its wholly-owned subsidiaries (the “Company”), is a Virginia corporation that has elected to be treated as a real estate investment trust (“REIT”) for federal income tax purposes.  The Company is a self-advised REIT that invests in income-producing real estate, primarily in the lodging sector, in the United States.  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, and therefore does not consolidate the entities.  As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in 33 states, including one hotel with 316 rooms classified as held for sale, which was sold to an unrelated party in October 2017.  The Company’s common shares are listed on the New York Stock Exchange 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 accounting principles generally accepted in the United States 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 2016 Annual Report on Form 10-K.  Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2017.

Use of Estimates

The preparation of the financial statements in conformity with United States generally accepted accounting principles 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.

Accounting Standards Recently Adopted

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which is intended to add guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The standard is effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted.  The Company adopted this standard effective January 1, 2017 on a prospective basis.  Prior to the adoption of this standard, the Company’s acquisitions of hotel properties were accounted for as existing businesses, and therefore all transaction costs associated with the acquisitions, including title, legal, accounting, brokerage commissions and other related costs were expensed as incurred.  Under the new standard, effective January 1, 2017, acquisitions of hotel properties (including the acquisition of three hotels during the first nine months of 2017, as discussed in Note 3) will generally be accounted for as acquisitions of a group of assets, with costs incurred to effect an acquisition being capitalized as part of the cost of the assets acquired, instead of accounted for separately as expenses in the period that they are incurred.  Asset acquisitions now require the Company to complete its allocation of the purchase price at the time of the acquisition as the measurement period applicable to business combinations does not apply to asset acquisitions.

6

Accounting Standards Recently Issued

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which affects virtually all aspects of an entity’s revenue recognition.  The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In March, April, May and December 2016, the FASB issued ASUs No. 2016-08, 2016-10, 2016-12 and 2016-20, respectively, all related to Revenue from Contracts with Customers (Topic 606), which further clarify the application of the standard.  In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effectiveness of ASU No. 2014-09 to annual and interim periods beginning after December 15, 2017, and permitted early application for annual reporting periods beginning after December 15, 2016.  The Company plans to adopt this standard on January 1, 2018 using the modified retrospective approach.  Although the Company is still evaluating this ASU, based on its assessment to date, the Company does not believe there will be a significant change to the amount or timing of the recording of revenue in its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which clarifies the scope of Accounting Standards Codification (“ASC”) Subtopic 610-20 and adds guidance for the derecognition of nonfinancial assets, including partial sales.  The standard is effective in conjunction with ASU No. 2014-09, presented above, which is effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted.  The provisions of this update must be applied at the same time as the adoption of ASU No. 2014-09.  The Company plans to adopt this standard on January 1, 2018 using the modified retrospective approach.  The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting model to enable entities to better portray their risk management activities in their financial statements and enhance the transparency and understandability of hedging activity.  The standard simplifies the application of hedge accounting and reduces the administrative burden of hedge documentation requirements and assessing hedge effectiveness.  The standard is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted.  The standard requires a modified retrospective approach for all hedge relationships that exist on the date of adoption.  The presentation and disclosure guidance is required only prospectively.  The Company is currently evaluating when it will adopt the standard.  The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

2.  Merger with Apple REIT Ten, Inc.

Effective September 1, 2016, the Company completed its previously announced merger with Apple REIT Ten, Inc. (“Apple Ten”) (the “merger”).  Pursuant to the Agreement and Plan of Merger entered into on April 13, 2016, as amended on July 13, 2016 (the “Merger Agreement”), Apple Ten merged with and into a wholly-owned subsidiary of the Company (“Acquisition Sub”), at which time the separate corporate existence of Apple Ten ceased and Acquisition Sub became the surviving corporation in the merger.  Acquisition Sub was formed solely for the purpose of engaging in the merger and had not conducted any prior activities.  As a result of the merger, the Company acquired the business of Apple Ten, a real estate investment trust, which immediately prior to the effective time of the merger, owned 56 hotels located in 17 states with an aggregate of 7,209 rooms.

The Company accounted for the merger in accordance with ASC 805, Business Combinations.  The Company was considered the acquirer for financial reporting purposes, which required, among other things, that the assets acquired and liabilities assumed from Apple Ten be recognized at their acquisition date fair values.  For purpose of accounting for the transaction, the aggregate value of the merger consideration paid to Apple Ten shareholders was estimated to be approximately $1.0 billion, and was comprised of approximately $956.1 million for the issuance of approximately 48.7 million common shares of the Company valued at $19.62 per share, which was the closing price of the Company’s common shares on August 31, 2016 (the date that the merger was approved), and $93.6 million in cash, which was funded through borrowings on the Company’s $540 million revolving credit facility (the “revolving credit facility”).  All costs (reimbursements) related to the merger were recorded in the period incurred and are included in transaction and litigation costs (reimbursements) in the Company’s consolidated financial statements.  In connection with the merger, the Company incurred approximately $37.6 million in merger costs for the nine months ended September 30, 2016, which included $32.0 million funded by the Company in January 2017 to settle the Apple Ten merger lawsuit and approximately $1.8 million in legal costs incurred to defend the lawsuit.  During 2017, the Company received $12.6 million in proceeds from its director and officer insurance carriers in connection with the merger lawsuit, of which $10.0 million (received in January 2017) and $2.6 million (received in May 2017) were included as reductions in transaction and litigation costs (reimbursements) for the fourth quarter of 2016 and nine months ended September 30, 2017, respectively.  Further discussion of the merger litigation is included in Note 10.

7

Effective September 1, 2016, upon completion of the merger, the Company assumed approximately $145.7 million in mortgage debt, prior to any fair value adjustments, secured by nine properties.  The Company also assumed the outstanding balance on Apple Ten’s credit facility totaling $111.1 million, which was terminated and repaid in full on September 1, 2016 with borrowings on the Company’s revolving credit facility.

As contemplated in the Merger Agreement, in connection with the completion of the merger, the advisory and related party arrangements with respect to Apple Ten and its advisors, as described in more detail in Note 7, were terminated.

The following unaudited pro forma information for the three and nine month periods ended September 30, 2017 and 2016, is presented as if the merger, effective September 1, 2016, had occurred on January 1, 2016, and is based on assumptions and estimates considered appropriate by the Company.  The pro forma information is provided for illustrative purposes only and does not necessarily reflect what the operating results would have been had the merger been completed on January 1, 2016, nor is it necessarily indicative of future operating results.  The pro forma information does not give effect to any cost synergies or other operating efficiencies that could result from the merger.  Amounts are in thousands except per share data.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017 (Actual)		2016 (Proforma)		2017 (Proforma)		2016 (Proforma)
Total revenue	$	324,926	$	325,924	$	949,555	$	949,760
Net income	$	62,824	$	59,960	$	182,209	$	176,985
Basic and diluted net income per common share	$	0.28	$	0.27	$	0.82	$	0.79
Weighted average common shares outstanding - basic and diluted		223,057		223,403		223,052		223,399

For purposes of calculating these pro forma amounts, merger transaction and litigation costs (reimbursements) totaling approximately ($2.6) million for the nine months ended September 30, 2017, and approximately $36.4 million and $37.6 million for the three and nine months ended September 30, 2016, respectively, included in the Company’s consolidated statements of operations, were excluded from the pro forma amounts since these costs and reimbursements are attributable to the merger and related transactions and do not have an ongoing impact to the statements of operations.

3.  Investment in Real Estate

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

	September 30,			December 31,
	2017			2016
Land	$	711,826		$	707,878
Building and Improvements		4,294,310			4,270,095
Furniture, Fixtures and Equipment		411,376			391,421
Franchise Fees		11,865			11,692
		5,429,377			5,381,086
Less Accumulated Depreciation		(686,787	)		(557,597	)
Investment in Real Estate, net	$	4,742,590		$	4,823,489

As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in 33 states, including one hotel with 316 rooms classified as held for sale, which was sold to an unrelated party in October 2017.

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

8

Acquisitions

The Company acquired three hotels during the first nine months of 2017.  The following table sets forth the location, brand, manager, date acquired, number of rooms and gross purchase price for each hotel.  All dollar amounts are in thousands.

City	State	Brand	Manager	Date Acquired	Rooms		Gross Purchase Price (a)
Fort Worth	TX	Courtyard	LBA	2/2/2017		124	$	18,000
Birmingham (b)	AL	Hilton Garden Inn	LBA	9/12/2017		104		19,162
Birmingham (b)	AL	Home2 Suites	LBA	9/12/2017		106		19,276
						334	$	56,438

(a)

The acquisitions of these hotel properties were accounted for as acquisitions of a group of assets, with costs incurred to effect the acquisitions, which were not significant, capitalized as part of the cost of the assets acquired.  The gross purchase price excludes capitalized transaction costs.  At the date of purchase, the purchase price for each of these properties was funded through the Company’s revolving credit facility.

(b)

The Hilton Garden Inn and Home2 Suites hotels in Birmingham, AL are part of an adjoining two-hotel complex located on the same site.

On July 1, 2016, the Company closed on the purchase of a newly constructed 128-room Home2 Suites hotel in Atlanta, Georgia, the same day the hotel opened for business, for a purchase price of approximately $24.6 million.  The Company used borrowings under its revolving credit facility to purchase the hotel.  Additionally, as described in Note 2, effective September 1, 2016, the Company completed the merger with Apple Ten, which added 56 hotels, located in 17 states, with an aggregate of 7,209 rooms to the Company’s real estate portfolio.  The total real estate value of the merger was estimated to be approximately $1.3 billion.  The Company accounted for the purchase of these hotels in accordance with ASC 805, Business Combinations.  No goodwill was recorded in connection with any of these acquisitions.  For the 57 hotels acquired during the nine months ended September 30, 2016, the amount of revenue and operating income (excluding merger and other acquisition related transaction costs) included in the Company’s consolidated statements of operations from the date of acquisition through September 30, 2016 was approximately $25.0 million and $9.5 million, respectively.

Hotel Contract Commitments

As of September 30, 2017, the Company had outstanding contracts for the potential purchase of four additional hotels for a total purchase price of approximately $146.1 million.  Two of the hotels, the Salt Lake City Residence Inn and the Portland Residence Inn, which are already in operation, were acquired in October 2017.  The two remaining hotels are under construction and are planned to be completed and opened for business over the next 12 months from September 30, 2017, at which time closing on these hotels is expected to occur.  Although the Company is working towards acquiring the two hotels under construction, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on these hotels will occur under the outstanding purchase contracts.  The following table summarizes the location, brand, date of purchase contract, expected number of rooms, refundable (if the seller does not meet its obligations under the contract) contract deposits paid, and gross purchase price for each of the contracts outstanding at September 30, 2017.  All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Operating (a)
Salt Lake City, UT	Residence Inn	8/22/2017		136	$	500	$	25,500
Portland, ME	Residence Inn	8/30/2017		179		1,000		55,750
Under development (b)
Phoenix, AZ	Hampton	10/25/2016		210		500		44,100
Orlando, FL	Home2 Suites	1/18/2017		128		3		20,736
				653	$	2,003	$	146,086

(a)

Closing on these hotels occurred in October 2017.

(b)

As of September 30, 2017, these hotels were under construction. The table shows the expected number of rooms upon hotel completion and the expected franchise brands. Assuming all conditions to closing are met, the purchases of these hotels are expected to close over the next 12 months from September 30, 2017. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the contract. As the property is under construction, at this time, the seller has not met all of the conditions to closing.

9

The purchase price for each of the Salt Lake City Residence Inn and Portland Residence Inn was funded through the Company’s revolving credit facility and it is anticipated that the purchase price for the remaining outstanding contracts will be funded similarly.

Loss on Impairment of Depreciable Real Estate Assets

During the first quarter of 2017, the Company identified two properties for potential sale: the Columbus, Georgia SpringHill Suites and TownePlace Suites hotels.  In April 2017, the Company entered into separate contracts with the same unrelated party for the sale of these properties for a total combined gross sales price of approximately $10.0 million.  Due to the change in the anticipated hold period for each of these hotels, the Company reviewed the estimated undiscounted cash flows generated by each property (including its sale price, net of estimated selling costs) and determined that, for each hotel, the undiscounted cash flows were less than its carrying value; therefore the Company recognized an impairment loss of approximately $7.9 million in the first quarter of 2017 to adjust the bases of these properties to their estimated fair values, which were based on the contracted sale price, net of estimated selling costs, a Level 1 input under the fair value hierarchy.  In May 2017, both of these contracts were terminated.

During the third quarter of 2016, the Company identified two properties for potential sale: the Dallas, Texas Hilton hotel and the Chesapeake, Virginia Marriott hotel.  In October 2016, the Company entered into separate contracts for the sale of these properties.  Due to the change in the anticipated hold period for each of these hotels, the Company reviewed the estimated undiscounted cash flows generated by each property (including its sale price, net of commissions and other selling costs) and determined that the Chesapeake, Virginia Marriott’s estimated undiscounted cash flows were less than its carrying value; therefore the Company recognized an impairment loss of approximately $5.5 million in the third quarter of 2016 to adjust the basis of this property to its estimated fair value, which was based on the original contracted sale price, net of broker commissions and other estimated selling costs, a Level 1 input under the fair value hierarchy.  The Chesapeake, Virginia Marriott was sold in December 2016.  The Dallas, Texas Hilton contract was terminated in November 2016, and, as discussed in Note 4, a new purchase and sale agreement was entered into by the Company in December 2016, and the hotel was sold in April 2017.

4.  Assets Held for Sale and Dispositions

In December 2016, the Company entered into a purchase and sale agreement with an unrelated party for the sale of its 224-room Hilton hotel in Dallas, Texas for a gross sales price of approximately $56.1 million, as amended.  The hotel was classified as held for sale at its historical cost (which was less than the contract price, net of costs to sell) in the Company’s consolidated balance sheet at December 31, 2016.  On April 20, 2017, the Company completed the sale resulting in a gain of approximately $16.0 million, which is included in the Company’s consolidated statement of operations for the nine months ended September 30, 2017.  The hotel had a carrying value totaling approximately $39.0 million at the date of sale.  Under the contract, at closing, the mortgage loan secured by the Dallas, Texas Hilton hotel was assumed by the buyer with the buyer receiving a credit for the amount assumed, which was approximately $27.1 million at the date of sale.

In June 2017, the Company entered into a purchase and sale agreement with an unrelated party for the sale of its 316-room Marriott hotel in Fairfax, Virginia, acquired by the Company in the merger with Apple Ten in September 2016, for a gross sales price of $41.5 million, as amended.  The hotel was classified as held for sale at its historical cost (which was less than the contract price, net of costs to sell) in the Company’s consolidated balance sheet as of September 30, 2017.  On October 5, 2017, the Company completed the sale, resulting in an estimated gain of approximately $0.3 million, which will be recognized in the fourth quarter of 2017.  The estimated gain is calculated as the total sales price, net of commissions and selling costs, less the carrying value totaling approximately $40.6 million as of September 30, 2017.

The net proceeds from the sales were used to pay down borrowings on the Company’s revolving credit facility.  The Company’s consolidated statements of operations include operating income of approximately $0.2 million and $0.8 million for the three months ended September 30, 2017 and 2016, respectively, and approximately $2.4 million and $2.1 million for the nine months ended September 30, 2017 and 2016, respectively, relating to the results of operations of the two hotels noted above for the period of ownership.  The sale of these properties does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results, and therefore the operating results for the period of ownership of these properties are included in income from continuing operations for the three and nine months ended September 30, 2017 and 2016.

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5.  Debt

$965 Million Credit Facility

The Company utilizes an unsecured “$965 million credit facility” comprised of (i) a $540 million revolving credit facility with an initial maturity date of May 18, 2019 and (ii) a $425 million term loan facility with a maturity date of May 18, 2020, consisting of three term loans, all funded during 2015 (the “$425 million term loans”).  Subject to certain conditions including covenant compliance and additional fees, the revolving credit facility maturity date may be extended one year and the amount of the total credit facility may be increased from $965 million to $1.25 billion.  The Company may make voluntary prepayments in whole or in part, at any time.  Interest payments on the $965 million credit facility are due monthly and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month LIBOR (the London Inter-Bank Offered Rate for a one-month term) plus a margin ranging from 1.50% to 2.30%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.  In conjunction with the $425 million term loans, the Company entered into two interest rate swap agreements, which effectively fix the interest rate on $322.5 million of the outstanding balance at approximately 3.10%, subject to adjustment based on the Company’s leverage ratio, through maturity.  See Note 6 for more information on the interest rate swap agreements.  The Company is also required to pay quarterly an unused facility fee at an annual rate of 0.20% or 0.30% on the unused portion of the revolving credit facility, based on the amount of borrowings outstanding during the quarter.

$150 Million Term Loan Facility

On April 8, 2016, the Company entered into an unsecured $150 million term loan facility with a syndicate of commercial banks (the “$150 million term loan facility”), consisting of a term loan of up to $50 million that will mature on April 8, 2021 (the “$50 million term loan”) and a term loan of up to $100 million that will mature on April 8, 2023 (the “$100 million term loan,” and collectively with the $50 million term loan, the “$150 million term loans”).  The Company initially borrowed $50 million under the $150 million term loan facility on April 8, 2016 and borrowed the remaining $100 million on September 30, 2016.  The credit agreement contains requirements and covenants similar to the Company’s $965 million credit facility.  The Company may make voluntary prepayments in whole or in part, at any time, subject to certain conditions.  Interest payments on the $150 million term loan facility are due monthly and the interest rate is equal to an annual rate of the one-month LIBOR plus a margin ranging from 1.45% to 2.20% for the $50 million term loan and 1.80% to 2.60% for the $100 million term loan, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.  The Company also entered into two interest rate swap agreements which, beginning on September 30, 2016, effectively fix the interest rate on the $50 million term loan and $100 million term loan at 2.54% and 3.13%, respectively, subject to adjustment based on the Company’s leverage ratio, through maturity.  See Note 6 for more information on the interest rate swap agreements.  Proceeds from the $150 million term loan facility were used to pay down outstanding borrowings on the Company’s revolving credit facility, using the increased availability to repay scheduled mortgage debt maturities through the end of the first quarter of 2017.

$85 Million Term Loan

On July 25, 2017, the Company entered into an unsecured $85 million term loan with a syndicate of commercial banks, with a maturity date of July 25, 2024 (the “$85 million term loan” and, together with the $425 million term loans and the $150 million term loans, the “term loans”).  Net proceeds from the $85 million term loan were used to pay down outstanding borrowings on the Company’s revolving credit facility.  Subject to certain conditions including covenant compliance and additional fees, the $85 million term loan may be increased to $125 million.  The credit agreement contains requirements and covenants similar to the Company’s $965 million credit facility.  The Company may make voluntary prepayments in whole or in part, at any time, subject to certain conditions.  Interest payments on the $85 million term loan are due monthly and the interest rate is equal to an annual rate of the one-month LIBOR plus a margin ranging from 1.80% to 2.60%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.  In conjunction with the $85 million term loan, the Company entered into two interest rate swap agreements (one in May 2017 with a notional amount of $75 million, effective July 31, 2017, and the other in August 2017 with a notional amount of $10 million, effective August 10, 2017), which effectively fix the interest rate on the $85 million term loan at approximately 3.76%, subject to adjustment based on the Company’s leverage ratio, through maturity.  See Note 6 for more information on the interest rate swap agreements.

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As of September 30, 2017 and December 31, 2016, the details of the Company’s revolving credit facility and term loans were as set forth below.  All dollar amounts are in thousands.

		As of September 30, 2017								As of December 31, 2016
	Maturity Date	Outstanding Balance			Interest Rate					Outstanding Balance			Interest Rate
Revolving credit facility (1)	5/18/2019	$	216,700			2.78	%	(2	)	$	270,000			2.32	%	(2	)
Term loans
$425 million term loans	5/18/2020		425,000			3.01	%	(3	)		425,000			2.90	%	(3	)
$50 million term loan	4/8/2021		50,000			2.54	%	(4	)		50,000			2.54	%	(4	)
$100 million term loan	4/8/2023		100,000			3.13	%	(4	)		100,000			3.13	%	(4	)
$85 million term loan	7/25/2024		85,000			3.76	%	(4	)		0			n/a
Total term loans at stated value			660,000								575,000
Unamortized debt issuance costs			(4,012	)							(4,066	)
Total term loans			655,988								570,934
Total revolving credit facility and term loans		$	872,688							$	840,934

(1)	Unamortized debt issuance costs related to the revolving credit facility totaled approximately $2.0 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively, and are included in other assets, net in the Company's consolidated balance sheets.
(2)	Annual variable interest rate at the balance sheet date.
(3)	Effective annual interest rate which includes the effect of interest rate swaps on $322.5 million of the outstanding loan balance, resulting in an annual fixed interest rate of approximately 3.10% on this portion of the debt, subject to adjustment based on the Company's leverage ratio.  See Note 6 for more information on the interest rate swap agreements.  Remaining portion is variable rate debt.
(4)	Annual fixed interest rate at the balance sheet date which includes the effect of interest rate swaps on the outstanding loan balance, subject to adjustment based on the Company’s leverage ratio.  See Note 6 for more information on the interest rate swap agreements.

The credit agreements governing the $965 million credit facility, the $150 million term loan facility and the $85 million term loan contain mandatory prepayment requirements, customary affirmative covenants, 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, limits on dividend payments and share repurchases and restrictions on certain investments.  The Company was in compliance with the applicable covenants at September 30, 2017.

Mortgage Debt

As of September 30, 2017, the Company had approximately $430.1 million in outstanding property level debt secured by 28 properties, with maturity dates ranging from June 2020 to December 2026, stated interest rates ranging from 3.55% to 6.25% and effective interest rates ranging from 3.55% to 4.97%.  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, 2017 and December 31, 2016 for each of the Company’s debt obligations.  All dollar amounts are in thousands.

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Location	Brand	Interest Rate (1)			Loan Assumption or Origination Date	Maturity Date			Principal Assumed or Originated		Outstanding balance as of September 30, 2017			Outstanding balance as of December 31, 2016
Irving, TX	Homewood Suites		5.83	%	12/29/2010		(2	)	$	6,052	$	0		$	5,072
Gainesville, FL	Homewood Suites		5.89	%	9/1/2016		(2	)		12,051		0			11,966
Duncanville, TX	Hilton Garden Inn		5.88	%	10/21/2008		(2	)		13,966		0			12,126
Dallas, TX	Hilton		3.95	%	5/22/2015		(3	)		28,000		0			27,246
San Juan Capistrano, CA	Residence Inn		4.15	%	9/1/2016	6/1/2020				16,210		15,858			16,104
Colorado Springs, CO	Hampton		6.25	%	9/1/2016	7/6/2021				7,923		7,787			7,883
Franklin, TN	Courtyard		6.25	%	9/1/2016	8/6/2021				14,679		14,429			14,604
Franklin, TN	Residence Inn		6.25	%	9/1/2016	8/6/2021				14,679		14,429			14,604
Grapevine, TX	Hilton Garden Inn		4.89	%	8/29/2012	9/1/2022				11,810		10,487			10,707
Collegeville/Philadelphia, PA	Courtyard		4.89	%	8/30/2012	9/1/2022				12,650		11,233			11,468
Hattiesburg, MS	Courtyard		5.00	%	3/1/2014	9/1/2022				5,732		5,249			5,357
Rancho Bernardo, CA	Courtyard		5.00	%	3/1/2014	9/1/2022				15,060		13,790			14,074
Kirkland, WA	Courtyard		5.00	%	3/1/2014	9/1/2022				12,145		11,121			11,350
Seattle, WA	Residence Inn		4.96	%	3/1/2014	9/1/2022				28,269		25,871			26,409
Anchorage, AK	Embassy Suites		4.97	%	9/13/2012	10/1/2022				23,230		20,706			21,133
Somerset, NJ	Courtyard		4.73	%	3/1/2014	10/6/2022				8,750		7,990			8,160
Tukwila, WA	Homewood Suites		4.73	%	3/1/2014	10/6/2022				9,431		8,611			8,795
Prattville, AL	Courtyard		4.12	%	3/1/2014	2/6/2023				6,596		5,989			6,123
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	2/6/2023				8,306		7,541			7,711
San Diego, CA	Residence Inn		3.97	%	3/1/2014	3/6/2023				18,600		16,865			17,248
Miami, FL	Homewood Suites		4.02	%	3/1/2014	4/1/2023				16,677		15,138			15,479
Syracuse, NY	Courtyard		4.75	%	10/16/2015	8/1/2024	(4	)		11,199		10,706			10,905
Syracuse, NY	Residence Inn		4.75	%	10/16/2015	8/1/2024	(4	)		11,199		10,706			10,905
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024				27,000		25,087			25,577
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025				10,000		9,448			9,626
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025				34,118		33,253			33,857
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025				13,655		13,394			13,576
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025				22,682		22,248			22,550
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026				24,000		23,522			23,813
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026				25,564		25,081			25,564
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026				25,473		24,992			25,473
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026				18,963		18,605			18,963
									$	514,669		430,136			494,428
Unamortized fair value adjustment of assumed debt												4,556			5,229
Unamortized debt issuance costs												(1,909	)		(2,628	)
Total											$	432,783		$	497,029

(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)	Loans were repaid in full during the three months ended March 31, 2017.
(3)	Assets securing this loan were classified as held for sale as of December 31, 2016.  In April 2017, the assets securing this loan were sold, and the loan was assumed by the buyer of those assets.
(4)	Outstanding principal balance is callable by lender or prepayable by the Company on August 1, 2019.

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The aggregate amounts of principal payable under the Company’s total debt obligations (including mortgage debt, the revolving credit facility and term loans), for the five years subsequent to September 30, 2017 and thereafter are as follows (in thousands):

2017 (October - December)	$	2,701
2018		11,071
2019		248,408
2020		451,164
2021		95,311
Thereafter		498,181
		1,306,836
Unamortized fair value adjustment of assumed debt		4,556
Unamortized debt issuance costs related to term loans and mortgage debt		(5,921	)
Total	$	1,305,471

6.  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, 2017 and December 31, 2016, both the carrying value and estimated fair value of the Company’s debt were approximately $1.3 billion.  Both the carrying value and estimated fair value of the Company’s debt (as discussed above) is net of unamortized debt issuance costs related to term loans and mortgage debt for each specific year.

Derivative Instruments

Currently, the Company uses interest rate swaps to manage its interest rate risks 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 LIBOR.  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, 2017 and December 31, 2016.  All dollar amounts are in thousands.

								Fair Value Asset (Liability)
Hedge Type	Notional Amount at September 30, 2017		Origination Date	Maturity Date	Swap Fixed Interest Rate			September 30, 2017			December 31, 2016
Cash flow hedge	$	212,500	5/21/2015	5/18/2020		1.58	%	$	538		$	(198	)
Cash flow hedge		110,000	7/2/2015	5/18/2020		1.62	%		166			(246	)
Cash flow hedge		50,000	4/7/2016	3/31/2021		1.09	%		1,168			1,289
Cash flow hedge		100,000	4/7/2016	3/31/2023		1.33	%		3,148			3,744
Cash flow hedge		75,000	5/31/2017	6/30/2024		1.96	%		202			0
Cash flow hedge		10,000	8/10/2017	6/30/2024		2.01	%		(4	)		0
	$	557,500						$	5,218		$	4,589

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The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges.  Changes in fair value on the effective portion of all designated cash flow hedges are recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.  Changes in fair value on the ineffective portion of all designated cash flow hedges are recorded to interest and other expense, net in the Company’s consolidated statements of operations.  

To adjust qualifying cash flow hedges to their fair value and recognize the impact of hedge accounting, the Company recorded net unrealized gains (losses) of approximately $0.3 million and $4.3 million during the three months ended September 30, 2017 and 2016, respectively, and approximately $0.6 million and $(7.9) million during the nine months ended September 30, 2017 and 2016, respectively, to other comprehensive income (loss).  There was no ineffectiveness recorded on designated cash flow hedges during the three and nine months ended September 30, 2017 and 2016.  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.  Net unrealized gains (losses) on cash flow hedges previously recorded to other comprehensive income (loss) that were reclassified to interest and other expense, net during the three months ended September 30, 2017 and 2016, include approximately $(0.4) million and $(0.9) million, respectively, and during the nine months ended September 30, 2017 and 2016, include approximately $(1.8) million and $(2.9) million, respectively.  The Company estimates that approximately $(0.6) million of net unrealized gains (losses) included in accumulated other comprehensive income at September 30, 2017 will be reclassified as a net increase to interest and other expense, net within the next 12 months.

7.  Related Parties

The Company has, 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.  There have been no changes to the contracts and relationships discussed in the Company’s 2016 Annual Report on Form 10-K.  Below is a summary of the significant related party relationships in effect during the nine months ended September 30, 2017 and 2016.

Prior to the merger, Glade M. Knight, Executive Chairman of the Company, was Chairman and Chief Executive Officer of Apple Ten.  Apple Ten’s advisors, Apple Ten Advisors, Inc. (“A10A”) and Apple Realty Group, Inc. (“ARG”), are wholly owned by Mr. Knight.  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.  Justin G. Knight, the Company’s President and Chief Executive Officer, and a member of the Company’s Board of Directors, also served as President of Apple Ten prior to the merger.

Support Services to Apple Ten, A10A and ARG Prior to and After the Apple Ten Merger

Effective September 1, 2016, the Company completed its merger with Apple Ten.  As contemplated in the Merger Agreement, in connection with the completion of the merger, the advisory and related party arrangements with respect to the Company, Apple Ten and Apple Ten’s advisors, A10A and ARG, were terminated.  Prior to the merger, A10A subcontracted its obligations under the advisory agreement between A10A and Apple Ten to the Company.  The Company provided to Apple Ten the advisory services contemplated under the A10A advisory agreement and received an annual advisory fee and was reimbursed by Apple Ten for the use of the Company’s employees and corporate office and other costs associated with the advisory agreement.  Additionally, the Company provided support services to Apple Ten’s advisors, who agreed to reimburse the Company for its costs in providing these services.  Both the advisory fees and reimbursed costs received by the Company from Apple Ten were recorded as general and administrative expense by Apple Ten and reductions to general and administrative expense by the Company and, therefore, the termination of the subcontract agreement had no financial impact on the combined company after the effective time of the merger.  After the merger, the Company has continued and will continue to provide support services to ARG for activities unrelated to Apple Ten.

Prior to the merger, advisory fees earned by the Company from Apple Ten for the nine months ended September 30, 2016 totaled approximately $1.6 million and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statement of operations.  Total reimbursed costs received by the Company from these entities for the nine months ended September 30, 2017 and 2016 (including Apple Ten, A10A and ARG prior to September 1, 2016 and ARG thereafter) totaled approximately $0.5 million and $2.3 million, respectively, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations.  As of September 30, 2017 and December 31, 2016, total amounts due from ARG for reimbursements under the cost sharing structure totaled approximately $0.3 million and $0.2 million, respectively, and are included in other assets, net in the Company’s consolidated balance sheets.

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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.

Apple Air Holding, LLC (“Apple Air”)

The Company, through a wholly-owned subsidiary, Apple Air, owns a Learjet used primarily for acquisition, asset management, renovation and public relations purposes.  Prior to the merger, Apple Air was jointly owned by the Company (74%) and Apple Ten (26%), with Apple Ten’s ownership interest accounted for as a minority interest.  Effective September 1, 2016, with the completion of the merger, the Company acquired Apple Ten’s 26% equity interest in Apple Air resulting in a 100% equity ownership interest in Apple Air and the elimination of Apple Ten’s minority interest.

The aircraft is also leased to affiliates of the Company based on third party rates, which was not significant during the reporting periods.  The Company also utilizes aircraft, owned through two entities, one of which is owned by the Company’s Executive Chairman, and the other, its President and Chief Executive Officer, for acquisition, asset management, renovation and public relations purposes, and reimburses these entities at third party rates.  Total amounts incurred during the nine months ended September 30, 2017 and 2016 were approximately $0.1 million and $0.2 million, respectively, related to aircraft owned through these two entities and are included in general and administrative expenses in the Company’s consolidated statements of operations.

8.  Shareholders’ Equity

Distributions

The Company’s current annual distribution rate, payable monthly, is $1.20 per common share.  For the three months ended September 30, 2017 and 2016, the Company paid distributions of $0.30 per common share for a total of $66.9 million and $57.2 million, respectively.  For the nine months ended September 30, 2017 and 2016, the Company paid distributions of $0.90 per common share for a total of $200.7 million and $161.9 million, respectively.  Additionally, in September 2017, the Company declared a monthly distribution of $0.10 per common share, totaling $22.3 million, which was recorded as a payable as of September 30, 2017 and paid in October 2017.  As of December 31, 2016, a monthly distribution of $0.10 per common share, totaling $22.3 million, was recorded as a payable and paid in January 2017.  These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets.

Equity Distribution Agreement

On February 28, 2017, the Company entered into an equity distribution agreement with Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., FBR Capital Markets & Co., Jefferies LLC, KeyBanc Capital Markets Inc. and Scotia Capital (USA) Inc. (collectively, the “Sales Agents”), pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares through the Sales Agents (the “ATM Program”).  During the nine months ended September 30, 2017, the Company had no sales under the ATM Program.

Share Repurchase Program

In connection with the implementation of its ATM Program, in February 2017, the Company terminated its existing written trading plan under the Company’s share repurchase program.  During the first nine months of 2016, the Company purchased, under its share repurchase program, approximately 20,000 of its common shares at a weighted-average market purchase price of approximately $18.10 per common share for an aggregate purchase price of approximately $0.4 million.  The Company did not repurchase any common shares under its share repurchase program during the first nine months of 2017.  The Company plans to continue to consider opportunistic share repurchases under the $467.5 million remaining portion of the authorized $475 million share repurchase program, which will depend on prevailing market conditions and other factors.  The program may be suspended or terminated at any time by the Company and, as a result of an extension of the program approved by the Board of Directors in May 2017, will end in July 2018 if not terminated earlier.

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9.  Compensation Plans

In February 2017, the Compensation Committee of the Board of Directors (“Compensation Committee”) approved an executive incentive plan (“2017 Incentive Plan”), effective January 1, 2017, and established incentive goals for 2017.  Under the 2017 Incentive Plan, participants are eligible to receive a bonus based on the achievement of certain 2017 performance measures, consisting of operational performance metrics (including targeted Modified Funds from Operations per share, Comparable Hotels revenue per available room growth and Adjusted Hotel EBITDA Margin growth) and shareholder return metrics (including shareholder return relative to a peer group and total shareholder return over one-year and two-year periods).  The components of the operational performance metrics and shareholder return metrics are equally weighted and the two metrics each account for 50% of the total target incentive compensation.  The range of potential aggregate payouts under the 2017 Incentive Plan is $0 - $18 million.  Based on performance through September 30, 2017, the Company has accrued approximately $4.7 million as a liability for potential executive bonus payments under the 2017 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of September 30, 2017.  Compensation expense recognized by the Company under the 2017 Incentive Plan is included in general and administrative expense in the Company’s consolidated statements of operations and totaled approximately $1.2 million and $4.7 million for the three and nine months ended September 30, 2017, respectively.  Approximately 25% of awards under the 2017 Incentive Plan, if any, will be paid in cash, and 75% will be issued in stock under the Company’s 2014 Omnibus Incentive Plan, two-thirds of which would vest at the end of 2017 and one-third of which would vest at the end of 2018.  During 2016 and 2015, comparable executive incentive plans were approved by the Compensation Committee (“2016 Incentive Plan” and “2015 Incentive Plan”) that were effective January 1, 2016 and January 1, 2015, respectively.  The Company recorded a (decrease) increase of approximately $(0.8) million and $2.8 million to general and administrative expense related to the 2016 Incentive Plan in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2016, respectively, with the decrease resulting from the reduction of the previously recorded executive bonus accrual due to lower anticipated 2016 performance.

Share Based Compensation Awards

During the first quarters of 2017 and 2016, the Company issued 101,305 and 304,345 common shares earned under the 2016 and 2015 Incentive Plans (net of 19,667 and 11,787 common shares surrendered to satisfy tax withholding obligations) at $19.10 and $19.87 per share, or approximately $2.3 million and $6.3 million in share based compensation, including the surrendered shares, respectively.  Of the total shares issued under the 2016 Incentive Plan, 60,028 shares were unrestricted at the time of issuance, and the remaining 41,277 restricted shares will vest on December 15, 2017.  Of the total shares issued under the 2015 Incentive Plan, 146,279 shares were unrestricted at the time of issuance, and the remaining 158,066 restricted shares vested on December 31, 2016, of which 50,044 common shares were surrendered to satisfy tax withholding obligations.  Of the total 2016 share based compensation, approximately $1.9 million was recorded as a liability as of December 31, 2016, which was included in accounts payable and other liabilities in the Company’s consolidated balance sheet and the remaining $0.4 million, which is subject to vesting on December 15, 2017, will be recognized as compensation expense proportionately throughout 2017.  Of the total 2015 share based compensation, approximately $1.6 million, which vested on December 31, 2016, was recognized as compensation expense proportionately throughout 2016.  For the three months ended September 30, 2017 and 2016, the Company recognized approximately $0.1 million and $0.4 million, respectively, and for the nine months ended September 30, 2017 and 2016, the Company recognized approximately $0.3 million and $1.2 million, respectively, of share based compensation expense related to the unvested restricted share awards.

10.  Legal Proceedings

Quinn v. Knight, et al.

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”), on July 19, 2016, a purported shareholder of Apple Ten, now part of the Company, commenced a derivative action in the United States District Court for the Eastern District of Virginia.  On November 2, 2016, the parties reached an agreement in principle to settle the litigation, which the Court approved by order dated March 16, 2017.  In January 2017, the Company funded the settlement amount of $32 million, which was included in accounts payable and other liabilities in its consolidated balance sheet as of December 31, 2016, and received $10 million of proceeds from its director and officer insurance carriers, which was included in other assets, net in its consolidated balance sheet as of December 31, 2016 and the net $22 million was included in transaction and litigation costs (reimbursements) in the Company’s consolidated statement of operations for the year then ended.  In May 2017, the Company received an additional $2.6 million of proceeds from its director and officer insurance carriers, which was included as a reduction in transaction and litigation costs (reimbursements) in the Company’s consolidated statements of operations for the nine months ended September 30, 2017.  The Company does not anticipate additional costs or reimbursements related to this litigation.

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Moses, et al. v. Apple Hospitality REIT, Inc., et al.

As previously disclosed in the 2016 Form 10-K, on April 22, 2014, Plaintiff Susan Moses, purportedly a shareholder of Apple REIT Seven, Inc. (“Apple Seven”) and Apple REIT Eight, Inc. (“Apple Eight”), filed a class action against the Company and several individual directors on behalf of all then-existing shareholders and former shareholders of Apple Seven and Apple Eight, who purchased additional shares under the Dividend Reinvestment Plans (“DRIP”) of Apple Seven, Apple Eight and the Company between July 17, 2007 and February 12, 2014.  In January 2017, the parties reached an agreement in principle to settle the litigation for $5.5 million.  The settlement was preliminarily approved by the court in September 2017 and a settlement hearing has been scheduled in January 2018.  The settlement amount has been included in accounts payable and other liabilities in the Company’s consolidated balance sheets as of December 31, 2016 and September 30, 2017, and in transaction and litigation costs (reimbursements) in the Company’s consolidated statement of operations for the year ended December 31, 2016.  At this time, no assurance can be given that the proposed settlement will be approved, and therefore the actual loss incurred could be in excess of the amount accrued as of September 30, 2017.

Wilchfort, et al. v. Apple Hospitality REIT, Inc., et al.

On February 24, 2017, Plaintiff Marsha Wilchfort, purportedly a shareholder of Apple REIT Six, Inc. (“Apple Six”), Apple Seven and Apple Eight, filed a class action against, among others, the Company and the former individual directors of Apple Six, Apple Seven and Apple Eight, including Mr. Glade Knight, on behalf of all then-existing shareholders and former shareholders of Apple Six, Apple Seven and Apple Eight, who purchased additional shares under Apple Six’s, Apple Seven’s and Apple Eight’s DRIP between July 17, 2007 and December 2012 (in the case of Apple Six shareholders) or June 30, 2013 (in the case of Apple Seven and Apple Eight shareholders).  The complaint was filed in the United States District Court for the Eastern District of New York and alleges, among other items, breach of contract under Virginia law, tortious interference and breach of implied duty of good faith and fair dealing.  The complaint alleges that the prices at which Plaintiff and the purported class members purchased additional shares through the DRIPs were not indicative of the true value of the units of Apple Six, Apple Seven and Apple Eight.

The Company believes that Plaintiff’s claims are without merit and intends to defend this case vigorously.  At this time, the Company cannot reasonably predict the outcome of this proceeding or provide a reasonable estimate of the possible loss or range of loss due to this proceeding, if any.

11.  Subsequent Events

In October 2017, the Company paid approximately $22.3 million, or $0.10 per outstanding common share, in distributions to its common shareholders.

In October 2017, the Company declared a regular monthly cash distribution of $0.10 per common share for the month of November 2017.  The distribution is payable on November 15, 2017.

On October 5, 2017, the Company completed the sale of the Fairfax, Virginia Marriott for a sale price of approximately $41.5 million.  The Company used the net proceeds from the sale to pay down borrowings on its revolving credit facility.  See Note 4 for additional information.

On October 13, 2017, the Company closed on the purchase of an existing 179-room Residence Inn in Portland, Maine for a gross purchase price of approximately $55.8 million.

On October 20, 2017, the Company closed on the purchase of an existing 136-room Residence Inn in Salt Lake City, Utah for a gross purchase price of $25.5 million.

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

Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Forward-looking statements are typically identified by use of terms 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 Apple Hospitality REIT, Inc. (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; 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; adverse changes in the real estate and real estate capital markets; financing risks; the outcome of current and future litigation, including any legal proceedings that have been or may be instituted against the Company or others; 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 real estate investment trust (“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.  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 Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  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 Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

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 United States.  As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in urban, high-end suburban and developing markets throughout 33 states, including one hotel with 316 rooms classified as held for sale, which was sold to an unrelated party in October 2017.  All of the Company’s hotels operate under Marriott or Hilton brands.  The hotels are operated and managed under separate management agreements with 22 hotel management companies, none of which are affiliated with the Company.  The Company’s common shares are listed on the New York Stock Exchange under the ticker symbol “APLE.”

2017 Investing Activities

The Company continually monitors market conditions and attempts to maximize shareholder value by investing in properties that it believes provide superior value in the long term.  Consistent with this strategy and the Company’s focus on investing in select-service hotels, the Company acquired three newly constructed hotels for an aggregate purchase price of approximately $56.4 million during the first nine months of 2017: a 124-room Courtyard by Marriott hotel in Fort Worth, Texas and a 104-room Hilton Garden Inn and 106-room Home2 Suites dual-branded hotel in Birmingham, Alabama.  The purchase price for each of these properties was funded through borrowings on the Company’s $540 million revolving credit facility (the “revolving credit facility”).  In October 2017, the Company completed the purchase of two additional hotels (a 136-room Residence Inn hotel in Salt Lake City, Utah and a 179-room Residence Inn hotel in Portland, Maine) for an aggregate purchase price of approximately $81.3 million.  The Company also has outstanding contracts for the potential purchase of two additional hotels that are under construction for a total purchase price of approximately $64.8 million, which are planned to be completed and opened for business over the next 12 months from September 30, 2017, at which time closing on these hotels is expected to occur.

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Additionally, 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 by the proceeds from the sale of the property.  As a result, on April 20, 2017, the Company completed the sale of its 224-room Hilton hotel in Dallas, Texas, which was classified as held for sale as of December 31, 2016, for approximately $56.1 million.  Also, on October 5, 2017, the Company completed the sale of its 316-room Marriott hotel in Fairfax, Virginia, which was classified as held for sale as of September 30. 2017, for a gross sales price of $41.5 million.  The Company used the net proceeds from the sales to pay down borrowings on its revolving credit facility.

See Note 3 titled “Investment in Real Estate” and Note 4 titled “Assets Held for Sale and Dispositions” 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 these transactions.

Hotel Operations

Although hotel performance can be influenced by many factors including local competition, local and general economic conditions in the United States and the performance of individual managers assigned to each hotel, performance of the Company’s hotels as compared to other hotels within their respective local markets, in general, has met the Company’s expectations for the period owned.  Over the past several quarters, the lodging industry and the Company have experienced low single-digit revenue growth.  Moderate improvements in the general U.S. economy have been partially offset by increased supply in many markets.  With modest revenue growth, the Company has produced stable operating results during the first nine months of 2017 on a comparable basis (as defined below) with expense increases generally offsetting revenue growth.  There is no way to predict future economic conditions, and there are certain additional factors that could negatively affect the lodging industry and the Company, including but not limited to, increased hotel supply in certain markets, labor uncertainty both for the economy as a whole and the lodging industry in particular, global volatility and government fiscal policies.  The Company, on a comparable basis, and industry are forecasting a low single-digit percentage increase in revenue for the full year of 2017 as compared to 2016, with this trend expected to continue into 2018.  The Company’s revenue growth rate for comparable hotels in 2017 is anticipated to be lower than the growth achieved in 2016, primarily due to inconsistent demand in certain markets and increased hotel supply meeting demand growth in others, limiting the Company’s ability to increase rates.

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.

As of September 30, 2017, the Company owned 237 hotels with a total of 30,188 rooms as compared to 236 hotels with a total of 30,299 rooms as of September 30, 2016, however, 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, 2017, the Company acquired three newly constructed hotels (one on February 2, 2017, and two on September 12, 2017) and sold one hotel on April 20, 2017.  During 2016, the Company acquired 56 hotels in the Apple REIT Ten, Inc. (“Apple Ten”) merger effective September 1, 2016 (the “Apple Ten merger”), acquired one additional newly constructed hotel on July 1, 2016 and sold one hotel on December 6, 2016.  As a result, the comparability of results for the three and nine months ended September 30, 2017 and 2016 as discussed below is significantly impacted by these transactions.

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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)	2017			Percent of Revenue			2016			Percent of Revenue			Percent Change			2017			Percent of Revenue			2016			Percent of Revenue			Percent Change
Total revenue	$	324,926			100.0	%	$	276,471			100.0	%		17.5	%	$	949,555			100.0	%	$	758,594			100.0	%		25.2	%
Hotel operating expense		179,829			55.3	%		153,337			55.5	%		17.3	%		528,295			55.6	%		417,965			55.1	%		26.4	%
Property taxes, insurance and other expense		17,598			5.4	%		14,787			5.3	%		19.0	%		52,346			5.5	%		40,315			5.3	%		29.8	%
Ground lease expense		2,831			0.9	%		2,615			0.9	%		8.3	%		8,486			0.9	%		7,587			1.0	%		11.8	%
General and administrative expense		5,350			1.6	%		2,623			0.9	%		104.0	%		18,255			1.9	%		12,511			1.6	%		45.9	%
Transaction and litigation costs (reimbursements)		-						36,452						n/a			(2,586	)					37,861						n/a
Loss on impairment of depreciable real estate assets		-						5,471						n/a			7,875						5,471						43.9	%
Depreciation expense		44,110						37,343						18.1	%		131,770						104,651						25.9	%
Interest and other expense, net		12,024						10,156						18.4	%		35,590						28,519						24.8	%
Gain (loss) on sale of real estate		(157	)					-						n/a			15,983						-						n/a
Income tax expense (benefit)		203						(7	)					n/a			712						616						15.6	%
Number of hotels owned at end of period		237						236						0.4	%		237						236						0.4	%
ADR	$	136.73					$	136.04						0.5	%	$	135.97					$	135.88						0.1	%
Occupancy		80.0	%					80.2	%					-0.2	%		78.7	%					78.9	%					-0.3	%
RevPAR	$	109.45					$	109.07						0.3	%	$	106.96					$	107.18						-0.2	%

Comparable Operating Results

The following table reflects certain operating statistics for the Company’s 236 hotels owned and held for use as of September 30, 2017 (“Comparable Hotels”).  The Company defines metrics from Comparable Hotels as results generated by the 236 hotels owned and held for use as of the end of the reporting period.  These metrics do not include the results generated by the Fairfax, Virginia Marriott hotel which was held for sale as of September 30, 2017 and sold on October 5, 2017.  For the hotels acquired during the current reporting period and prior year, 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,
	2017			2016			Percent Change			2017			2016			Percent Change
ADR	$	136.83		$	134.79			1.5	%	$	135.84		$	134.88			0.7	%
Occupancy		80.2	%		80.4	%		-0.2	%		78.8	%		78.7	%		0.1	%
RevPAR	$	109.77		$	108.32			1.3	%	$	107.10		$	106.20			0.8	%

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Same Store Operating Results

The following table reflects certain operating statistics for the Company’s 177 hotels owned and held for use by the Company as of January 1, 2016 and during the entirety of the periods being compared.  This information has not been audited.

	Three Months Ended September 30,									Nine Months Ended September 30,
	2017			2016			Percent Change			2017			2016			Percent Change
ADR	$	138.86		$	136.60			1.7	%	$	137.09		$	136.09			0.7	%
Occupancy		80.2	%		80.5	%		-0.4	%		79.0	%		79.0	%		0.0	%
RevPAR	$	111.42		$	110.02			1.3	%	$	108.23		$	107.49			0.7	%

Revenues

The Company’s principal source of revenue is hotel revenue consisting of room and other related revenue.  For the three months ended September 30, 2017 and 2016, the Company had total revenue of $324.9 million and $276.5 million, respectively.  For the nine months ended September 30, 2017 and 2016, the Company had total revenue of $949.6 million and $758.6 million, respectively.  For the three months ended September 30, 2017 and 2016, respectively, Comparable Hotels achieved combined average occupancy of 80.2% and 80.4%, ADR of $136.83 and $134.79 and RevPAR of $109.77 and $108.32.  For the nine months ended September 30, 2017 and 2016, respectively, Comparable Hotels achieved combined average occupancy of 78.8% and 78.7%, ADR of $135.84 and $134.88 and RevPAR of $107.10 and $106.20.  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 2016, during the three and nine months ended September 30, 2017, the Company experienced increases in ADR, resulting in increases of 1.3% and 0.8% in RevPAR for Comparable Hotels, respectively.  The Company’s growth during the first nine months of 2017 was impacted by a decline in the Los Angeles market due to outsized growth in 2016 from the Porter Ranch gas leak.  The Company anticipates that with its geographically diverse portfolio of upscale and upper midscale select-service hotels, on a comparable basis, overall RevPAR growth for the remainder of the year will approximate industry averages.  Although certain markets will vary based on local supply/demand dynamics and local market economic conditions, with continued overall room rate improvement combined with expected stable overall demand growth compared to supply growth, the Company, on a comparable basis, and industry are forecasting a low single-digit percentage increase in revenue for the full year of 2017 as compared to 2016, with this trend expected to continue into 2018.  Markets with above average growth in the third quarter and first nine months of 2017 for the Company and industry included Richmond, Knoxville, Kansas City, St. Louis and San Diego.  Markets that were below average for the Company and industry included Dallas, Austin and Philadelphia.  Additionally, in the third quarter of 2017, Houston and certain Florida markets experienced an increase in demand due to evacuation and restoration efforts related to hurricanes Harvey and Irma, which led to increased RevPAR for the Company and industry in those markets.  While certain of the Company’s hotels incurred minor wind and water related damage from the hurricanes, the overall impact was not material.

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.  For the three months ended September 30, 2017 and 2016, respectively, hotel operating expense totaled $179.8 million and $153.3 million or 55.3% and 55.5% of total revenue for each respective period.  For the nine months ended September 30, 2017 and 2016, respectively, hotel operating expense totaled $528.3 million and $418.0 million or 55.6% and 55.1% of total revenue for each respective period.  Overall hotel operational expenses for the first nine months of 2017 include the results of the 57 hotels acquired during 2016, including one hotel acquired on July 1, 2016 and 56 hotels acquired with the Apple Ten merger effective September 1, 2016, for the full period and three hotels acquired in 2017 from their respective dates of acquisition.  Expenses for 2017 also include the results of one hotel sold on April 20, 2017 until the date of sale.  Expenses for the first nine months of 2016 include the results of one hotel sold on December 6, 2016 and the hotel sold on April 20, 2017 for the full period, and the results of one hotel acquired on July 1, 2016 from the date of acquisition and the 56 hotels acquired in the Apple Ten merger for the month of September 2016.  For the Company’s Comparable Hotels, hotel operating expense as a percentage of revenue increased approximately 20 and 90 basis points, respectively, for the three and nine months ended September 30, 2017 as compared to the same periods in 2016.  During the first nine months of 2017, the Company experienced increases in labor costs as a percentage of revenue, which was the primary cause of the increase in hotel operating expense.  Although labor costs were the primary cause of the increase in hotel operating expenses in the third quarter of 2017, these increases did moderate as compared to the same period in 2016.  The Company anticipates continued increases in labor costs due to government regulations surrounding wages, healthcare and other benefits, other wage-related initiatives and lower unemployment rates.  Although operating expenses will increase as revenue increases, the Company will continue to work with its management companies to reduce costs as a percentage of revenue where possible while maintaining quality and service levels at each property.

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Property Taxes, Insurance and Other Expense

Property taxes, insurance, and other expense for the three months ended September 30, 2017 and 2016 totaled $17.6 million and $14.8 million, respectively, or 5.4% and 5.3% of total revenue, respectively, and for Comparable Hotels, 5.4% and 5.5% of total revenue for each respective period.  For the nine months ended September 30, 2017 and 2016, property taxes, insurance and other expense totaled $52.3 million and $40.3 million, respectively, or 5.5% and 5.3% of total revenue, respectively, and for Comparable Hotels, 5.5% of total revenue for each period.  For the Company’s Comparable Hotels, real estate taxes increased slightly during the first nine months of 2017 compared to the first nine months of 2016, with tax increases at 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.  With the economy continuing to improve, the Company anticipates continued increases in property tax assessments during the remainder of 2017.  The Company will continue to appeal tax assessments in certain jurisdictions to attempt to minimize tax increases as warranted.

Ground Lease Expense

Ground lease expense for the three months ended September 30, 2017 and 2016 was $2.8 million and $2.6 million, respectively.  For the nine months ended September 30, 2017 and 2016, ground lease expense was $8.5 million and $7.6 million, respectively.  Ground lease expense primarily represents the expense incurred by the Company to lease land for 14 of its hotel properties, including four acquired in the Apple Ten merger effective September 1, 2016.

General and Administrative Expense

General and administrative expense for the three months ended September 30, 2017 and 2016 was $5.4 million and $2.6 million, respectively, or 1.6% and 0.9% of total revenue, respectively.  For the nine months ended September 30, 2017 and 2016, general and administrative expense was $18.3 million and $12.5 million, respectively, or 1.9% and 1.6% of total revenue, respectively.  The principal components of general and administrative expense are payroll and related benefit costs, legal fees, accounting fees and reporting expenses.  In addition, during the first eight months of 2016, the Company provided to Apple Ten the advisory services contemplated under their advisory agreement, and the Company received fees and reimbursement of expenses payable under the advisory agreement from Apple Ten totaling approximately $3.5 million, which were recorded as reductions to general and administrative expenses.  Effective September 1, 2016, in connection with the completion of the Apple Ten merger, the advisory agreement was terminated and the Company no longer receives the fees and reimbursement of expenses payable under the advisory agreement from Apple Ten, which resulted in an increase in the Company’s general and administrative expenses from the prior period.  Although expense for the Company in total dollars increased from the prior period, since both the advisory fees and reimbursed costs received by the Company from Apple Ten were recorded as general and administrative expense by Apple Ten and as reductions to general and administrative expense by the Company, the termination of the advisory agreement had no financial impact on the combined company after the effective time of the Apple Ten merger.  General and administrative expense also increased for both the third quarter and first nine months of 2017 as compared to the prior year due to an increased accrual as of September 30, 2017 for the Company’s executive incentive plan related to better projected performance under the plan.  In comparison, the accrual for potential executive bonus payments was reduced during the third quarter of 2016 by approximately $0.8 million, due to lower than previously anticipated 2016 performance, resulting in a decrease in executive compensation expense for the period.  The increases in the third quarter and the first nine months of 2017 over the same periods of 2016 were $1.7 million and $1.0 million, respectively. 

Transaction and Litigation Costs (Reimbursements)

During the nine months ended September 30, 2017, transaction and litigation costs (reimbursements) totaled approximately $(2.6) million which primarily related to the additional proceeds received in May 2017 from the Company’s directors and officers insurance carriers in connection with the Apple Ten merger litigation, as discussed herein.  Combined with the $10.0 million received in January 2017 and recorded to transaction and litigation costs (reimbursements) in the fourth quarter of 2016, total proceeds from the Company’s director and officer coverage related to the Apple Ten merger litigation were $12.6 million.  During the three and nine months ended September 30, 2016, transaction and litigation costs (reimbursements) were approximately $36.5 million and $37.9 million, respectively.  Transaction and litigation costs (reimbursements) for the nine months ended September 30, 2016 consisted primarily of costs related to the Apple Ten merger totaling approximately $37.6 million (including $32 million funded by the Company in January 2017 to settle the Apple Ten merger litigation and approximately $1.8 million in legal costs incurred to defend the litigation) and other acquisition related costs totaling approximately $0.3 million.  On January 1, 2017, the Company adopted the newly issued accounting standard on business combinations that modifies the definition of a business.  Under the new guidance, acquisition of hotel properties will generally be accounted for as an acquisition of a group of assets with transaction costs associated with the acquisition capitalized as part of the cost of the asset acquired instead of expensed in the period they are incurred.  In accordance with this standard, the Company capitalized approximately $0.2 million in transaction costs related to the acquisition of three hotels during the nine months ended September 30, 2017.

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Loss on Impairment of Depreciable Real Estate Assets

Loss on impairment of depreciable real estate assets was approximately $7.9 million for the nine months ended September 30, 2017, and related to the Columbus, Georgia SpringHill Suites and TownePlace Suites hotels that the Company identified for potential sale during the first quarter of 2017.  For each of the three and nine months ended September 30, 2016, loss on impairment of depreciable real estate assets was approximately $5.5 million, and related to the Chesapeake, Virginia Marriott hotel that the Company identified for potential sale during the period.  See Note 3 titled “Investment in Real Estate” 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 these impairment losses.

Depreciation Expense

Depreciation expense for the three months ended September 30, 2017 and 2016 was $44.1 million and $37.3 million, respectively.  For the nine months ended September 30, 2017 and 2016, depreciation expense was $131.8 million and $104.7 million, respectively.  Depreciation expense primarily represents expense of the Company’s hotel buildings and related improvements, and associated personal property (furniture, fixtures, and equipment) for their respective periods owned.  The increase was primarily due to the increase in the number of properties owned as a result of the Apple Ten merger effective September 1, 2016, the acquisition of three hotels in 2017 and one hotel in July 2016 and renovations completed throughout 2017 and 2016.

Interest and Other Expense, net

Interest and other expense, net for the three months ended September 30, 2017 and 2016 was $12.0 million and $10.2 million, respectively, and is net of approximately $0.1 million and $0.2 million, respectively, of interest capitalized associated with renovation projects.  For the nine months ended September 30, 2017 and 2016, interest and other expense, net was $35.6 million and $28.5 million, respectively, and is net of approximately $0.7 million and $1.2 million of interest capitalized associated with renovation projects, respectively.  The increase in interest expense was primarily due to an increase in the Company’s average outstanding borrowings during the first nine months of 2017 as compared to 2016 which is primarily attributable to (a) mortgage debt assumed in the Apple Ten merger effective September 1, 2016 and (b) borrowings to fund (i) the cash payment portion of the Apple Ten merger, (ii) the repayment of Apple Ten’s outstanding balance on its extinguished credit facility assumed in the Apple Ten merger and (iii) the acquisition of four hotels (one in July 2016, one in February 2017 and two in September 2017); which increases were partially offset by the sale of two hotels (one in December 2016 and one in April 2017).  The impact of higher debt balances and the increasing cost of variable rate debt was partially offset by a reduction in the average interest rate incurred on the Company’s total outstanding debt, resulting from the repayment of maturing fixed-rate mortgage debt with lower rate borrowings primarily from its $150 million term loan facility and new mortgage debt originations.

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 FFO (“MFFO”), Earnings before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”), and Adjusted EBITDA (“Adjusted EBITDA”).  These non-GAAP financial measures should be considered along with, but not as alternatives to, net income, cash flow from operations or any other operating GAAP measure.  FFO, MFFO, EBITDA and Adjusted 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 and Adjusted EBITDA, as calculated by the Company, may not be comparable to FFO, MFFO, EBITDA and Adjusted 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.

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 (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains or losses from sales of real estate, extraordinary items as defined by GAAP, the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated partnerships and joint ventures.  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.

24

The Company further adjusts FFO for certain additional items that are not in NAREIT’s definition of FFO, including: (i) the exclusion of transaction and litigation costs (reimbursements) as these costs do not represent ongoing operations and (ii) the exclusion of non-cash straight-line ground lease expense as this expense does 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, 2017 and 2016 (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017			2016
Net income	$	62,824	$	13,694	$	184,795		$	103,098
Depreciation of real estate owned		43,880		37,114		131,081			103,962
(Gain) loss on sale of real estate		157		-		(15,983	)		-
Loss on impairment of depreciable real estate assets		-		5,471		7,875			5,471
Amortization of favorable and unfavorable leases, net		165		132		498			513
Funds from operations		107,026		56,411		308,266			213,044
Transaction and litigation costs (reimbursements)		-		36,452		(2,586	)		37,861
Non-cash straight-line ground lease expense		917		843		2,794			2,479
Modified funds from operations	$	107,943	$	93,706	$	308,474		$	253,384

EBITDA and Adjusted EBITDA

EBITDA is a commonly used measure of performance in many industries and is defined as net income excluding interest, income taxes and 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.

The Company considers the exclusion of certain additional items from EBITDA useful, including: (i) the exclusion of transaction and litigation costs (reimbursements), gains or losses from sales of real estate and the loss on impairment of depreciable real estate assets as these items do not represent ongoing operations and (ii) the exclusion of non-cash straight-line ground lease expense as this expense does not reflect the underlying performance of the related hotels.

The following table reconciles the Company’s GAAP net income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2017 and 2016 (in thousands).

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017			2016
Net income	$	62,824	$	13,694		$	184,795		$	103,098
Depreciation		44,110		37,343			131,770			104,651
Amortization of favorable and unfavorable leases, net		165		132			498			513
Interest and other expense, net		12,024		10,156			35,590			28,519
Income tax expense (benefit)		203		(7	)		712			616
EBITDA		119,326		61,318			353,365			237,397
Transaction and litigation costs (reimbursements)		-		36,452			(2,586	)		37,861
(Gain) loss on sale of real estate		157		-			(15,983	)		-
Loss on impairment of depreciable real estate assets		-		5,471			7,875			5,471
Non-cash straight-line ground lease expense		917		843			2,794			2,479
Adjusted EBITDA	$	120,400	$	104,084		$	345,465		$	283,208

25

Hotels Owned

As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in 33 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		42		5,807
Courtyard		40		5,460
Hampton		36		4,422
Homewood Suites		34		3,831
Residence Inn		32		3,696
SpringHill Suites		17		2,248
TownePlace Suites		12		1,196
Fairfield Inn		11		1,300
Home2 Suites		7		775
Marriott		3		932
Embassy Suites		2		316
Renaissance		1		205
Total		237		30,188

Number of Hotels and Guest Rooms by State
	Number of		Number of
State	Hotels		Rooms
Alabama		15		1,434
Alaska		1		169
Arizona		11		1,434
Arkansas		4		408
California		27		3,807
Colorado		4		567
Florida		23		2,851
Georgia		6		596
Idaho		2		416
Illinois		8		1,420
Indiana		4		479
Iowa		3		301
Kansas		4		422
Louisiana		4		541
Maryland		2		233
Massachusetts		4		466
Michigan		1		148
Minnesota		2		244
Mississippi		2		168
Missouri		4		544
Nebraska		4		621
New Jersey		5		629
New York		4		550
North Carolina		12		1,337
Ohio		2		252
Oklahoma		4		545
Pennsylvania		3		391
South Carolina		5		538
Tennessee		12		1,356
Texas		34		4,072
Utah		2		257
Virginia		15		2,383
Washington		4		609
Total		237		30,188

26

The following table summarizes the location, brand, manager, date acquired or completed and number of rooms for each of the 237 hotels the Company owned as of September 30, 2017.

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Anchorage	AK	Embassy Suites	Stonebridge	4/30/2010		169
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	Homewood Suites	McKibbon	3/1/2014		95
Birmingham	AL	Home2 Suites	LBA	9/12/2017		106
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
Montgomery	AL	Hilton Garden Inn	LBA	3/1/2014		97
Montgomery	AL	Homewood Suites	LBA	3/1/2014		91
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
Rogers	AR	Residence Inn	Raymond	3/1/2014		88
Springdale	AR	Residence Inn	Aimbridge	3/1/2014		72
Chandler	AZ	Courtyard	North Central	11/2/2010		150
Chandler	AZ	Fairfield Inn & Suites	North Central	11/2/2010		110
Phoenix	AZ	Courtyard	North Central	11/2/2010		164
Phoenix	AZ	Courtyard	North Central	9/1/2016		127
Phoenix	AZ	Hampton	North Central	9/1/2016		125
Phoenix	AZ	Homewood Suites	North Central	9/1/2016		134
Phoenix	AZ	Residence Inn	North Central	11/2/2010		129
Scottsdale	AZ	Hilton Garden Inn	North Central	9/1/2016		122
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
Burbank	CA	Residence Inn	Marriott	3/1/2014		166
Burbank	CA	SpringHill Suites	Marriott	7/13/2015		170
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
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
San Diego	CA	Hampton	Dimension	3/1/2014		177

27

City	State	Brand	Manager	Date Acquired or Completed	Rooms
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
San Juan Capistrano	CA	Residence Inn	Marriott	9/1/2016		130
Santa Ana	CA	Courtyard	Dimension	5/23/2011		155
Santa Clarita	CA	Courtyard	Dimension	9/24/2008		140
Santa Clarita	CA	Fairfield Inn	Dimension	10/29/2008		66
Santa Clarita	CA	Hampton	Dimension	10/29/2008		128
Santa Clarita	CA	Residence Inn	Dimension	10/29/2008		90
Tulare	CA	Hampton	InnVentures	3/1/2014		86
Tustin	CA	Fairfield Inn & Suites	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	Stonebridge	9/1/2016		221
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	White Lodging	9/1/2016		149
Cape Canaveral	FL	Homewood Suites	LBA	9/1/2016		153
Fort Lauderdale	FL	Hampton	Vista Host	12/31/2008		109
Fort Lauderdale	FL	Hampton	LBA	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
Lakeland	FL	Courtyard	LBA	3/1/2014		78
Miami	FL	Courtyard	Dimension	3/1/2014		118
Miami	FL	Hampton	White Lodging	4/9/2010		121
Miami	FL	Homewood Suites	Dimension	3/1/2014		162
Orlando	FL	Fairfield Inn & Suites	Marriott	7/1/2009		200
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
Sanford	FL	SpringHill Suites	LBA	3/1/2014		105
Sarasota	FL	Homewood Suites	Hilton	3/1/2014		100
Tallahassee	FL	Fairfield Inn & Suites	LBA	9/1/2016		97
Tallahassee	FL	Hilton Garden Inn	LBA	3/1/2014		85
Tampa	FL	Embassy Suites	White Lodging	11/2/2010		147
Tampa	FL	TownePlace Suites	McKibbon	3/1/2014		94
Albany	GA	Fairfield Inn & Suites	LBA	1/14/2010		87
Atlanta	GA	Home2 Suites	McKibbon	7/1/2016		128
Columbus	GA	SpringHill Suites	LBA	3/1/2014		89
Columbus	GA	TownePlace Suites	LBA	3/1/2014		86
Macon	GA	Hilton Garden Inn	LBA	3/1/2014		101
Savannah	GA	Hilton Garden Inn	Newport	3/1/2014		105
Cedar Rapids	IA	Hampton	Schulte	9/1/2016		103
Cedar Rapids	IA	Homewood Suites	Schulte	9/1/2016		95
Davenport	IA	Hampton	Schulte	9/1/2016		103

28

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Boise	ID	Hampton	Raymond	4/30/2010		186
Boise	ID	SpringHill Suites	InnVentures	3/1/2014		230
Des Plaines	IL	Hilton Garden Inn	Raymond	9/1/2016		252
Hoffman Estates	IL	Hilton Garden Inn	White Lodging	9/1/2016		184
Mettawa	IL	Hilton Garden Inn	White Lodging	11/2/2010		170
Mettawa	IL	Residence Inn	White Lodging	11/2/2010		130
Rosemont	IL	Hampton	Raymond	9/1/2016		158
Schaumburg	IL	Hilton Garden Inn	White Lodging	11/2/2010		166
Skokie	IL	Hampton	Raymond	9/1/2016		225
Warrenville	IL	Hilton Garden Inn	White Lodging	11/2/2010		135
Indianapolis	IN	SpringHill Suites	White Lodging	11/2/2010		130
Merrillville	IN	Hilton Garden Inn	White Lodging	9/1/2016		124
Mishawaka	IN	Residence Inn	White Lodging	11/2/2010		106
South Bend	IN	Fairfield Inn & Suites	White Lodging	9/1/2016		119
Overland Park	KS	Fairfield Inn & Suites	True North	3/1/2014		110
Overland Park	KS	Residence Inn	True North	3/1/2014		120
Overland Park	KS	SpringHill Suites	True North	3/1/2014		102
Wichita	KS	Courtyard	Aimbridge	3/1/2014		90
Baton Rouge	LA	SpringHill Suites	Dimension	9/25/2009		119
Lafayette	LA	Hilton Garden Inn	LBA	7/30/2010		153
Lafayette	LA	SpringHill Suites	LBA	6/23/2011		103
New Orleans	LA	Homewood Suites	Dimension	3/1/2014		166
Andover	MA	SpringHill Suites	Marriott	11/5/2010		136
Marlborough	MA	Residence Inn	True North	3/1/2014		112
Westford	MA	Hampton	True North	3/1/2014		110
Westford	MA	Residence Inn	True North	3/1/2014		108
Annapolis	MD	Hilton Garden Inn	White Lodging	3/1/2014		126
Silver Spring	MD	Hilton Garden Inn	White Lodging	7/30/2010		107
Novi	MI	Hilton Garden Inn	White Lodging	11/2/2010		148
Maple Grove	MN	Hilton Garden Inn	North Central	9/1/2016		120
Rochester	MN	Hampton	Raymond	8/3/2009		124
Kansas City	MO	Hampton	Raymond	8/31/2010		122
Kansas City	MO	Residence Inn	True North	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 Inn & Suites	Newport	9/1/2016		94
Charlotte	NC	Homewood Suites	McKibbon	9/24/2008		118
Durham	NC	Homewood Suites	McKibbon	12/4/2008		122
Fayetteville	NC	Home2 Suites	LBA	2/3/2011		118
Fayetteville	NC	Residence Inn	Aimbridge	3/1/2014		92
Greensboro	NC	SpringHill Suites	Newport	3/1/2014		82
Holly Springs	NC	Hampton	LBA	11/30/2010		124
Jacksonville	NC	Home2 Suites	LBA	9/1/2016		105
Wilmington	NC	Fairfield Inn & Suites	Crestline	3/1/2014		122
Winston-Salem	NC	Courtyard	McKibbon	3/1/2014		122

29

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Winston-Salem	NC	Hampton	McKibbon	9/1/2016		94
Omaha	NE	Courtyard	Marriott	3/1/2014		181
Omaha	NE	Hampton	White Lodging	9/1/2016		139
Omaha	NE	Hilton Garden Inn	White Lodging	9/1/2016		178
Omaha	NE	Homewood Suites	White Lodging	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
West Orange	NJ	Courtyard	Newport	1/11/2011		131
Islip/Ronkonkoma	NY	Hilton Garden Inn	White Lodging	3/1/2014		165
New York	NY	Renaissance	Highgate	3/1/2014		205
Syracuse	NY	Courtyard	New Castle	10/16/2015		102
Syracuse	NY	Residence Inn	New Castle	10/16/2015		78
Mason	OH	Hilton Garden Inn	Schulte	9/1/2016		110
Twinsburg	OH	Hilton Garden Inn	Gateway	10/7/2008		142
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
Collegeville/Philadelphia	PA	Courtyard	White Lodging	11/15/2010		132
Malvern/Philadelphia	PA	Courtyard	White Lodging	11/30/2010		127
Pittsburgh	PA	Hampton	Vista Host	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	Residence Inn	McKibbon	3/1/2014		78
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
Jackson	TN	Hampton	Vista Host	12/30/2008		83
Johnson City	TN	Courtyard	LBA	9/25/2009		90
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	Homewood Suites	Hilton	3/1/2014		140
Nashville	TN	Hilton Garden Inn	Vista Host	9/30/2010		194
Nashville	TN	Home2 Suites	Vista Host	5/31/2012		119
Nashville	TN	TownePlace Suites	LBA	9/1/2016		101
Addison	TX	SpringHill Suites	Marriott	3/1/2014		159
Allen	TX	Hampton	Gateway	9/26/2008		103
Allen	TX	Hilton Garden Inn	Gateway	10/31/2008		150
Arlington	TX	Hampton	Western	12/1/2010		98
Austin	TX	Courtyard	White Lodging	11/2/2010		145
Austin	TX	Fairfield Inn & Suites	White Lodging	11/2/2010		150
Austin	TX	Hampton	Vista Host	4/14/2009		124
Austin	TX	Hilton Garden Inn	White Lodging	11/2/2010		117

30

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Austin	TX	Homewood Suites	Vista Host	4/14/2009		97
Austin/Round Rock	TX	Homewood Suites	Vista Host	9/1/2016		115
Beaumont	TX	Residence Inn	Western	10/29/2008		133
Burleson/Fort Worth	TX	Hampton	LBA	10/7/2014		88
Dallas	TX	Homewood Suites	Western	9/1/2016		130
Denton	TX	Homewood Suites	Chartwell	9/1/2016		107
Duncanville	TX	Hilton Garden Inn	Gateway	10/21/2008		142
El Paso	TX	Hilton Garden Inn	Western	12/19/2011		145
El Paso	TX	Homewood Suites	Western	3/1/2014		114
Fort Worth	TX	Courtyard	LBA	2/2/2017		124
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
Irving	TX	Homewood Suites	Western	12/29/2010		77
Lewisville	TX	Hilton Garden Inn	Gateway	10/16/2008		165
Round Rock	TX	Hampton	Vista Host	3/6/2009		94
San Antonio	TX	TownePlace Suites	Western	3/1/2014		106
Shenandoah	TX	Courtyard	LBA	9/1/2016		124
Stafford	TX	Homewood Suites	Western	3/1/2014		78
Texarkana	TX	Courtyard	Aimbridge	3/1/2014		90
Texarkana	TX	Hampton	Aimbridge	1/31/2011		81
Texarkana	TX	TownePlace Suites	Aimbridge	3/1/2014		85
Provo	UT	Residence Inn	Dimension	3/1/2014		114
Salt Lake City	UT	SpringHill Suites	White Lodging	11/2/2010		143
Alexandria	VA	Courtyard	Marriott	3/1/2014		178
Alexandria	VA	SpringHill Suites	Marriott	3/28/2011		155
Bristol	VA	Courtyard	LBA	11/7/2008		175
Charlottesville	VA	Courtyard	Crestline	3/1/2014		139
Fairfax	VA	Marriott	White Lodging	9/1/2016		316
Harrisonburg	VA	Courtyard	Newport	3/1/2014		125
Manassas	VA	Residence Inn	Crestline	2/16/2011		107
Richmond	VA	Courtyard	White Lodging	12/8/2014		135
Richmond	VA	Marriott	White Lodging	3/1/2014		410
Richmond	VA	Residence Inn	White Lodging	12/8/2014		75
Richmond	VA	SpringHill Suites	McKibbon	9/1/2016		103
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
Vancouver	WA	SpringHill Suites	InnVentures	3/1/2014		119
Total						30,188

31

Related Parties

The Company has, 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 7 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 sources of liquidity are the operating cash flow generated from the Company’s properties, availability under its $540 million unsecured revolving credit facility, proceeds from the strategic disposition of its hotel properties and proceeds from potential offerings of the Company’s common shares.

The revolving credit facility, which as of September 30, 2017 had unused borrowing capacity of approximately $323.3 million, is available for share repurchases, acquisitions, hotel renovations and development, working capital and other general corporate funding purposes, including the payment of distributions to shareholders.  As of September 30, 2017, the Company’s revolving credit facility had an outstanding principal balance of approximately $216.7 million with an annual variable interest rate of approximately 2.78%.

The credit agreement governing the revolving credit facility contains mandatory prepayment requirements, customary affirmative covenants, negative covenants and events of default.  The credit agreement requires 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, limits on dividend payments and share repurchases and restrictions on certain investments.  The Company was in compliance with the applicable covenants at September 30, 2017.

In February 2017, the Company executed an equity distribution agreement that allows the Company to sell, from time to time, up to an aggregate of $300 million of its common shares through sales agents (the “ATM Program”).  Actual sales 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 determinations by the Company of the appropriate uses of any proceeds.  As of September 30, 2017, the Company had not sold any shares under the ATM Program.

On July 25, 2017, the Company entered into an unsecured $85 million term loan with a syndicate of commercial banks, with a maturity date of July 25, 2024.  The Company used the net proceeds from the $85 million term loan to pay down the borrowings on the Company’s revolving credit facility.  See Note 5 titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for additional information related to the $85 million term loan.

As discussed below in “Subsequent Events,” in October 2017, the Company sold the Fairfax, Virginia Marriott for a sale price of approximately $41.5 million.  The Company used the net proceeds from the sale to pay down borrowings on its revolving credit facility.

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 liquidity requirements, including debt service, hotel acquisitions, hotel renovations, required distributions to shareholders (the Company is not required to make distributions at its current rate for REIT purposes) and share repurchases.

Distributions

To maintain its REIT status, the Company is required to distribute at least 90% of its ordinary income.  Distributions paid during the nine months ended September 30, 2017 totaled approximately $200.7 million or $0.90 per common share and were paid at a monthly rate of $0.10 per common share.  For the same period, the Company’s net cash generated from operations was approximately $280.5 million, which included a payment of approximately $19.4 million, net of reimbursements received from the Company’s directors and officers insurance carriers, during the first nine months of 2017 to settle the Apple Ten merger lawsuit which is discussed in Note 10 titled “Legal Proceedings” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q.

32

The Company’s current annual distribution rate, payable monthly, is $1.20 per common share.  As it has done historically, due to seasonality, the Company may use its revolving credit facility to maintain the consistency of the monthly distribution rate, taking into consideration any acquisitions, dispositions, capital improvements and economic cycles.  Any distribution will be subject to approval of the Company’s Board of Directors and there can be no assurance of the classification or duration of distributions at the current annual distribution rate.  The Board of Directors monitors the Company’s distribution rate relative to the performance of the 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 the Company.  If cash flow 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 assurances it will be successful with this strategy and may need to reduce its distributions to required levels.  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 connection with the implementation of the ATM Program, in February 2017 the Company terminated its existing written trading plan under the Company’s share repurchase program.  In January 2016, the Company purchased, under its share repurchase program, approximately 20,000 of its common shares at a weighted-average market purchase price of approximately $18.10 per common share for an aggregate purchase price of approximately $0.4 million.  The Company did not repurchase any common shares under its share repurchase program during the first nine months of 2017.  The Company plans to continue to consider opportunistic share repurchases under the $467.5 million remaining portion of the authorized $475 million share repurchase program, which will depend on prevailing market conditions and other factors.  The program may be suspended or terminated at any time by the Company and, as a result of an extension of the program approved by the Board of Directors in May 2017, will end in July 2018 if not terminated earlier.

Capital Improvements

The Company has ongoing capital commitments to fund its capital improvements.  To maintain and enhance each property’s competitive position in its market, the Company has invested 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, 2017, the Company held $26.8 million in reserve related to these properties.  During the nine months ended September 30, 2017, the Company invested approximately $41.9 million in capital expenditures and anticipates spending an additional $25 million during the remainder of 2017, which includes various scheduled renovation projects for approximately 15 properties.  The Company does not currently have any existing or planned projects for development.

Hotel Contract Commitments

As of September 30, 2017, the Company had outstanding contracts for the potential purchase of four additional hotels for a total purchase price of approximately $146.1 million.  Two of the hotels, the Salt Lake City Residence Inn and the Portland Residence Inn, which are already in operation, were acquired in October 2017.  The two remaining hotels are under construction and are planned to be completed and opened for business over the next 12 months from September 30, 2017, at which time closing on these hotels is expected to occur.  Although the Company is working towards acquiring these hotels, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on these hotels will occur under the outstanding purchase contracts.  The purchase price for each of the Salt Lake City Residence Inn and Portland Residence Inn was funded through the Company’s revolving credit facility and it is anticipated that the purchase price for the remaining outstanding contracts will be funded similarly.

Cash Management Activities

As part of the cost sharing arrangements discussed in Note 7 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 Apple Realty Group, Inc. (“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.

33

Impact of Inflation

Operators of hotels, in general, possess the ability to adjust room rates daily to reflect the effects of inflation.  Competitive pressures may, however, limit the operators’ ability to raise room rates.  Currently the Company is not experiencing any material impact from inflation.

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 there is 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 are greater in the second and third quarters than in the first and fourth quarters.  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.

New Accounting Standards

See Note 1 titled “Organization and Summary of Significant Accounting Policies” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q for information on the adoption of accounting standards in the first nine months of 2017 and the anticipated adoption of recently issued accounting standards.

Subsequent Events

In October 2017, the Company paid approximately $22.3 million, or $0.10 per outstanding common share, in distributions to its common shareholders.

In October 2017, the Company declared a regular monthly cash distribution of $0.10 per common share for the month of November 2017.  The distribution is payable on November 15, 2017.

On October 5, 2017, the Company completed the sale of the Fairfax, Virginia Marriott for a sale price of approximately $41.5 million.  The Company used the net proceeds from the sale to pay down borrowings on its revolving credit facility.  See Note 4 for additional information.

On October 13, 2017, the Company closed on the purchase of an existing 179-room Residence Inn in Portland, Maine for a gross purchase price of approximately $55.8 million.

On October 20, 2017, the Company closed on the purchase of an existing 136-room Residence Inn in Salt Lake City, Utah for a gross purchase price of $25.5 million.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As of September 30, 2017, 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 its variable interest rate term loan.  As of September 30, 2017, after giving effect to interest rate swaps, as described below, approximately $319.2 million, or approximately 24% 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, 2017, every 100 basis points change in interest rates will impact the Company’s annual net income by approximately $3.2 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.  The Company’s cash balance at September 30, 2017 was $0.

34

As of September 30, 2017, the Company’s variable rate debt consisted of its $540 million revolving credit facility and six term loans totaling $660 million.  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, 2017, the Company had six interest rate swap agreements that effectively fix the interest payments on approximately $557.5 million of the Company’s variable rate debt outstanding (consisting of five term loans) through maturity.  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 one month LIBOR.

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.  The following table summarizes the annual maturities and average interest rates of the Company’s mortgage debt, the six term loans and borrowings outstanding under the $540 million revolving credit facility at September 30, 2017.  All dollar amounts are in thousands.

	October 1 - December 31, 2017			2018			2019			2020			2021			Thereafter			Total		Fair Market Value
Total debt:
Maturities	$	2,701		$	11,071		$	248,408		$	451,164		$	95,311		$	498,181		$	1,306,836	$	1,307,025
Average interest rates		3.5	%		3.5	%		3.5	%		3.8	%		4.0	%		4.0	%
Variable rate debt:
Maturities	$	-		$	-		$	216,700		$	425,000		$	50,000		$	185,000		$	876,700	$	877,783
Average interest rates (1)		3.0	%		3.0	%		3.0	%		3.1	%		3.3	%		3.4	%
Fixed rate debt:
Maturities	$	2,701		$	11,071		$	31,708		$	26,164		$	45,311		$	313,181		$	430,136	$	429,242
Average interest rates		4.5	%		4.5	%		4.5	%		4.5	%		4.4	%		4.3	%

(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 and Chief Financial 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 and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2017.  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

There have been no material changes to the legal proceedings previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”) except as described in Note 10 titled “Legal Proceedings” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, which information is incorporated by reference herein.

Item 1A.  Risk Factors

For a discussion of the Company’s potential risks and uncertainties, see the section titled “Risk Factors” in the 2016 Form 10-K.  There have been no material changes to the risk factors previously disclosed in the 2016 Form 10-K.

Item 6.  Exhibits

Exhibit Number	Description of Documents
3.1	Amended and Restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K (SEC File No. 001-37389) filed May 23, 2017)
3.2	Second Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K (SEC File No. 001-37389) filed February 18, 2016)
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)
32.1	Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (FURNISHED HEREWITH)
101	The following materials from Apple Hospitality REIT, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, and (iv) related notes to these financial statements, tagged as blocks of text and in detail (FILED HEREWITH)

36

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 6, 2017
	Justin G. Knight,
	President and Chief Executive Officer (Principal Executive Officer)
By:	/s/    Bryan Peery	Date:  November 6, 2017
	Bryan Peery,
	Chief Financial Officer (Principal Financial and Principal Accounting Officer)

37

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

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

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

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

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

5. The registrant’s other certifying officer 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 6, 2017	/s/    Justin G. Knight
	Justin G. Knight President and Chief Executive Officer
	Apple Hospitality REIT, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Bryan Peery, 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

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

5. The registrant’s other certifying officer 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 6, 2017	/s/    Bryan Peery
	Bryan Peery Chief Financial 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 ending September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies, 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, 2017, and for the period then ended.

Apple Hospitality REIT, Inc.

  /s/    Justin G. Knight     

Justin G. Knight

President and Chief Executive Officer

 /s/    Bryan Peery     

Bryan Peery

Chief Financial Officer

November 6, 2017

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 01, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Apple Hospitality REIT, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		223,060,840
Amendment Flag	false
Entity Central Index Key	0001418121
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Investment in real estate, net of accumulated depreciation of $686,787 and $557,597, respectively	$ 4,742,590	$ 4,823,489
Assets held for sale	40,626	39,000
Restricted cash-furniture, fixtures and other escrows	30,299	29,425
Due from third party managers, net	52,354	31,460
Other assets, net	48,018	56,509
Total Assets	4,913,887	4,979,883
Liabilities
Revolving credit facility	216,700	270,000
Term loans	655,988	570,934
Mortgage debt	432,783	497,029
Accounts payable and other liabilities	104,467	124,856
Total Liabilities	1,409,938	1,462,819
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 223,060,840 and 222,938,648 shares, respectively	4,455,390	4,453,205
Accumulated other comprehensive income	5,218	4,589
Distributions greater than net income	(956,659)	(940,730)
Total Shareholders' Equity	3,503,949	3,517,064
Total Liabilities and Shareholders' Equity	$ 4,913,887	$ 4,979,883

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investment in real estate accumulated depreciation (in Dollars)	$ 686,787	$ 557,597
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	223,060,840	222,938,648
Common stock, shares outstanding	223,060,840	222,938,648

XML

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Room	$ 302,298	$ 255,269	$ 877,974	$ 698,759
Other	22,628	21,202	71,581	59,835
Total revenue	324,926	276,471	949,555	758,594
Expenses:
Operating	79,975	69,082	235,474	187,370
Hotel administrative	24,842	20,866	74,895	57,921
Sales and marketing	25,488	21,329	75,867	59,244
Utilities	12,036	10,543	31,982	25,862
Repair and maintenance	12,199	10,478	36,394	29,167
Franchise fees	13,974	11,834	40,611	32,212
Management fees	11,315	9,205	33,072	26,189
Property taxes, insurance and other	17,598	14,787	52,346	40,315
Ground lease	2,831	2,615	8,486	7,587
General and administrative	5,350	2,623	18,255	12,511
Transaction and litigation costs (reimbursements)	0	36,452	(2,586)	37,861
Loss on impairment of depreciable real estate assets	0	5,471	7,875	5,471
Depreciation	44,110	37,343	131,770	104,651
Total expenses	249,718	252,628	744,441	626,361
Operating income	75,208	23,843	205,114	132,233
Interest and other expense, net	(12,024)	(10,156)	(35,590)	(28,519)
Gain (loss) on sale of real estate	(157)	0	15,983	0
Income before income taxes	63,027	13,687	185,507	103,714
Income tax benefit (expense)	(203)	7	(712)	(616)
Net income	62,824	13,694	184,795	103,098
Other comprehensive income (loss):
Interest rate derivatives	259	4,261	629	(7,934)
Comprehensive income	$ 63,083	$ 17,955	$ 185,424	$ 95,164
Basic and diluted net income per common share (in Dollars per share)	$ 0.28	$ 0.07	$ 0.83	$ 0.57
Weighted average common shares outstanding - basic and diluted (in Shares)	223,057	190,563	223,052	180,004

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net income	$ 184,795	$ 103,098
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	131,770	104,651
Loss on impairment of depreciable real estate assets	7,875	5,471
Gain on sale of real estate	(15,983)	0
Other non-cash expenses, net	5,372	4,806
Changes in operating assets and liabilities, net of amounts acquired or assumed with acquisitions:
Increase in due from third party managers, net	(20,883)	(14,350)
Decrease (increase) in other assets, net	8,507	(1,014)
Increase (decrease) in accounts payable and other liabilities	(20,944)	35,309
Net cash provided by operating activities	280,509	237,971
Cash flows from investing activities:
Cash consideration in Apple Ten merger	0	(93,590)
Acquisition of hotel properties, net	(56,794)	(23,994)
Deposits and other disbursements for potential acquisitions	(1,810)	0
Capital improvements	(41,370)	(47,523)
Decrease (increase) in capital improvement reserves	(1,351)	2,459
Net proceeds from sale of real estate	28,374	0
Net cash used in investing activities	(72,951)	(162,648)
Cash flows from financing activities:
Repurchases of common shares	0	(361)
Repurchases of common shares to satisfy employee withholding requirements	(432)	(459)
Equity issuance costs	0	(1,176)
Distributions paid to common shareholders	(200,716)	(161,940)
Net proceeds from (payments on) revolving credit facility	(53,300)	187,300
Payments on extinguished credit facility	0	(111,100)
Proceeds from term loans	85,000	150,000
Proceeds from mortgage debt	0	24,000
Payments of mortgage debt	(37,219)	(157,823)
Financing costs	(891)	(3,764)
Net cash used in financing activities	(207,558)	(75,323)
Net change in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	0	0
Supplemental cash flow information:
Interest paid	35,049	30,192
Supplemental disclosure of noncash investing and financing activities:
Stock consideration in Apple Ten merger (see note 2)	0	956,086
Accrued distribution to common shareholders	22,302	22,325
Mortgage debt assumed by buyer upon sale of real estate	$ 27,073	$ 0

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Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

1.  Organization and Summary of Significant Accounting Policies

Organization

Apple Hospitality REIT, Inc., together with its wholly-owned subsidiaries (the “Company”), is a Virginia corporation that has elected to be treated as a real estate investment trust (“REIT”) for federal income tax purposes.  The Company is a self-advised REIT that invests in income-producing real estate, primarily in the lodging sector, in the United States.  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, and therefore does not consolidate the entities.  As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in 33 states, including one hotel with 316 rooms classified as held for sale, which was sold to an unrelated party in October 2017.  The Company’s common shares are listed on the New York Stock Exchange 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 accounting principles generally accepted in the United States 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 2016 Annual Report on Form 10-K.  Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2017.

Use of Estimates

The preparation of the financial statements in conformity with United States generally accepted accounting principles 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.

Accounting Standards Recently Adopted

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which is intended to add guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The standard is effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted.  The Company adopted this standard effective January 1, 2017 on a prospective basis.  Prior to the adoption of this standard, the Company’s acquisitions of hotel properties were accounted for as existing businesses, and therefore all transaction costs associated with the acquisitions, including title, legal, accounting, brokerage commissions and other related costs were expensed as incurred.  Under the new standard, effective January 1, 2017, acquisitions of hotel properties (including the acquisition of three hotels during the first nine months of 2017, as discussed in Note 3) will generally be accounted for as acquisitions of a group of assets, with costs incurred to effect an acquisition being capitalized as part of the cost of the assets acquired, instead of accounted for separately as expenses in the period that they are incurred.  Asset acquisitions now require the Company to complete its allocation of the purchase price at the time of the acquisition as the measurement period applicable to business combinations does not apply to asset acquisitions.

Accounting Standards Recently Issued

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which affects virtually all aspects of an entity’s revenue recognition.  The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In March, April, May and December 2016, the FASB issued ASUs No. 2016-08, 2016-10, 2016-12 and 2016-20, respectively, all related to Revenue from Contracts with Customers (Topic 606), which further clarify the application of the standard.  In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effectiveness of ASU No. 2014-09 to annual and interim periods beginning after December 15, 2017, and permitted early application for annual reporting periods beginning after December 15, 2016.  The Company plans to adopt this standard on January 1, 2018 using the modified retrospective approach.  Although the Company is still evaluating this ASU, based on its assessment to date, the Company does not believe there will be a significant change to the amount or timing of the recording of revenue in its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which clarifies the scope of Accounting Standards Codification (“ASC”) Subtopic 610-20 and adds guidance for the derecognition of nonfinancial assets, including partial sales.  The standard is effective in conjunction with ASU No. 2014-09, presented above, which is effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted.  The provisions of this update must be applied at the same time as the adoption of ASU No. 2014-09.  The Company plans to adopt this standard on January 1, 2018 using the modified retrospective approach.  The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting model to enable entities to better portray their risk management activities in their financial statements and enhance the transparency and understandability of hedging activity.  The standard simplifies the application of hedge accounting and reduces the administrative burden of hedge documentation requirements and assessing hedge effectiveness.  The standard is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted.  The standard requires a modified retrospective approach for all hedge relationships that exist on the date of adoption.  The presentation and disclosure guidance is required only prospectively.  The Company is currently evaluating when it will adopt the standard.  The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

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Merger with Apple REIT Ten, Inc.

9 Months Ended

Sep. 30, 2017

Disclosure Text Block Supplement [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

2.  Merger with Apple REIT Ten, Inc.

Effective September 1, 2016, the Company completed its previously announced merger with Apple REIT Ten, Inc. (“Apple Ten”) (the “merger”).  Pursuant to the Agreement and Plan of Merger entered into on April 13, 2016, as amended on July 13, 2016 (the “Merger Agreement”), Apple Ten merged with and into a wholly-owned subsidiary of the Company (“Acquisition Sub”), at which time the separate corporate existence of Apple Ten ceased and Acquisition Sub became the surviving corporation in the merger.  Acquisition Sub was formed solely for the purpose of engaging in the merger and had not conducted any prior activities.  As a result of the merger, the Company acquired the business of Apple Ten, a real estate investment trust, which immediately prior to the effective time of the merger, owned 56 hotels located in 17 states with an aggregate of 7,209 rooms.

The Company accounted for the merger in accordance with ASC 805, Business Combinations.  The Company was considered the acquirer for financial reporting purposes, which required, among other things, that the assets acquired and liabilities assumed from Apple Ten be recognized at their acquisition date fair values.  For purpose of accounting for the transaction, the aggregate value of the merger consideration paid to Apple Ten shareholders was estimated to be approximately $1.0 billion, and was comprised of approximately $956.1 million for the issuance of approximately 48.7 million common shares of the Company valued at $19.62 per share, which was the closing price of the Company’s common shares on August 31, 2016 (the date that the merger was approved), and $93.6 million in cash, which was funded through borrowings on the Company’s $540 million revolving credit facility (the “revolving credit facility”).  All costs (reimbursements) related to the merger were recorded in the period incurred and are included in transaction and litigation costs (reimbursements) in the Company’s consolidated financial statements.  In connection with the merger, the Company incurred approximately $37.6 million in merger costs for the nine months ended September 30, 2016, which included $32.0 million funded by the Company in January 2017 to settle the Apple Ten merger lawsuit and approximately $1.8 million in legal costs incurred to defend the lawsuit.  During 2017, the Company received $12.6 million in proceeds from its director and officer insurance carriers in connection with the merger lawsuit, of which $10.0 million (received in January 2017) and $2.6 million (received in May 2017) were included as reductions in transaction and litigation costs (reimbursements) for the fourth quarter of 2016 and nine months ended September 30, 2017, respectively.  Further discussion of the merger litigation is included in Note 10.

Effective September 1, 2016, upon completion of the merger, the Company assumed approximately $145.7 million in mortgage debt, prior to any fair value adjustments, secured by nine properties.  The Company also assumed the outstanding balance on Apple Ten’s credit facility totaling $111.1 million, which was terminated and repaid in full on September 1, 2016 with borrowings on the Company’s revolving credit facility.

As contemplated in the Merger Agreement, in connection with the completion of the merger, the advisory and related party arrangements with respect to Apple Ten and its advisors, as described in more detail in Note 7, were terminated.

The following unaudited pro forma information for the three and nine month periods ended September 30, 2017 and 2016, is presented as if the merger, effective September 1, 2016, had occurred on January 1, 2016, and is based on assumptions and estimates considered appropriate by the Company.  The pro forma information is provided for illustrative purposes only and does not necessarily reflect what the operating results would have been had the merger been completed on January 1, 2016, nor is it necessarily indicative of future operating results.  The pro forma information does not give effect to any cost synergies or other operating efficiencies that could result from the merger.  Amounts are in thousands except per share data.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017 (Actual)		2016 (Proforma)		2017 (Proforma)		2016 (Proforma)
Total revenue	$	324,926	$	325,924	$	949,555	$	949,760
Net income	$	62,824	$	59,960	$	182,209	$	176,985
Basic and diluted net income per common share	$	0.28	$	0.27	$	0.82	$	0.79
Weighted average common shares outstanding - basic and diluted		223,057		223,403		223,052		223,399

For purposes of calculating these pro forma amounts, merger transaction and litigation costs (reimbursements) totaling approximately ($2.6) million for the nine months ended September 30, 2017, and approximately $36.4 million and $37.6 million for the three and nine months ended September 30, 2016, respectively, included in the Company’s consolidated statements of operations, were excluded from the pro forma amounts since these costs and reimbursements are attributable to the merger and related transactions and do not have an ongoing impact to the statements of operations.

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Investment in Real Estate

9 Months Ended

Sep. 30, 2017

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

3.  Investment in Real Estate

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

	September 30,			December 31,
	2017			2016
Land	$	711,826		$	707,878
Building and Improvements		4,294,310			4,270,095
Furniture, Fixtures and Equipment		411,376			391,421
Franchise Fees		11,865			11,692
		5,429,377			5,381,086
Less Accumulated Depreciation		(686,787	)		(557,597	)
Investment in Real Estate, net	$	4,742,590		$	4,823,489

As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in 33 states, including one hotel with 316 rooms classified as held for sale, which was sold to an unrelated party in October 2017.

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

Acquisitions

The Company acquired three hotels during the first nine months of 2017.  The following table sets forth the location, brand, manager, date acquired, number of rooms and gross purchase price for each hotel.  All dollar amounts are in thousands.

City	State	Brand	Manager	Date Acquired	Rooms		Gross Purchase Price (a)
Fort Worth	TX	Courtyard	LBA	2/2/2017		124	$	18,000
Birmingham (b)	AL	Hilton Garden Inn	LBA	9/12/2017		104		19,162
Birmingham (b)	AL	Home2 Suites	LBA	9/12/2017		106		19,276
						334	$	56,438

(a)

The acquisitions of these hotel properties were accounted for as acquisitions of a group of assets, with costs incurred to effect the acquisitions, which were not significant, capitalized as part of the cost of the assets acquired.  The gross purchase price excludes capitalized transaction costs.  At the date of purchase, the purchase price for each of these properties was funded through the Company’s revolving credit facility.

(b)

The Hilton Garden Inn and Home2 Suites hotels in Birmingham, AL are part of an adjoining two-hotel complex located on the same site.

On July 1, 2016, the Company closed on the purchase of a newly constructed 128-room Home2 Suites hotel in Atlanta, Georgia, the same day the hotel opened for business, for a purchase price of approximately $24.6 million.  The Company used borrowings under its revolving credit facility to purchase the hotel.  Additionally, as described in Note 2, effective September 1, 2016, the Company completed the merger with Apple Ten, which added 56 hotels, located in 17 states, with an aggregate of 7,209 rooms to the Company’s real estate portfolio.  The total real estate value of the merger was estimated to be approximately $1.3 billion.  The Company accounted for the purchase of these hotels in accordance with ASC 805, Business Combinations.  No goodwill was recorded in connection with any of these acquisitions.  For the 57 hotels acquired during the nine months ended September 30, 2016, the amount of revenue and operating income (excluding merger and other acquisition related transaction costs) included in the Company’s consolidated statements of operations from the date of acquisition through September 30, 2016 was approximately $25.0 million and $9.5 million, respectively.

Hotel Contract Commitments

As of September 30, 2017, the Company had outstanding contracts for the potential purchase of four additional hotels for a total purchase price of approximately $146.1 million.  Two of the hotels, the Salt Lake City Residence Inn and the Portland Residence Inn, which are already in operation, were acquired in October 2017.  The two remaining hotels are under construction and are planned to be completed and opened for business over the next 12 months from September 30, 2017, at which time closing on these hotels is expected to occur.  Although the Company is working towards acquiring the two hotels under construction, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on these hotels will occur under the outstanding purchase contracts.  The following table summarizes the location, brand, date of purchase contract, expected number of rooms, refundable (if the seller does not meet its obligations under the contract) contract deposits paid, and gross purchase price for each of the contracts outstanding at September 30, 2017.  All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Operating (a)
Salt Lake City, UT	Residence Inn	8/22/2017		136	$	500	$	25,500
Portland, ME	Residence Inn	8/30/2017		179		1,000		55,750
Under development (b)
Phoenix, AZ	Hampton	10/25/2016		210		500		44,100
Orlando, FL	Home2 Suites	1/18/2017		128		3		20,736
				653	$	2,003	$	146,086

(a)

Closing on these hotels occurred in October 2017.

(b)

As of September 30, 2017, these hotels were under construction. The table shows the expected number of rooms upon hotel completion and the expected franchise brands. Assuming all conditions to closing are met, the purchases of these hotels are expected to close over the next 12 months from September 30, 2017. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the contract. As the property is under construction, at this time, the seller has not met all of the conditions to closing.

The purchase price for each of the Salt Lake City Residence Inn and Portland Residence Inn was funded through the Company’s revolving credit facility and it is anticipated that the purchase price for the remaining outstanding contracts will be funded similarly.

Loss on Impairment of Depreciable Real Estate Assets

During the first quarter of 2017, the Company identified two properties for potential sale: the Columbus, Georgia SpringHill Suites and TownePlace Suites hotels.  In April 2017, the Company entered into separate contracts with the same unrelated party for the sale of these properties for a total combined gross sales price of approximately $10.0 million.  Due to the change in the anticipated hold period for each of these hotels, the Company reviewed the estimated undiscounted cash flows generated by each property (including its sale price, net of estimated selling costs) and determined that, for each hotel, the undiscounted cash flows were less than its carrying value; therefore the Company recognized an impairment loss of approximately $7.9 million in the first quarter of 2017 to adjust the bases of these properties to their estimated fair values, which were based on the contracted sale price, net of estimated selling costs, a Level 1 input under the fair value hierarchy.  In May 2017, both of these contracts were terminated.

During the third quarter of 2016, the Company identified two properties for potential sale: the Dallas, Texas Hilton hotel and the Chesapeake, Virginia Marriott hotel.  In October 2016, the Company entered into separate contracts for the sale of these properties.  Due to the change in the anticipated hold period for each of these hotels, the Company reviewed the estimated undiscounted cash flows generated by each property (including its sale price, net of commissions and other selling costs) and determined that the Chesapeake, Virginia Marriott’s estimated undiscounted cash flows were less than its carrying value; therefore the Company recognized an impairment loss of approximately $5.5 million in the third quarter of 2016 to adjust the basis of this property to its estimated fair value, which was based on the original contracted sale price, net of broker commissions and other estimated selling costs, a Level 1 input under the fair value hierarchy.  The Chesapeake, Virginia Marriott was sold in December 2016.  The Dallas, Texas Hilton contract was terminated in November 2016, and, as discussed in Note 4, a new purchase and sale agreement was entered into by the Company in December 2016, and the hotel was sold in April 2017.

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Assets Held for Sale and Dispositions

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

4.  Assets Held for Sale and Dispositions

In December 2016, the Company entered into a purchase and sale agreement with an unrelated party for the sale of its 224-room Hilton hotel in Dallas, Texas for a gross sales price of approximately $56.1 million, as amended.  The hotel was classified as held for sale at its historical cost (which was less than the contract price, net of costs to sell) in the Company’s consolidated balance sheet at December 31, 2016.  On April 20, 2017, the Company completed the sale resulting in a gain of approximately $16.0 million, which is included in the Company’s consolidated statement of operations for the nine months ended September 30, 2017.  The hotel had a carrying value totaling approximately $39.0 million at the date of sale.  Under the contract, at closing, the mortgage loan secured by the Dallas, Texas Hilton hotel was assumed by the buyer with the buyer receiving a credit for the amount assumed, which was approximately $27.1 million at the date of sale.

In June 2017, the Company entered into a purchase and sale agreement with an unrelated party for the sale of its 316-room Marriott hotel in Fairfax, Virginia, acquired by the Company in the merger with Apple Ten in September 2016, for a gross sales price of $41.5 million, as amended.  The hotel was classified as held for sale at its historical cost (which was less than the contract price, net of costs to sell) in the Company’s consolidated balance sheet as of September 30, 2017.  On October 5, 2017, the Company completed the sale, resulting in an estimated gain of approximately $0.3 million, which will be recognized in the fourth quarter of 2017.  The estimated gain is calculated as the total sales price, net of commissions and selling costs, less the carrying value totaling approximately $40.6 million as of September 30, 2017.

The net proceeds from the sales were used to pay down borrowings on the Company’s revolving credit facility.  The Company’s consolidated statements of operations include operating income of approximately $0.2 million and $0.8 million for the three months ended September 30, 2017 and 2016, respectively, and approximately $2.4 million and $2.1 million for the nine months ended September 30, 2017 and 2016, respectively, relating to the results of operations of the two hotels noted above for the period of ownership.  The sale of these properties does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results, and therefore the operating results for the period of ownership of these properties are included in income from continuing operations for the three and nine months ended September 30, 2017 and 2016.

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Debt

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

5.  Debt

$965 Million Credit Facility

The Company utilizes an unsecured “$965 million credit facility” comprised of (i) a $540 million revolving credit facility with an initial maturity date of May 18, 2019 and (ii) a $425 million term loan facility with a maturity date of May 18, 2020, consisting of three term loans, all funded during 2015 (the “$425 million term loans”).  Subject to certain conditions including covenant compliance and additional fees, the revolving credit facility maturity date may be extended one year and the amount of the total credit facility may be increased from $965 million to $1.25 billion.  The Company may make voluntary prepayments in whole or in part, at any time.  Interest payments on the $965 million credit facility are due monthly and the interest rate, subject to certain exceptions, is equal to an annual rate of the one-month LIBOR (the London Inter-Bank Offered Rate for a one-month term) plus a margin ranging from 1.50% to 2.30%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.  In conjunction with the $425 million term loans, the Company entered into two interest rate swap agreements, which effectively fix the interest rate on $322.5 million of the outstanding balance at approximately 3.10%, subject to adjustment based on the Company’s leverage ratio, through maturity.  See Note 6 for more information on the interest rate swap agreements.  The Company is also required to pay quarterly an unused facility fee at an annual rate of 0.20% or 0.30% on the unused portion of the revolving credit facility, based on the amount of borrowings outstanding during the quarter.

$150 Million Term Loan Facility

On April 8, 2016, the Company entered into an unsecured $150 million term loan facility with a syndicate of commercial banks (the “$150 million term loan facility”), consisting of a term loan of up to $50 million that will mature on April 8, 2021 (the “$50 million term loan”) and a term loan of up to $100 million that will mature on April 8, 2023 (the “$100 million term loan,” and collectively with the $50 million term loan, the “$150 million term loans”).  The Company initially borrowed $50 million under the $150 million term loan facility on April 8, 2016 and borrowed the remaining $100 million on September 30, 2016.  The credit agreement contains requirements and covenants similar to the Company’s $965 million credit facility.  The Company may make voluntary prepayments in whole or in part, at any time, subject to certain conditions.  Interest payments on the $150 million term loan facility are due monthly and the interest rate is equal to an annual rate of the one-month LIBOR plus a margin ranging from 1.45% to 2.20% for the $50 million term loan and 1.80% to 2.60% for the $100 million term loan, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.  The Company also entered into two interest rate swap agreements which, beginning on September 30, 2016, effectively fix the interest rate on the $50 million term loan and $100 million term loan at 2.54% and 3.13%, respectively, subject to adjustment based on the Company’s leverage ratio, through maturity.  See Note 6 for more information on the interest rate swap agreements.  Proceeds from the $150 million term loan facility were used to pay down outstanding borrowings on the Company’s revolving credit facility, using the increased availability to repay scheduled mortgage debt maturities through the end of the first quarter of 2017.

$85 Million Term Loan

On July 25, 2017, the Company entered into an unsecured $85 million term loan with a syndicate of commercial banks, with a maturity date of July 25, 2024 (the “$85 million term loan” and, together with the $425 million term loans and the $150 million term loans, the “term loans”).  Net proceeds from the $85 million term loan were used to pay down outstanding borrowings on the Company’s revolving credit facility.  Subject to certain conditions including covenant compliance and additional fees, the $85 million term loan may be increased to $125 million.  The credit agreement contains requirements and covenants similar to the Company’s $965 million credit facility.  The Company may make voluntary prepayments in whole or in part, at any time, subject to certain conditions.  Interest payments on the $85 million term loan are due monthly and the interest rate is equal to an annual rate of the one-month LIBOR plus a margin ranging from 1.80% to 2.60%, depending upon the Company’s leverage ratio, as calculated under the terms of the credit agreement.  In conjunction with the $85 million term loan, the Company entered into two interest rate swap agreements (one in May 2017 with a notional amount of $75 million, effective July 31, 2017, and the other in August 2017 with a notional amount of $10 million, effective August 10, 2017), which effectively fix the interest rate on the $85 million term loan at approximately 3.76%, subject to adjustment based on the Company’s leverage ratio, through maturity.  See Note 6 for more information on the interest rate swap agreements.

As of September 30, 2017 and December 31, 2016, the details of the Company’s revolving credit facility and term loans were as set forth below.  All dollar amounts are in thousands.

		As of September 30, 2017								As of December 31, 2016
	Maturity Date	Outstanding Balance			Interest Rate					Outstanding Balance			Interest Rate
Revolving credit facility (1)	5/18/2019	$	216,700			2.78	%	(2	)	$	270,000			2.32	%	(2	)
Term loans
$425 million term loans	5/18/2020		425,000			3.01	%	(3	)		425,000			2.90	%	(3	)
$50 million term loan	4/8/2021		50,000			2.54	%	(4	)		50,000			2.54	%	(4	)
$100 million term loan	4/8/2023		100,000			3.13	%	(4	)		100,000			3.13	%	(4	)
$85 million term loan	7/25/2024		85,000			3.76	%	(4	)		0			n/a
Total term loans at stated value			660,000								575,000
Unamortized debt issuance costs			(4,012	)							(4,066	)
Total term loans			655,988								570,934
Total revolving credit facility and term loans		$	872,688							$	840,934

(1)	Unamortized debt issuance costs related to the revolving credit facility totaled approximately $2.0 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively, and are included in other assets, net in the Company's consolidated balance sheets.
(2)	Annual variable interest rate at the balance sheet date.
(3)	Effective annual interest rate which includes the effect of interest rate swaps on $322.5 million of the outstanding loan balance, resulting in an annual fixed interest rate of approximately 3.10% on this portion of the debt, subject to adjustment based on the Company's leverage ratio.  See Note 6 for more information on the interest rate swap agreements.  Remaining portion is variable rate debt.
(4)	Annual fixed interest rate at the balance sheet date which includes the effect of interest rate swaps on the outstanding loan balance, subject to adjustment based on the Company’s leverage ratio.  See Note 6 for more information on the interest rate swap agreements.

The credit agreements governing the $965 million credit facility, the $150 million term loan facility and the $85 million term loan contain mandatory prepayment requirements, customary affirmative covenants, 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, limits on dividend payments and share repurchases and restrictions on certain investments.  The Company was in compliance with the applicable covenants at September 30, 2017.

Mortgage Debt

As of September 30, 2017, the Company had approximately $430.1 million in outstanding property level debt secured by 28 properties, with maturity dates ranging from June 2020 to December 2026, stated interest rates ranging from 3.55% to 6.25% and effective interest rates ranging from 3.55% to 4.97%.  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, 2017 and December 31, 2016 for each of the Company’s 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, 2017			Outstanding balance as of December 31, 2016
Irving, TX	Homewood Suites		5.83	%	12/29/2010		(2	)	$	6,052	$	0		$	5,072
Gainesville, FL	Homewood Suites		5.89	%	9/1/2016		(2	)		12,051		0			11,966
Duncanville, TX	Hilton Garden Inn		5.88	%	10/21/2008		(2	)		13,966		0			12,126
Dallas, TX	Hilton		3.95	%	5/22/2015		(3	)		28,000		0			27,246
San Juan Capistrano, CA	Residence Inn		4.15	%	9/1/2016	6/1/2020				16,210		15,858			16,104
Colorado Springs, CO	Hampton		6.25	%	9/1/2016	7/6/2021				7,923		7,787			7,883
Franklin, TN	Courtyard		6.25	%	9/1/2016	8/6/2021				14,679		14,429			14,604
Franklin, TN	Residence Inn		6.25	%	9/1/2016	8/6/2021				14,679		14,429			14,604
Grapevine, TX	Hilton Garden Inn		4.89	%	8/29/2012	9/1/2022				11,810		10,487			10,707
Collegeville/Philadelphia, PA	Courtyard		4.89	%	8/30/2012	9/1/2022				12,650		11,233			11,468
Hattiesburg, MS	Courtyard		5.00	%	3/1/2014	9/1/2022				5,732		5,249			5,357
Rancho Bernardo, CA	Courtyard		5.00	%	3/1/2014	9/1/2022				15,060		13,790			14,074
Kirkland, WA	Courtyard		5.00	%	3/1/2014	9/1/2022				12,145		11,121			11,350
Seattle, WA	Residence Inn		4.96	%	3/1/2014	9/1/2022				28,269		25,871			26,409
Anchorage, AK	Embassy Suites		4.97	%	9/13/2012	10/1/2022				23,230		20,706			21,133
Somerset, NJ	Courtyard		4.73	%	3/1/2014	10/6/2022				8,750		7,990			8,160
Tukwila, WA	Homewood Suites		4.73	%	3/1/2014	10/6/2022				9,431		8,611			8,795
Prattville, AL	Courtyard		4.12	%	3/1/2014	2/6/2023				6,596		5,989			6,123
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	2/6/2023				8,306		7,541			7,711
San Diego, CA	Residence Inn		3.97	%	3/1/2014	3/6/2023				18,600		16,865			17,248
Miami, FL	Homewood Suites		4.02	%	3/1/2014	4/1/2023				16,677		15,138			15,479
Syracuse, NY	Courtyard		4.75	%	10/16/2015	8/1/2024	(4	)		11,199		10,706			10,905
Syracuse, NY	Residence Inn		4.75	%	10/16/2015	8/1/2024	(4	)		11,199		10,706			10,905
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024				27,000		25,087			25,577
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025				10,000		9,448			9,626
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025				34,118		33,253			33,857
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025				13,655		13,394			13,576
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025				22,682		22,248			22,550
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026				24,000		23,522			23,813
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026				25,564		25,081			25,564
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026				25,473		24,992			25,473
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026				18,963		18,605			18,963
									$	514,669		430,136			494,428
Unamortized fair value adjustment of assumed debt												4,556			5,229
Unamortized debt issuance costs												(1,909	)		(2,628	)
Total											$	432,783		$	497,029

(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)	Loans were repaid in full during the three months ended March 31, 2017.
(3)	Assets securing this loan were classified as held for sale as of December 31, 2016.  In April 2017, the assets securing this loan were sold, and the loan was assumed by the buyer of those assets.
(4)	Outstanding principal balance is callable by lender or prepayable by the Company on August 1, 2019.

The aggregate amounts of principal payable under the Company’s total debt obligations (including mortgage debt, the revolving credit facility and term loans), for the five years subsequent to September 30, 2017 and thereafter are as follows (in thousands):

2017 (October - December)	$	2,701
2018		11,071
2019		248,408
2020		451,164
2021		95,311
Thereafter		498,181
		1,306,836
Unamortized fair value adjustment of assumed debt		4,556
Unamortized debt issuance costs related to term loans and mortgage debt		(5,921	)
Total	$	1,305,471

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

6.  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, 2017 and December 31, 2016, both the carrying value and estimated fair value of the Company’s debt were approximately $1.3 billion.  Both the carrying value and estimated fair value of the Company’s debt (as discussed above) is net of unamortized debt issuance costs related to term loans and mortgage debt for each specific year.

Derivative Instruments

Currently, the Company uses interest rate swaps to manage its interest rate risks 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 LIBOR.  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, 2017 and December 31, 2016.  All dollar amounts are in thousands.

								Fair Value Asset (Liability)
Hedge Type	Notional Amount at September 30, 2017		Origination Date	Maturity Date	Swap Fixed Interest Rate			September 30, 2017			December 31, 2016
Cash flow hedge	$	212,500	5/21/2015	5/18/2020		1.58	%	$	538		$	(198	)
Cash flow hedge		110,000	7/2/2015	5/18/2020		1.62	%		166			(246	)
Cash flow hedge		50,000	4/7/2016	3/31/2021		1.09	%		1,168			1,289
Cash flow hedge		100,000	4/7/2016	3/31/2023		1.33	%		3,148			3,744
Cash flow hedge		75,000	5/31/2017	6/30/2024		1.96	%		202			0
Cash flow hedge		10,000	8/10/2017	6/30/2024		2.01	%		(4	)		0
	$	557,500						$	5,218		$	4,589

The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges.  Changes in fair value on the effective portion of all designated cash flow hedges are recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.  Changes in fair value on the ineffective portion of all designated cash flow hedges are recorded to interest and other expense, net in the Company’s consolidated statements of operations.  

To adjust qualifying cash flow hedges to their fair value and recognize the impact of hedge accounting, the Company recorded net unrealized gains (losses) of approximately $0.3 million and $4.3 million during the three months ended September 30, 2017 and 2016, respectively, and approximately $0.6 million and $(7.9) million during the nine months ended September 30, 2017 and 2016, respectively, to other comprehensive income (loss).  There was no ineffectiveness recorded on designated cash flow hedges during the three and nine months ended September 30, 2017 and 2016.  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.  Net unrealized gains (losses) on cash flow hedges previously recorded to other comprehensive income (loss) that were reclassified to interest and other expense, net during the three months ended September 30, 2017 and 2016, include approximately $(0.4) million and $(0.9) million, respectively, and during the nine months ended September 30, 2017 and 2016, include approximately $(1.8) million and $(2.9) million, respectively.  The Company estimates that approximately $(0.6) million of net unrealized gains (losses) included in accumulated other comprehensive income at September 30, 2017 will be reclassified as a net increase to interest and other expense, net within the next 12 months.

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Related Parties

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

7.  Related Parties

The Company has, 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.  There have been no changes to the contracts and relationships discussed in the Company’s 2016 Annual Report on Form 10-K.  Below is a summary of the significant related party relationships in effect during the nine months ended September 30, 2017 and 2016.

Prior to the merger, Glade M. Knight, Executive Chairman of the Company, was Chairman and Chief Executive Officer of Apple Ten.  Apple Ten’s advisors, Apple Ten Advisors, Inc. (“A10A”) and Apple Realty Group, Inc. (“ARG”), are wholly owned by Mr. Knight.  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.  Justin G. Knight, the Company’s President and Chief Executive Officer, and a member of the Company’s Board of Directors, also served as President of Apple Ten prior to the merger.

Support Services to Apple Ten, A10A and ARG Prior to and After the Apple Ten Merger

Effective September 1, 2016, the Company completed its merger with Apple Ten.  As contemplated in the Merger Agreement, in connection with the completion of the merger, the advisory and related party arrangements with respect to the Company, Apple Ten and Apple Ten’s advisors, A10A and ARG, were terminated.  Prior to the merger, A10A subcontracted its obligations under the advisory agreement between A10A and Apple Ten to the Company.  The Company provided to Apple Ten the advisory services contemplated under the A10A advisory agreement and received an annual advisory fee and was reimbursed by Apple Ten for the use of the Company’s employees and corporate office and other costs associated with the advisory agreement.  Additionally, the Company provided support services to Apple Ten’s advisors, who agreed to reimburse the Company for its costs in providing these services.  Both the advisory fees and reimbursed costs received by the Company from Apple Ten were recorded as general and administrative expense by Apple Ten and reductions to general and administrative expense by the Company and, therefore, the termination of the subcontract agreement had no financial impact on the combined company after the effective time of the merger.  After the merger, the Company has continued and will continue to provide support services to ARG for activities unrelated to Apple Ten.

Prior to the merger, advisory fees earned by the Company from Apple Ten for the nine months ended September 30, 2016 totaled approximately $1.6 million and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statement of operations.  Total reimbursed costs received by the Company from these entities for the nine months ended September 30, 2017 and 2016 (including Apple Ten, A10A and ARG prior to September 1, 2016 and ARG thereafter) totaled approximately $0.5 million and $2.3 million, respectively, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations.  As of September 30, 2017 and December 31, 2016, total amounts due from ARG for reimbursements under the cost sharing structure totaled approximately $0.3 million and $0.2 million, respectively, and are included in other assets, net in the Company’s consolidated balance sheets.

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.

Apple Air Holding, LLC (“Apple Air”)

The Company, through a wholly-owned subsidiary, Apple Air, owns a Learjet used primarily for acquisition, asset management, renovation and public relations purposes.  Prior to the merger, Apple Air was jointly owned by the Company (74%) and Apple Ten (26%), with Apple Ten’s ownership interest accounted for as a minority interest.  Effective September 1, 2016, with the completion of the merger, the Company acquired Apple Ten’s 26% equity interest in Apple Air resulting in a 100% equity ownership interest in Apple Air and the elimination of Apple Ten’s minority interest.

The aircraft is also leased to affiliates of the Company based on third party rates, which was not significant during the reporting periods.  The Company also utilizes aircraft, owned through two entities, one of which is owned by the Company’s Executive Chairman, and the other, its President and Chief Executive Officer, for acquisition, asset management, renovation and public relations purposes, and reimburses these entities at third party rates.  Total amounts incurred during the nine months ended September 30, 2017 and 2016 were approximately $0.1 million and $0.2 million, respectively, related to aircraft owned through these two entities 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, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

8.  Shareholders’ Equity

Distributions

The Company’s current annual distribution rate, payable monthly, is $1.20 per common share.  For the three months ended September 30, 2017 and 2016, the Company paid distributions of $0.30 per common share for a total of $66.9 million and $57.2 million, respectively.  For the nine months ended September 30, 2017 and 2016, the Company paid distributions of $0.90 per common share for a total of $200.7 million and $161.9 million, respectively.  Additionally, in September 2017, the Company declared a monthly distribution of $0.10 per common share, totaling $22.3 million, which was recorded as a payable as of September 30, 2017 and paid in October 2017.  As of December 31, 2016, a monthly distribution of $0.10 per common share, totaling $22.3 million, was recorded as a payable and paid in January 2017.  These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets.

Equity Distribution Agreement

On February 28, 2017, the Company entered into an equity distribution agreement with Robert W. Baird & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Canaccord Genuity Inc., FBR Capital Markets & Co., Jefferies LLC, KeyBanc Capital Markets Inc. and Scotia Capital (USA) Inc. (collectively, the “Sales Agents”), pursuant to which the Company may sell, from time to time, up to an aggregate of $300 million of its common shares through the Sales Agents (the “ATM Program”).  During the nine months ended September 30, 2017, the Company had no sales under the ATM Program.

Share Repurchase Program

In connection with the implementation of its ATM Program, in February 2017, the Company terminated its existing written trading plan under the Company’s share repurchase program.  During the first nine months of 2016, the Company purchased, under its share repurchase program, approximately 20,000 of its common shares at a weighted-average market purchase price of approximately $18.10 per common share for an aggregate purchase price of approximately $0.4 million.  The Company did not repurchase any common shares under its share repurchase program during the first nine months of 2017.  The Company plans to continue to consider opportunistic share repurchases under the $467.5 million remaining portion of the authorized $475 million share repurchase program, which will depend on prevailing market conditions and other factors.  The program may be suspended or terminated at any time by the Company and, as a result of an extension of the program approved by the Board of Directors in May 2017, will end in July 2018 if not terminated earlier.

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Compensation Plans

9 Months Ended

Sep. 30, 2017

Disclosure Text Block Supplement [Abstract]

Compensation and Employee Benefit Plans [Text Block]

9.  Compensation Plans

In February 2017, the Compensation Committee of the Board of Directors (“Compensation Committee”) approved an executive incentive plan (“2017 Incentive Plan”), effective January 1, 2017, and established incentive goals for 2017.  Under the 2017 Incentive Plan, participants are eligible to receive a bonus based on the achievement of certain 2017 performance measures, consisting of operational performance metrics (including targeted Modified Funds from Operations per share, Comparable Hotels revenue per available room growth and Adjusted Hotel EBITDA Margin growth) and shareholder return metrics (including shareholder return relative to a peer group and total shareholder return over one-year and two-year periods).  The components of the operational performance metrics and shareholder return metrics are equally weighted and the two metrics each account for 50% of the total target incentive compensation.  The range of potential aggregate payouts under the 2017 Incentive Plan is $0 - $18 million.  Based on performance through September 30, 2017, the Company has accrued approximately $4.7 million as a liability for potential executive bonus payments under the 2017 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of September 30, 2017.  Compensation expense recognized by the Company under the 2017 Incentive Plan is included in general and administrative expense in the Company’s consolidated statements of operations and totaled approximately $1.2 million and $4.7 million for the three and nine months ended September 30, 2017, respectively.  Approximately 25% of awards under the 2017 Incentive Plan, if any, will be paid in cash, and 75% will be issued in stock under the Company’s 2014 Omnibus Incentive Plan, two-thirds of which would vest at the end of 2017 and one-third of which would vest at the end of 2018.  During 2016 and 2015, comparable executive incentive plans were approved by the Compensation Committee (“2016 Incentive Plan” and “2015 Incentive Plan”) that were effective January 1, 2016 and January 1, 2015, respectively.  The Company recorded a (decrease) increase of approximately $(0.8) million and $2.8 million to general and administrative expense related to the 2016 Incentive Plan in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2016, respectively, with the decrease resulting from the reduction of the previously recorded executive bonus accrual due to lower anticipated 2016 performance.

Share Based Compensation Awards

During the first quarters of 2017 and 2016, the Company issued 101,305 and 304,345 common shares earned under the 2016 and 2015 Incentive Plans (net of 19,667 and 11,787 common shares surrendered to satisfy tax withholding obligations) at $19.10 and $19.87 per share, or approximately $2.3 million and $6.3 million in share based compensation, including the surrendered shares, respectively.  Of the total shares issued under the 2016 Incentive Plan, 60,028 shares were unrestricted at the time of issuance, and the remaining 41,277 restricted shares will vest on December 15, 2017.  Of the total shares issued under the 2015 Incentive Plan, 146,279 shares were unrestricted at the time of issuance, and the remaining 158,066 restricted shares vested on December 31, 2016, of which 50,044 common shares were surrendered to satisfy tax withholding obligations.  Of the total 2016 share based compensation, approximately $1.9 million was recorded as a liability as of December 31, 2016, which was included in accounts payable and other liabilities in the Company’s consolidated balance sheet and the remaining $0.4 million, which is subject to vesting on December 15, 2017, will be recognized as compensation expense proportionately throughout 2017.  Of the total 2015 share based compensation, approximately $1.6 million, which vested on December 31, 2016, was recognized as compensation expense proportionately throughout 2016.  For the three months ended September 30, 2017 and 2016, the Company recognized approximately $0.1 million and $0.4 million, respectively, and for the nine months ended September 30, 2017 and 2016, the Company recognized approximately $0.3 million and $1.2 million, respectively, of share based compensation expense related to the unvested restricted share awards.

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Legal Proceedings

9 Months Ended

Sep. 30, 2017

Disclosure Text Block Supplement [Abstract]

Legal Matters and Contingencies [Text Block]

10.  Legal Proceedings

Quinn v. Knight, et al.

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”), on July 19, 2016, a purported shareholder of Apple Ten, now part of the Company, commenced a derivative action in the United States District Court for the Eastern District of Virginia.  On November 2, 2016, the parties reached an agreement in principle to settle the litigation, which the Court approved by order dated March 16, 2017.  In January 2017, the Company funded the settlement amount of $32 million, which was included in accounts payable and other liabilities in its consolidated balance sheet as of December 31, 2016, and received $10 million of proceeds from its director and officer insurance carriers, which was included in other assets, net in its consolidated balance sheet as of December 31, 2016 and the net $22 million was included in transaction and litigation costs (reimbursements) in the Company’s consolidated statement of operations for the year then ended.  In May 2017, the Company received an additional $2.6 million of proceeds from its director and officer insurance carriers, which was included as a reduction in transaction and litigation costs (reimbursements) in the Company’s consolidated statements of operations for the nine months ended September 30, 2017.  The Company does not anticipate additional costs or reimbursements related to this litigation.

Moses, et al. v. Apple Hospitality REIT, Inc., et al.

As previously disclosed in the 2016 Form 10-K, on April 22, 2014, Plaintiff Susan Moses, purportedly a shareholder of Apple REIT Seven, Inc. (“Apple Seven”) and Apple REIT Eight, Inc. (“Apple Eight”), filed a class action against the Company and several individual directors on behalf of all then-existing shareholders and former shareholders of Apple Seven and Apple Eight, who purchased additional shares under the Dividend Reinvestment Plans (“DRIP”) of Apple Seven, Apple Eight and the Company between July 17, 2007 and February 12, 2014.  In January 2017, the parties reached an agreement in principle to settle the litigation for $5.5 million.  The settlement was preliminarily approved by the court in September 2017 and a settlement hearing has been scheduled in January 2018.  The settlement amount has been included in accounts payable and other liabilities in the Company’s consolidated balance sheets as of December 31, 2016 and September 30, 2017, and in transaction and litigation costs (reimbursements) in the Company’s consolidated statement of operations for the year ended December 31, 2016.  At this time, no assurance can be given that the proposed settlement will be approved, and therefore the actual loss incurred could be in excess of the amount accrued as of September 30, 2017.

Wilchfort, et al. v. Apple Hospitality REIT, Inc., et al.

On February 24, 2017, Plaintiff Marsha Wilchfort, purportedly a shareholder of Apple REIT Six, Inc. (“Apple Six”), Apple Seven and Apple Eight, filed a class action against, among others, the Company and the former individual directors of Apple Six, Apple Seven and Apple Eight, including Mr. Glade Knight, on behalf of all then-existing shareholders and former shareholders of Apple Six, Apple Seven and Apple Eight, who purchased additional shares under Apple Six’s, Apple Seven’s and Apple Eight’s DRIP between July 17, 2007 and December 2012 (in the case of Apple Six shareholders) or June 30, 2013 (in the case of Apple Seven and Apple Eight shareholders).  The complaint was filed in the United States District Court for the Eastern District of New York and alleges, among other items, breach of contract under Virginia law, tortious interference and breach of implied duty of good faith and fair dealing.  The complaint alleges that the prices at which Plaintiff and the purported class members purchased additional shares through the DRIPs were not indicative of the true value of the units of Apple Six, Apple Seven and Apple Eight.

The Company believes that Plaintiff’s claims are without merit and intends to defend this case vigorously.  At this time, the Company cannot reasonably predict the outcome of this proceeding or provide a reasonable estimate of the possible loss or range of loss due to this proceeding, if any.

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Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

11.  Subsequent Events

In October 2017, the Company paid approximately $22.3 million, or $0.10 per outstanding common share, in distributions to its common shareholders.

In October 2017, the Company declared a regular monthly cash distribution of $0.10 per common share for the month of November 2017.  The distribution is payable on November 15, 2017.

On October 5, 2017, the Company completed the sale of the Fairfax, Virginia Marriott for a sale price of approximately $41.5 million.  The Company used the net proceeds from the sale to pay down borrowings on its revolving credit facility.  See Note 4 for additional information.

On October 13, 2017, the Company closed on the purchase of an existing 179-room Residence Inn in Portland, Maine for a gross purchase price of approximately $55.8 million.

On October 20, 2017, the Company closed on the purchase of an existing 136-room Residence Inn in Salt Lake City, Utah for a gross purchase price of $25.5 million.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Organization

Apple Hospitality REIT, Inc., together with its wholly-owned subsidiaries (the “Company”), is a Virginia corporation that has elected to be treated as a real estate investment trust (“REIT”) for federal income tax purposes.  The Company is a self-advised REIT that invests in income-producing real estate, primarily in the lodging sector, in the United States.  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, and therefore does not consolidate the entities.  As of September 30, 2017, the Company owned 237 hotels with an aggregate of 30,188 rooms located in 33 states, including one hotel with 316 rooms classified as held for sale, which was sold to an unrelated party in October 2017.  The Company’s common shares are listed on the New York Stock Exchange under the ticker symbol “APLE.

Basis of Accounting, Policy [Policy Text Block]

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 accounting principles generally accepted in the United States 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 2016 Annual Report on Form 10-K.  Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2017.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of the financial statements in conformity with United States generally accepted accounting principles 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.

Earnings Per Share, Policy [Policy Text Block]

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.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Standards Recently Adopted

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which is intended to add guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.  The standard is effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted.  The Company adopted this standard effective January 1, 2017 on a prospective basis.  Prior to the adoption of this standard, the Company’s acquisitions of hotel properties were accounted for as existing businesses, and therefore all transaction costs associated with the acquisitions, including title, legal, accounting, brokerage commissions and other related costs were expensed as incurred.  Under the new standard, effective January 1, 2017, acquisitions of hotel properties (including the acquisition of three hotels during the first nine months of 2017, as discussed in Note 3) will generally be accounted for as acquisitions of a group of assets, with costs incurred to effect an acquisition being capitalized as part of the cost of the assets acquired, instead of accounted for separately as expenses in the period that they are incurred.  Asset acquisitions now require the Company to complete its allocation of the purchase price at the time of the acquisition as the measurement period applicable to business combinations does not apply to asset acquisitions.

Accounting Standards Recently Issued

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which affects virtually all aspects of an entity’s revenue recognition.  The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.  In March, April, May and December 2016, the FASB issued ASUs No. 2016-08, 2016-10, 2016-12 and 2016-20, respectively, all related to Revenue from Contracts with Customers (Topic 606), which further clarify the application of the standard.  In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effectiveness of ASU No. 2014-09 to annual and interim periods beginning after December 15, 2017, and permitted early application for annual reporting periods beginning after December 15, 2016.  The Company plans to adopt this standard on January 1, 2018 using the modified retrospective approach.  Although the Company is still evaluating this ASU, based on its assessment to date, the Company does not believe there will be a significant change to the amount or timing of the recording of revenue in its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20), Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which clarifies the scope of Accounting Standards Codification (“ASC”) Subtopic 610-20 and adds guidance for the derecognition of nonfinancial assets, including partial sales.  The standard is effective in conjunction with ASU No. 2014-09, presented above, which is effective for annual and interim periods beginning after December 15, 2017 with early adoption permitted.  The provisions of this update must be applied at the same time as the adoption of ASU No. 2014-09.  The Company plans to adopt this standard on January 1, 2018 using the modified retrospective approach.  The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting model to enable entities to better portray their risk management activities in their financial statements and enhance the transparency and understandability of hedging activity.  The standard simplifies the application of hedge accounting and reduces the administrative burden of hedge documentation requirements and assessing hedge effectiveness.  The standard is effective for annual and interim periods beginning after December 15, 2018 with early adoption permitted.  The standard requires a modified retrospective approach for all hedge relationships that exist on the date of adoption.  The presentation and disclosure guidance is required only prospectively.  The Company is currently evaluating when it will adopt the standard.  The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

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Merger with Apple REIT Ten, Inc. (Tables)

9 Months Ended

Sep. 30, 2017

Disclosure Text Block Supplement [Abstract]

Business Acquisition, Pro Forma Information [Table Text Block]

The following unaudited pro forma information for the three and nine month periods ended September 30, 2017 and 2016, is presented as if the merger, effective September 1, 2016, had occurred on January 1, 2016, and is based on assumptions and estimates considered appropriate by the Company. The pro forma information is provided for illustrative purposes only and does not necessarily reflect what the operating results would have been had the merger been completed on January 1, 2016, nor is it necessarily indicative of future operating results. The pro forma information does not give effect to any cost synergies or other operating efficiencies that could result from the merger. Amounts are in thousands except per share data.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017 (Actual)		2016 (Proforma)		2017 (Proforma)		2016 (Proforma)
Total revenue	$	324,926	$	325,924	$	949,555	$	949,760
Net income	$	62,824	$	59,960	$	182,209	$	176,985
Basic and diluted net income per common share	$	0.28	$	0.27	$	0.82	$	0.79
Weighted average common shares outstanding - basic and diluted		223,057		223,403		223,052		223,399

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Investment in Real Estate (Tables)

9 Months Ended

Sep. 30, 2017

Real Estate [Abstract]

Property, Plant and Equipment [Table Text Block]

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

	September 30,			December 31,
	2017			2016
Land	$	711,826		$	707,878
Building and Improvements		4,294,310			4,270,095
Furniture, Fixtures and Equipment		411,376			391,421
Franchise Fees		11,865			11,692
		5,429,377			5,381,086
Less Accumulated Depreciation		(686,787	)		(557,597	)
Investment in Real Estate, net	$	4,742,590		$	4,823,489

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The Company acquired three hotels during the first nine months of 2017. The following table sets forth the location, brand, manager, date acquired, number of rooms and gross purchase price for each hotel. All dollar amounts are in thousands.

City	State	Brand	Manager	Date Acquired	Rooms		Gross Purchase Price (a)
Fort Worth	TX	Courtyard	LBA	2/2/2017		124	$	18,000
Birmingham (b)	AL	Hilton Garden Inn	LBA	9/12/2017		104		19,162
Birmingham (b)	AL	Home2 Suites	LBA	9/12/2017		106		19,276
						334	$	56,438

(a)

The acquisitions of these hotel properties were accounted for as acquisitions of a group of assets, with costs incurred to effect the acquisitions, which were not significant, capitalized as part of the cost of the assets acquired.  The gross purchase price excludes capitalized transaction costs.  At the date of purchase, the purchase price for each of these properties was funded through the Company’s revolving credit facility.

(b)

The Hilton Garden Inn and Home2 Suites hotels in Birmingham, AL are part of an adjoining two-hotel complex located on the same site.

Schedule of Outstanding Contracts for Potential Purchase of Hotels [Table Text Block]

As of September 30, 2017, the Company had outstanding contracts for the potential purchase of four additional hotels for a total purchase price of approximately $146.1 million. Two of the hotels, the Salt Lake City Residence Inn and the Portland Residence Inn, which are already in operation, were acquired in October 2017. The two remaining hotels are under construction and are planned to be completed and opened for business over the next 12 months from September 30, 2017, at which time closing on these hotels is expected to occur. Although the Company is working towards acquiring the two hotels under construction, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on these hotels will occur under the outstanding purchase contracts. The following table summarizes the location, brand, date of purchase contract, expected number of rooms, refundable (if the seller does not meet its obligations under the contract) contract deposits paid, and gross purchase price for each of the contracts outstanding at September 30, 2017. All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Operating (a)
Salt Lake City, UT	Residence Inn	8/22/2017		136	$	500	$	25,500
Portland, ME	Residence Inn	8/30/2017		179		1,000		55,750
Under development (b)
Phoenix, AZ	Hampton	10/25/2016		210		500		44,100
Orlando, FL	Home2 Suites	1/18/2017		128		3		20,736
				653	$	2,003	$	146,086

(a)

Closing on these hotels occurred in October 2017.

(b)

As of September 30, 2017, these hotels were under construction. The table shows the expected number of rooms upon hotel completion and the expected franchise brands. Assuming all conditions to closing are met, the purchases of these hotels are expected to close over the next 12 months from September 30, 2017. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the contract. As the property is under construction, at this time, the seller has not met all of the conditions to closing.

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Debt (Tables)

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

As of September 30, 2017 and December 31, 2016, the details of the Company’s revolving credit facility and term loans were as set forth below. All dollar amounts are in thousands.

		As of September 30, 2017								As of December 31, 2016
	Maturity Date	Outstanding Balance			Interest Rate					Outstanding Balance			Interest Rate
Revolving credit facility (1)	5/18/2019	$	216,700			2.78	%	(2	)	$	270,000			2.32	%	(2	)
Term loans
$425 million term loans	5/18/2020		425,000			3.01	%	(3	)		425,000			2.90	%	(3	)
$50 million term loan	4/8/2021		50,000			2.54	%	(4	)		50,000			2.54	%	(4	)
$100 million term loan	4/8/2023		100,000			3.13	%	(4	)		100,000			3.13	%	(4	)
$85 million term loan	7/25/2024		85,000			3.76	%	(4	)		0			n/a
Total term loans at stated value			660,000								575,000
Unamortized debt issuance costs			(4,012	)							(4,066	)
Total term loans			655,988								570,934
Total revolving credit facility and term loans		$	872,688							$	840,934

(1)	Unamortized debt issuance costs related to the revolving credit facility totaled approximately $2.0 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively, and are included in other assets, net in the Company's consolidated balance sheets.
(2)	Annual variable interest rate at the balance sheet date.
(3)	Effective annual interest rate which includes the effect of interest rate swaps on $322.5 million of the outstanding loan balance, resulting in an annual fixed interest rate of approximately 3.10% on this portion of the debt, subject to adjustment based on the Company's leverage ratio.  See Note 6 for more information on the interest rate swap agreements.  Remaining portion is variable rate debt.
(4)	Annual fixed interest rate at the balance sheet date which includes the effect of interest rate swaps on the outstanding loan balance, subject to adjustment based on the Company’s leverage ratio.  See Note 6 for more information on the interest rate swap agreements.

Schedule of Debt [Table Text Block]

As of September 30, 2017, the Company had approximately $430.1 million in outstanding property level debt secured by 28 properties, with maturity dates ranging from June 2020 to December 2026, stated interest rates ranging from 3.55% to 6.25% and effective interest rates ranging from 3.55% to 4.97%. 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, 2017 and December 31, 2016 for each of the Company’s 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, 2017			Outstanding balance as of December 31, 2016
Irving, TX	Homewood Suites		5.83	%	12/29/2010		(2	)	$	6,052	$	0		$	5,072
Gainesville, FL	Homewood Suites		5.89	%	9/1/2016		(2	)		12,051		0			11,966
Duncanville, TX	Hilton Garden Inn		5.88	%	10/21/2008		(2	)		13,966		0			12,126
Dallas, TX	Hilton		3.95	%	5/22/2015		(3	)		28,000		0			27,246
San Juan Capistrano, CA	Residence Inn		4.15	%	9/1/2016	6/1/2020				16,210		15,858			16,104
Colorado Springs, CO	Hampton		6.25	%	9/1/2016	7/6/2021				7,923		7,787			7,883
Franklin, TN	Courtyard		6.25	%	9/1/2016	8/6/2021				14,679		14,429			14,604
Franklin, TN	Residence Inn		6.25	%	9/1/2016	8/6/2021				14,679		14,429			14,604
Grapevine, TX	Hilton Garden Inn		4.89	%	8/29/2012	9/1/2022				11,810		10,487			10,707
Collegeville/Philadelphia, PA	Courtyard		4.89	%	8/30/2012	9/1/2022				12,650		11,233			11,468
Hattiesburg, MS	Courtyard		5.00	%	3/1/2014	9/1/2022				5,732		5,249			5,357
Rancho Bernardo, CA	Courtyard		5.00	%	3/1/2014	9/1/2022				15,060		13,790			14,074
Kirkland, WA	Courtyard		5.00	%	3/1/2014	9/1/2022				12,145		11,121			11,350
Seattle, WA	Residence Inn		4.96	%	3/1/2014	9/1/2022				28,269		25,871			26,409
Anchorage, AK	Embassy Suites		4.97	%	9/13/2012	10/1/2022				23,230		20,706			21,133
Somerset, NJ	Courtyard		4.73	%	3/1/2014	10/6/2022				8,750		7,990			8,160
Tukwila, WA	Homewood Suites		4.73	%	3/1/2014	10/6/2022				9,431		8,611			8,795
Prattville, AL	Courtyard		4.12	%	3/1/2014	2/6/2023				6,596		5,989			6,123
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	2/6/2023				8,306		7,541			7,711
San Diego, CA	Residence Inn		3.97	%	3/1/2014	3/6/2023				18,600		16,865			17,248
Miami, FL	Homewood Suites		4.02	%	3/1/2014	4/1/2023				16,677		15,138			15,479
Syracuse, NY	Courtyard		4.75	%	10/16/2015	8/1/2024	(4	)		11,199		10,706			10,905
Syracuse, NY	Residence Inn		4.75	%	10/16/2015	8/1/2024	(4	)		11,199		10,706			10,905
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024				27,000		25,087			25,577
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025				10,000		9,448			9,626
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025				34,118		33,253			33,857
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025				13,655		13,394			13,576
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025				22,682		22,248			22,550
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026				24,000		23,522			23,813
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026				25,564		25,081			25,564
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026				25,473		24,992			25,473
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026				18,963		18,605			18,963
									$	514,669		430,136			494,428
Unamortized fair value adjustment of assumed debt												4,556			5,229
Unamortized debt issuance costs												(1,909	)		(2,628	)
Total											$	432,783		$	497,029

(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)	Loans were repaid in full during the three months ended March 31, 2017.
(3)	Assets securing this loan were classified as held for sale as of December 31, 2016.  In April 2017, the assets securing this loan were sold, and the loan was assumed by the buyer of those assets.
(4)	Outstanding principal balance is callable by lender or prepayable by the Company on August 1, 2019.

Schedule of Maturities of Long-term Debt [Table Text Block]

The aggregate amounts of principal payable under the Company’s total debt obligations (including mortgage debt, the revolving credit facility and term loans), for the five years subsequent to September 30, 2017 and thereafter are as follows (in thousands):

2017 (October - December)	$	2,701
2018		11,071
2019		248,408
2020		451,164
2021		95,311
Thereafter		498,181
		1,306,836
Unamortized fair value adjustment of assumed debt		4,556
Unamortized debt issuance costs related to term loans and mortgage debt		(5,921	)
Total	$	1,305,471

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Interest Rate Derivatives [Table Text Block]

The following table sets forth information for each of the Company’s interest rate swap agreements outstanding as of September 30, 2017 and December 31, 2016. All dollar amounts are in thousands.

								Fair Value Asset (Liability)
Hedge Type	Notional Amount at September 30, 2017		Origination Date	Maturity Date	Swap Fixed Interest Rate			September 30, 2017			December 31, 2016
Cash flow hedge	$	212,500	5/21/2015	5/18/2020		1.58	%	$	538		$	(198	)
Cash flow hedge		110,000	7/2/2015	5/18/2020		1.62	%		166			(246	)
Cash flow hedge		50,000	4/7/2016	3/31/2021		1.09	%		1,168			1,289
Cash flow hedge		100,000	4/7/2016	3/31/2023		1.33	%		3,148			3,744
Cash flow hedge		75,000	5/31/2017	6/30/2024		1.96	%		202			0
Cash flow hedge		10,000	8/10/2017	6/30/2024		2.01	%		(4	)		0
	$	557,500						$	5,218		$	4,589

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Organization and Summary of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2017
Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Number of Reportable Segments	1
Number of Hotels	237
Aggregate Number of Hotel Rooms	30,188
Number of States in which Hotels are Located	33
Hotels Held for Sale and Subsequently Sold [Member] | Marriott Fairfax, VA [Member]
Organization and Summary of Significant Accounting Policies (Details) [Line Items]
Number of Hotels	1
Aggregate Number of Hotel Rooms	316

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Merger with Apple REIT Ten, Inc. (Details) $ / shares in Units, $ in Thousands, shares in Millions		1 Months Ended		3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 01, 2016 USD ($) $ / shares shares	May 31, 2017 USD ($)	Jan. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Number of Hotels				237			237
Number of States in which Entity Operates				33			33
Aggregate Number of Hotel Rooms				30,188			30,188
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable							$ 0	$ 956,086
Payments to Acquire Businesses, Gross							0	93,590
Transaction and Litigation Costs (Reimbursements)				$ 0		$ 36,452	(2,586)	37,861
Settlement of the Apple Ten Merger Litigation [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Transaction and Litigation Costs (Reimbursements)		$ (2,600)			$ (10,000)		(2,600)	32,000	$ 22,000
Payments for Legal Settlements			$ 32,000
Proceeds from Insurance Settlement, Operating Activities		$ 2,600	$ 10,000				12,600
Costs Incurred to Defend the Apple Ten Merger Litigation [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Transaction and Litigation Costs (Reimbursements)								1,800
Hotels Acquired from Apple Ten Merger [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Number of Hotels	56
Number of States in which Entity Operates	17
Aggregate Number of Hotel Rooms	7,209
Apple Ten Merger [Member] | Aggregate Value of the Merger Consideration Paid to Apple Ten Shareholders [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Business Combination, Consideration Transferred	$ 1,000,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 956,100
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in Shares) | shares	48.7
Business Acquisition, Share Price (in Dollars per share) | $ / shares	$ 19.62
Payments to Acquire Businesses, Gross	$ 93,600
Apple Ten Merger [Member] | Assumed Mortgage Debt [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Noncash or Part Noncash Acquisition, Debt Assumed	$ 145,700
Number of Hotel Properties Used to Secure Debt	9
Apple Ten Merger [Member] | Assumed Credit Facility Terminated and Repaid [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Credit Facility	$ 111,100
Merger Costs (Reimbursements) [Member] | Apple Ten Merger [Member]
Merger with Apple REIT Ten, Inc. (Details) [Line Items]
Transaction and Litigation Costs (Reimbursements)						$ 36,400	$ (2,600)	$ 37,600

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Merger with Apple REIT Ten, Inc. (Details) - Business Acquisition, Pro Forma Information - Apple Ten Merger [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Merger with Apple REIT Ten, Inc. (Details) - Business Acquisition, Pro Forma Information [Line Items]
Total revenue	$ 324,926	$ 325,924	$ 949,555	$ 949,760
Net income	$ 62,824	$ 59,960	$ 182,209	$ 176,985
Basic and diluted net income per common share (in Dollars per share)	$ 0.28	$ 0.27	$ 0.82	$ 0.79
Weighted average common shares outstanding - basic and diluted (in Shares)	223,057	223,403	223,052	223,399

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Investment in Real Estate (Details) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 01, 2016 USD ($)
Investment in Real Estate (Details) [Line Items]
Number of Hotels	237				237
Aggregate Number of Hotel Rooms	30,188				30,188
Number of States in which Hotels Are Located	33				33
Revenues (in Dollars)	$ 324,926			$ 276,471	$ 949,555	$ 758,594
Operating Income (Loss) (in Dollars)	75,208			23,843	205,114	132,233
Impairment of Real Estate (in Dollars)	$ 0			$ 5,471	$ 7,875	$ 5,471
Hilton Dallas, TX and Marriott Chesapeake, VA [Member] | Hotels Identified for Potential Sale 3Q 2016 [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels				2		2
Marriott Chesapeake, VA [Member] | Hotels Identified for Potential Sale 3Q 2016 [Member]
Investment in Real Estate (Details) [Line Items]
Impairment of Real Estate (in Dollars)				$ 5,500		$ 5,500
Hotels Held for Sale and Subsequently Sold [Member] | Marriott Fairfax, VA [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels	1				1
Aggregate Number of Hotel Rooms	316				316
Purchase and Sale Agreement, Gross Sales Price (in Dollars)					$ 41,500
Execution of Sales Contracts in April 2017 Terminated in May 2017 [Member] | SpringHill Suites and TownePlace Suites Columbus, GA [Member] | Hotels Identified for Potential Sale 1Q 2017 [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels			2
Purchase and Sale Agreement, Gross Sales Price (in Dollars)		$ 10,000
Impairment of Real Estate (in Dollars)			$ 7,900
Hotels Under Contract [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels	4				4
Purchase Contract Gross Purchase Price (in Dollars)	$ 146,100				$ 146,100
Hotel Acquisitions [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels					3	57
Revenues (in Dollars)						$ 25,000
Operating Income (Loss) (in Dollars)						$ 9,500
Hotel Acquisitions [Member] | Home2 Suites Atlanta, GA [Member]
Investment in Real Estate (Details) [Line Items]
Aggregate Number of Hotel Rooms				128		128
Business Acquisition, Effective Date of Acquisition						Jul. 01, 2016
Business Combination, Consideration Transferred (in Dollars)						$ 24,600
Goodwill (in Dollars)				$ 0		$ 0
Hotels Acquired from Apple Ten Merger [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels							56
Aggregate Number of Hotel Rooms							7,209
Number of States in which Hotels Are Located							17
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Investment in Real Estate (in Dollars)							$ 1,300,000
Goodwill (in Dollars)							$ 0
Hotels Already in Operation [Member] | Hotels Under Contract [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels					2
Hotels Under Contract [Member]
Investment in Real Estate (Details) [Line Items]
Aggregate Number of Hotel Rooms	653				653
Purchase Contract Gross Purchase Price (in Dollars)	$ 146,086				$ 146,086
Hotels Under Contract [Member] | Hotels Under Construction [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels					2
Hotel Construction, Time to Completion					over the next 12 months

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Investment in Real Estate (Details) - Investment in Real Estate - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Investment in Real Estate [Abstract]
Land	$ 711,826	$ 707,878
Building and Improvements	4,294,310	4,270,095
Furniture, Fixtures and Equipment	411,376	391,421
Franchise Fees	11,865	11,692
	5,429,377	5,381,086
Less Accumulated Depreciation	(686,787)	(557,597)
Investment in Real Estate, net	$ 4,742,590	$ 4,823,489

XML

Investment in Real Estate (Details) - Hotel Acquisitions $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Business Acquisition [Line Items]
Rooms	30,188
Courtyard Fort Worth, TX [Member]
Business Acquisition [Line Items]
State	TX
Brand	Courtyard
Manager	LBA
Date Acquired	Feb. 02, 2017
Rooms	124
Gross Purchase Price	$ 18,000	[1]
Hilton Garden Inn Birmingham, AL [Member]
Business Acquisition [Line Items]
State	AL
Brand	Hilton Garden Inn	[2]
Manager	LBA
Date Acquired	Sep. 12, 2017
Rooms	104
Gross Purchase Price	$ 19,162	[1]
Home2 Suites Birmingham, AL [Member]
Business Acquisition [Line Items]
State	AL
Brand	Home2 Suites	[2]
Manager	LBA
Date Acquired	Sep. 12, 2017
Rooms	106
Gross Purchase Price	$ 19,276	[1]
Total [Member]
Business Acquisition [Line Items]
Rooms	334
Gross Purchase Price	$ 56,438	[1]

[1] The acquisitions of these hotel properties were accounted for as acquisitions of a group of assets, with costs incurred to effect the acquisitions, which were not significant, capitalized as part of the cost of the assets acquired. The gross purchase price excludes capitalized transaction costs. At the date of purchase, the purchase price for each of these properties was funded through the Company's revolving credit facility.

[2] The Hilton Garden Inn and Home2 Suites hotels in Birmingham, AL are part of an adjoining two-hotel complex located on the same site.

XML

Investment in Real Estate (Details) - Outstanding Contracts $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Rooms	30,188
Hotels Under Contract [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Rooms	653
Refundable Deposits	$ 2,003
Gross Purchase Price	$ 146,086
Hotels Under Contract [Member] | Hotels Already in Operation [Member] | Residence Inn Salt Lake City, UT [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Brand	Residence Inn	[1]
Date of Purchase Contract	Aug. 22, 2017	[1]
Rooms	136	[1]
Refundable Deposits	$ 500	[1]
Gross Purchase Price	$ 25,500	[1]
Hotels Under Contract [Member] | Hotels Already in Operation [Member] | Residence Inn Portland, ME [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Brand	Residence Inn	[1]
Date of Purchase Contract	Aug. 30, 2017	[1]
Rooms	179	[1]
Refundable Deposits	$ 1,000	[1]
Gross Purchase Price	$ 55,750	[1]
Hotels Under Contract [Member] | Hotels Under Construction [Member] | Hampton Phoenix, AZ [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Brand	Hampton	[2]
Date of Purchase Contract	Oct. 25, 2016	[2]
Rooms	210	[2]
Refundable Deposits	$ 500	[2]
Gross Purchase Price	$ 44,100	[2]
Hotels Under Contract [Member] | Hotels Under Construction [Member] | Home2 Suites Orlando, FL [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Brand	Home2 Suites	[2]
Date of Purchase Contract	Jan. 18, 2017	[2]
Rooms	128	[2]
Refundable Deposits	$ 3	[2]
Gross Purchase Price	$ 20,736	[2]

[1] Closing on these hotels occurred in October 2017.

[2] As of September 30, 2017, these hotels were under construction. The table shows the expected number of rooms upon hotel completion and the expected franchise brands. Assuming all conditions to closing are met, the purchases of these hotels are expected to close over the next 12 months from September 30, 2017. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the contract. As the property is under construction, at this time, the seller has not met all of the conditions to closing.

XML

Assets Held for Sale and Dispositions (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 20, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Assets Held for Sale and Dispositions (Details) [Line Items]
Aggregate Number of Hotel Rooms		30,188		30,188
Gain (Loss) on Disposition of Assets		$ (157)	$ 0	$ 15,983	$ 0
Real Estate Held-for-sale		40,626		40,626		$ 39,000
Long-term Debt, Gross		1,306,836		1,306,836
Operating Income (Loss)		$ 75,208	23,843	$ 205,114	132,233
Hotels Held for Sale and Subsequently Sold [Member] | Marriott Fairfax, VA [Member]
Assets Held for Sale and Dispositions (Details) [Line Items]
Aggregate Number of Hotel Rooms		316		316
Real Estate Held-for-sale		$ 40,600		$ 40,600
Purchase and Sale Agreement, Gross Sales Price				41,500
Estimated Net Gain on Disposal of Assets				300
Hotels Sold or Classified as Held for Sale [Member]
Assets Held for Sale and Dispositions (Details) [Line Items]
Operating Income (Loss)		$ 200	$ 800	$ 2,400	$ 2,100
Number of Hotels				2
Hilton Dallas, TX [Member] | Hotels Sold [Member]
Assets Held for Sale and Dispositions (Details) [Line Items]
Aggregate Number of Hotel Rooms	224					224
Sale of Real Estate Assets, Gross Sales Price	$ 56,100
Gain (Loss) on Disposition of Assets	16,000
Real Estate Held-for-sale	39,000					$ 39,000
Long-term Debt, Gross	$ 27,100

XML

Debt (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Debt (Details) [Line Items]
Derivative, Notional Amount (in Dollars)	$ 557,500
Debt Issuance Costs, Net (in Dollars)	5,921
Long-term Debt, Gross (in Dollars)	$ 1,306,836
Mortgage Debt [Member]
Debt (Details) [Line Items]
Debt Instrument, Maturity Date, Description	maturity dates ranging from June 2020 to December 2026
Long-term Debt, Gross (in Dollars)	$ 430,100
Number of Hotel Properties Used to Secure Debt	28
Minimum [Member] | Mortgage Debt [Member]
Debt (Details) [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	3.55%
Debt Instrument, Interest Rate, Stated Percentage	3.55%
Maximum [Member] | Mortgage Debt [Member]
Debt (Details) [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	4.97%
Debt Instrument, Interest Rate, Stated Percentage	6.25%
$85 Million Unsecured Term Loan [Member]
Debt (Details) [Line Items]
Debt Instrument, Maturity Date	Jul. 25, 2024
Line of Credit Facility, Borrowing Capacity, Description	the $85 million term loan may be increased to $125 million
Debt Instrument, Description of Variable Rate Basis	one-month LIBOR
Debt Instrument, Face Amount (in Dollars)	$ 85,000
$85 Million Unsecured Term Loan [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.80%
$85 Million Unsecured Term Loan [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.60%
$85 Million Unsecured Term Loan [Member] | Loans with Interest Rates Effectively Fixed by Interest Rate Swaps Effective July 31, 2017 [Member]
Debt (Details) [Line Items]
Derivative, Notional Amount (in Dollars)	$ 75,000
$85 Million Unsecured Term Loan [Member] | Loans with Interest Rates Effectively Fixed by Interest Rate Swaps Effective August 10, 2017 [Member]
Debt (Details) [Line Items]
Derivative, Notional Amount (in Dollars)	10,000
$150 Million Unsecured Term Loan Facility [Member]
Debt (Details) [Line Items]
Term Loan Facility, Maximum Borrowing Capacity (in Dollars)	$ 150,000
Debt Instrument, Description	The Company initially borrowed $50 million under the $150 million term loan facility on April 8, 2016 and borrowed the remaining $100 million on September 30, 2016.
Debt Instrument, Description of Variable Rate Basis	one-month LIBOR
$150 Million Unsecured Term Loan Facility [Member] | $50 Million Term Loan [Member]
Debt (Details) [Line Items]
Debt Instrument, Maturity Date	Apr. 08, 2021
Debt Instrument, Face Amount (in Dollars)	$ 50,000
$150 Million Unsecured Term Loan Facility [Member] | $100 Million Term Loan [Member]
Debt (Details) [Line Items]
Debt Instrument, Maturity Date	Apr. 08, 2023
Debt Instrument, Face Amount (in Dollars)	$ 100,000
$150 Million Unsecured Term Loan Facility [Member] | Amount Borrowed on April 8, 2016 [Member]
Debt (Details) [Line Items]
Proceeds from Issuance of Unsecured Debt (in Dollars)		$ 50,000
$150 Million Unsecured Term Loan Facility [Member] | Amount Borrowed on September 30, 2016 [Member]
Debt (Details) [Line Items]
Proceeds from Issuance of Unsecured Debt (in Dollars)		100,000
$150 Million Unsecured Term Loan Facility [Member] | Minimum [Member] | $50 Million Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.45%
$150 Million Unsecured Term Loan Facility [Member] | Minimum [Member] | $100 Million Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.80%
$150 Million Unsecured Term Loan Facility [Member] | Maximum [Member] | $50 Million Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.20%
$150 Million Unsecured Term Loan Facility [Member] | Maximum [Member] | $100 Million Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.60%
$150 Million Unsecured Term Loan Facility [Member] | Loans with Interest Rates Effectively Fixed by Interest Rate Swaps Effective September 30, 2016 [Member]
Debt (Details) [Line Items]
Number of Interest Rate Derivatives Held	2
$150 Million Unsecured Term Loan Facility [Member] | Loans with Interest Rates Effectively Fixed by Interest Rate Swaps Effective September 30, 2016 [Member] | $50 Million Term Loan [Member]
Debt (Details) [Line Items]
Derivative, Notional Amount (in Dollars)	$ 50,000
Debt Instrument, Interest Rate, Effective Percentage	2.54%
$150 Million Unsecured Term Loan Facility [Member] | Loans with Interest Rates Effectively Fixed by Interest Rate Swaps Effective September 30, 2016 [Member] | $100 Million Term Loan [Member]
Debt (Details) [Line Items]
Derivative, Notional Amount (in Dollars)	$ 100,000
Debt Instrument, Interest Rate, Effective Percentage	3.13%
$965 Million Unsecured Credit Facility [Member]
Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)	$ 965,000
Line of Credit Facility, Borrowing Capacity, Description	the amount of the total credit facility may be increased from $965 million to $1.25 billion
$965 Million Unsecured Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Description of Variable Rate Basis	one-month LIBOR
$965 Million Unsecured Credit Facility [Member] | $540 Million Unsecured Revolving Credit Facility [Member]
Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)	$ 540,000
Line of Credit Facility, Expiration Date	May 18, 2019
Debt Instrument, Maturity Date, Description	maturity date may be extended one year
Debt Issuance Costs, Net (in Dollars)	$ 2,000	$ 2,800
$965 Million Unsecured Credit Facility [Member] | $425 Million Term Loans [Member]
Debt (Details) [Line Items]
Term Loan Facility, Maximum Borrowing Capacity (in Dollars)	$ 425,000
Debt Instrument, Maturity Date	May 18, 2020
Debt Instrument, Description	consisting of three term loans, all funded during 2015
Number of Term Loans	3
$965 Million Unsecured Credit Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.50%
$965 Million Unsecured Credit Facility [Member] | Minimum [Member] | $540 Million Unsecured Revolving Credit Facility [Member]
Debt (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.20%
$965 Million Unsecured Credit Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.30%
$965 Million Unsecured Credit Facility [Member] | Maximum [Member] | $540 Million Unsecured Revolving Credit Facility [Member]
Debt (Details) [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.30%
$965 Million Unsecured Credit Facility [Member] | Loans With Interest Rates Effectively Fixed By Interest Rate Swaps [Member] | $425 Million Term Loans [Member]
Debt (Details) [Line Items]
Number of Interest Rate Derivatives Held	2
Derivative, Notional Amount (in Dollars)	$ 322,500
Debt Instrument, Interest Rate, Effective Percentage	3.10%
$85 Million Unsecured Term Loan [Member] | Amount Borrowed on July 25, 2017 [Member]
Debt (Details) [Line Items]
Proceeds from Issuance of Unsecured Debt (in Dollars)	$ 85,000
$85 Million Unsecured Term Loan [Member] | Loans With Interest Rates Effectively Fixed By Interest Rate Swaps [Member]
Debt (Details) [Line Items]
Number of Interest Rate Derivatives Held	2
Derivative, Notional Amount (in Dollars)	$ 85,000
Debt Instrument, Interest Rate, Effective Percentage	3.76%
Revolving Credit Facility and Term Loans [Member]
Debt (Details) [Line Items]
Line of Credit Facility, Covenant Terms	the $965 million credit facility, the $150 million term loan facility and the $85 million term loan contain mandatory prepayment requirements, customary affirmative covenants, 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, limits on dividend payments and share repurchases and restrictions on certain investments. The Company was in compliance with the applicable covenants at September 30, 2017.

XML

Debt (Details) - Revolving Credit Facility and Term Loans - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Revolving credit facility outstanding balance (in Dollars)		$ 216,700	$ 270,000
Outstanding balance (in Dollars)		1,306,836
Unamortized debt issuance costs (in Dollars)		(5,921)
Total term loans (in Dollars)		655,988	570,934
Debt carrying value (in Dollars)		$ 1,305,471	1,300,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maturity date		May 18, 2019
Revolving credit facility outstanding balance (in Dollars)	[1]	$ 216,700	$ 270,000
Interest rate	[2]	2.78%	2.32%
$425 Million Term Loans [Member]
Debt Instrument [Line Items]
Maturity date		May 18, 2020
Interest rate	[3]	3.01%	2.90%
Outstanding balance (in Dollars)		$ 425,000	$ 425,000
$50 Million Term Loan [Member]
Debt Instrument [Line Items]
Maturity date		Apr. 08, 2021
Interest rate	[4]	2.54%	2.54%
Outstanding balance (in Dollars)		$ 50,000	$ 50,000
$100 Million Term Loan [Member]
Debt Instrument [Line Items]
Maturity date		Apr. 08, 2023
Interest rate	[4]	3.13%	3.13%
Outstanding balance (in Dollars)		$ 100,000	$ 100,000
$85 Million Term Loan [Member]
Debt Instrument [Line Items]
Maturity date		Jul. 25, 2024
Interest rate	[4]	3.76%
Outstanding balance (in Dollars)		$ 85,000	$ 0
Total Term Loans [Member]
Debt Instrument [Line Items]
Outstanding balance (in Dollars)		660,000	575,000
Unamortized debt issuance costs (in Dollars)		(4,012)	(4,066)
Total term loans (in Dollars)		655,988	570,934
Total Revolving Credit Facility and Term Loans [Member]
Debt Instrument [Line Items]
Debt carrying value (in Dollars)		$ 872,688	$ 840,934

[1] Unamortized debt issuance costs related to the revolving credit facility totaled approximately $2.0 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively, and are included in other assets, net in the Company's consolidated balance sheets.

[2] Annual variable interest rate at the balance sheet date.

[3] Effective annual interest rate which includes the effect of interest rate swaps on $322.5 million of the outstanding loan balance, resulting in an annual fixed interest rate of approximately 3.10% on this portion of the debt, subject to adjustment based on the Company's leverage ratio. See Note 6 for more information on the interest rate swap agreements. Remaining portion is variable rate debt.

[4] Annual fixed interest rate at the balance sheet date which includes the effect of interest rate swaps on the outstanding loan balance, subject to adjustment based on the Company's leverage ratio. See Note 6 for more information on the interest rate swap agreements.

XML

Debt (Details) - Mortgage Note Debt - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2017	Dec. 31, 2016
Debt (Details) - Mortgage Note Debt [Line Items]
Outstanding Balance		$ 1,306,836
Unamortized fair value adjustment of assumed debt		4,556
Unamortized debt issuance costs		(5,921)
Total		$ 432,783	$ 497,029
Homewood Suites Irving, TX [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	5.83%
Loan Assumption or Origination Date		Dec. 29, 2010
Maturity Date	[2]
Principal Assumed or Originated		$ 6,052
Outstanding Balance		$ 0	5,072
Homewood Suites Gainesville, FL [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	5.89%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date	[2]
Principal Assumed or Originated		$ 12,051
Outstanding Balance		$ 0	11,966
Hilton Garden Inn Duncanville, TX [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hilton Garden Inn
Interest Rate	[1]	5.88%
Loan Assumption or Origination Date		Oct. 21, 2008
Maturity Date	[2]
Principal Assumed or Originated		$ 13,966
Outstanding Balance		$ 0	12,126
Hilton Dallas, TX [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hilton
Interest Rate	[1]	3.95%
Loan Assumption or Origination Date		May 22, 2015
Maturity Date	[3]
Principal Assumed or Originated		$ 28,000
Outstanding Balance		$ 0	27,246
Residence Inn San Juan Capistrano, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Residence Inn
Interest Rate	[1]	4.15%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Jun. 01, 2020
Principal Assumed or Originated		$ 16,210
Outstanding Balance		$ 15,858	16,104
Hampton Colorado Springs, CO [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hampton
Interest Rate	[1]	6.25%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Jul. 06, 2021
Principal Assumed or Originated		$ 7,923
Outstanding Balance		$ 7,787	7,883
Courtyard Franklin, TN [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	6.25%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Aug. 06, 2021
Principal Assumed or Originated		$ 14,679
Outstanding Balance		$ 14,429	14,604
Residence Inn Franklin, TN [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Residence Inn
Interest Rate	[1]	6.25%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Aug. 06, 2021
Principal Assumed or Originated		$ 14,679
Outstanding Balance		$ 14,429	14,604
Hilton Garden Inn Grapevine, TX [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hilton Garden Inn
Interest Rate	[1]	4.89%
Loan Assumption or Origination Date		Aug. 29, 2012
Maturity Date		Sep. 01, 2022
Principal Assumed or Originated		$ 11,810
Outstanding Balance		$ 10,487	10,707
Courtyard Collegeville/Philadelphia, PA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	4.89%
Loan Assumption or Origination Date		Aug. 30, 2012
Maturity Date		Sep. 01, 2022
Principal Assumed or Originated		$ 12,650
Outstanding Balance		$ 11,233	11,468
Courtyard Hattiesburg, MS [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	5.00%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Sep. 01, 2022
Principal Assumed or Originated		$ 5,732
Outstanding Balance		$ 5,249	5,357
Courtyard Rancho Bernardo, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	5.00%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Sep. 01, 2022
Principal Assumed or Originated		$ 15,060
Outstanding Balance		$ 13,790	14,074
Courtyard Kirkland, WA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	5.00%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Sep. 01, 2022
Principal Assumed or Originated		$ 12,145
Outstanding Balance		$ 11,121	11,350
Residence Inn Seattle, WA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Residence Inn
Interest Rate	[1]	4.96%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Sep. 01, 2022
Principal Assumed or Originated		$ 28,269
Outstanding Balance		$ 25,871	26,409
Embassy Suites Anchorage, AK [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Embassy Suites
Interest Rate	[1]	4.97%
Loan Assumption or Origination Date		Sep. 13, 2012
Maturity Date		Oct. 01, 2022
Principal Assumed or Originated		$ 23,230
Outstanding Balance		$ 20,706	21,133
Courtyard Somerset, NJ [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	4.73%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Oct. 06, 2022
Principal Assumed or Originated		$ 8,750
Outstanding Balance		$ 7,990	8,160
Homewood Suites Tukwila, WA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	4.73%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Oct. 06, 2022
Principal Assumed or Originated		$ 9,431
Outstanding Balance		$ 8,611	8,795
Courtyard Prattville, AL [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	4.12%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Feb. 06, 2023
Principal Assumed or Originated		$ 6,596
Outstanding Balance		$ 5,989	6,123
Homewood Suites Huntsville, AL [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	4.12%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Feb. 06, 2023
Principal Assumed or Originated		$ 8,306
Outstanding Balance		$ 7,541	7,711
Residence Inn San Diego, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Residence Inn
Interest Rate	[1]	3.97%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Mar. 06, 2023
Principal Assumed or Originated		$ 18,600
Outstanding Balance		$ 16,865	17,248
Homewood Suites Miami, FL [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	4.02%
Loan Assumption or Origination Date		Mar. 01, 2014
Maturity Date		Apr. 01, 2023
Principal Assumed or Originated		$ 16,677
Outstanding Balance		$ 15,138	15,479
Courtyard Syracuse, NY [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	4.75%
Loan Assumption or Origination Date		Oct. 16, 2015
Maturity Date	[4]	Aug. 01, 2024
Principal Assumed or Originated		$ 11,199
Outstanding Balance		$ 10,706	10,905
Residence Inn Syracuse, NY [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Residence Inn
Interest Rate	[1]	4.75%
Loan Assumption or Origination Date		Oct. 16, 2015
Maturity Date	[4]	Aug. 01, 2024
Principal Assumed or Originated		$ 11,199
Outstanding Balance		$ 10,706	10,905
Homewood Suites New Orleans, LA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	4.36%
Loan Assumption or Origination Date		Jul. 17, 2014
Maturity Date		Aug. 11, 2024
Principal Assumed or Originated		$ 27,000
Outstanding Balance		$ 25,087	25,577
Residence Inn Westford, MA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Residence Inn
Interest Rate	[1]	4.28%
Loan Assumption or Origination Date		Mar. 18, 2015
Maturity Date		Apr. 11, 2025
Principal Assumed or Originated		$ 10,000
Outstanding Balance		$ 9,448	9,626
Hilton Garden Inn Denver, CO [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hilton Garden Inn
Interest Rate	[1]	4.46%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Jun. 11, 2025
Principal Assumed or Originated		$ 34,118
Outstanding Balance		$ 33,253	33,857
Courtyard Oceanside, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	4.28%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Oct. 01, 2025
Principal Assumed or Originated		$ 13,655
Outstanding Balance		$ 13,394	13,576
Hilton Garden Inn Omaha, NE [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hilton Garden Inn
Interest Rate	[1]	4.28%
Loan Assumption or Origination Date		Sep. 01, 2016
Maturity Date		Oct. 01, 2025
Principal Assumed or Originated		$ 22,682
Outstanding Balance		$ 22,248	22,550
Hampton Boise, ID [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hampton
Interest Rate	[1]	4.37%
Loan Assumption or Origination Date		May 26, 2016
Maturity Date		Jun. 11, 2026
Principal Assumed or Originated		$ 24,000
Outstanding Balance		$ 23,522	23,813
Courtyard Burbank, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	3.55%
Loan Assumption or Origination Date		Nov. 03, 2016
Maturity Date		Dec. 01, 2026
Principal Assumed or Originated		$ 25,564
Outstanding Balance		$ 25,081	25,564
Courtyard San Diego, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	3.55%
Loan Assumption or Origination Date		Nov. 03, 2016
Maturity Date		Dec. 01, 2026
Principal Assumed or Originated		$ 25,473
Outstanding Balance		$ 24,992	25,473
Hampton San Diego, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Hampton
Interest Rate	[1]	3.55%
Loan Assumption or Origination Date		Nov. 03, 2016
Maturity Date		Dec. 01, 2026
Principal Assumed or Originated		$ 18,963
Outstanding Balance		18,605	18,963
Total [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Principal Assumed or Originated		514,669
Outstanding Balance		430,136	494,428
Unamortized fair value adjustment of assumed debt		4,556	5,229
Unamortized debt issuance costs		(1,909)	(2,628)
Total		$ 432,783	$ 497,029

[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] Loans were repaid in full during the three months ended March 31, 2017.

[3] Assets securing this loan were classified as held for sale as of December 31, 2016. In April 2017, the assets securing this loan were sold, and the loan was assumed by the buyer of those assets.

[4] Outstanding principal balance is callable by lender or prepayable by the Company on August 1, 2019.

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Debt (Details) - Future Minimum Debt Payments - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Future Minimum Debt Payments [Abstract]
2017 (October - December)	$ 2,701
2018	11,071
2019	248,408
2020	451,164
2021	95,311
Thereafter	498,181
	1,306,836
Unamortized fair value adjustment of assumed debt	4,556
Unamortized debt issuance costs related to term loans and mortgage debt	(5,921)
Total	$ 1,305,471	$ 1,300,000

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Long-term Debt, Fair Value	$ 1,300,000		$ 1,300,000		$ 1,300,000
Long-term Debt	1,305,471		$ 1,305,471		$ 1,300,000
Derivative, Description of Terms			Company pays a fixed rate of interest and receives a floating rate of interest equal to the one month LIBOR
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	259	$ 4,261	$ 629	$ (7,934)
Gain (Loss) on Cash Flow Hedge Ineffectiveness, Net	0	0	0	0
Amount of net losses reclassified from accumulated other comprehensive income (loss) to interest expense	400	$ 900	1,800	$ 2,900
Net unrealized losses in accumulated other comprehensive income (loss) expected to be reclassified to interest expense within the next 12 months	$ 600		$ 600

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Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 557,500
Fair value asset (liability)	5,218	$ 4,589
Interest Rate Swap #1 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 212,500
Origination Date	May 21, 2015
Maturity date	May 18, 2020
Swap fixed interest rate	1.58%
Fair value asset (liability)	$ 538	(198)
Interest Rate Swap #2 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 110,000
Origination Date	Jul. 02, 2015
Maturity date	May 18, 2020
Swap fixed interest rate	1.62%
Fair value asset (liability)	$ 166	(246)
Interest Rate Swap #3 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 50,000
Origination Date	Apr. 07, 2016
Maturity date	Mar. 31, 2021
Swap fixed interest rate	1.09%
Fair value asset (liability)	$ 1,168	1,289
Interest Rate Swap #4 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 100,000
Origination Date	Apr. 07, 2016
Maturity date	Mar. 31, 2023
Swap fixed interest rate	1.33%
Fair value asset (liability)	$ 3,148	3,744
Interest Rate Swap #5 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 75,000
Origination Date	May 31, 2017
Maturity date	Jun. 30, 2024
Swap fixed interest rate	1.96%
Fair value asset (liability)	$ 202	0
Interest Rate Swap #6 [Member] | Designated as Hedging Instrument [Member]
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 10,000
Origination Date	Aug. 10, 2017
Maturity date	Jun. 30, 2024
Swap fixed interest rate	2.01%
Fair value asset (liability)	$ (4)	$ 0

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Related Parties (Details) - USD ($) $ in Millions		9 Months Ended
	Sep. 01, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
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.
Aircraft Owned by Executive Officers [Member]
Related Parties (Details) [Line Items]
Aircraft Rental Expense		$ 0.1	$ 0.2
Reimbursement Recevied 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		(0.5)	(2.3)
Due from Related Parties		$ 0.3		$ 0.2
Prior to Apple Ten Merger and Related Transactions Completed on September 1, 2016 [Member] | Apple Air Holding, LLC [Member]
Related Parties (Details) [Line Items]
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions	74.00%
Prior to Apple Ten Merger and Related Transactions Completed on September 1, 2016 [Member] | Apple Air Holding, LLC [Member] | Apple Ten's Minority Interest [Member]
Related Parties (Details) [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	26.00%
Purchase of Apple Ten Equity Interest in Apple Ten Merger [Member] | Apple Air Holding, LLC [Member]
Related Parties (Details) [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	26.00%
Upon Completion of Apple Ten Merger and Related Transactions on September 1, 2016 [Member] | Apple Air Holding, LLC [Member]
Related Parties (Details) [Line Items]
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions	100.00%
Prior to Apple Ten Merger and Related Transactions Completed on September 1, 2016 [Member] | Advisory Fees Earned by Apple Hospitality from Apple Ten [Member]
Related Parties (Details) [Line Items]
Related Party Transaction, Amounts of Transaction			$ (1.6)

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Shareholders' Equity (Details) [Line Items]
Payments of Ordinary Dividends, Common Stock			$ 200,716	$ 161,940
Dividends Payable	$ 22,302	$ 22,325	$ 22,302	$ 22,325
Distributions [Member]
Shareholders' Equity (Details) [Line Items]
Annual Distribution rate (in Dollars per share)			$ 1.20
Common Stock, Dividends, Per Share, Cash Paid (in Dollars per share)	$ 0.30	$ 0.30	$ 0.90	$ 0.90
Payments of Ordinary Dividends, Common Stock	$ 66,900	$ 57,200	$ 200,700	$ 161,900
Dividends Payable, Amount Per Share (in Dollars per share)	$ 0.10		$ 0.10		$ 0.10
Dividends Payable	$ 22,300		$ 22,300		$ 22,300
ATM Program [Member]
Shareholders' Equity (Details) [Line Items]
Stock Issuance Program, Authorized Amount	300,000		$ 300,000
Stock Issued During Period, Shares, New Issues (in Shares)			0
Share Repurchase Program [Member]
Shareholders' Equity (Details) [Line Items]
Stock Repurchased and Retired During Period, Shares (in Shares)				20,000
Stock Repurchased During Period, Weighted Average Market Purchase Price Per Share (in Dollars per share)				$ 18.10
Stock Repurchased and Retired During Period, Value				$ 400
Stock Repurchase Program, Remaining Authorized Repurchase Amount	467,500		$ 467,500
Stock Repurchase Program, Authorized Amount	$ 475,000		$ 475,000
Share Repurchase Program, End Date			July 2018

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Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
2017 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Compensation Arrangement by Cash and Share-based Payment Award, Component Description					The components of the operational performance metrics and shareholder return metrics are equally weighted and the two metrics each account for 50% of the total target incentive compensation.
Labor and Related Expense	$ 1.2				$ 4.7
Accrued Bonuses, Current	4.7				$ 4.7
Portion of Awards Paid in Cash					25.00%
Portion of Awards Issued in Equity					75.00%
2016 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Labor and Related Expense			$ (0.8)			$ 2.8
Equity Awards Vesting at the End of 2017 [Member] | 2017 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Portion					two-thirds
Equity Awards Vesting at the End of 2018 [Member] | 2017 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Portion					one-third
Share Based Compensation [Member] | Equity Awards Issued in First Quarter of 2017 [Member] | 2016 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares)		101,305
Stock Issued During Period, Shares, Share-based Compensation, Forfeited (in Shares)		19,667
Shares Issued, Price Per Share (in Dollars per share)		$ 19.10
Stock Issued During Period, Value, Share-based Compensation, Gross		$ 2.3
Accrued Bonuses, Share Based Compensation, Current							$ 1.9
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized							$ 0.4
Share Based Compensation [Member] | Equity Awards Issued in First Quarter of 2016 [Member] | 2015 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares)				304,345
Stock Issued During Period, Shares, Share-based Compensation, Forfeited (in Shares)				11,787
Shares Issued, Price Per Share (in Dollars per share)				$ 19.87
Stock Issued During Period, Value, Share-based Compensation, Gross				$ 6.3
Share Based Compensation [Member] | Unrestricted Shares at Time of Issuance [Member] | Equity Awards Issued in First Quarter of 2017 [Member] | 2016 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares)		60,028
Share Based Compensation [Member] | Unrestricted Shares at Time of Issuance [Member] | Equity Awards Issued in First Quarter of 2016 [Member] | 2015 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares)				146,279
Share Based Compensation [Member] | Restricted Shares Vesting on December 15, 2017 [Member] | Equity Awards Issued in First Quarter of 2017 [Member] | 2016 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)		41,277
Allocated Share-based Compensation Expense	$ 0.1				$ 0.3
Share Based Compensation [Member] | Restricted Shares Vested on December 31, 2016 [Member] | Equity Awards Issued in First Quarter of 2016 [Member] | 2015 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Forfeited (in Shares)							50,044
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)				158,066
Allocated Share-based Compensation Expense			$ 0.4			$ 1.2	$ 1.6
Potential Aggregate Payout [Member] | Minimum [Member] | 2017 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Labor and Related Expense					0.0
Potential Aggregate Payout [Member] | Maximum [Member] | 2017 Executive Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Labor and Related Expense					$ 18.0

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Legal Proceedings (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended			9 Months Ended		12 Months Ended
	May 31, 2017	Jan. 31, 2017	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Legal Proceedings (Details) [Line Items]
Transaction and Litigation Costs (Reimbursements)			$ 0		$ 36,452	$ (2,586)	$ 37,861
Settlement of the Apple Ten Merger Litigation [Member]
Legal Proceedings (Details) [Line Items]
Estimated Litigation Liability				$ 32,000				$ 32,000
Payments for Legal Settlements		$ 32,000
Insurance Settlements Receivable				10,000				10,000
Proceeds from Insurance Settlement, Operating Activities	$ 2,600	$ 10,000				12,600
Transaction and Litigation Costs (Reimbursements)	$ (2,600)			(10,000)		(2,600)	$ 32,000	22,000
Settlement of the Apple Seven and Apple Eight Terminated DRIPs Litigation (preliminarily approved by Court in Sept. 2017) [Member]
Legal Proceedings (Details) [Line Items]
Estimated Litigation Liability			$ 5,500	$ 5,500		$ 5,500		5,500
Transaction and Litigation Costs (Reimbursements)								$ 5,500

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Subsequent Events (Details) $ / shares in Units, $ in Thousands				1 Months Ended	9 Months Ended
	Oct. 20, 2017 USD ($)	Oct. 13, 2017 USD ($)	Oct. 05, 2017 USD ($)	Oct. 31, 2017 USD ($) $ / shares	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)
Subsequent Events (Details) [Line Items]
Payments of Ordinary Dividends, Common Stock					$ 200,716	$ 161,940
Aggregate Number of Hotel Rooms					30,188
Subsequent Event [Member]
Subsequent Events (Details) [Line Items]
Payments of Ordinary Dividends, Common Stock				$ 22,300
Common Stock, Dividends, Per Share, Cash Paid (in Dollars per share) | $ / shares				$ 0.10
Common Stock, Dividends, Per Share, Declared (in Dollars per share) | $ / shares				$ 0.10
Dividends Payable, Date to be Paid				Nov. 15, 2017
Subsequent Event [Member] | Hotel Acquisitions [Member] | Residence Inn Portland, ME [Member]
Subsequent Events (Details) [Line Items]
Aggregate Number of Hotel Rooms		179
Acquisition Consideration Transferred		$ 55,800
Subsequent Event [Member] | Hotel Acquisitions [Member] | Residence Inn Salt Lake City, UT [Member]
Subsequent Events (Details) [Line Items]
Aggregate Number of Hotel Rooms	136
Acquisition Consideration Transferred	$ 25,500
Subsequent Event [Member] | Hotels Sold [Member] | Marriott Fairfax, VA [Member]
Subsequent Events (Details) [Line Items]
Sale of Real Estate Assets, Gross Sales Price			$ 41,500