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 March 31, 2018

☐ 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 May 1, 2018: 230,339,578 

Apple Hospitality REIT, Inc.

Form 10-Q

Index

			Page Number
PART I.  FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets – March 31, 2018 and December 31, 2017	3
		Consolidated Statements of Operations and Comprehensive Income - Three months ended March 31, 2018 and 2017	4
		Consolidated Statements of Cash Flows - Three months ended March 31, 2018 and 2017	5
		Notes to Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
	Item 4.	Controls and Procedures	31
PART II.  OTHER INFORMATION
	Item 1.	Legal Proceedings	32
	Item 1A.	Risk Factors	32
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 6.	Exhibits	33
Signatures			34

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®, Hampton Inn & Suites by Hilton®, 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)

	March 31,			December 31,
	2018			2017
	(unaudited)
Assets
Investment in real estate, net of accumulated depreciation of $775,894 and $731,284, respectively	$	4,829,776		$	4,793,159
Restricted cash-furniture, fixtures and other escrows		31,438			29,791
Due from third party managers, net		57,240			31,457
Other assets, net		54,917			47,931
Total Assets	$	4,973,371		$	4,902,338
Liabilities
Revolving credit facility	$	170,700		$	106,900
Term loans		656,569			656,279
Mortgage debt		500,189			459,017
Accounts payable and other liabilities		89,439			109,057
Total Liabilities		1,416,897			1,331,253
Shareholders’ Equity
Preferred stock, authorized 30,000,000 shares; none issued and outstanding		-			-
Common stock, no par value, authorized 800,000,000 shares; issued and outstanding 230,339,578 and 229,961,548 shares, respectively		4,594,247			4,588,188
Accumulated other comprehensive income		16,070			9,778
Distributions greater than net income		(1,053,843	)		(1,026,881	)
Total Shareholders’ Equity		3,556,474			3,571,085
Total Liabilities and Shareholders’ Equity	$	4,973,371		$	4,902,338

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
	March 31,
	2018			2017
Revenues:
Room	$	274,836		$	269,393
Other		23,553			23,532
Total revenue		298,389			292,925
Expenses:
Operating		75,954			75,154
Hotel administrative		25,102			24,836
Sales and marketing		25,332			24,109
Utilities		10,283			9,753
Repair and maintenance		12,453			11,916
Franchise fees		12,733			12,474
Management fees		10,472			10,212
Property taxes, insurance and other		17,229			16,927
Ground lease		2,850			2,816
General and administrative		6,877			6,754
Loss on impairment of depreciable real estate assets		-			7,875
Depreciation		44,840			43,767
Total expenses		244,125			246,593
Operating income		54,264			46,332
Interest and other expense, net		(11,919	)		(11,717	)
Income before income taxes		42,345			34,615
Income tax expense		(163	)		(250	)
Net income	$	42,182		$	34,365
Other comprehensive income:
Interest rate derivatives		6,292			1,545
Comprehensive income	$	48,474		$	35,910
Basic and diluted net income per common share	$	0.18		$	0.15
Weighted average common shares outstanding - basic and diluted		230,515			223,047

See notes to consolidated financial statements.

4

Apple Hospitality REIT, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2018			2017
Cash flows from operating activities:
Net income	$	42,182		$	34,365
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		44,840			43,767
Loss on impairment of depreciable real estate assets		-			7,875
Other non-cash expenses, net		1,992			1,849
Changes in operating assets and liabilities:
Increase in due from third party managers, net		(25,920	)		(26,222	)
Decrease (increase) in other assets, net		(2,485	)		9,345
Decrease in accounts payable and other liabilities		(7,746	)		(34,814	)
Net cash provided by operating activities		52,863			36,165
Cash flows from investing activities:
Acquisition of hotel properties, net		(61,614	)		(18,131	)
Deposits and other disbursements for potential acquisitions		(204	)		-
Capital improvements		(24,672	)		(17,461	)
Net cash used in investing activities		(86,490	)		(35,592	)
Cash flows from financing activities:
Net proceeds related to issuance of common shares		4,731			-
Repurchases of common shares		(4,304	)		-
Repurchases of common shares to satisfy employee withholding requirements		(876	)		(432	)
Distributions paid to common shareholders		(69,144	)		(66,908	)
Net proceeds from revolving credit facility		63,800			96,600
Proceeds from mortgage debt		44,000			-
Payments of mortgage debt		(2,933	)		(31,949	)
Net cash provided by (used in) financing activities		35,274			(2,689	)
Net change in cash, cash equivalents and restricted cash		1,647			(2,116	)
Cash, cash equivalents and restricted cash, beginning of period		29,791			29,425
Cash, cash equivalents and restricted cash, end of period	$	31,438		$	27,309
Supplemental cash flow information:
Interest paid	$	11,760		$	11,855
Supplemental disclosure of noncash investing and financing activities:
Accrued distribution to common shareholders	$	23,020		$	22,301
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	$	-		$	-
Restricted cash-furniture, fixtures and other escrows, beginning of period		29,791			29,425
Cash, cash equivalents and restricted cash, beginning of period	$	29,791		$	29,425
Cash and cash equivalents, end of period	$	-		$	-
Restricted cash-furniture, fixtures and other escrows, end of period		31,438			27,309
Cash, cash equivalents and restricted cash, end of period	$	31,438		$	27,309

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 March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in 34 states.  The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “APLE.”

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q.  Accordingly, they do not include all of the information required by United States generally accepted accounting principles (“GAAP”) for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”).  Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2018.

Use of Estimates

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

Net Income Per Common Share

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

Accounting Standards Recently Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606).  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.  The standard became effective for annual and interim periods beginning after December 15, 2017.  The Company adopted this standard as of January 1, 2018 using the modified retrospective approach.  The Company evaluated each of its revenue streams under the new standard and concluded that the adoption of this standard did not impact the amount or timing of revenue recognition in the Company’s consolidated financial statements.  The Company also considered and determined that the following disaggregated revenue reflects the nature and timing of its significant revenue streams (in thousands).

6

	Three Months Ended March 31,
	2018		2017
Revenues:
Room	$	274,836	$	269,393
Food and beverage		15,710		16,733
Other		7,843		6,799
Total revenue	$	298,389	$	292,925

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.  The standard was effective for annual and interim periods beginning after December 15, 2017.  The Company adopted this standard as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which is intended to reduce diversity in practice in the classification and presentation of changes in restricted cash in the statement of cash flows.  The standard was effective for annual and interim periods beginning after December 15, 2017.  Under this standard, restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown in the statements of cash flows.  The Company adopted this standard as of January 1, 2018.  Amounts included in restricted cash on the Company’s consolidated balance sheets are now included with cash and cash equivalents in the Company’s consolidated statements of cash flows for all periods presented.  The adoption of this standard required retrospective revision to the statement of cash flows for the three months ended March 31, 2017.  Other than the reclassification of restricted cash balances and activity in the statements of cash flows, the adoption of the standard did not have an impact on the Company’s consolidated financial statements and related disclosures.

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 provisions of this standard must be applied at the same time as the adoption of ASU No. 2014-09.  The Company adopted this standard as of January 1, 2018 using the modified retrospective approach.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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 Company adopted this standard on January 1, 2018 using the modified retrospective approach.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

2.  Investment in Real Estate

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

	March 31,			December 31,
	2018			2017
Land	$	730,763		$	720,465
Building and Improvements		4,425,158			4,362,929
Furniture, Fixtures and Equipment		437,084			428,734
Franchise Fees		12,665			12,315
		5,605,670			5,524,443
Less Accumulated Depreciation		(775,894	)		(731,284	)
Investment in Real Estate, net	$	4,829,776		$	4,793,159

7

As of March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in 34 states.

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 two hotels during the first three months of 2018.  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)
Atlanta	GA	Hampton	McKibbon	2/5/2018		119	$	24,000
Memphis	TN	Hampton	Crestline	2/5/2018		144		39,000
						263	$	63,000

(a) The gross purchase price excludes transaction costs.

During the year ended December 31, 2017, the Company acquired six hotels including one in the first quarter 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	$	18,034
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
Portland	ME	Residence Inn	Pyramid	10/13/2017		179		55,750
Salt Lake City	UT	Residence Inn	Huntington	10/20/2017		136		25,500
Anchorage	AK	Home2 Suites	Stonebridge	12/1/2017		135		24,048
						784	$	161,770

(a) The gross purchase price excludes transaction costs.

(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.

The Company used borrowings under its $540 million revolving credit facility (the “revolving credit facility”) to purchase each of these hotels.  The acquisitions of these hotel properties were accounted for as an acquisition of a group of assets, with costs incurred to effect the acquisition, which were not significant, capitalized as part of the cost of the assets acquired.  For the two hotels acquired during the three months ended March 31, 2018, the amount of revenue and operating income included in the Company’s consolidated statement of operations from the date of acquisition through March 31, 2018 was approximately $2.4 million and $0.8 million, respectively.  For the hotel acquired during the three months ended March 31, 2017, the amount of revenue and operating income included in the Company’s consolidated statement of operations from the date of acquisition through March 31, 2017 was approximately $0.7 million and $0.04 million, respectively.

Hotel Contract Commitments

As of March 31, 2018, the Company had outstanding contracts for the potential purchase of two additional hotels, which were under construction, for a total purchase price of approximately $65.0 million.  The Phoenix Hampton Inn & Suites was acquired on May 2, 2018, the same day the hotel opened for business.  It is anticipated that the construction of the Orlando Home2 Suites will be completed and opened for business during the fourth quarter of 2018, at which time a closing on this hotel is expected to occur.  Although the Company is working towards acquiring this hotel, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on this hotel will occur under the outstanding purchase contract.  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 March 31, 2018.  All dollar amounts are in thousands.

8

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Phoenix, AZ (a)	Hampton	10/25/2016		210	$	500	$	44,300
Orlando, FL (b)	Home2 Suites	1/18/2017		128		3		20,736
				338	$	503	$	65,036

(a) Newly constructed hotel was acquired on May 2, 2018, the same day the hotel opened for business.

(b) This hotel is currently under construction.  The table shows the expected number of rooms upon hotel completion and the expected franchise brand.  Assuming all conditions to closing are met, the purchase of this hotel is expected to close during the fourth quarter of 2018.  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 of the Phoenix Hampton Inn & Suites was funded through the Company’s revolving credit facility and it is anticipated that the purchase of the Orlando Home2 Suites will be funded similarly if a closing occurs.

Loss on Impairment of Depreciable Real Estate Assets

During the first quarter of 2017, the Company identified two properties for potential sale and in April 2017, the Company entered into separate contracts with the same unrelated party 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 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 then 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.

3.  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.  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.  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 $50 million term loan that will mature on April 8, 2021 (the “$50 million term loan”) and a $100 million term loan 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 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.  

9

$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”).  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.

As of March 31, 2018 and December 31, 2017, 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 March 31, 2018							As of December 31, 2017
	Maturity Date	Outstanding Balance			Interest Rate				Outstanding Balance			Interest Rate
Revolving credit facility (1)	5/18/2019	$	170,700			3.43	%	(2)	$	106,900			3.11	%	(2)
Term loans
$425 million term loans	5/18/2020		425,000			3.16	%	(3)		425,000			3.09	%	(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)		85,000			3.76	%	(4)
Total term loans at stated value			660,000							660,000
Unamortized debt issuance costs			(3,431	)						(3,721	)
Total term loans			656,569							656,279
Total revolving credit facility and term loans		$	827,269						$	763,179

(1) Unamortized debt issuance costs related to the revolving credit facility totaled approximately $1.3 million and $1.7 million as of March 31, 2018 and December 31, 2017, 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 at the balance sheet date 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, through maturity.  See Note 4 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, through maturity.  See Note 4 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 March 31, 2018.

Mortgage Debt

As of March 31, 2018, the Company had approximately $498.5 million in outstanding mortgage debt secured by 31 properties, with maturity dates ranging from June 2020 to January 2038, 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 March 31, 2018 and December 31, 2017 for each of the Company’s debt obligations.  All dollar amounts are in thousands.

10

Location	Brand	Interest Rate (1)			Loan Assumption or Origination Date	Maturity Date		Principal Assumed or Originated		Outstanding balance as of March 31, 2018			Outstanding balance as of December 31, 2017
San Juan Capistrano, CA	Residence Inn		4.15	%	9/1/2016	6/1/2020		$	16,210	$	15,687		$	15,774
Colorado Springs, CO	Hampton		6.25	%	9/1/2016	7/6/2021			7,923		7,719			7,754
Franklin, TN	Courtyard		6.25	%	9/1/2016	8/6/2021			14,679		14,303			14,368
Franklin, TN	Residence Inn		6.25	%	9/1/2016	8/6/2021			14,679		14,303			14,368
Grapevine, TX	Hilton Garden Inn		4.89	%	8/29/2012	9/1/2022			11,810		10,334			10,412
Collegeville/Philadelphia, PA	Courtyard		4.89	%	8/30/2012	9/1/2022			12,650		11,069			11,152
Hattiesburg, MS	Courtyard		5.00	%	3/1/2014	9/1/2022			5,732		5,173			5,212
Rancho Bernardo/San Diego, CA	Courtyard		5.00	%	3/1/2014	9/1/2022			15,060		13,591			13,692
Kirkland, WA	Courtyard		5.00	%	3/1/2014	9/1/2022			12,145		10,960			11,042
Seattle, WA	Residence Inn		4.96	%	3/1/2014	9/1/2022			28,269		25,496			25,687
Anchorage, AK	Embassy Suites		4.97	%	9/13/2012	10/1/2022			23,230		20,408			20,560
Somerset, NJ	Courtyard		4.73	%	3/1/2014	10/6/2022			8,750		7,872			7,932
Tukwila, WA	Homewood Suites		4.73	%	3/1/2014	10/6/2022			9,431		8,484			8,549
Prattville, AL	Courtyard		4.12	%	3/1/2014	2/6/2023			6,596		5,895			5,943
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	2/6/2023			8,306		7,424			7,483
San Diego, CA	Residence Inn		3.97	%	3/1/2014	3/6/2023			18,600		16,599			16,733
Miami, FL	Homewood Suites		4.02	%	3/1/2014	4/1/2023			16,677		14,903			15,022
Syracuse, NY	Courtyard		4.75	%	10/16/2015	8/1/2024	(2)		11,199		10,567			10,637
Syracuse, NY	Residence Inn		4.75	%	10/16/2015	8/1/2024	(2)		11,199		10,567			10,637
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024			27,000		24,747			24,919
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025			10,000		9,324			9,386
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025			34,118		32,833			33,046
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025			13,655		13,269			13,332
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025			22,682		22,040			22,145
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026			24,000		23,319			23,422
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026			25,564		24,752			24,917
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026			25,473		24,664			24,828
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026			18,963		18,360			18,483
Burbank, CA	SpringHill Suites		3.94	%	3/9/2018	4/1/2028			28,470		28,470			-
Santa Ana, CA	Courtyard		3.94	%	3/9/2018	4/1/2028			15,530		15,530			-
San Jose, CA	Homewood Suites		4.22	%	12/22/2017	1/1/2038			30,000		29,840			30,000
								$	528,600		498,502			457,435
Unamortized fair value adjustment of assumed debt											4,105			4,330
Unamortized debt issuance costs											(2,418	)		(2,748	)
Total										$	500,189		$	459,017

(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) 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 March 31, 2018 and thereafter are as follows (in thousands):

2018 (April - December)	$	9,730
2019		204,505
2020		453,349
2021		97,586
2022		109,252
Thereafter		454,780
		1,329,202
Unamortized fair value adjustment of assumed debt		4,105
Unamortized debt issuance costs related to term loans and mortgage debt		(5,849	)
Total	$	1,327,458

4.  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 March 31, 2018, both the carrying value and estimated fair value of the Company’s debt were approximately $1.3 billion.  As of December 31, 2017, both the carrying value and estimated fair value of the Company’s debt were approximately $1.2 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 are included in other assets, net, 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 March 31, 2018 and December 31, 2017.  All dollar amounts are in thousands.

								Fair Value Asset
	Notional Amount at March 31, 2018
Hedge Type			Origination Date	Maturity Date	Swap Fixed Interest Rate			March 31, 2018		December 31, 2017
Cash flow hedge	$	212,500	5/21/2015	5/18/2020		1.58	%	$	3,478	$	2,033
Cash flow hedge		110,000	7/2/2015	5/18/2020		1.62	%		1,709		951
Cash flow hedge		50,000	4/7/2016	3/31/2021		1.09	%		2,007		1,544
Cash flow hedge		100,000	4/7/2016	3/31/2023		1.33	%		5,819		4,098
Cash flow hedge		75,000	5/31/2017	6/30/2024		1.96	%		2,724		1,043
Cash flow hedge		10,000	8/10/2017	6/30/2024		2.01	%		333		109
	$	557,500						$	16,070	$	9,778

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The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges.  The Company elected to early adopt ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, on January 1, 2018, using the modified retrospective approach for all of its hedging relationships that existed as of that date.  As a result, effective January 1, 2018, the entire change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.  Prior to January 1, 2018, changes in fair value on the effective portion of all designated cash flow hedges were recorded to accumulated other comprehensive income, while changes in fair value on the ineffective portion of all designated cash flow hedges were recorded to interest and other expense, net in the Company’s consolidated statements of operations.  Since prior to January 1, 2018 there was no material ineffectiveness related to the Company’s outstanding designated cash flow hedges, the adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three months ended March 31, 2018 and 2017 (in thousands):

	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2018		2017
Interest rate derivatives in cash flow hedging relationships	$	6,348	$	723	$	56	$	(822	)

Amounts reported in accumulated other comprehensive income will be reclassified to interest and other expense, net as interest payments are made or received on the Company’s variable-rate derivatives.  The Company estimates that approximately $3.2 million of net unrealized gains included in accumulated other comprehensive income at March 31, 2018 will be reclassified as a decrease to interest and other expense, net within the next 12 months.

5.  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 2017 Form 10-K.  Below is a summary of the significant related party relationships in effect during the three months ended March 31, 2018 and 2017.

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

The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these services.  The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG.  Total reimbursed costs received by the Company from ARG for the three months ended March 31, 2018 and 2017 totaled approximately $0.2 million in each period, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations. 

As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG.  To efficiently manage cash disbursements, the Company or ARG may make payments for the other company.  Under this cash management process, each company may advance or defer up to $1 million at any time.  Each quarter, any outstanding amounts are settled between the companies.  This process allows each company to minimize its cash on hand and reduces the cost for each company.  The amounts outstanding at any point in time are not significant to either of the companies.  As of March 31, 2018 and December 31, 2017, total amounts due from ARG for reimbursements under the cost sharing structure each totaled approximately $0.3 million at each date, and are included in other assets, net in the Company’s consolidated balance sheets.

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The Company, through a wholly-owned subsidiary, Apple Air Holding, LLC, owns a Learjet used primarily for acquisition, asset management, renovation and public relations purposes.  The aircraft is also leased to affiliates of the Company based on third party rates.  Leasing activity to affiliates 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, by its President and Chief Executive Officer, for acquisition, asset management, renovation and public relations purposes, and reimburses these entities at third party rates.  Total costs incurred for the use of these aircraft during the three months ended March 31, 2018 and 2017 were approximately $0.03 million and $0.04 million, respectively, and are included in general and administrative expenses in the Company’s consolidated statements of operations.

6.  Shareholders’ Equity

Distributions

The Company’s current annual distribution rate, payable monthly, is $1.20 per common share.  For the three months ended March 31, 2018 and 2017, the Company paid distributions of $0.30 per common share for a total of $69.1 million and $66.9 million, respectively.  Additionally, in March 2018, the Company declared a monthly distribution of $0.10 per common share, totaling $23.0 million, which was recorded as a payable as of March 31, 2018 and paid in April 2018.  As of December 31, 2017, a monthly distribution of $0.10 per common share, totaling $23.0 million, was recorded as a payable and paid in January 2018.  These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets.

Issuance of Shares

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 under an at-the-market offering program (the “ATM Program”).  Since inception of the ATM Program in February 2017 through March 31, 2018, the Company has sold approximately 7.2 million common shares at a weighted-average market sales price of approximately $19.56 per common share and received aggregate gross proceeds of approximately $139.8 million before commission and issuance costs, including the sale of approximately 0.2 million common shares during the three months ended March 31, 2018 at a weighted-average market sales price of approximately $19.73 per common share and receipt of aggregate gross proceeds of approximately $4.8 million.  The Company used the proceeds from the sale of these shares to pay down borrowings on its revolving credit facility.  No shares were issued under the ATM Program during the three months ended March 31, 2017.  As of March 31, 2018, approximately $160.2 million remained available for issuance under the ATM Program.

Share Repurchases

During the first three months of 2018, the Company purchased, under its $475 million share repurchase program (the “Share Repurchase Program”), approximately 0.3 million of its common shares at a weighted-average market purchase price of approximately $16.89 per common share for an aggregate purchase price of approximately $4.3 million.  The Company did not purchase any common shares under its Share Repurchase Program during the first three months of 2017.  In March 2018, the Company established a new written trading plan as part of the Share Repurchase Program that provides for share repurchases in open market transactions that is intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with availability under its revolving credit facility.  As of March 31, 2018, approximately $463.2 million remained available for repurchase under the Share Repurchase Program.  The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2018 if not terminated earlier.

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7.  Compensation Plans

The Company annually establishes an incentive plan for its executive management.  Under the incentive plan for 2018 (the “2018 Incentive Plan”), participants are eligible to receive a bonus based on the achievement of certain 2018 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, two-year and three-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 2018 Incentive Plan is $0 - $20 million.  Based on performance through March 31, 2018, the Company has accrued approximately $1.9 million as a liability for potential executive bonus payments under the 2018 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of March 31, 2018 and in general and administrative expenses in the Company’s consolidated statement of operations for the three months ended March 31, 2018.  Approximately 25% of awards under the 2018 Incentive Plan, if any, will be paid in cash, and 75% will be issued in stock under the Company’s 2014 Omnibus Incentive Plan, approximately two-thirds of which will vest at the end of 2018 and one-third of which will vest in December 2019.  Under the incentive plan for 2017 (the “2017 Incentive Plan”), the Company recorded approximately $2.0 million in general and administrative expenses in the Company’s consolidated statement of operations for the three months ended March 31, 2017. 

Share Based Compensation Awards

During the first quarters of 2018 and 2017, the Company issued 367,333 and 101,305 common shares earned under the 2017 Incentive Plan and the incentive plan for 2016 (the “2016 Incentive Plan”) (net of 48,533 and 19,667 common shares surrendered to satisfy tax withholding obligations) at $16.92 and $19.10 per share, or approximately $7.0 million and $2.3 million in share based compensation, including the surrendered shares, respectively.  Of the total shares issued under the 2017 Incentive Plan, 223,421 shares were unrestricted at the time of issuance, and the remaining 143,912 restricted shares will vest on December 14, 2018.  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 vested on December 15, 2017, of which 13,129 common shares were surrendered to satisfy tax withholding obligations.  Of the total 2017 share based compensation, approximately $5.8 million was recorded as a liability as of December 31, 2017, which was included in accounts payable and other liabilities in the Company’s consolidated balance sheet and the remaining $1.2 million, which is subject to vesting on December 14, 2018, will be recognized as compensation expense proportionately throughout 2018.  Of the total 2016 share based compensation, approximately $0.4 million, which vested on December 15, 2017, was recognized as compensation expense proportionately throughout 2017.  For the three months ended March 31, 2018 and 2017, the Company recognized approximately $0.3 million and $0.1 million, respectively, of share based compensation expense related to the unvested restricted share awards.

8.  Legal Proceedings

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

As previously disclosed in the 2017 Form 10-K, on April 22, 2014, a purported 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 (the “2014 DRIP litigation”).  In January 2017, the parties reached an agreement in principle to settle the litigation which the court approved by order dated March 27, 2018.  In January 2018, the Company funded the settlement amount of $5.5 million, which was included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of December 31, 2017, and in transaction and litigation costs (reimbursements) in the Company’s consolidated statement of operations for the year ended December 31, 2016.

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

As previously disclosed in the 2017 Form 10-K, on February 24, 2017, a purported 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 (“the Apple REIT Defendants”), 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).  On May 1, 2018, all of the Apple REIT Defendants were dismissed from the complaint without prejudice by the plaintiff.

9.  Subsequent Events

In April 2018, the Company paid approximately $23.0 million, or $0.10 per outstanding common share, in distributions to its common shareholders.

In April 2018, the Company declared a regular monthly cash distribution of $0.10 per common share for the month of May 2018.  The distribution is payable on May 15, 2018.

In April 2018, the Company, through one of its indirect wholly-owned subsidiaries, entered into a purchase contract for the purchase of all of the ownership interests in a limited liability company which plans to construct a dual-branded Hampton Inn & Suites and Home2 Suites by Hilton property in Cape Canaveral, Florida, with a combined total of 224 guest rooms for a purchase price of approximately $46.7 million.  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.

On May 2, 2018, the Company closed on the purchase of a newly constructed 210-room Hampton Inn & Suites in Phoenix, Arizona, the same day the hotel opened for business.  The gross purchase price was approximately $44.3 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 statements that include phrases such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “target,” “goal,” “plan,” “should,” “will,” “predict,” “potential,” “outlook,” “strategy,” and similar expressions that convey the uncertainty of future events or outcomes.  Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties; 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 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 2017 Form 10-K.  Any forward-looking statement that the Company makes speaks only as of the date of this Quarterly Report.  The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors, as a result of new information, future events, or otherwise, except as required by law.

The following discussion and analysis should be read in conjunction with the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, as well as the information contained in the 2017 Form 10-K.

Overview

The Company is a Virginia corporation that has elected to be treated as a REIT for federal income tax purposes.  The Company is self-advised and invests in income-producing real estate, primarily in the lodging sector, in the United States.  As of March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in urban, high-end suburban and developing markets throughout 34 states.  All of the Company’s hotels operate under Marriott or Hilton brands.  The hotels are operated and managed under separate management agreements with 23 hotel management companies, none of which are affiliated with the Company.  The Company’s common shares are listed on the NYSE under the ticker symbol “APLE.”

2018 Hotel Portfolio Activities

The Company continually monitors market conditions and attempts to maximize shareholder value by investing in properties that it believes provide superior value over the long term.  Consistent with this strategy and the Company’s focus on investing in select-service hotels, the Company acquired two hotels for an aggregate purchase price of approximately $63.0 million during the first three months of 2018: a 119-room Hampton Inn & Suites in Atlanta, Georgia and a 144-room Hampton Inn & Suites in Memphis, Tennessee.  On May 2, 2018, the same day the hotel opened for business, the Company acquired a 210-room Hampton Inn & Suites in Phoenix, Arizona for approximately $44.3 million.  As of May 2, 2018, the Company also had outstanding contracts for the potential purchase of three hotels that were under construction for a total purchase price of approximately $67.4 million, including  a 128-room Home2 Suites in Orlando, Florida which is planned to be completed and opened for business in the fourth quarter of 2018, and a combined 224-room dual-branded Hampton Inn & Suites and Home2 Suites by Hilton property in Cape Canaveral, Florida which is planned to be completed and opened for business in 2020.  The Company utilized its revolving credit facility to fund the completed acquisitions and plans to utilize the revolving credit facility for any additional acquisitions.

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See Note 2 titled “Investment in Real Estate” and Note 9 titled “Subsequent Events” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for 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 years, the lodging industry and the Company have experienced modest 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 three months of 2018 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 continue to be 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 2018 as compared to 2017.  The anticipated low growth is 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.

As of March 31, 2018, the Company owned 241 hotels with a total of 30,585 rooms as compared to 236 hotels with a total of 30,203 rooms as of March 31, 2017, 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 three months ended March 31, 2018, the Company acquired two existing hotels (both on February 5, 2018).  During 2017, the Company acquired three newly constructed hotels (one on February 2, 2017 and two on September 12, 2017) and three existing hotels (one on October 13, 2017, one on October 20, 2017 and one on December 1, 2017), and sold two hotels (one on April 20, 2017 and one on October 5, 2017).  As a result, the comparability of results for the three months ended March 31, 2018 and 2017 as discussed below is impacted by these transactions.

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.

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 March 31,
(in thousands, except statistical data)	2018			Percent of Revenue			2017			Percent of Revenue			Percent Change
Total revenue	$	298,389			100.0	%	$	292,925			100.0	%		1.9	%
Hotel operating expense		172,329			57.8	%		168,454			57.5	%		2.3	%
Property taxes, insurance and other expense		17,229			5.8	%		16,927			5.8	%		1.8	%
Ground lease expense		2,850			1.0	%		2,816			1.0	%		1.2	%
General and administrative expense		6,877			2.3	%		6,754			2.3	%		1.8	%
Loss on impairment of depreciable real estate assets		-						7,875						n/a
Depreciation expense		44,840						43,767						2.5	%
Interest and other expense, net		11,919						11,717						1.7	%
Income tax expense		163						250						-34.8	%
Number of hotels owned at end of period		241						236						2.1	%
ADR	$	134.32					$	133.39						0.7	%
Occupancy		74.6	%					74.4	%					0.3	%
RevPAR	$	100.18					$	99.27						0.9	%

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Comparable Hotels Operating Results

The following table reflects certain operating statistics for the Company’s 241 hotels owned as of March 31, 2018 (“Comparable Hotels”).  The Company defines metrics from Comparable Hotels as results generated by the 241 hotels owned as of the end of the reporting period.  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 March 31,
	2018			2017			Percent Change
ADR	$	134.43		$	133.25			0.9	%
Occupancy		74.6	%		74.5	%		0.1	%
RevPAR	$	100.23		$	99.31			0.9	%

Same Store Operating Results

The following table reflects certain operating statistics for the Company’s 233 hotels owned by the Company as of January 1, 2017 and during the entirety of the reporting periods being compared (“Same Store Hotels”).  This information has not been audited.

	Three Months Ended March 31,
	2018			2017			Percent Change
ADR	$	134.26		$	132.98			1.0	%
Occupancy		74.8	%		74.7	%		0.1	%
RevPAR	$	100.37		$	99.31			1.1	%

As discussed above, hotel performance is impacted by many factors, including the economic conditions in the United States as well as each individual locality.  Economic indicators in the United States have generally been favorable, which has been partially offset by increased supply in many of the Company’s markets.  As a result, the Company’s revenue and operating results for its Comparable Hotels and Same Store Hotels experienced modest growth during the first quarter of 2018 as compared to 2017.  The Company expects continued modest improvement in both revenue and operating results for its Comparable Hotels in 2018 as compared to 2017.  The Company’s hotels in general have shown results consistent with industry and brand averages for the period of ownership.  During the first quarter of 2018, revenue growth from the leisure travel sector of the industry was estimated to be stronger than from the business travel sector as a result of the shift of the Easter holiday to March and April in 2018.  With a greater proportion of its revenue generated from business travel as compared to leisure travel, the Company’s growth was slightly below industry averages.

Revenues

The Company’s principal source of revenue is hotel revenue consisting of room and other related revenue.  For the three months ended March 31, 2018 and 2017, the Company had total revenue of $298.4 million and $292.9 million, respectively.  For the three months ended March 31, 2018 and 2017, respectively, Comparable Hotels achieved combined average occupancy of 74.6% and 74.5%, ADR of $134.43 and $133.25 and RevPAR of $100.23 and $99.31.  ADR is calculated as room revenue divided by the number of rooms sold, and RevPAR is calculated as occupancy multiplied by ADR.

During the first quarter of 2018, the Company experienced a modest increase in ADR and stable occupancy, resulting in a 0.9% increase in RevPAR for Comparable Hotels compared to the first quarter of 2017.  Markets with above average growth in the first quarter of 2018 for the Company and industry included Fort Worth, Texas, Knoxville, Tennessee, Norfolk/Virginia Beach, Virginia and South Florida.  Markets that were below average for the Company and industry included Austin, Texas, Kansas City, Missouri, Omaha, Nebraska and Washington, D.C. 

19

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 March 31, 2018 and 2017, respectively, hotel operating expense totaled $172.3 million and $168.5 million or 57.8% and 57.5% of total revenue for each respective period.  For the Company’s Comparable Hotels, hotel operating expense as a percentage of revenue increased approximately 50 basis points for the three months ended March 31, 2018 as compared to the same period in 2017.  Increases in labor costs as a percentage of revenue during the first quarter of 2018 as compared to the same period in 2017 was the primary cause of the increased hotel operating expense.  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.

Property Taxes, Insurance and Other Expense

Property taxes, insurance, and other expense for the three months ended March 31, 2018 and 2017 totaled $17.2 million and $16.9 million, respectively, or 5.8% of total revenue for each respective period, and for Comparable Hotels, 5.8% of total revenue for each respective period.  For the Company’s Comparable Hotels, real estate taxes increased slightly during the first three months of 2018 compared to the first three months of 2017, 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 2018.  The Company will continue to appeal tax assessments in certain jurisdictions to attempt to minimize tax increases as warranted.  Additionally, due to increased losses in 2017 for property insurance carriers, the Company’s property insurance costs are anticipated to increase slightly as a percentage of revenue for the full year of 2018 as compared to 2017.

Ground Lease Expense

Ground lease expense for the three months ended March 31, 2018 and 2017 was $2.9 million and $2.8 million, respectively.  Ground lease expense primarily represents the expense incurred by the Company to lease land for 14 of its hotel properties.

General and Administrative Expense

General and administrative expense for the three months ended March 31, 2018 and 2017 was $6.9 million and $6.8 million, respectively, or 2.3% of total revenue for each respective period.  The principal components of general and administrative expense are payroll and related benefit costs, legal fees, accounting fees and reporting expenses.

Loss on Impairment of Depreciable Real Estate Assets

The Company did not experience any loss on impairment of depreciable real estate assets for the three months ended March 31, 2018.  Loss on impairment of depreciable real estate assets was approximately $7.9 million for the three months ended March 31, 2017, and related to two properties that the Company identified for potential sale during the first quarter of 2017.  See Note 2 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 this impairment loss.

Depreciation Expense

Depreciation expense for the three months ended March 31, 2018 and 2017 was $44.8 million and $43.8 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 acquisition of two hotels in February 2018 and six hotels in 2017 and renovations completed throughout 2018 and 2017.

20

Interest and Other Expense, net

Interest and other expense, net for the three months ended March 31, 2018 and 2017 was $11.9 million and $11.7 million, respectively, and is net of approximately $0.5 million in each respective period, of interest capitalized associated with renovation projects.  Although average outstanding debt was less in the first quarter of 2018 as compared to the first quarter of 2017, interest expense increased slightly as a result of an increase in the Company’s effective interest rate during the first quarter of 2018 as compared to 2017, due to (a) the issuance of longer term fixed-rate debt subsequent to March 31, 2017, which was used to reduce the Company’s revolving credit facility, resulting in a higher average interest rate than the variable-rate borrowings repaid, and (b) an increase in interest rates on the Company’s variable-rate debt, with the one-month LIBOR increasing from 0.98% at March 31, 2017 to 1.88% at March 31, 2018.  While approximately 79% of the Company’s outstanding debt was effectively fixed rate at March 31, 2018, the Company does expect interest costs to continue to increase for the remainder of 2018 due to increased rates for its remaining variable rate debt.

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 GAAP), excluding gains or losses from sales of real estate, extraordinary items as defined by GAAP, and the cumulative effect of changes in accounting principles, plus real estate related depreciation, amortization and impairments, and adjustments for unconsolidated 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.

The Company further adjusts FFO for 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 months ended March 31, 2018 and 2017 (in thousands).

	Three Months Ended March 31,
	2018		2017
Net income	$	42,182	$	34,365
Depreciation of real estate owned		44,610		43,537
Loss on impairment of depreciable real estate assets		-		7,875
Amortization of favorable and unfavorable leases, net		206		165
Funds from operations		86,998		85,942
Non-cash straight-line ground lease expense		904		939
Modified funds from operations	$	87,902	$	86,881

21

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, 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 loss on impairment of depreciable real estate assets as this item does 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 months ended March 31, 2018 and 2017 (in thousands).

	Three Months Ended March 31,
	2018		2017
Net income	$	42,182	$	34,365
Depreciation		44,840		43,767
Amortization of favorable and unfavorable leases, net		206		165
Interest and other expense, net		11,919		11,717
Income tax expense		163		250
EBITDA		99,310		90,264
Loss on impairment of depreciable real estate assets		-		7,875
Non-cash straight-line ground lease expense		904		939
Adjusted EBITDA	$	100,214	$	99,078

Hotels Owned

As of March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in 34 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		38		4,685
Residence Inn		34		4,011
Homewood Suites		34		3,831
SpringHill Suites		17		2,248
TownePlace Suites		12		1,196
Fairfield Inn		11		1,300
Home2 Suites		8		910
Marriott		2		616
Embassy Suites		2		316
Renaissance		1		205
Total		241		30,585

22

Number of Hotels and Guest Rooms by State
	Number of		Number of
State	Hotels		Rooms
Alabama		15		1,434
Alaska		2		304
Arizona		11		1,434
Arkansas		4		408
California		27		3,807
Colorado		4		567
Florida		23		2,851
Georgia		7		715
Idaho		2		416
Illinois		8		1,420
Indiana		4		479
Iowa		3		301
Kansas		4		422
Louisiana		4		541
Maine		1		179
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		13		1,500
Texas		34		4,072
Utah		3		393
Virginia		14		2,067
Washington		4		609
Total		241		30,585

The following table summarizes the location, brand, manager, date acquired or completed and number of rooms for each of the 241 hotels the Company owned as of March 31, 2018.

City	State	Brand	Manager	Date Acquired or Completed	Rooms
Anchorage	AK	Embassy Suites	Stonebridge	4/30/2010		169
Anchorage	AK	Home2 Suites	Stonebridge	12/1/2017		135
Auburn	AL	Hilton Garden Inn	LBA	3/1/2014		101
Birmingham	AL	Courtyard	LBA	3/1/2014		84
Birmingham	AL	Hilton Garden Inn	LBA	9/12/2017		104
Birmingham	AL	Home2 Suites	LBA	9/12/2017		106
Birmingham	AL	Homewood Suites	McKibbon	3/1/2014		95
Dothan	AL	Hilton Garden Inn	LBA	6/1/2009		104
Dothan	AL	Residence Inn	LBA	3/1/2014		84
Huntsville	AL	Hampton	LBA	9/1/2016		98
Huntsville	AL	Hilton Garden Inn	LBA	3/1/2014		101
Huntsville	AL	Home2 Suites	LBA	9/1/2016		77
Huntsville	AL	Homewood Suites	LBA	3/1/2014		107

23

City	State	Brand	Manager	Date Acquired or Completed	Rooms
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
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

24

City	State	Brand	Manager	Date Acquired or Completed	Rooms
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	Hampton	McKibbon	2/5/2018	119
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
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
Portland	ME	Residence Inn	Pyramid	10/13/2017	179

25

City	State	Brand	Manager	Date Acquired or Completed	Rooms
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
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	Interstate	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	Hampton	Crestline	2/5/2018	144
Memphis	TN	Homewood Suites	Hilton	3/1/2014	140

26

City	State	Brand	Manager	Date Acquired or Completed	Rooms
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	Interstate	9/26/2008	103
Allen	TX	Hilton Garden Inn	Interstate	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
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	Interstate	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	Interstate	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	Residence Inn	Huntington	10/20/2017	136
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
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					30,585

27

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 5 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 daily sources of liquidity are the operating cash flow generated from the Company’s properties and availability under its revolving credit facility.  Periodically the Company may receive proceeds from strategic additional secured and unsecured debt financing, dispositions of its hotel properties and offerings of the Company’s common shares.

The revolving credit facility has an initial maturity of May 18, 2019 and, subject to certain conditions and fees, may be extended one year.  The revolving credit facility, which as of March 31, 2018 had unused borrowing capacity of approximately $369.3 million, is available for acquisitions, hotel renovations and development, share repurchases, working capital and other general corporate funding purposes, including the payment of distributions to shareholders.  As of March 31, 2018, the Company’s revolving credit facility had an outstanding principal balance of approximately $170.7 million with an annual variable interest rate of approximately 3.43%.

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 March 31, 2018.

See Note 3 titled “Debt” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for a description of the Company’s other debt instruments.

The Company’s ATM Program allows it to sell, from time to time, up to an aggregate of $300 million of its common shares through sales agents.  Since inception of the ATM Program in February 2017 through March 31, 2018, the Company has sold approximately 7.2 million common shares at a weighted-average market sales price of approximately $19.56 per common share and received aggregate gross proceeds of approximately $139.8 million and proceeds net of offering costs of approximately $137.5 million.  During the three months ended March 31, 2018, the Company sold approximately 0.2 million common shares under its ATM Program at a weighted-average market sales price of approximately $19.73 per common share and aggregate gross proceeds of approximately $4.8 million.  The Company used the proceeds from the sale of these shares to pay down borrowings on its revolving credit facility.  No shares were issued under the ATM Program during the three months ended March 31, 2017.  As of March 31, 2018, approximately $160.2 million remained available for issuance under the ATM program.  Future 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 opportunities for uses of any proceeds. 

Capital Uses

The Company anticipates that cash flow from operations, availability under its revolving credit facility, additional borrowings and proceeds from hotel dispositions and equity offerings will be adequate to meet its anticipated liquidity requirements, including debt service, hotel acquisitions, hotel renovations, share repurchases, and required distributions to shareholders (the Company is not required to make distributions at its current rate for REIT purposes).

28

Distributions

To maintain its REIT status, the Company is required to distribute at least 90% of its ordinary income.  Distributions paid during the three months ended March 31, 2018 totaled approximately $69.1 million or $0.30 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 $52.9 million, which included a payment of $5.5 million to settle the 2014 DRIP litigation which is discussed in Note 8 titled “Legal Proceedings” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q.  This shortfall includes a return of capital and was funded primarily by borrowings on the Company’s revolving credit facility.  At this time, the Company does not anticipate distributions for the full year of 2018 to exceed net cash generated from operations.

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

During the first three months of 2018, the Company purchased, under its $475 million share repurchase program, approximately 0.3 million of its common shares at a weighted-average market purchase price of approximately $16.89 per common share for an aggregate purchase price of approximately $4.3 million.  The Company did not purchase any common shares under its Share Repurchase Program during the first three months of 2017.  Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with availability under its revolving credit facility.  The timing of share repurchases and the number of common shares to be repurchased under the Share Repurchase Program will depend upon prevailing market conditions, regulatory requirements and other factors.  As of March 31, 2018, approximately $463.2 million remained available for repurchase under the Share Repurchase Program.  The Share Repurchase Program may be suspended or terminated at any time by the Company and 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 in and plans to continue to reinvest in its hotels.  Under certain loan and management agreements, the Company is required to place in escrow funds for the repair, replacement and refurbishing of furniture, fixtures, and equipment, based on a percentage of gross revenues, provided that such amount may be used for the Company’s capital expenditures with respect to the hotels.  As of March 31, 2018, the Company held $28.4 million in reserve related to these properties.  During the three months ended March 31, 2018, the Company invested approximately $18.1 million in capital expenditures and anticipates spending an additional $50 million to $60 million during the remainder of 2018, which includes various scheduled renovation projects for approximately 25 to 30 properties.  The Company does not currently have any existing or planned projects for development.

Hotel Contract Commitments

On May 2, 2018, the same day the hotel opened for business, the Company completed the purchase of a 210-room Hampton Inn & Suites in Phoenix, Arizona for approximately $44.3 million, using borrowings under its revolving credit facility.  After this purchase, the Company had outstanding contracts for the potential purchase of three hotels that were under construction for a total purchase price of approximately $67.4 million, including a 128-room Home2 Suites in Orlando, Florida which is planned to be completed and opened for business in the fourth quarter of 2018, and a combined 224-room dual-branded Hampton Inn & Suites and Home2 Suites by Hilton property in Cape Canaveral, Florida which is planned to be completed and opened for business in 2020.  Closing on the remaining hotels is expected to occur upon completion of construction.  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 Company intends to use borrowings under its revolving credit facility to purchase hotels under contract if a closing occurs.

29

Cash Management Activities

As part of the cost sharing arrangements discussed in Note 5 titled “Related Parties” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, certain day-to-day transactions may result in amounts due to or from the Company and ARG.  To efficiently manage cash disbursements, the Company or ARG may make payments for the other company.  Under the cash management process, each company may advance or defer up to $1 million at any time.  Each quarter, any outstanding amounts are settled between the companies.  This process allows each company to minimize its cash on hand and reduces the cost for each company.  The amounts outstanding at any point in time are not significant to either of the companies.

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 three months of 2018 and the anticipated adoption of recently issued accounting standards.

Subsequent Events

In April 2018, the Company paid approximately $23.0 million, or $0.10 per outstanding common share, in distributions to its common shareholders.

In April 2018, the Company declared a regular monthly cash distribution of $0.10 per common share for the month of May 2018.  The distribution is payable on May 15, 2018.

In April 2018, the Company, through one of its indirect wholly-owned subsidiaries, entered into a purchase contract for the purchase of all of the ownership interests in a limited liability company which plans to construct a dual-branded Hampton Inn & Suites and Home2 Suites by Hilton property in Cape Canaveral, Florida, with a combined total of 224 guest rooms for a purchase price of approximately $46.7 million.  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.

On May 2, 2018, the Company closed on the purchase of a newly constructed 210-room Hampton Inn & Suites in Phoenix, Arizona, the same day the hotel opened for business.  The gross purchase price was approximately $44.3 million.

30

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As of March 31, 2018, 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 March 31, 2018, after giving effect to interest rate swaps, as described below, approximately $273.2 million, or approximately 21% of the Company’s total debt outstanding, was subject to variable interest rates.  Based on the Company’s variable rate debt outstanding as of March 31, 2018, every 100 basis points change in interest rates will impact the Company’s annual net income by approximately $2.7 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 and cash equivalents at March 31, 2018 were $0.

As of March 31, 2018, 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 March 31, 2018, 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 March 31, 2018.  All dollar amounts are in thousands.

	April 1 - December 31, 2018			2019			2020			2021			2022			Thereafter			Total		Fair Market Value
Total debt:
Maturities	$	9,730		$	204,505		$	453,349		$	97,586		$	109,252		$	454,780		$	1,329,202	$	1,326,386
Average interest rates		3.7	%		3.7	%		3.8	%		4.0	%		3.9	%		3.8	%
Variable rate debt:
Maturities	$	-		$	170,700		$	425,000		$	50,000		$	-		$	185,000		$	830,700	$	832,515
Average interest rates (1)		3.2	%		3.2	%		3.2	%		3.3	%		3.4	%		3.4	%
Fixed rate debt:
Maturities	$	9,730		$	33,805		$	28,349		$	47,586		$	109,252		$	269,780		$	498,502	$	493,871
Average interest rates		4.5	%		4.4	%		4.4	%		4.4	%		4.2	%		4.1	%

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

Item 4.  Controls and Procedures

Senior management, including the Chief Executive Officer 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 March 31, 2018.  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.

31

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

There have been no material changes to the legal proceedings previously disclosed in the 2017 Form 10-K except as described in Note 8 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 2017 Form 10-K.  There have been no material changes to the risk factors previously disclosed in the 2017 Form 10-K.

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

The following is a summary of all share repurchases during the first quarter of 2018.

Issuer Purchases of Equity Securities
	(a)		(b)		(c)		(d)
Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) (1)
January 1 - January 31, 2018		-		-		-	$	467,500
February 1 - February 28, 2018		-		-		-	$	467,500
March 1 - March 31, 2018 (2)		306,413	$	16.90		254,653	$	463,200
Total		306,413				254,653

(1) Represents amount outstanding under the Company’s authorized $475 million share repurchase program.  This program may be suspended or terminated at any time by the Company.  If not terminated earlier, the program will end in July 2018.  Refer to Note 6 titled “Shareholders’ Equity” in the Company’s Unaudited Consolidated Financial Statements and Notes thereto, appearing elsewhere in this Quarterly Report on Form 10-Q, for more information on the Company’s share repurchase program.

(2) Includes 51,760 common shares surrendered to the Company to satisfy tax withholding obligations associated with the issuance of common shares awarded to employees.

32

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 the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 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)

33

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:  May 7, 2018
	Justin G. Knight,
	President and Chief Executive Officer (Principal Executive Officer)
By:	/s/    Bryan Peery	Date:  May 7, 2018
	Bryan Peery,
	Chief Financial Officer (Principal Financial and Principal Accounting Officer)

34

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: May 7, 2018	/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: May 7, 2018	/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 March 31, 2018 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 March 31, 2018, 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

May 7, 2018

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 01, 2018
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		230,339,578
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	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Assets
Investment in real estate, net of accumulated depreciation of $775,894 and $731,284, respectively	$ 4,829,776	$ 4,793,159
Restricted cash-furniture, fixtures and other escrows	31,438	29,791
Due from third party managers, net	57,240	31,457
Other assets, net	54,917	47,931
Total Assets	4,973,371	4,902,338
Liabilities
Revolving credit facility	170,700	106,900
Term loans	656,569	656,279
Mortgage debt	500,189	459,017
Accounts payable and other liabilities	89,439	109,057
Total Liabilities	1,416,897	1,331,253
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 230,339,578 and 229,961,548 shares, respectively	4,594,247	4,588,188
Accumulated other comprehensive income	16,070	9,778
Distributions greater than net income	(1,053,843)	(1,026,881)
Total Shareholders’ Equity	3,556,474	3,571,085
Total Liabilities and Shareholders’ Equity	$ 4,973,371	$ 4,902,338

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Investment in real estate accumulated depreciation (in Dollars)	$ 775,894	$ 731,284
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	230,339,578	229,961,548
Common stock, shares outstanding	230,339,578	229,961,548

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Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues:
Room	$ 274,836	$ 269,393
Other	23,553	23,532
Total revenue	298,389	292,925
Expenses:
Operating	75,954	75,154
Hotel administrative	25,102	24,836
Sales and marketing	25,332	24,109
Utilities	10,283	9,753
Repair and maintenance	12,453	11,916
Franchise fees	12,733	12,474
Management fees	10,472	10,212
Property taxes, insurance and other	17,229	16,927
Ground lease	2,850	2,816
General and administrative	6,877	6,754
Loss on impairment of depreciable real estate assets	0	7,875
Depreciation	44,840	43,767
Total expenses	244,125	246,593
Operating income	54,264	46,332
Interest and other expense, net	(11,919)	(11,717)
Income before income taxes	42,345	34,615
Income tax expense	(163)	(250)
Net income	42,182	34,365
Other comprehensive income:
Interest rate derivatives	6,292	1,545
Comprehensive income	$ 48,474	$ 35,910
Basic and diluted net income per common share (in Dollars per share)	$ 0.18	$ 0.15
Weighted average common shares outstanding - basic and diluted (in Shares)	230,515	223,047

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net income	$ 42,182	$ 34,365
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation	44,840	43,767
Loss on impairment of depreciable real estate assets	0	7,875
Other non-cash expenses, net	1,992	1,849
Changes in operating assets and liabilities:
Increase in due from third party managers, net	(25,920)	(26,222)
Decrease (increase) in other assets, net	(2,485)	9,345
Decrease in accounts payable and other liabilities	(7,746)	(34,814)
Net cash provided by operating activities	52,863	36,165
Cash flows from investing activities:
Acquisition of hotel properties, net	(61,614)	(18,131)
Deposits and other disbursements for potential acquisitions	(204)	0
Capital improvements	(24,672)	(17,461)
Net cash used in investing activities	(86,490)	(35,592)
Cash flows from financing activities:
Net proceeds related to issuance of common shares	4,731	0
Repurchases of common shares	(4,304)	0
Repurchases of common shares to satisfy employee withholding requirements	(876)	(432)
Distributions paid to common shareholders	(69,144)	(66,908)
Net proceeds from revolving credit facility	63,800	96,600
Proceeds from mortgage debt	44,000	0
Payments of mortgage debt	(2,933)	(31,949)
Net cash provided by (used in) financing activities	35,274	(2,689)
Net change in cash, cash equivalents and restricted cash	1,647	(2,116)
Cash, cash equivalents and restricted cash, beginning of period	29,791	29,425
Cash, cash equivalents and restricted cash, end of period	31,438	27,309
Supplemental cash flow information:
Interest paid	11,760	11,855
Supplemental disclosure of noncash investing and financing activities:
Accrued distribution to common shareholders	23,020	22,301
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents, beginning of period	0	0
Restricted cash-furniture, fixtures and other escrows, beginning of period	29,791	29,425
Cash, cash equivalents and restricted cash, beginning of period	29,791	29,425
Cash and cash equivalents, end of period	0	0
Restricted cash-furniture, fixtures and other escrows, end of period	31,438	27,309
Cash, cash equivalents and restricted cash, end of period	$ 31,438	$ 27,309

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Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

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 March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in 34 states.  The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “APLE.”

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations for reporting on Form 10-Q.  Accordingly, they do not include all of the information required by United States generally accepted accounting principles (“GAAP”) for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”).  Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2018.

Use of Estimates

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

Net Income Per Common Share

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

Accounting Standards Recently Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606).  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.  The standard became effective for annual and interim periods beginning after December 15, 2017.  The Company adopted this standard as of January 1, 2018 using the modified retrospective approach.  The Company evaluated each of its revenue streams under the new standard and concluded that the adoption of this standard did not impact the amount or timing of revenue recognition in the Company’s consolidated financial statements.  The Company also considered and determined that the following disaggregated revenue reflects the nature and timing of its significant revenue streams (in thousands).

	Three Months Ended March 31,
	2018		2017
Revenues:
Room	$	274,836	$	269,393
Food and beverage		15,710		16,733
Other		7,843		6,799
Total revenue	$	298,389	$	292,925

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.  The standard was effective for annual and interim periods beginning after December 15, 2017.  The Company adopted this standard as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which is intended to reduce diversity in practice in the classification and presentation of changes in restricted cash in the statement of cash flows.  The standard was effective for annual and interim periods beginning after December 15, 2017.  Under this standard, restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown in the statements of cash flows.  The Company adopted this standard as of January 1, 2018.  Amounts included in restricted cash on the Company’s consolidated balance sheets are now included with cash and cash equivalents in the Company’s consolidated statements of cash flows for all periods presented.  The adoption of this standard required retrospective revision to the statement of cash flows for the three months ended March 31, 2017.  Other than the reclassification of restricted cash balances and activity in the statements of cash flows, the adoption of the standard did not have an impact on the Company’s consolidated financial statements and related disclosures.

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 provisions of this standard must be applied at the same time as the adoption of ASU No. 2014-09.  The Company adopted this standard as of January 1, 2018 using the modified retrospective approach.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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 Company adopted this standard on January 1, 2018 using the modified retrospective approach.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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Investment in Real Estate

3 Months Ended

Mar. 31, 2018

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

2.  Investment in Real Estate

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

	March 31,			December 31,
	2018			2017
Land	$	730,763		$	720,465
Building and Improvements		4,425,158			4,362,929
Furniture, Fixtures and Equipment		437,084			428,734
Franchise Fees		12,665			12,315
		5,605,670			5,524,443
Less Accumulated Depreciation		(775,894	)		(731,284	)
Investment in Real Estate, net	$	4,829,776		$	4,793,159

As of March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in 34 states.

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 two hotels during the first three months of 2018.  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)
Atlanta	GA	Hampton	McKibbon	2/5/2018		119	$	24,000
Memphis	TN	Hampton	Crestline	2/5/2018		144		39,000
						263	$	63,000

(a) The gross purchase price excludes transaction costs.

During the year ended December 31, 2017, the Company acquired six hotels including one in the first quarter 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	$	18,034
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
Portland	ME	Residence Inn	Pyramid	10/13/2017		179		55,750
Salt Lake City	UT	Residence Inn	Huntington	10/20/2017		136		25,500
Anchorage	AK	Home2 Suites	Stonebridge	12/1/2017		135		24,048
						784	$	161,770

(a) The gross purchase price excludes transaction costs.

(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.

The Company used borrowings under its $540 million revolving credit facility (the “revolving credit facility”) to purchase each of these hotels.  The acquisitions of these hotel properties were accounted for as an acquisition of a group of assets, with costs incurred to effect the acquisition, which were not significant, capitalized as part of the cost of the assets acquired.  For the two hotels acquired during the three months ended March 31, 2018, the amount of revenue and operating income included in the Company’s consolidated statement of operations from the date of acquisition through March 31, 2018 was approximately $2.4 million and $0.8 million, respectively.  For the hotel acquired during the three months ended March 31, 2017, the amount of revenue and operating income included in the Company’s consolidated statement of operations from the date of acquisition through March 31, 2017 was approximately $0.7 million and $0.04 million, respectively.

Hotel Contract Commitments

As of March 31, 2018, the Company had outstanding contracts for the potential purchase of two additional hotels, which were under construction, for a total purchase price of approximately $65.0 million.  The Phoenix Hampton Inn & Suites was acquired on May 2, 2018, the same day the hotel opened for business.  It is anticipated that the construction of the Orlando Home2 Suites will be completed and opened for business during the fourth quarter of 2018, at which time a closing on this hotel is expected to occur.  Although the Company is working towards acquiring this hotel, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on this hotel will occur under the outstanding purchase contract.  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 March 31, 2018.  All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Phoenix, AZ (a)	Hampton	10/25/2016		210	$	500	$	44,300
Orlando, FL (b)	Home2 Suites	1/18/2017		128		3		20,736
				338	$	503	$	65,036

(a) Newly constructed hotel was acquired on May 2, 2018, the same day the hotel opened for business.

(b) This hotel is currently under construction.  The table shows the expected number of rooms upon hotel completion and the expected franchise brand.  Assuming all conditions to closing are met, the purchase of this hotel is expected to close during the fourth quarter of 2018.  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 of the Phoenix Hampton Inn & Suites was funded through the Company’s revolving credit facility and it is anticipated that the purchase of the Orlando Home2 Suites will be funded similarly if a closing occurs.

Loss on Impairment of Depreciable Real Estate Assets

During the first quarter of 2017, the Company identified two properties for potential sale and in April 2017, the Company entered into separate contracts with the same unrelated party 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 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 then 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.

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Debt

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

3.  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.  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.  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 $50 million term loan that will mature on April 8, 2021 (the “$50 million term loan”) and a $100 million term loan 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 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.  

$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”).  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.

As of March 31, 2018 and December 31, 2017, 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 March 31, 2018							As of December 31, 2017
	Maturity Date	Outstanding Balance			Interest Rate				Outstanding Balance			Interest Rate
Revolving credit facility (1)	5/18/2019	$	170,700			3.43	%	(2)	$	106,900			3.11	%	(2)
Term loans
$425 million term loans	5/18/2020		425,000			3.16	%	(3)		425,000			3.09	%	(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)		85,000			3.76	%	(4)
Total term loans at stated value			660,000							660,000
Unamortized debt issuance costs			(3,431	)						(3,721	)
Total term loans			656,569							656,279
Total revolving credit facility and term loans		$	827,269						$	763,179

(1) Unamortized debt issuance costs related to the revolving credit facility totaled approximately $1.3 million and $1.7 million as of March 31, 2018 and December 31, 2017, 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 at the balance sheet date 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, through maturity.  See Note 4 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, through maturity.  See Note 4 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 March 31, 2018.

Mortgage Debt

As of March 31, 2018, the Company had approximately $498.5 million in outstanding mortgage debt secured by 31 properties, with maturity dates ranging from June 2020 to January 2038, 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 March 31, 2018 and December 31, 2017 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 March 31, 2018			Outstanding balance as of December 31, 2017
San Juan Capistrano, CA	Residence Inn		4.15	%	9/1/2016	6/1/2020		$	16,210	$	15,687		$	15,774
Colorado Springs, CO	Hampton		6.25	%	9/1/2016	7/6/2021			7,923		7,719			7,754
Franklin, TN	Courtyard		6.25	%	9/1/2016	8/6/2021			14,679		14,303			14,368
Franklin, TN	Residence Inn		6.25	%	9/1/2016	8/6/2021			14,679		14,303			14,368
Grapevine, TX	Hilton Garden Inn		4.89	%	8/29/2012	9/1/2022			11,810		10,334			10,412
Collegeville/Philadelphia, PA	Courtyard		4.89	%	8/30/2012	9/1/2022			12,650		11,069			11,152
Hattiesburg, MS	Courtyard		5.00	%	3/1/2014	9/1/2022			5,732		5,173			5,212
Rancho Bernardo/San Diego, CA	Courtyard		5.00	%	3/1/2014	9/1/2022			15,060		13,591			13,692
Kirkland, WA	Courtyard		5.00	%	3/1/2014	9/1/2022			12,145		10,960			11,042
Seattle, WA	Residence Inn		4.96	%	3/1/2014	9/1/2022			28,269		25,496			25,687
Anchorage, AK	Embassy Suites		4.97	%	9/13/2012	10/1/2022			23,230		20,408			20,560
Somerset, NJ	Courtyard		4.73	%	3/1/2014	10/6/2022			8,750		7,872			7,932
Tukwila, WA	Homewood Suites		4.73	%	3/1/2014	10/6/2022			9,431		8,484			8,549
Prattville, AL	Courtyard		4.12	%	3/1/2014	2/6/2023			6,596		5,895			5,943
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	2/6/2023			8,306		7,424			7,483
San Diego, CA	Residence Inn		3.97	%	3/1/2014	3/6/2023			18,600		16,599			16,733
Miami, FL	Homewood Suites		4.02	%	3/1/2014	4/1/2023			16,677		14,903			15,022
Syracuse, NY	Courtyard		4.75	%	10/16/2015	8/1/2024	(2)		11,199		10,567			10,637
Syracuse, NY	Residence Inn		4.75	%	10/16/2015	8/1/2024	(2)		11,199		10,567			10,637
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024			27,000		24,747			24,919
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025			10,000		9,324			9,386
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025			34,118		32,833			33,046
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025			13,655		13,269			13,332
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025			22,682		22,040			22,145
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026			24,000		23,319			23,422
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026			25,564		24,752			24,917
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026			25,473		24,664			24,828
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026			18,963		18,360			18,483
Burbank, CA	SpringHill Suites		3.94	%	3/9/2018	4/1/2028			28,470		28,470			-
Santa Ana, CA	Courtyard		3.94	%	3/9/2018	4/1/2028			15,530		15,530			-
San Jose, CA	Homewood Suites		4.22	%	12/22/2017	1/1/2038			30,000		29,840			30,000
								$	528,600		498,502			457,435
Unamortized fair value adjustment of assumed debt											4,105			4,330
Unamortized debt issuance costs											(2,418	)		(2,748	)
Total										$	500,189		$	459,017

(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) 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 March 31, 2018 and thereafter are as follows (in thousands):

2018 (April - December)	$	9,730
2019		204,505
2020		453,349
2021		97,586
2022		109,252
Thereafter		454,780
		1,329,202
Unamortized fair value adjustment of assumed debt		4,105
Unamortized debt issuance costs related to term loans and mortgage debt		(5,849	)
Total	$	1,327,458

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

4.  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 March 31, 2018, both the carrying value and estimated fair value of the Company’s debt were approximately $1.3 billion.  As of December 31, 2017, both the carrying value and estimated fair value of the Company’s debt were approximately $1.2 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 are included in other assets, net, 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 March 31, 2018 and December 31, 2017.  All dollar amounts are in thousands.

								Fair Value Asset
	Notional Amount at March 31, 2018
Hedge Type			Origination Date	Maturity Date	Swap Fixed Interest Rate			March 31, 2018		December 31, 2017
Cash flow hedge	$	212,500	5/21/2015	5/18/2020		1.58	%	$	3,478	$	2,033
Cash flow hedge		110,000	7/2/2015	5/18/2020		1.62	%		1,709		951
Cash flow hedge		50,000	4/7/2016	3/31/2021		1.09	%		2,007		1,544
Cash flow hedge		100,000	4/7/2016	3/31/2023		1.33	%		5,819		4,098
Cash flow hedge		75,000	5/31/2017	6/30/2024		1.96	%		2,724		1,043
Cash flow hedge		10,000	8/10/2017	6/30/2024		2.01	%		333		109
	$	557,500						$	16,070	$	9,778

The Company assesses, both at inception and on an ongoing basis, the effectiveness of its qualifying cash flow hedges.  The Company elected to early adopt ASU No. 2017-12, Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities, on January 1, 2018, using the modified retrospective approach for all of its hedging relationships that existed as of that date.  As a result, effective January 1, 2018, the entire change in the fair value of the Company’s designated cash flow hedges is recorded to accumulated other comprehensive income, a component of shareholders’ equity in the Company’s consolidated balance sheets.  Prior to January 1, 2018, changes in fair value on the effective portion of all designated cash flow hedges were recorded to accumulated other comprehensive income, while changes in fair value on the ineffective portion of all designated cash flow hedges were recorded to interest and other expense, net in the Company’s consolidated statements of operations.  Since prior to January 1, 2018 there was no material ineffectiveness related to the Company’s outstanding designated cash flow hedges, the adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three months ended March 31, 2018 and 2017 (in thousands):

	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2018		2017
Interest rate derivatives in cash flow hedging relationships	$	6,348	$	723	$	56	$	(822	)

Amounts reported in accumulated other comprehensive income will be reclassified to interest and other expense, net as interest payments are made or received on the Company’s variable-rate derivatives.  The Company estimates that approximately $3.2 million of net unrealized gains included in accumulated other comprehensive income at March 31, 2018 will be reclassified as a decrease to interest and other expense, net within the next 12 months.

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Related Parties

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

5.  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 2017 Form 10-K.  Below is a summary of the significant related party relationships in effect during the three months ended March 31, 2018 and 2017.

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

The Company provides support services, including the use of the Company’s employees and corporate office, to ARG and is reimbursed by ARG for the cost of these services.  The amounts reimbursed to the Company are based on the actual costs of the services and a good faith estimate of the proportionate amount of time incurred by the Company’s employees on behalf of ARG.  Total reimbursed costs received by the Company from ARG for the three months ended March 31, 2018 and 2017 totaled approximately $0.2 million in each period, and are recorded as a reduction to general and administrative expenses in the Company’s consolidated statements of operations. 

As part of the cost sharing arrangement, certain day-to-day transactions may result in amounts due to or from the Company and ARG.  To efficiently manage cash disbursements, the Company or ARG may make payments for the other company.  Under this cash management process, each company may advance or defer up to $1 million at any time.  Each quarter, any outstanding amounts are settled between the companies.  This process allows each company to minimize its cash on hand and reduces the cost for each company.  The amounts outstanding at any point in time are not significant to either of the companies.  As of March 31, 2018 and December 31, 2017, total amounts due from ARG for reimbursements under the cost sharing structure each totaled approximately $0.3 million at each date, and are included in other assets, net in the Company’s consolidated balance sheets.

The Company, through a wholly-owned subsidiary, Apple Air Holding, LLC, owns a Learjet used primarily for acquisition, asset management, renovation and public relations purposes.  The aircraft is also leased to affiliates of the Company based on third party rates.  Leasing activity to affiliates 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, by its President and Chief Executive Officer, for acquisition, asset management, renovation and public relations purposes, and reimburses these entities at third party rates.  Total costs incurred for the use of these aircraft during the three months ended March 31, 2018 and 2017 were approximately $0.03 million and $0.04 million, respectively, and are included in general and administrative expenses in the Company’s consolidated statements of operations.

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Shareholders' Equity

3 Months Ended

Mar. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

6.  Shareholders’ Equity

Distributions

The Company’s current annual distribution rate, payable monthly, is $1.20 per common share.  For the three months ended March 31, 2018 and 2017, the Company paid distributions of $0.30 per common share for a total of $69.1 million and $66.9 million, respectively.  Additionally, in March 2018, the Company declared a monthly distribution of $0.10 per common share, totaling $23.0 million, which was recorded as a payable as of March 31, 2018 and paid in April 2018.  As of December 31, 2017, a monthly distribution of $0.10 per common share, totaling $23.0 million, was recorded as a payable and paid in January 2018.  These accrued distributions were included in accounts payable and other liabilities in the Company’s consolidated balance sheets.

Issuance of Shares

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 under an at-the-market offering program (the “ATM Program”).  Since inception of the ATM Program in February 2017 through March 31, 2018, the Company has sold approximately 7.2 million common shares at a weighted-average market sales price of approximately $19.56 per common share and received aggregate gross proceeds of approximately $139.8 million before commission and issuance costs, including the sale of approximately 0.2 million common shares during the three months ended March 31, 2018 at a weighted-average market sales price of approximately $19.73 per common share and receipt of aggregate gross proceeds of approximately $4.8 million.  The Company used the proceeds from the sale of these shares to pay down borrowings on its revolving credit facility.  No shares were issued under the ATM Program during the three months ended March 31, 2017.  As of March 31, 2018, approximately $160.2 million remained available for issuance under the ATM Program.

Share Repurchases

During the first three months of 2018, the Company purchased, under its $475 million share repurchase program (the “Share Repurchase Program”), approximately 0.3 million of its common shares at a weighted-average market purchase price of approximately $16.89 per common share for an aggregate purchase price of approximately $4.3 million.  The Company did not purchase any common shares under its Share Repurchase Program during the first three months of 2017.  In March 2018, the Company established a new written trading plan as part of the Share Repurchase Program that provides for share repurchases in open market transactions that is intended to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  Repurchases under the Share Repurchase Program have been funded, and the Company intends to fund future repurchases, with availability under its revolving credit facility.  As of March 31, 2018, approximately $463.2 million remained available for repurchase under the Share Repurchase Program.  The Share Repurchase Program may be suspended or terminated at any time by the Company and will end in July 2018 if not terminated earlier.

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Compensation Plans

3 Months Ended

Mar. 31, 2018

Disclosure Text Block Supplement [Abstract]

Compensation and Employee Benefit Plans [Text Block]

7.  Compensation Plans

The Company annually establishes an incentive plan for its executive management.  Under the incentive plan for 2018 (the “2018 Incentive Plan”), participants are eligible to receive a bonus based on the achievement of certain 2018 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, two-year and three-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 2018 Incentive Plan is $0 - $20 million.  Based on performance through March 31, 2018, the Company has accrued approximately $1.9 million as a liability for potential executive bonus payments under the 2018 Incentive Plan, which is included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of March 31, 2018 and in general and administrative expenses in the Company’s consolidated statement of operations for the three months ended March 31, 2018.  Approximately 25% of awards under the 2018 Incentive Plan, if any, will be paid in cash, and 75% will be issued in stock under the Company’s 2014 Omnibus Incentive Plan, approximately two-thirds of which will vest at the end of 2018 and one-third of which will vest in December 2019.  Under the incentive plan for 2017 (the “2017 Incentive Plan”), the Company recorded approximately $2.0 million in general and administrative expenses in the Company’s consolidated statement of operations for the three months ended March 31, 2017. 

Share Based Compensation Awards

During the first quarters of 2018 and 2017, the Company issued 367,333 and 101,305 common shares earned under the 2017 Incentive Plan and the incentive plan for 2016 (the “2016 Incentive Plan”) (net of 48,533 and 19,667 common shares surrendered to satisfy tax withholding obligations) at $16.92 and $19.10 per share, or approximately $7.0 million and $2.3 million in share based compensation, including the surrendered shares, respectively.  Of the total shares issued under the 2017 Incentive Plan, 223,421 shares were unrestricted at the time of issuance, and the remaining 143,912 restricted shares will vest on December 14, 2018.  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 vested on December 15, 2017, of which 13,129 common shares were surrendered to satisfy tax withholding obligations.  Of the total 2017 share based compensation, approximately $5.8 million was recorded as a liability as of December 31, 2017, which was included in accounts payable and other liabilities in the Company’s consolidated balance sheet and the remaining $1.2 million, which is subject to vesting on December 14, 2018, will be recognized as compensation expense proportionately throughout 2018.  Of the total 2016 share based compensation, approximately $0.4 million, which vested on December 15, 2017, was recognized as compensation expense proportionately throughout 2017.  For the three months ended March 31, 2018 and 2017, the Company recognized approximately $0.3 million and $0.1 million, respectively, of share based compensation expense related to the unvested restricted share awards.

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Legal Proceedings

3 Months Ended

Mar. 31, 2018

Disclosure Text Block Supplement [Abstract]

Legal Matters and Contingencies [Text Block]

8.  Legal Proceedings

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

As previously disclosed in the 2017 Form 10-K, on April 22, 2014, a purported 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 (the “2014 DRIP litigation”).  In January 2017, the parties reached an agreement in principle to settle the litigation which the court approved by order dated March 27, 2018.  In January 2018, the Company funded the settlement amount of $5.5 million, which was included in accounts payable and other liabilities in the Company’s consolidated balance sheet as of December 31, 2017, and in transaction and litigation costs (reimbursements) in the Company’s consolidated statement of operations for the year ended December 31, 2016.

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

As previously disclosed in the 2017 Form 10-K, on February 24, 2017, a purported 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 (“the Apple REIT Defendants”), 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).  On May 1, 2018, all of the Apple REIT Defendants were dismissed from the complaint without prejudice by the plaintiff.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

Subsequent Events [Text Block]

9.  Subsequent Events

In April 2018, the Company paid approximately $23.0 million, or $0.10 per outstanding common share, in distributions to its common shareholders.

In April 2018, the Company declared a regular monthly cash distribution of $0.10 per common share for the month of May 2018.  The distribution is payable on May 15, 2018.

In April 2018, the Company, through one of its indirect wholly-owned subsidiaries, entered into a purchase contract for the purchase of all of the ownership interests in a limited liability company which plans to construct a dual-branded Hampton Inn & Suites and Home2 Suites by Hilton property in Cape Canaveral, Florida, with a combined total of 224 guest rooms for a purchase price of approximately $46.7 million.  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.

On May 2, 2018, the Company closed on the purchase of a newly constructed 210-room Hampton Inn & Suites in Phoenix, Arizona, the same day the hotel opened for business.  The gross purchase price was approximately $44.3 million.

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Accounting Policies, by Policy (Policies)

3 Months Ended

Mar. 31, 2018

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 March 31, 2018, the Company owned 241 hotels with an aggregate of 30,585 rooms located in 34 states.  The Company’s common shares are listed on the New York Stock Exchange (“NYSE”) 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 United States generally accepted accounting principles (“GAAP”) for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  These unaudited financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”).  Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2018.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

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

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 May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606).  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.  The standard became effective for annual and interim periods beginning after December 15, 2017.  The Company adopted this standard as of January 1, 2018 using the modified retrospective approach.  The Company evaluated each of its revenue streams under the new standard and concluded that the adoption of this standard did not impact the amount or timing of revenue recognition in the Company’s consolidated financial statements.  The Company also considered and determined that the following disaggregated revenue reflects the nature and timing of its significant revenue streams (in thousands).

	Three Months Ended March 31,
	2018		2017
Revenues:
Room	$	274,836	$	269,393
Food and beverage		15,710		16,733
Other		7,843		6,799
Total revenue	$	298,389	$	292,925

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.  The standard was effective for annual and interim periods beginning after December 15, 2017.  The Company adopted this standard as of January 1, 2018, and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash, which is intended to reduce diversity in practice in the classification and presentation of changes in restricted cash in the statement of cash flows.  The standard was effective for annual and interim periods beginning after December 15, 2017.  Under this standard, restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown in the statements of cash flows.  The Company adopted this standard as of January 1, 2018.  Amounts included in restricted cash on the Company’s consolidated balance sheets are now included with cash and cash equivalents in the Company’s consolidated statements of cash flows for all periods presented.  The adoption of this standard required retrospective revision to the statement of cash flows for the three months ended March 31, 2017.  Other than the reclassification of restricted cash balances and activity in the statements of cash flows, the adoption of the standard did not have an impact on the Company’s consolidated financial statements and related disclosures.

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 provisions of this standard must be applied at the same time as the adoption of ASU No. 2014-09.  The Company adopted this standard as of January 1, 2018 using the modified retrospective approach.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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 Company adopted this standard on January 1, 2018 using the modified retrospective approach.  The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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Organization and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Disaggregation of Revenue [Table Text Block]

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). 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. The standard became effective for annual and interim periods beginning after December 15, 2017. The Company adopted this standard as of January 1, 2018 using the modified retrospective approach. The Company evaluated each of its revenue streams under the new standard and concluded that the adoption of this standard did not impact the amount or timing of revenue recognition in the Company’s consolidated financial statements. The Company also considered and determined that the following disaggregated revenue reflects the nature and timing of its significant revenue streams (in thousands).

	Three Months Ended March 31,
	2018		2017
Revenues:
Room	$	274,836	$	269,393
Food and beverage		15,710		16,733
Other		7,843		6,799
Total revenue	$	298,389	$	292,925

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Investment in Real Estate (Tables)

3 Months Ended

Mar. 31, 2018

Investment in Real Estate (Tables) [Line Items]

Property, Plant and Equipment [Table Text Block]

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

	March 31,			December 31,
	2018			2017
Land	$	730,763		$	720,465
Building and Improvements		4,425,158			4,362,929
Furniture, Fixtures and Equipment		437,084			428,734
Franchise Fees		12,665			12,315
		5,605,670			5,524,443
Less Accumulated Depreciation		(775,894	)		(731,284	)
Investment in Real Estate, net	$	4,829,776		$	4,793,159

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

As of March 31, 2018, the Company had outstanding contracts for the potential purchase of two additional hotels, which were under construction, for a total purchase price of approximately $65.0 million. The Phoenix Hampton Inn & Suites was acquired on May 2, 2018, the same day the hotel opened for business. It is anticipated that the construction of the Orlando Home2 Suites will be completed and opened for business during the fourth quarter of 2018, at which time a closing on this hotel is expected to occur. Although the Company is working towards acquiring this hotel, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on this hotel will occur under the outstanding purchase contract. 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 March 31, 2018. All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Phoenix, AZ (a)	Hampton	10/25/2016		210	$	500	$	44,300
Orlando, FL (b)	Home2 Suites	1/18/2017		128		3		20,736
				338	$	503	$	65,036

(a) Newly constructed hotel was acquired on May 2, 2018, the same day the hotel opened for business.

(b) This hotel is currently under construction.  The table shows the expected number of rooms upon hotel completion and the expected franchise brand.  Assuming all conditions to closing are met, the purchase of this hotel is expected to close during the fourth quarter of 2018.  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.

2018 Acquisitions [Member]

Investment in Real Estate (Tables) [Line Items]

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

The Company acquired two hotels during the first three months of 2018. 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)
Atlanta	GA	Hampton	McKibbon	2/5/2018		119	$	24,000
Memphis	TN	Hampton	Crestline	2/5/2018		144		39,000
						263	$	63,000

(a) The gross purchase price excludes transaction costs.

2017 Acquisitions [Member]

Investment in Real Estate (Tables) [Line Items]

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

During the year ended December 31, 2017, the Company acquired six hotels including one in the first quarter 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	$	18,034
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
Portland	ME	Residence Inn	Pyramid	10/13/2017		179		55,750
Salt Lake City	UT	Residence Inn	Huntington	10/20/2017		136		25,500
Anchorage	AK	Home2 Suites	Stonebridge	12/1/2017		135		24,048
						784	$	161,770

(a) The gross purchase price excludes transaction costs.

(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.

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Debt (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

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

As of March 31, 2018 and December 31, 2017, 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 March 31, 2018							As of December 31, 2017
	Maturity Date	Outstanding Balance			Interest Rate				Outstanding Balance			Interest Rate
Revolving credit facility (1)	5/18/2019	$	170,700			3.43	%	(2)	$	106,900			3.11	%	(2)
Term loans
$425 million term loans	5/18/2020		425,000			3.16	%	(3)		425,000			3.09	%	(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)		85,000			3.76	%	(4)
Total term loans at stated value			660,000							660,000
Unamortized debt issuance costs			(3,431	)						(3,721	)
Total term loans			656,569							656,279
Total revolving credit facility and term loans		$	827,269						$	763,179

(1) Unamortized debt issuance costs related to the revolving credit facility totaled approximately $1.3 million and $1.7 million as of March 31, 2018 and December 31, 2017, 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 at the balance sheet date 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, through maturity.  See Note 4 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, through maturity.  See Note 4 for more information on the interest rate swap agreements.

Schedule of Debt [Table Text Block]

As of March 31, 2018, the Company had approximately $498.5 million in outstanding mortgage debt secured by 31 properties, with maturity dates ranging from June 2020 to January 2038, 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 March 31, 2018 and December 31, 2017 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 March 31, 2018			Outstanding balance as of December 31, 2017
San Juan Capistrano, CA	Residence Inn		4.15	%	9/1/2016	6/1/2020		$	16,210	$	15,687		$	15,774
Colorado Springs, CO	Hampton		6.25	%	9/1/2016	7/6/2021			7,923		7,719			7,754
Franklin, TN	Courtyard		6.25	%	9/1/2016	8/6/2021			14,679		14,303			14,368
Franklin, TN	Residence Inn		6.25	%	9/1/2016	8/6/2021			14,679		14,303			14,368
Grapevine, TX	Hilton Garden Inn		4.89	%	8/29/2012	9/1/2022			11,810		10,334			10,412
Collegeville/Philadelphia, PA	Courtyard		4.89	%	8/30/2012	9/1/2022			12,650		11,069			11,152
Hattiesburg, MS	Courtyard		5.00	%	3/1/2014	9/1/2022			5,732		5,173			5,212
Rancho Bernardo/San Diego, CA	Courtyard		5.00	%	3/1/2014	9/1/2022			15,060		13,591			13,692
Kirkland, WA	Courtyard		5.00	%	3/1/2014	9/1/2022			12,145		10,960			11,042
Seattle, WA	Residence Inn		4.96	%	3/1/2014	9/1/2022			28,269		25,496			25,687
Anchorage, AK	Embassy Suites		4.97	%	9/13/2012	10/1/2022			23,230		20,408			20,560
Somerset, NJ	Courtyard		4.73	%	3/1/2014	10/6/2022			8,750		7,872			7,932
Tukwila, WA	Homewood Suites		4.73	%	3/1/2014	10/6/2022			9,431		8,484			8,549
Prattville, AL	Courtyard		4.12	%	3/1/2014	2/6/2023			6,596		5,895			5,943
Huntsville, AL	Homewood Suites		4.12	%	3/1/2014	2/6/2023			8,306		7,424			7,483
San Diego, CA	Residence Inn		3.97	%	3/1/2014	3/6/2023			18,600		16,599			16,733
Miami, FL	Homewood Suites		4.02	%	3/1/2014	4/1/2023			16,677		14,903			15,022
Syracuse, NY	Courtyard		4.75	%	10/16/2015	8/1/2024	(2)		11,199		10,567			10,637
Syracuse, NY	Residence Inn		4.75	%	10/16/2015	8/1/2024	(2)		11,199		10,567			10,637
New Orleans, LA	Homewood Suites		4.36	%	7/17/2014	8/11/2024			27,000		24,747			24,919
Westford, MA	Residence Inn		4.28	%	3/18/2015	4/11/2025			10,000		9,324			9,386
Denver, CO	Hilton Garden Inn		4.46	%	9/1/2016	6/11/2025			34,118		32,833			33,046
Oceanside, CA	Courtyard		4.28	%	9/1/2016	10/1/2025			13,655		13,269			13,332
Omaha, NE	Hilton Garden Inn		4.28	%	9/1/2016	10/1/2025			22,682		22,040			22,145
Boise, ID	Hampton		4.37	%	5/26/2016	6/11/2026			24,000		23,319			23,422
Burbank, CA	Courtyard		3.55	%	11/3/2016	12/1/2026			25,564		24,752			24,917
San Diego, CA	Courtyard		3.55	%	11/3/2016	12/1/2026			25,473		24,664			24,828
San Diego, CA	Hampton		3.55	%	11/3/2016	12/1/2026			18,963		18,360			18,483
Burbank, CA	SpringHill Suites		3.94	%	3/9/2018	4/1/2028			28,470		28,470			-
Santa Ana, CA	Courtyard		3.94	%	3/9/2018	4/1/2028			15,530		15,530			-
San Jose, CA	Homewood Suites		4.22	%	12/22/2017	1/1/2038			30,000		29,840			30,000
								$	528,600		498,502			457,435
Unamortized fair value adjustment of assumed debt											4,105			4,330
Unamortized debt issuance costs											(2,418	)		(2,748	)
Total										$	500,189		$	459,017

(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) 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 March 31, 2018 and thereafter are as follows (in thousands):

2018 (April - December)	$	9,730
2019		204,505
2020		453,349
2021		97,586
2022		109,252
Thereafter		454,780
		1,329,202
Unamortized fair value adjustment of assumed debt		4,105
Unamortized debt issuance costs related to term loans and mortgage debt		(5,849	)
Total	$	1,327,458

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2018

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 March 31, 2018 and December 31, 2017. All dollar amounts are in thousands.

								Fair Value Asset
	Notional Amount at March 31, 2018
Hedge Type			Origination Date	Maturity Date	Swap Fixed Interest Rate			March 31, 2018		December 31, 2017
Cash flow hedge	$	212,500	5/21/2015	5/18/2020		1.58	%	$	3,478	$	2,033
Cash flow hedge		110,000	7/2/2015	5/18/2020		1.62	%		1,709		951
Cash flow hedge		50,000	4/7/2016	3/31/2021		1.09	%		2,007		1,544
Cash flow hedge		100,000	4/7/2016	3/31/2023		1.33	%		5,819		4,098
Cash flow hedge		75,000	5/31/2017	6/30/2024		1.96	%		2,724		1,043
Cash flow hedge		10,000	8/10/2017	6/30/2024		2.01	%		333		109
	$	557,500						$	16,070	$	9,778

Derivative Instruments, Gain (Loss) [Table Text Block]

The following table presents the effect of derivative instruments in cash flow hedging relationships in the Company’s consolidated statements of operations and comprehensive income for the three months ended March 31, 2018 and 2017 (in thousands):

	Net Unrealized Gain Recognized in Other Comprehensive Income				Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net
	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2018		2017
Interest rate derivatives in cash flow hedging relationships	$	6,348	$	723	$	56	$	(822	)

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Organization and Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Number of Reportable Segments	1
Number of Hotels	241
Aggregate Number of Hotel Rooms	30,585
Number of States in which Hotels are Located	34

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Organization and Summary of Significant Accounting Policies (Details) - Disaggregation of Revenue - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues:
Room	$ 274,836	$ 269,393
Food and beverage	15,710	16,733
Other	7,843	6,799
Total revenue	$ 298,389	$ 292,925

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Investment in Real Estate (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2017
Investment in Real Estate (Details) [Line Items]
Number of Hotels	241
Aggregate Number of Hotel Rooms	30,585
Number of States in which Hotels Are Located	34
Revenues (in Dollars)	$ 298,389	$ 292,925
Operating Income (Loss) (in Dollars)	54,264	46,332
Impairment of Real Estate (in Dollars)	$ 0	$ 7,875
Execution of Sales Contracts in April 2017 Terminated in May 2017 [Member] | Hotels Identified for Potential Sale 1Q 2017 [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels		2
Impairment of Real Estate (in Dollars)		$ 7,900
Hotels Under Contract [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels	2
Purchase Contract Gross Purchase Price (in Dollars)	$ 65,000
Hotel Acquisitions [Member]
Investment in Real Estate (Details) [Line Items]
Number of Hotels	2	1	6
Revenues (in Dollars)	$ 2,400	$ 700
Operating Income (Loss) (in Dollars)	$ 800	$ 40

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Investment in Real Estate (Details) - Investment in Real Estate - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Investment in Real Estate [Abstract]
Land	$ 730,763	$ 720,465
Building and Improvements	4,425,158	4,362,929
Furniture, Fixtures and Equipment	437,084	428,734
Franchise Fees	12,665	12,315
	5,605,670	5,524,443
Less Accumulated Depreciation	(775,894)	(731,284)
Investment in Real Estate, net	$ 4,829,776	$ 4,793,159

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Investment in Real Estate (Details) - Hotel Acquisitions $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Rooms		30,585
Hampton Atlanta, GA [Member]
Business Acquisition [Line Items]
State		GA
Brand		Hampton
Manager		McKibbon
Date Acquired		Feb. 05, 2018
Rooms		119
Gross Purchase Price	[1]	$ 24,000
Hampton Memphis, TN [Member]
Business Acquisition [Line Items]
State		TN
Brand		Hampton
Manager		Crestline
Date Acquired		Feb. 05, 2018
Rooms		144
Gross Purchase Price	[1]	$ 39,000
Total [Member]
Business Acquisition [Line Items]
Rooms		263	784
Gross Purchase Price	[1]	$ 63,000	$ 161,770

[1] The gross purchase price excludes transaction costs.

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Investment in Real Estate (Details) - Hotel Acquisitions $ in Thousands		3 Months Ended	12 Months Ended
		Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Rooms		30,585
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	[1]		$ 18,034
Hilton Garden Inn Birmingham, AL [Member]
Business Acquisition [Line Items]
State			AL
Brand	[2]		Hilton Garden Inn
Manager			LBA
Date Acquired			Sep. 12, 2017
Rooms			104
Gross Purchase Price	[1]		$ 19,162
Home2 Suites Birmingham, AL [Member]
Business Acquisition [Line Items]
State			AL
Brand	[2]		Home2 Suites
Manager			LBA
Date Acquired			Sep. 12, 2017
Rooms			106
Gross Purchase Price	[1]		$ 19,276
Residence Inn Portland, ME [Member]
Business Acquisition [Line Items]
State			ME
Brand			Residence Inn
Manager			Pyramid
Date Acquired			Oct. 13, 2017
Rooms			179
Gross Purchase Price	[1]		$ 55,750
Residence Inn Salt Lake City, UT [Member]
Business Acquisition [Line Items]
State			UT
Brand			Residence Inn
Manager			Huntington
Date Acquired			Oct. 20, 2017
Rooms			136
Gross Purchase Price	[1]		$ 25,500
Home2 Suites Anchorage, AK [Member]
Business Acquisition [Line Items]
State			AK
Brand			Home2 Suites
Manager			Stonebridge
Date Acquired			Dec. 01, 2017
Rooms			135
Gross Purchase Price	[1]		$ 24,048
Total [Member]
Business Acquisition [Line Items]
Rooms		263	784
Gross Purchase Price	[1]	$ 63,000	$ 161,770

[1] The gross purchase price excludes transaction costs.

[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.

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Investment in Real Estate (Details) - Outstanding Contracts $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Rooms	30,585
Hotels Under Contract [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Rooms	338
Refundable Deposits	$ 503
Gross Purchase Price	$ 65,036
Hotels Under Contract [Member] | Hotels Under Construction [Member] | Hampton Phoenix, AZ [Member]
Investment in Real Estate (Details) - Outstanding Contracts [Line Items]
Brand	Hampton	[1]
Date of Purchase Contract	Oct. 25, 2016
Rooms	210
Refundable Deposits	$ 500
Gross Purchase Price	$ 44,300
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
Rooms	128
Refundable Deposits	$ 3
Gross Purchase Price	$ 20,736

[1] Newly constructed hotel was acquired on May 2, 2018, the same day the hotel opened for business.

[2] This hotel is currently under construction. The table shows the expected number of rooms upon hotel completion and the expected franchise brand. Assuming all conditions to closing are met, the purchase of this hotel is expected to close during the fourth quarter of 2018. 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 (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt (Details) [Line Items]
Debt Issuance Costs, Net (in Dollars)	$ 5,849
Derivative, Notional Amount (in Dollars)	557,500
Long-term Debt, Gross (in Dollars)	$ 1,329,202
Mortgage Debt [Member]
Debt (Details) [Line Items]
Debt Instrument, Maturity Date, Description	maturity dates ranging from June 2020 to January 2038
Long-term Debt, Gross (in Dollars)	$ 498,500
Number of Hotel Properties Used to Secure Debt	31
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%
$150 Million Unsecured Term Loan Facility [Member]
Debt (Details) [Line Items]
Term Loan Facility, Maximum Borrowing Capacity (in Dollars)	$ 150,000
Debt Instrument, Description of Variable Rate Basis	one-month LIBOR
$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%
$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%
Funded During 2016 [Member] | $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
Funded During 2016 [Member] | $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
Funded During 2017 [Member] | $85 Million Unsecured Term Loan [Member]
Debt (Details) [Line Items]
Debt Instrument, Maturity Date	Jul. 25, 2024
Debt Instrument, Description of Variable Rate Basis	one-month LIBOR
Debt Instrument, Face Amount (in Dollars)	$ 85,000
$965 Million Unsecured Credit Facility [Member]
Debt (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars)	$ 965,000
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)	$ 1,300	$ 1,700
$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]
Derivative, Notional Amount (in Dollars)	$ 322,500
Debt Instrument, Interest Rate, Effective Percentage	3.10%
$965 Million Unsecured Credit Facility [Member] | Funded During 2015 [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
Number of Term Loans	3
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 March 31, 2018.

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Debt (Details) - Revolving Credit Facility and Term Loans - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Revolving credit facility outstanding balance (in Dollars)		$ 170,700	$ 106,900
Outstanding balance (in Dollars)		1,329,202
Unamortized debt issuance costs (in Dollars)		(5,849)
Total term loans (in Dollars)		656,569	656,279
Debt carrying value (in Dollars)		$ 1,327,458	1,200,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maturity date		May 18, 2019
Revolving credit facility outstanding balance (in Dollars)	[1]	$ 170,700	$ 106,900
Interest rate	[2]	3.43%	3.11%
$425 Million Term Loans [Member]
Debt Instrument [Line Items]
Maturity date		May 18, 2020
Interest rate	[3]	3.16%	3.09%
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%	3.76%
Outstanding balance (in Dollars)		$ 85,000	$ 85,000
Total Term Loans [Member]
Debt Instrument [Line Items]
Outstanding balance (in Dollars)		660,000	660,000
Unamortized debt issuance costs (in Dollars)		(3,431)	(3,721)
Total term loans (in Dollars)		656,569	656,279
Total Revolving Credit Facility and Term Loans [Member]
Debt Instrument [Line Items]
Debt carrying value (in Dollars)		$ 827,269	$ 763,179

[1] Unamortized debt issuance costs related to the revolving credit facility totaled approximately $1.3 million and $1.7 million as of March 31, 2018 and December 31, 2017, 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 at the balance sheet date 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, through maturity. See Note 4 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, through maturity. See Note 4 for more information on the interest rate swap agreements.

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Debt (Details) - Mortgage Note Debt - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018	Dec. 31, 2017
Debt (Details) - Mortgage Note Debt [Line Items]
Outstanding Balance		$ 1,329,202
Unamortized fair value adjustment of assumed debt		4,105
Unamortized debt issuance costs		(5,849)
Total		$ 500,189	$ 459,017
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		$ 15,687	15,774
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		$ 7,719	7,754
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		$ 14,303	14,368
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		$ 14,303	14,368
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		$ 10,334	10,412
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		$ 11,069	11,152
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		$ 5,173	5,212
Courtyard Rancho Bernardo / San Diego, 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		$ 13,591	13,692
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		$ 10,960	11,042
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		$ 25,496	25,687
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		$ 20,408	20,560
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		$ 7,872	7,932
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		$ 8,484	8,549
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		$ 5,895	5,943
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		$ 7,424	7,483
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		$ 16,599	16,733
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		$ 14,903	15,022
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	[2]	Aug. 01, 2024
Principal Assumed or Originated		$ 11,199
Outstanding Balance		$ 10,567	10,637
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	[2]	Aug. 01, 2024
Principal Assumed or Originated		$ 11,199
Outstanding Balance		$ 10,567	10,637
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		$ 24,747	24,919
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		$ 9,324	9,386
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		$ 32,833	33,046
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		$ 13,269	13,332
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		$ 22,040	22,145
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		$ 23,319	23,422
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		$ 24,752	24,917
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		$ 24,664	24,828
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		$ 18,360	18,483
SpringHill Suites Burbank, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		SpringHill Suites
Interest Rate	[1]	3.94%
Loan Assumption or Origination Date		Mar. 09, 2018
Maturity Date		Apr. 01, 2028
Principal Assumed or Originated		$ 28,470
Outstanding Balance		$ 28,470	0
Courtyard Santa Ana, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Courtyard
Interest Rate	[1]	3.94%
Loan Assumption or Origination Date		Mar. 09, 2018
Maturity Date		Apr. 01, 2028
Principal Assumed or Originated		$ 15,530
Outstanding Balance		$ 15,530	0
Homewood Suites San Jose, CA [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Brand		Homewood Suites
Interest Rate	[1]	4.22%
Loan Assumption or Origination Date		Dec. 22, 2017
Maturity Date		Jan. 01, 2038
Principal Assumed or Originated		$ 30,000
Outstanding Balance		29,840	30,000
Total [Member]
Debt (Details) - Mortgage Note Debt [Line Items]
Principal Assumed or Originated		528,600
Outstanding Balance		498,502	457,435
Unamortized fair value adjustment of assumed debt		4,105	4,330
Unamortized debt issuance costs		(2,418)	(2,748)
Total		$ 500,189	$ 459,017

[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] 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	Mar. 31, 2018	Dec. 31, 2017
Future Minimum Debt Payments [Abstract]
2018 (April - December)	$ 9,730
2019	204,505
2020	453,349
2021	97,586
2022	109,252
Thereafter	454,780
	1,329,202
Unamortized fair value adjustment of assumed debt	4,105
Unamortized debt issuance costs related to term loans and mortgage debt	(5,849)
Total	$ 1,327,458	$ 1,200,000

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Long-term Debt, Fair Value	$ 1,300,000	$ 1,200,000
Long-term Debt	$ 1,327,458	$ 1,200,000
Derivative, Description of Terms	Company pays a fixed rate of interest and receives a floating rate of interest equal to the one-month LIBOR
Net unrealized gains in accumulated other comprehensive income (loss) expected to be reclassified to interest expense within the next 12 months	$ 3,200

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Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Fair Value of Financial Instruments (Details) - Schedule of Interest Rate Swap Agreements [Line Items]
Notional amount	$ 557,500
Fair value asset (liability)	16,070	$ 9,778
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)	$ 3,478	2,033
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)	$ 1,709	951
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)	$ 2,007	1,544
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)	$ 5,819	4,098
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)	$ 2,724	1,043
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)	$ 333	$ 109

XML

Fair Value of Financial Instruments (Details) - Derivative Instruments, Gain (Loss) Recognized - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Derivative Instruments, Gain (Loss) Recognized [Abstract]
Net Unrealized Gain Recognized in Other Comprehensive Income	$ 6,348	$ 723
Net Unrealized Gain (Loss) Reclassified from Accumulated Other Comprehensive Income to Interest and Other Expense, net	$ 56	$ (822)

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Related Parties (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
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	$ 30	$ 40
Reimbursement Received From Related Parties For Their Proportionate Share of Staffing and Office Related Costs Provided by Apple Hospitality [Member]
Related Parties (Details) [Line Items]
Related Party Transaction, Amounts of Transaction	(200)	$ (200)
Due from Related Parties	$ 300		$ 300

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Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended		14 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Mar. 31, 2018	Dec. 31, 2017
Shareholders' Equity (Details) [Line Items]
Payments of Ordinary Dividends, Common Stock	$ 69,144	$ 66,908
Dividends Payable	$ 23,020	$ 22,301	$ 23,020
Annual Distribution [Member]
Shareholders' Equity (Details) [Line Items]
Annual Distribution rate (in Dollars per share)	$ 1.20
Distributions [Member]
Shareholders' Equity (Details) [Line Items]
Common Stock, Dividends, Per Share, Cash Paid (in Dollars per share)	$ 0.30	$ 0.30
Payments of Ordinary Dividends, Common Stock	$ 69,100	$ 66,900
Dividends Payable, Amount Per Share (in Dollars per share)	$ 0.10		$ 0.10	$ 0.10
Dividends Payable	$ 23,000		$ 23,000	$ 23,000
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)	0.2	0.0	7.2
Shares Issued Weighted Average Market Sales Price Per Share (in Dollars per share)	$ 19.73		$ 19.56
Proceeds From Issuance of Common Stock, Gross	$ 4,800		$ 139,800
Stock Issuance Program, Available for Issuance	160,200		160,200
Share Repurchase Program [Member]
Shareholders' Equity (Details) [Line Items]
Stock Repurchase Program, Authorized Amount	$ 475,000		475,000
Stock Repurchased and Retired During Period, Shares (in Shares)	0.3	0.0
Stock Repurchased During Period, Weighted Average Market Purchase Price Per Share (in Dollars per share)	$ 16.89
Stock Repurchased and Retired During Period, Value	$ 4,300
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 463,200		$ 463,200
Share Repurchase Program, End Date	July 2018

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Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
2018 Executive Management 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	$ 1.9
Accrued Bonuses, Current	$ 1.9
Portion of Awards Paid in Cash	25.00%
Portion of Awards Issued in Equity	75.00%
2017 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Labor and Related Expense		$ 2.0
Equity Awards Vesting at the End of 2018 [Member] | 2018 Executive Management 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 in December 2019 [Member] | 2018 Executive Management 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 2018 [Member] | 2017 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares)	367,333
Stock Issued During Period, Shares, Share-based Compensation, Forfeited (in Shares)	48,533
Shares Issued, Price Per Share (in Dollars per share)	$ 16.92
Stock Issued During Period, Value, Share-based Compensation, Gross	$ 7.0
Accrued Bonuses, Share Based Compensation, Current			$ 5.8
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 1.2
Share Based Compensation [Member] | Equity Awards Issued in First Quarter of 2017 [Member] | 2016 Executive Management 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
Share Based Compensation [Member] | Unrestricted Shares at Time of Issuance [Member] | Equity Awards Issued in First Quarter of 2018 [Member] | 2017 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures (in Shares)	223,421
Share Based Compensation [Member] | Unrestricted Shares at Time of Issuance [Member] | Equity Awards Issued in First Quarter of 2017 [Member] | 2016 Executive Management 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] | Restricted Shares Vesting on December 14, 2018 [Member] | Equity Awards Issued in First Quarter of 2018 [Member] | 2017 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)	143,912
Allocated Share-based Compensation Expense	$ 0.3
Share Based Compensation [Member] | Restricted Shares Vesting on December 15, 2017 [Member] | Equity Awards Issued in First Quarter of 2017 [Member] | 2016 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Forfeited (in Shares)			13,129
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)		41,277
Allocated Share-based Compensation Expense		$ 0.1	$ 0.4
Potential Aggregate Payout [Member] | Minimum [Member] | 2018 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Labor and Related Expense	0.0
Potential Aggregate Payout [Member] | Maximum [Member] | 2018 Executive Management Incentive Plan [Member]
Compensation Plans (Details) [Line Items]
Labor and Related Expense	$ 20.0

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Legal Proceedings (Details) - Settlement of 2014 DRIP Litigation [Member] - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2018	Dec. 31, 2016	Dec. 31, 2017
Legal Proceedings (Details) [Line Items]
Estimated Litigation Liability			$ 5.5
Transaction and Litigation Costs (Reimbursements)		$ 5.5
Payments for Legal Settlements	$ 5.5

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Subsequent Events (Details) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended
	May 02, 2018 USD ($)	Apr. 30, 2018 USD ($) $ / shares	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)
Subsequent Events (Details) [Line Items]
Payments of Ordinary Dividends, Common Stock			$ 69,144	$ 66,908
Aggregate Number of Hotel Rooms			30,585
Hotels Under Contract [Member]
Subsequent Events (Details) [Line Items]
Aggregate Number of Hotel Rooms			338
Purchase Contract Gross Purchase Price			$ 65,036
Subsequent Event [Member]
Subsequent Events (Details) [Line Items]
Payments of Ordinary Dividends, Common Stock		$ 23,000
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		May 15, 2018
Subsequent Event [Member] | Hotel Acquisitions [Member] | Hampton Inn & Suites Phoenix, AZ [Member]
Subsequent Events (Details) [Line Items]
Aggregate Number of Hotel Rooms	210
Acquisition Consideration Transferred	$ 44,300
Subsequent Event [Member] | Hotels Under Construction [Member] | Hotels Under Contract [Member] | Hampton Inn & Suites and Home2 Suites Cape Canaveral, FL [Member]
Subsequent Events (Details) [Line Items]
Aggregate Number of Hotel Rooms		224
Purchase Contract Gross Purchase Price		$ 46,700