Redeemable Noncontrolling Interests in Operating Partnership

3 Months Ended

Mar. 31, 2026

Redeemable Noncontrolling Interests in Operating Partnership

Redeemable noncontrolling interests in the operating partnership represent the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP units”) that are vested. Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.

LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, generally have vesting periods of three years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of our operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of our operating partnership; or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership.

As of March 31, 2026, there were approximately 77,000 issued and outstanding LTIP and Performance LTIP units. All LTIP and Performance LTIP units had reached full economic parity with, and are convertible into, common units.

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:


	March 31, 2026			December 31, 2025
Redeemable noncontrolling interests in Braemar OP (in thousands)	$	15,925		$	19,005
Adjustments to redeemable noncontrolling interests (1) (in thousands)	$	3,125		$	5,830
Ownership percentage of operating partnership	6.61		%	6.91		%

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(1) Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net (income) loss to the redeemable noncontrolling interests as illustrated in the table below (in thousands):


	Three Months Ended March 31,
		2026		2025
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership		$	(347)	$	262
Distributions declared to holders of common units, LTIP units and Performance LTIP units		—		344

The following table presents the common units redeemed/exchanged for common stock (in thousands):


	Three Months Ended March 31,
		2026		2025
Units redeemed/exchanged		460		457
Fair value of common units redeemed (1)		$	1,391	$	1,381

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(1) The redemption value is the greater of accumulated historical cost or fair value. The accumulated historical cost of the converted units for the three months ended March 31, 2026 and 2025 was $722,000 and $2.3 million, respectively.

The following table presents the common units redeemed for cash (in thousands):


	Three Months Ended March 31,
		2026		2025
Units redeemed		—		35
Fair value of common units redeemed		$	—	$	92