Attached files
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| 8-K - 8-K - Service Properties Trust | svc-20210507.htm |
| EX-99.1 - EX-99.1 - Service Properties Trust | ex991svcq12021er.htm |
Royal Sonesta Chase Park Plaza St. Louis, MO FIRST QUARTER 2021 Supplemental Operating and Financial Data ALL AMOUNTS IN THIS REPORT ARE UNAUDITED. Exhibit 99.2
Supplemental Q1 2021 2 Table of Contents CORPORATE INFORMATION Company Profile............................................................................................................................................................................................. 3 Investor Information....................................................................................................................................................................................... 4 Research Coverage........................................................................................................................................................................................ 5 FINANCIALS Key Financial Data.......................................................................................................................................................................................... 6 Condensed Consolidated Balance Sheets................................................................................................................................................. 7 Condensed Consolidated Statements of Income (Loss)........................................................................................................................... 8 Calculation of FFO and Normalized FFO.................................................................................................................................................... 9 Calculation of EBITDA, EBITDAre and Adjusted EBITDAre...................................................................................................................... 10 Notes to Condensed Consolidated Statements of Income (Loss), and calculations of FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, Hotel EBITDA and Adjusted Hotel EBITDA...................................................................................... 11 Debt Summary................................................................................................................................................................................................ 12 Debt Maturity Schedule................................................................................................................................................................................. 13 Leverage Ratios, Coverage Ratios and Public Debt Covenants............................................................................................................... 14 Capital Expenditures and Restricted Cash Activity.................................................................................................................................... 15 Property Acquisitions and Dispositions Information Since January 1, 2021.......................................................................................... 16 PORTFOLIO INFORMATION Portfolio Summary.......................................................................................................................................................................................... 17 Consolidated Portfolio by Brand Affiliation................................................................................................................................................ 18 Consolidated Portfolio Diversification by Industry.................................................................................................................................... 19 Hotel Portfolio by Brand................................................................................................................................................................................ 20 Hotel Operating Statistics by Service Level - Comparable Hotels........................................................................................................... 21 Hotel Operating Statistics by Service Level - All Hotels............................................................................................................................ 22 Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA - Comparable Hotels................................................. 23 Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA - All Hotels.................................................................. 24 Net Lease Portfolio by Brand........................................................................................................................................................................ 25 Net Lease Portfolio by Industry.................................................................................................................................................................... 26 Net Lease Portfolio by Tenant (Top 10)....................................................................................................................................................... 27 Net Lease Portfolio Expiration Schedule..................................................................................................................................................... 28 Net Lease Portfolio Occupancy Summary................................................................................................................................................... 29 Non-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS................................................................................................................................. 30 WARNING CONCERNING FORWARD-LOOKING STATEMENTS................................................................................................................................... 32 Please refer to Non-GAAP Financial Measures and Certain Definitions for terms used throughout this document. SVC Nasdaq Listed
Supplemental Q1 2021 3 Corporate Headquarters: Two Newton Place 255 Washington Street, Suite 300 Newton, MA 02458-1634 (t) (617) 964-8389 Stock Exchange Listing: Nasdaq Trading Symbol: Common Shares: SVC Key Data (as of and for the three months ended March 31, 2021): (dollars in 000s) Total properties: 1,108 Hotels 310 Net lease properties 798 Number of hotel rooms/suites 49,015 Total net lease square feet 13,452,608 Q1 2021 Total revenues $ 261,170 Q1 2021 Net loss $ (194,990) Q1 2021 Normalized FFO $ (41,996) Q1 2021 Adjusted EBITDAre $ 48,705 The Company: Service Properties Trust, or SVC, we, our or us, is a real estate investment trust, or REIT, which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties across the United States and in Puerto Rico and Canada with 142 distinct brands across 22 distinct industries. SVC is a component of 139 market indices and it comprises more than 1% of the following index as of March 31, 2021: Bloomberg REIT Hotels Index (BBREHOTL). Management: SVC is managed by The RMR Group LLC, or RMR LLC, the majority owned operating subsidiary of The RMR Group Inc. (Nasdaq: RMR). RMR is an alternative asset management company that is focused on commercial real estate and related businesses. RMR primarily provides management services to publicly traded real estate companies, privately held real estate funds and real estate related operating businesses. As of March 31, 2021, RMR had $31.8 billion of real estate assets under management and the combined RMR managed companies had approximately $10 billion of annual revenues, nearly 2,100 properties and approximately 43,000 employees. We believe that being managed by RMR is a competitive advantage for SVC because of RMR’s depth of management and experience in the real estate industry. We also believe RMR provides management services to us at costs that are lower than we would have to pay for similar quality services if we were self- managed. Company Profile RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 4 Board of Trustees Laurie B. Burns Robert E. Cramer Donna D. Fraiche Independent Trustee Independent Trustee Independent Trustee John L. Harrington William A. Lamkin John G. Murray Lead Independent Trustee Independent Trustee Managing Trustee Adam D. Portnoy Chair of the Board & Managing Trustee Senior Management John G. Murray Brian E. Donley Todd W. Hargreaves President and Chief Executive Officer Chief Financial Officer and Treasurer Vice President and Chief Investment Officer Contact Information Investor Relations Inquiries Service Properties Trust Financial, investor and media inquiries should be directed to: Two Newton Place Kristin Brown, Director, Investor Relations at 255 Washington Street/Suite 300 (617) 796-8232, or kbrown@rmrgroup.com. Newton, MA 02458-1634 (t) (617) 964-8389 (email) info@svcreit.com (website) www.svcreit.com Investor Information RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 5 Equity Research Coverage (1) B. Riley Securities, Inc. BTIG Janney Montgomery Scott Wells Fargo Securities Bryan Maher James Sullivan Tyler Batory Dori Kesten (646) 885-5423 (212) 738-6139 (215) 665-4448 (617) 603-4233 bmaher@brileyfin.com jsullivan@btig.com tbatory@janney.com dori.kesten@wellsfargo.com Rating Agencies (1) Senior Unsecured Debt Ratings Moody’s Investors Service S&P Global Standard & Poor's: BB-/BB* Reed Valutas Michael Souers Moody's: Ba2/ Ba1* (212) 553-4169 (212) 438-2508 * BB/ Ba1 rating assigned to guaranteed Senior Unsecured Notes. reed.valutas@moodys.com michael.souers@spglobal.com Research Coverage (1) SVC is followed by the analysts and its publicly held debt is rated by the rating agencies listed above. Please note that any opinions, estimates or forecasts regarding SVC's performance made by these analysts or agencies do not represent opinions, forecasts or predictions of SVC or its management. SVC does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts or agencies. RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 6 As of and For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Selected Balance Sheet Data: Total gross assets $ 12,892,150 $ 11,967,429 $ 12,009,267 $ 12,026,904 $ 12,206,842 Total assets $ 9,514,515 $ 8,687,319 $ 8,796,673 $ 8,879,545 $ 8,996,623 Total liabilities $ 7,607,983 $ 6,584,529 $ 6,554,589 $ 6,533,824 $ 6,614,357 Total shareholders' equity $ 1,906,532 $ 2,102,790 $ 2,242,084 $ 2,345,721 $ 2,382,266 Selected Income Statement Data: Total revenues $ 261,170 $ 270,043 $ 296,495 $ 214,940 $ 483,776 Net loss $ (194,990) $ (137,740) $ (102,642) $ (37,349) $ (33,650) FFO $ (62,456) $ (43,124) $ 23,195 $ 117,924 $ 123,084 Normalized FFO $ (41,996) $ (22,474) $ 23,195 $ 78,158 $ 123,084 Adjusted EBITDAre $ 48,705 $ 64,953 $ 103,611 $ 152,166 $ 195,137 Per Common Share Data (basic and diluted): Net loss $ (1.19) $ (0.84) $ (0.62) $ (0.23) $ (0.20) FFO $ (0.38) $ (0.26) $ 0.14 $ 0.72 $ 0.75 Normalized FFO $ (0.26) $ (0.14) $ 0.14 $ 0.48 $ 0.75 Dividend Data: Annualized dividends paid per share during the period $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 2.16 Annualized dividend yield (at end of period) 0.3 % 0.3 % 0.5 % 0.6 % 40.0 % Normalized FFO payout ratio (3.8) % (7.1) % 7.1 % 2.1 % 72.0 % (dollars in thousands, except per share data) Key Financial Data RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 7 March 31, 2021 December 31, 2020 ASSETS Real estate properties: Land $ 2,037,534 $ 2,030,440 Buildings, improvements and equipment 9,152,881 9,131,832 Total real estate properties, gross 11,190,415 11,162,272 Accumulated depreciation (3,377,635) (3,280,110) Total real estate properties, net 7,812,780 7,882,162 Acquired real estate leases and other intangibles, net 312,765 325,845 Assets held for sale 13,805 13,543 Cash and cash equivalents 874,455 73,332 Restricted cash 5,096 18,124 Due from related persons 52,620 55,530 Other assets, net 442,994 318,783 Total assets $ 9,514,515 $ 8,687,319 LIABILITIES AND SHAREHOLDERS' EQUITY Revolving credit facility $ 1,000,000 $ 78,424 Senior unsecured notes, net 6,133,376 6,130,166 Accounts payable and other liabilities 428,626 345,373 Due to related persons 45,981 30,566 Total liabilities 7,607,983 6,584,529 Commitments and contingencies Shareholders' equity: Common shares of beneficial interest, $.01 par value; 200,000,000 shares authorized; 164,823,833 shares issued and outstanding 1,648 1,648 Additional paid in capital 4,550,765 4,550,385 Cumulative other comprehensive loss (760) (760) Cumulative net income available for common shareholders 2,985,273 3,180,263 Cumulative common distributions (5,630,394) (5,628,746) Total shareholders' equity 1,906,532 2,102,790 Total liabilities and shareholders' equity $ 9,514,515 $ 8,687,319 Condensed Consolidated Balance Sheets (dollars in thousands, except share data) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 8 Three Months Ended March 31, 2021 2020 Revenues: Hotel operating revenues (1) $ 168,953 $ 383,503 Rental income (2) 92,217 100,273 Total revenues 261,170 483,776 Expenses: Hotel operating expenses (1)(3)(9)(11)(13) 214,987 271,148 Other operating expenses 3,417 3,759 Depreciation and amortization 124,368 127,926 General and administrative 12,657 14,024 Loss on asset impairment (4) 1,211 16,740 Total expenses 356,640 433,597 Loss on sale of real estate, net (5) (9) (6,911) Unrealized losses on equity securities, net (6) (6,481) (5,045) Interest income 57 262 Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $4,355 and $3,288 respectively) (89,391) (71,075) Loss before income taxes and equity in losses of an investee (191,294) (32,590) Income tax expense (853) (342) Equity in losses of an investee (7) (2,843) (718) Net loss $ (194,990) $ (33,650) Weighted average common shares outstanding (basic) 164,498 164,370 Weighted average common shares outstanding (diluted) 164,498 164,370 Net loss per common share (basic and diluted) $ (1.19) $ (0.20) (amounts in thousands, except per share data) Condensed Consolidated Statements of Income (Loss) RETURN TO TABLE OF CONTENTS See accompanying notes on page 11.
Supplemental Q1 2021 9 For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net loss $ (194,990) $ (137,740) $ (102,642) $ (37,349) $ (33,650) Add (Less): Depreciation and amortization 124,368 121,351 122,204 127,427 127,926 Loss on asset impairment (4) 1,211 254 10,248 28,514 16,740 (Gain) loss on sale of real estate, net (5) 9 (11,916) (109) 2,853 6,911 Unrealized (gains) losses on equity securities, net (6) 6,481 (15,473) (5,606) (3,848) 5,045 Adjustments to reflect our share of FFO attributable to an investee (7) 465 400 (900) 327 112 FFO (62,456) (43,124) 23,195 117,924 123,084 Add (Less): Adjustments to reflect our share of Normalized FFO attributable to an investee (7) 825 964 — — — Loss on early extinguishment of debt (8) — 2,424 — 6,970 — Loss contingency (9) — 3,962 — — — Gain on insurance settlement, net of tax (10) — (1,800) — (46,736) — Hotel manager transition related costs (11) 19,635 15,100 — — — Normalized FFO $ (41,996) $ (22,474) $ 23,195 $ 78,158 $ 123,084 Weighted average shares outstanding (basic) 164,498 164,498 164,435 164,382 164,370 Weighted average shares outstanding (diluted) 164,498 164,498 164,435 164,382 164,370 Basic and diluted per share common share amounts: Net loss $ (1.19) $ (0.84) $ (0.62) $ (0.23) $ (0.20) FFO $ (0.38) $ (0.26) $ 0.14 $ 0.72 $ 0.75 Normalized FFO $ (0.26) $ (0.14) $ 0.14 $ 0.48 $ 0.75 Calculation of FFO and Normalized FFO (amounts in thousands, except per share data) RETURN TO TABLE OF CONTENTS See accompanying notes on page 11.
Supplemental Q1 2021 10 For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Net loss $ (194,990) $ (137,740) $ (102,642) $ (37,349) $ (33,650) Add (Less): Interest expense 89,391 82,811 80,532 72,072 71,075 Income tax expense (benefit) (10) 853 505 (296) 16,660 342 Depreciation and amortization 124,368 121,351 122,204 127,427 127,926 EBITDA 19,622 66,927 99,798 178,810 165,693 Add (Less): Loss on asset impairment (4) 1,211 254 10,248 28,514 16,740 (Gain) loss on sale of real estate, net (5) 9 (11,916) (109) 2,853 6,911 Adjustments to reflect our share of EBITDAre attributable to an investee (7) 543 — — — — EBITDAre 21,385 55,265 109,937 210,177 189,344 Add (less): Unrealized (gains) losses on equity securities, net (6) 6,481 (15,473) (5,606) (3,848) 5,045 Adjustments to reflect our share of Adjusted EBITDAre attributable to an investee (7) 825 2,755 (1,583) 421 158 Loss on early extinguishment of debt (8) — 2,424 — 6,970 — Loss contingency (9) — 3,962 — — — Gain on insurance settlement (10) — — — (62,386) — Hotel manager transition related costs (11) 19,635 15,100 — — — General and administrative expense paid in common shares (12) 379 920 863 832 590 Adjusted EBITDAre $ 48,705 $ 64,953 $ 103,611 $ 152,166 $ 195,137 Calculation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) See accompanying notes on page 11. RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 11 (1) As of March 31, 2021, we owned 310 hotels; 305 of these hotels were managed by hotel operating companies. We have entered into an agreement to sell five hotels and we have entered into a short term lease of these properties with the buyer in anticipation of the sale. Our condensed consolidated statements of income (loss) include hotel operating revenues and expenses of managed hotels and rental income from our leased hotels. (2) We reduced rental income by $1,883 and $3,543 for the three months ended March 31, 2021 and 2020, respectively, to record scheduled rent changes under certain of our leases, the deferred rent obligations under our leases with TravelCenters of America Inc., or TA, and the estimated future payments to us under our leases with TA for the cost of removing underground storage tanks on a straight-line basis. (3) When managers of our hotels are required to fund the shortfalls of minimum returns under the terms of our management agreements or their guarantees, we reflect such fundings (including security deposit applications) in our condensed consolidated statements of income (loss) as a reduction of hotel operating expenses. The net reduction to hotel operating expenses was $10,392 and $70,506 for the three months ended March 31, 2021 and 2020, respectively. (4) We recorded a $1,211 loss on asset impairment during the three months ended March 31, 2021 to reduce the carrying value of two net lease properties to their estimated fair value. We recorded a $254 loss on asset impairment during the three months ended December 31, 2020 to reduce the carrying value of five net lease properties to their estimated fair value. We recorded a $10,248 loss on asset impairment during the three months ended September 30, 2020 to reduce the carrying value of one hotel and two net lease properties to their estimated fair value. We recorded a $28,514 loss on asset impairment during the three months ended June 30, 2020 to reduce the carrying value of 17 hotel properties and four net lease properties to their estimated fair value. We recorded a $16,740 loss on asset impairment during the three months ended March 31, 2020 to reduce the carrying value of two net lease properties to their estimated fair value less costs to sell and two hotels to their estimated fair value. (5) We recorded a $9 loss on sale of real estate during the three months ended March 31, 2021 in connection with the sale of one net lease property. We recorded a a $11,916 net gain on sale of real estate during the three months ended December 31, 2020 in connection with the sales of 18 hotels and six net lease properties, a $109 net gain on sale of real estate during the three months ended September 30, 2020 in connection with the sales of five net lease properties, a $2,853 net loss on sale of real estate during the three months ended June 30, 2020 in connection with the sales of four net lease properties and a $6,911 loss on sale of real estate during the three months ended March 31, 2020 in connection with the sale of six net lease properties. (6) Unrealized gains (losses) on equity securities, net represents the adjustment required to adjust the carrying value of our investment in TA common shares to their fair value. (7) Represents our proportionate share from our equity investment in Sonesta. (8) We recorded a loss of $2,424 and $6,970 during the quarters ended December 31, 2020 and June 30, 2020, respectively, on extinguishment of debt relating to our repayment of our $400 million term loan and certain unsecured senior notes. (9) Hotel operating expenses for the three months ended December 31, 2020 includes a $3,962 loss contingency related to a litigation matter at certain hotels. (10) We recorded a $62,386 gain on insurance settlement during the three months ended June 30, 2020 for insurance proceeds received for our leased hotel in San Juan, PR related to Hurricane Maria. Under GAAP, we are required to increase the building basis of our San Juan hotel for the amount of the insurance proceeds. We also recorded a $13,850 deferred tax liability as a result of the book value to tax basis difference related to this accounting in the three months ended March 31, 2021. (11) Hotel operating expenses for the three months ended March 31, 2021 includes $19,635 of hotel manager transition related costs resulting from the rebranding of 88 hotels during the period. Hotel operating expenses for the three months ended December 31, 2020 includes $15,100 of hotel manager transition related costs resulting from the rebranding of 112 hotels during the period. (12) Amounts represent the equity compensation for our Trustees, officers and certain other employees of our manager. (13) Various percentages of total sales at certain of our hotels are escrowed as reserves for future renovations or refurbishments, or FF&E reserve escrows. We own all the FF&E reserve escrows for our hotels. (14) We are amortizing a liability we recorded for the fair value of our initial investment in Sonesta as a reduction to hotel operating expenses in our condensed consolidated statements of income (loss). Notes to Consolidated Statements of Income (Loss) and Calculations of FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, Hotel EBITDA and Adjusted Hotel EBITDA (dollar in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 12 (1) We are required to pay interest on borrowings under our revolving credit facility at a rate of LIBOR plus a premium of 235 basis points per annum, subject to an interest rate floor of 0.50%. We also pay a facility fee of 30 basis points per annum on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and facility fee are subject to adjustment based upon changes to our credit ratings. The interest rate listed above is as of March 31, 2021. Subject to the payment of an extension fee and meeting certain other conditions, we may extend the maturity date of our credit facility by two additional six month periods. (2) Under the terms of our November 2020 amendment to the credit agreement governing our credit facility, we have provided equity pledges on certain of our property owning subsidiaries and will provide first mortgage liens on 74 properties owned by certain of the pledged subsidiaries to secure our obligations under the credit agreement. (3) The notes are guaranteed by certain of our subsidiaries. (4) The carrying value of our total debt of $7,133,376 as of March 31, 2021 is net of unamortized discounts and premiums and certain issuance costs totaling $66,624. Interest Principal Maturity Due at Years to Rate Balance Date Maturity Maturity Floating Rate Debt: $1,000,000 revolving credit facility (1) (2) 2.850 % $ 1,000,000 7/15/22 $ 1,000,000 1.3 Unsecured Fixed Rate Debt: Senior unsecured notes due 2022 5.000 % 500,000 8/15/22 500,000 1.4 Senior unsecured notes due 2023 4.500 % 500,000 6/15/23 500,000 2.2 Senior unsecured notes due 2024 4.650 % 350,000 3/15/24 350,000 3.0 Senior unsecured notes due 2024 4.350 % 825,000 10/1/24 825,000 3.5 Senior unsecured notes due 2025 4.500 % 350,000 3/15/25 350,000 4.0 Senior unsecured notes due 2025 (3) 7.500 % 800,000 9/15/25 800,000 4.5 Senior unsecured notes due 2026 5.250 % 350,000 2/15/26 350,000 4.9 Senior unsecured notes due 2026 4.750 % 450,000 10/1/26 450,000 5.5 Senior unsecured notes due 2027 4.950 % 400,000 2/15/27 400,000 5.9 Senior unsecured notes due 2027 (3) 5.500 % 450,000 12/15/27 450,000 6.7 Senior unsecured notes due 2028 3.950 % 400,000 1/15/28 400,000 6.8 Senior unsecured notes due 2029 4.950 % 425,000 10/1/29 425,000 8.5 Senior unsecured notes due 2030 4.375 % 400,000 2/15/30 400,000 8.9 Subtotal / weighted average 5.065 % 6,200,000 6,200,000 4.9 Total / weighted average (4) 4.758 % $ 7,200,000 $ 7,200,000 4.4 Debt Summary As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 13 (1) Represents amounts outstanding under our $1.0 billion revolving credit facility at March 31, 2021. Debt Maturity Schedule As of March 31, 2021 RETURN TO TABLE OF CONTENTS (1) $1,000
Supplemental Q1 2021 14 As of and For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Leverage Ratios: Net debt / total gross assets 49.1 % 51.8 % 51.9 % 51.7 % 50.4 % Net debt / gross book value of real estate assets 51.0 % 53.7 % 54.4 % 54.1 % 52.0 % Secured debt/ total assets 0.9 % 0.9 % 14.0 % 13.8 % 0.0 % Variable rate debt / Net debt 15.8 % 1.3 % 7.7 % 7.0 % 13.9 % Coverage Ratios: Rolling four-quarter Adjusted EBITDAre/ rolling four-quarter interest expense 1.14x 1.68x 2.3x 2.9x 3.5x Net debt / rolling four-quarter Adjusted EBITDAre 17.1x 12.0x 9.2x 7.9x 7.2x As of and For the Trailing Twelve Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Public Debt Covenants: Maintenance Covenant Total unencumbered assets / unsecured debt - required minimum 150% 179.6 % 167.3 % 197.2 % 199.5 % 201.5 % Incurrence Covenants (1) Total debt / adjusted total assets - allowable maximum 60.0% 55.4 % 51.3 % 50.4 % 50.1 % 49.6 % Secured debt / adjusted total assets - allowable maximum 40.0% 7.7 % 0.6 % 3.9 % 3.5 % 0.0 % Consolidated income available for debt service / debt service - required minimum 1.50x 1.12x 1.56x 2.05x 2.85x 2.87x Leverage Ratios, Coverage Ratios and Public Debt Covenants RETURN TO TABLE OF CONTENTS (1) As of March 31, 2021, we were below the covenant levels under our debt agreements necessary to incur debt, and, as a result, we will not be able to incur additional debt while below these levels.
Supplemental Q1 2021 15 Capital Expenditures For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Hotel capital improvements & FF&E Reserve fundings (1) $ 28,881 $ 32,153 $ 29,874 $ 39,085 $ 35,015 Net lease capital improvements 156 265 18 221 4,179 Total capital improvements & FF&E Reserve fundings $ 29,037 $ 32,418 $ 29,892 $ 39,306 $ 39,194 Restricted Cash As of and For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Total restricted cash (beginning of period) $ 18,124 $ 38,130 $ 29,652 $ 44,537 $ 53,626 Manager deposits into FF&E Reserve 447 2,782 18,735 — 18,806 SVC fundings into FF&E Reserve: IHG — — — 3,900 — Marriott 7,000 15,400 21,500 28,600 5,800 Hyatt 168 — — — — Radisson — 1,985 — — — Hotel improvements funded from FF&E Reserves (14,198) (26,269) (31,757) (47,385) (48,695) FF&E reserves (end of period) 11,541 32,028 38,130 29,652 29,537 Hotel manager release of FF&E Reserve to SVC (6,445) — — — — Hotel manager deposit (withdrawal) of insurance proceeds — (13,904) — — 15,000 Total restricted cash (end of period) $ 5,096 $ 18,124 $ 38,130 $ 29,652 $ 44,537 (1) Includes amounts we funded into our FF&E reserves and amounts directly reimbursed to our hotel managers for capital expenditures. (dollars in thousands) Capital Expenditures and Restricted Cash Activity RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 16 ACQUISITIONS: Square Footage Purchase Price (1) Average Purchase Price per Room or Suite / Square FootDate Acquired Properties Brand Location Operating Agreement 3/9/2021 — N/A Nashville, TN (2) N/A N/A $ 7,600 N/A DISPOSITIONS: Rooms or Suites/ Square Footage Former Operating Agreement Average Sales Price per Room or Suite / Square FootDate Disposed Properties Brand Location Sales Price (1) 03/16/2021 1 Vacant Chattanooga, TN 2,797 Vacant $ 375 $ 134 04/01/2021 1 Marriott Jacksonville, FL 146 Marriott 9,753 $ 67 04/05/2021 1 Vacant Colorado Springs, CO 32,130 Vacant 1,206 $ 38 3 146/ 34,927 $ 11,334 $67/ $45 Property Acquisitions and Dispositions Information Since January 1, 2021 (dollars in thousands, except per sq. ft. data) (1) Represents cash purchase or sale price and excludes acquisition and closing related costs, respectively. (2) Consists of land adjacent to a property we own in Nashville, TN. RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 17 Number of Properties Hotel Properties 310 Number of hotel rooms 49,015 Net Lease Properties 798 Square feet 13,452,608 Total Properties 1,108 Average hotel property size 158 rooms Average net lease property size 16,858 sq. feet Investments Diversification Facts Hotels $ 6,990,630 Tenants/Operators 174 Net Lease Properties 5,164,029 Brands 142 Total Investments $ 12,154,659 Industries 22 States 47 (37 States, DC, PR, ON) Portfolio Summary As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS (1) Based on investment (1) (1)
Supplemental Q1 2021 18 Brand Affiliation Segment Number of Properties Percent of Total Number of Properties Number of Rooms or Suites (Hotels) / Square Footage (Net Lease) Percent of Total Number of Rooms or Suites (Hotels) / Square Footage (Net Lease) Investment (1) Percent of Total Investment Investment Per Room / SF Sonesta Hotels 256 23.1 % 41,126 83.9 % $ 6,012,659 49.5 % $ 146 TravelCenters of America Net Lease 134 12.1 % 3,720,693 27.7 % 2,289,189 18.8 % 615 Petro Stopping Centers Net Lease 45 4.1 % 1,470,004 10.9 % 1,021,226 8.4 % 695 Hyatt Hotels 22 2.0 % 2,724 5.6 % 302,110 2.5 % 111 Radisson Hotels 9 0.8 % 1,939 4.0 % 291,123 2.4 % 150 Marriott Hotels 17 1.5 % 2,301 4.6 % 236,377 1.9 % 103 IHG Hotels 1 0.1 % 495 1.0 % 123,283 1.0 % 249 AMC Theatres Net Lease 11 1.0 % 575,967 4.3 % 102,580 0.8 % 178 The Great Escape Net Lease 14 1.3 % 542,666 4.0 % 98,242 0.8 % 181 Life Time Fitness Net Lease 3 0.3 % 420,335 3.1 % 92,617 0.8 % 220 Buehler's Fresh Foods Net Lease 5 0.5 % 502,727 3.7 % 76,536 0.6 % 152 Heartland Dental Net Lease 59 5.3 % 234,274 1.7 % 61,120 0.5 % 261 Norms Net Lease 10 0.9 % 63,490 0.5 % 53,673 0.4 % 845 Express Oil Change Net Lease 23 2.1 % 83,825 0.6 % 49,724 0.4 % 593 Pizza Hut Net Lease 44 4.0 % 154,377 1.1 % 49,525 0.4 % 321 Other (2) Net Lease 455 40.9 % 5,684,680 43.3 % 1,294,675 10.8 % 228 Total/Average 1,108 100.0 % 49,015/13,452,608 100%/100% $ 12,154,659 100.0 % $143 /$384 (1) Includes five hotels with an aggregate of 430 rooms, and an aggregate carrying value of $10,699 classified as held for sale and six net lease properties with an aggregate of 45,745 square feet and an aggregate carrying value of $3,106 classified as held for sale. (2) Consists of 120 distinct brands with an average investment of $10,746. Consolidated Portfolio by Brand Affiliation As of March 31, 2021 (dollars in thousands except per sq. ft. data) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 19 Industry No. of Properties Rooms/ Square Footage Investments (1) Percent of Total Investment 1. Hotels 310 49,015 $ 6,990,630 57.5% 2. Travel Centers 182 5,238,765 3,352,096 27.6% 3. Restaurants-Quick Service 230 636,087 305,949 2.5% 4. Restaurants-Casual Dining 59 412,762 213,689 1.8% 5. Movie Theaters 22 1,152,845 190,725 1.6% 6. Health and Fitness 14 870,841 189,215 1.6% 7. Grocery Stores 19 1,020,819 129,219 1.1% 8. Home Goods and Leisure 21 695,119 127,379 1.0% 9. Medical, Dental Office 70 405,779 116,678 1.0% 10. Automotive Equipment & Services 64 379,992 102,384 0.8% 11. Automotive Dealers 9 172,251 64,756 0.5% 12. Entertainment 4 199,853 61,436 0.5% 13. General Merchandise Stores 5 406,786 56,321 0.5% 14. Educational Services 9 220,758 55,647 0.5% 15. Building Materials 26 424,998 28,987 0.2% 16. Car Washes 5 41,456 28,658 0.2% 17. Miscellaneous Manufacturing 6 593,472 26,984 0.2% 18. Drug Stores and Pharmacies 8 82,543 23,970 0.2% 19. Sporting Goods 2 113,616 14,220 0.1% 20. Legal Services 5 25,429 11,362 0.1% 21. Dollar Stores 3 27,593 2,971 —% 22. Other 5 153,550 11,837 0.1% 24. Vacant 30 177,294 49,546 0.4% Total 1,108 49,015 /13,452,608 $ 12,154,659 100.0% (1) Includes five hotels with an aggregate of 430 rooms, and an aggregate carrying value of $10,699 classified as held for sale and six net lease properties with an aggregate of 45,745 square feet and an aggregate carrying value of $3,106 classified as held for sale. Consolidated Portfolio Diversification by Industry As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 20 Brand Service Level Chain Scale Number of Hotels Percent of Total Number of Hotels Number of Rooms or Suites Percent of Total Number of Rooms or Suites Investment Percent of Total Hotel Investment Investment Per Room or Suite Royal Sonesta Hotels® Full Service Upper Upscale 16 5.2 % 5,303 10.8 % $ 1,730,813 24.8 % $ 326 Sonesta ES Suites® Extended Stay Upscale Midscale 92 29.7 % 11,472 23.4 % 1,552,802 22.2 % $ 135 Sonesta Hotels & Resorts® Full Service Upscale 25 8.1 % 8,040 16.4 % 1,224,741 17.5 % $ 152 Sonesta Select Select Service Upscale 58 18.7 % 8,271 16.9 % 842,879 11.9 % $ 102 Sonesta Simply Suites Extended Stay Midscale 65 21.0 % 8,040 16.4 % 661,424 9.5 % $ 82 Hyatt Place® Select Service Upscale 22 7.1 % 2,724 5.6 % 302,110 4.3 % $ 111 Courtyard by Marriott® Select Service Upscale 14 4.4 % 1,959 4.0 % 190,385 2.7 % $ 97 Radisson® Hotels & Resorts Full Service Upscale 5 1.6 % 1,149 2.3 % 159,707 2.3 % $ 139 Crowne Plaza® Full Service Upscale 1 0.3 % 495 1.0 % 123,283 1.8 % $ 249 Radisson Blu® Full Service Upper Upscale 1 0.3 % 360 0.7 % 77,340 1.1 % $ 215 Country Inns & Suites® by Radisson Full Service Upper Midscale 3 1.0 % 430 0.9 % 54,076 0.8 % $ 126 Residence Inn by Marriott® Extended Stay Upscale 3 1.0 % 342 0.7 % 45,992 0.7 % $ 134 Other (1) 5 1.6 % 430 0.9 % 25,078 0.4 % $ 58 Total/Average Hotels 310 100.0 % 49,015 100.0 % $ 6,990,630 100.0 % $ 143 (1) We have entered into an agreement to sell five hotels and we have entered a short-term lease of these properties with the buyer in anticipation of the sale. Hotel Portfolio by Brand As of March 31, 2021 (dollars in thousands, except per room or suite data) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 21 All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods. We have not independently verified our managers' or tenants' operating data. (1) Includes operating data for periods prior to when certain hotels were managed by Sonesta. (2) We have entered into an agreement to sell five hotels and we have entered a short- term lease of these properties with the buyer in anticipation of the sale. Occupancy ADR RevPAR No. of Hotels No. of Rooms or Suites Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, Brand Service Level 2021 2020 Change 2021 2020 Change 2021 2020 Change Sonesta (1) Full Service 24 7,821 31.5 % 58.3 % (26.8) pts $ 106.61 $ 136.32 (21.8) % $ 33.58 $ 79.47 (57.7) % Royal Sonesta (1) Full Service 14 4,529 20.8 % 54.5 % (33.7) pts 143.29 190.25 (24.7) % 29.80 103.69 (71.3) % Radisson Hotel Full Service 5 1,149 38.0 % 57.7 % (19.7) pts 90.60 130.51 (30.6) % 34.43 75.30 (54.3) % Crowne Plaza Full Service 1 495 36.0 % 46.8 % (10.8) pts 93.92 145.17 (35.3) % 33.81 67.94 (50.2) % Country Inn and Suites Full Service 2 264 35.7 % 54.8 % (19.1) pts 80.34 120.92 (33.6) % 28.68 66.26 (56.7) % Radisson Blu Full Service 1 360 14.6 % 54.8 % (40.2) pts 82.07 119.40 (31.3) % 11.98 65.43 (81.7) % Full Service Total / Average 47 14,618 28.5 % 56.5 % (28.0) pts 111.78 151.39 (26.2) % 31.86 85.54 (62.8) % Sonesta Select (1) Select Service 58 8,271 23.8 % 51.0 % (27.2) pts 86.46 134.69 (35.8) % 20.58 68.69 (70.0) % Hyatt Place Select Service 22 2,724 46.6 % 59.5 % (12.9) pts 82.41 106.95 (22.9) % 38.40 63.64 (39.7) % Courtyard Select Service 14 1,959 40.9 % 45.1 % (4.2) pts 92.51 112.78 (18.0) % 37.84 50.86 (25.6) % Select Service Total / Average 94 12,954 31.2 % 51.9 % (20.7) pts 86.39 125.12 (31.0) % 26.95 64.94 (58.5) % Sonesta ES Suites (1) Extended Stay 92 11,472 54.1 % 58.2 % (4.1) pts 88.52 121.63 (27.2) % 47.89 70.79 (32.3) % Sonesta Simply Suites (1) Extended Stay 63 7,796 55.1 % 66.7 % (11.6) pts 63.79 81.46 (21.7) % 35.15 54.33 (35.3) % Residence Inn Extended Stay 3 342 43.7 % 50.2 % (6.5) pts 96.74 111.15 (13.0) % 42.28 55.80 (24.2) % Other (2) Extended Stay 5 430 60.8 % 66.5 % (5.7) pts 55.85 71.75 (22.2) % 33.96 47.71 (28.8) % Extended Stay Total / Average 163 20,040 54.4 % 61.6 % (7.2) pts 78.09 103.38 (24.5) % 42.48 63.68 (33.3) % 304 47,612 40.1 % 57.4 % (17.3) pts $ 87.19 $ 123.22 (29.2) % $ 34.96 $ 70.73 (50.6) % Hotel Operating Statistics by Service Level - Comparable Hotels RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 22 All operating data presented are based upon the operating results provided by our managers and tenants for the indicated periods. We have not independently verified our managers' or tenants' operating data. (1) Includes operating data for periods prior to when certain hotels were managed by Sonesta. (2) We have entered into an agreement to sell five hotels and we have entered a short- term lease of these properties with the buyer in anticipation of the sale. No. of Hotels No. of Rooms or Suites Occupancy ADR RevPAR Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, Brand Service Level 2021 2020 Change 2021 2020 Change 2021 2020 Change Sonesta (1) Full Service 25 8,040 31.2 % 58.2 % (27.0) pts $ 106.61 $ 136.43 (21.9) % $ 33.26 $ 79.40 (58.1) % Royal Sonesta (1) Full Service 16 5,303 22.7 % 51.1 % (28.4) pts 153.25 203.56 (24.7) % 34.79 104.02 (66.6) % Radisson Hotel Full Service 5 1,149 38.0 % 57.7 % (19.7) pts 90.60 130.51 (30.6) % 34.43 75.30 (54.3) % Crowne Plaza Full Service 1 495 36.0 % 46.8 % (10.8) pts 93.92 145.17 (35.3) % 33.81 67.94 (50.2) % Country Inn and Suites Full Service 3 430 30.2 % 41.3 % (11.1) pts 79.75 114.89 (30.6) % 24.08 47.45 (49.2) % Radisson Blu Full Service 1 360 14.6 % 54.8 % (40.2) pts 82.07 119.40 (31.3) % 11.98 65.43 (81.7) % Full Service Total / Average 51 15,777 28.7 % 54.8 % (26.1) pts 115.34 156.09 (26.1) % 33.10 85.54 (61.3) % Sonesta Select (1) Select Service 58 8,271 23.8 % 51.0 % (27.2) pts 86.46 134.69 (35.8) % 20.58 68.69 (70.0) % Hyatt Place Select Service 22 2,724 46.6 % 59.5 % (12.9) pts 82.41 106.95 (22.9) % 38.40 63.64 (39.7) % Courtyard Select Service 14 1,959 40.9 % 45.1 % (4.2) pts 92.51 112.78 (18.0) % 37.84 50.86 (25.6) % Select Service Total / Average 94 12,954 31.2 % 51.9 % (20.7) pts 86.39 125.12 (31.0) % 26.95 64.94 (58.5) % Sonesta ES Suites (1) Extended Stay 92 11,472 54.1 % 58.2 % (4.1) pts 88.52 121.63 (27.2) % 47.89 70.79 (32.3) % Sonesta Simply Suites (1) Extended Stay 65 8,040 55.2 % 65.0 % (9.8) pts 63.42 81.40 (22.1) % 35.01 52.91 (33.8) % Residence Inn Extended Stay 3 342 43.7 % 50.2 % (6.5) pts 96.74 111.15 (13.0) % 42.28 55.80 (24.2) % Other (2) Extended Stay 5 430 60.8 % 66.5 % (5.7) pts 55.85 71.75 (22.2) % 33.96 47.71 (28.8) % Extended Stay Total / Average 165 20,284 54.5 % 61.0 % (6.5) pts 77.76 103.31 (24.7) % 42.38 63.02 (32.8) % 310 49,015 40.1 % 56.6 % (16.5) pts $ 88.02 $ 125.06 (29.6) % $ 35.30 $ 70.78 (50.1) % Hotel Operating Statistics by Service Level - All Hotels RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 23 (dollars in thousands) For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Number of hotels 304 304 304 304 304 Room revenues $ 149,850 $ 152,602 $ 173,594 $ 104,018 $ 305,920 Food and beverage revenues 7,383 7,566 6,552 2,352 45,250 Other revenues 7,424 9,096 11,274 5,712 15,425 Hotel operating revenues - comparable hotels 164,657 169,264 191,420 112,082 366,595 Rooms expenses 56,401 57,410 56,389 41,866 99,837 Food and beverage expenses 8,454 9,640 9,766 7,695 41,392 Other direct and indirect expenses 118,451 110,965 96,786 79,021 147,261 Management fees 5,065 2,233 1,709 968 2,691 Real estate taxes, insurance and other 30,021 28,880 28,382 28,785 29,825 FF&E reserves (13) 752 380 262 3 10,570 Hotel operating expenses - comparable hotels 219,144 209,508 193,294 158,338 331,576 Hotel EBITDA $ (54,487) $ (40,244) $ (1,874) $ (46,256) $ 35,019 Loss contingency (9) — 3,962 — — — Hotel manager transition costs (11) 19,344 14,212 — — — Adjusted Hotel EBITDA $ (35,143) $ (22,070) $ (1,874) $ (46,256) $ 35,019 Adjusted Hotel EBITDA Margin (21) % (13) % (1) % (41) % 10 % Hotel operating revenues (GAAP) (1) $ 168,953 $ 174,520 $ 199,719 $ 117,356 $ 383,503 Hotel operating revenues from non-comparable hotels (4,296) (5,256) (8,299) (5,274) (16,908) Hotel operating revenues - comparable hotels $ 164,657 $ 169,264 $ 191,420 $ 112,082 $ 366,595 Hotel operating expenses (GAAP) (1) $ 214,987 $ 204,998 $ 174,801 $ 46,957 $ 271,148 Add (less) Hotel operating expenses from non-comparable hotels (7,620) (9,888) (12,864) (10,398) (21,227) Reduction for security deposit and guaranty fundings, net (3) 10,392 13,387 30,474 121,155 70,506 Management and incentive management fees paid from cashflows in excess of minimum returns and rents — — — — — FF&E reserves from managed hotel operations (13) 764 390 262 3 10,942 Other (14) 621 621 621 621 207 Hotel operating expenses - comparable hotels $ 219,144 $ 209,508 $ 193,294 $ 158,338 $ 331,576 Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA - Comparable Hotels RETURN TO TABLE OF CONTENTS See accompanying notes on page 11.
Supplemental Q1 2021 24 (dollars in thousands) For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Number of hotels 310 310 329 329 329 Room revenues $ 152,728 $ 159,022 $ 182,366 $ 109,516 $ 322,668 Food and beverage revenues 8,172 7,911 6,786 2,411 49,722 Other revenues 8,053 9,485 12,895 9,667 16,292 Hotel operating revenues 168,953 176,418 202,047 121,594 388,682 Rooms expenses 56,578 59,784 59,711 44,267 107,066 Food and beverage expenses 9,042 9,928 11,420 8,325 46,045 Other direct and indirect expenses 119,401 112,428 97,993 80,827 146,671 Management fees 5,238 2,436 1,781 969 2,864 Real estate taxes, insurance and other 35,741 36,655 37,169 36,263 44,288 FF&E reserves (13) 764 390 262 (515) 11,137 Hotel operating expenses 226,764 221,621 208,336 170,136 358,071 Hotel EBITDA $ (57,811) $ (45,203) $ (6,289) $ (48,542) $ 30,611 Loss contingency (9) — 3,962 — — — Hotel manager transition costs (11) 19,635 15,100 — — — Adjusted Hotel EBITDA $ (38,176) $ (26,141) $ (6,289) $ (48,542) $ 30,611 Adjusted Hotel EBITDA Margin (23) % (15) % (3) % (40) % 8 % Hotel operating revenues (GAAP) (1) $ 168,953 $ 174,520 $ 199,719 $ 117,356 $ 383,503 Add: hotel revenues of leased hotels — 1,898 2,328 4,238 5,179 Hotel operating revenues $ 168,953 $ 176,418 $ 202,047 $ 121,594 $ 388,682 Hotel operating expenses (GAAP) (1) $ 214,987 $ 204,998 $ 174,801 $ 46,957 $ 271,148 Add (less) Reduction for security deposit and guaranty fundings, net (3) 10,392 13,387 30,474 121,155 70,506 Hotel expenses for leased hotels — 2,225 2,178 1,403 5,268 Management and incentive management fees paid from cashflows in excess of minimum returns and rents — — — — — FF&E reserves from managed hotel operations (13) 764 390 262 — 10,942 Other (14) 621 621 621 621 207 Hotel operating expenses $ 226,764 $ 221,621 $ 208,336 $ 170,136 $ 358,071 Calculation and Reconciliation of Hotel EBITDA and Adjusted Hotel EBITDA - All Hotels RETURN TO TABLE OF CONTENTS See accompanying notes on page 11.
Supplemental Q1 2021 25 Brand No. of Buildings Square Feet Investment (1) Percent of Total Investment Annualized Minimum Rent (1) Percent of Total Annualized Minimum Rent Coverage 1. TravelCenters of America 134 3,720,693 $ 2,289,189 44.3 % $ 168,012 44.7 % 2.01x 2. Petro Stopping Centers 45 1,470,004 1,021,226 19.8 % 78,099 20.8 % 1.65x 3. AMC Theatres 11 575,967 102,580 2.0 % 8,637 2.3 % -0.03x 4. The Great Escape 14 542,666 98,242 1.9 % 7,140 1.9 % 2.02x 5. Life Time Fitness 3 420,335 92,617 1.8 % 5,770 1.5 % 1.52x 6. Buehler's Fresh Foods 5 502,727 76,536 1.5 % 5,657 1.5 % 4.79x 7. Heartland Dental 59 234,274 61,120 1.2 % 4,493 1.2 % 3.38x 8. Norms 10 63,490 53,673 1.0 % 3,169 0.8 % 0.47x 9. Express Oil Change 23 83,825 49,724 1.0 % 3,379 0.9 % 4.14x 10. Pizza Hut 44 154,377 49,525 1.0 % 3,522 0.9 % 1.61x 11. Regal Cinemas 6 266,546 44,476 0.9 % 3,854 1.0 % 0.01x 12. Flying J Travel Plaza 3 48,069 41,681 0.8 % 3,183 0.8 % 4.18x 13. Courthouse Athletic Club 4 193,659 39,688 0.8 % 2,400 0.6 % 0.89x 14. Fleet Farm 1 218,248 37,802 0.7 % 2,622 0.7 % 3.47x 15. Church's Chicken 45 59,523 35,995 0.7 % 2,587 0.7 % 1.99x 16. Big Al's 2 111,912 35,214 0.7 % 2,336 0.6 % -0.23x 17. B&B Theatres 4 261,300 34,369 0.7 % 2,000 0.5 % 0.16x 18. America's Auto Auction 6 72,338 34,314 0.7 % 3,216 0.9 % 8.08x 19. Burger King 21 68,710 34,289 0.7 % 2,069 0.6 % 2.40x 20. Hardee's 19 62,792 31,844 0.6 % 2,111 0.6 % 2.15x 21. Martin's 16 81,909 31,144 0.6 % 2,288 0.6 % 1.65x 22. Arby's 19 57,868 29,166 0.6 % 1,824 0.5 % 4.08x 23. Creme de la Creme 4 81,929 29,131 0.6 % 2,429 0.6 % 0.82x 24. Mister Car Wash 5 41,456 28,658 0.6 % 2,086 0.6 % 4.90x 25. Popeye's Chicken & Biscuits 20 45,708 28,434 0.6 % 1,910 0.5 % 4.28x 26. Other (2) 275 4,012,283 753,392 14.2 % 51,018 13.7 % 3.40x Total 798 13,452,608 $ 5,164,029 100.0 % $ 375,811 100.0 % 2.19x (1) Includes six net lease properties with an aggregate of 45,745 square feet and an aggregate carrying value of $3,106 classified as held for sale. (2) Consists of 105 distinct brands with an average investment of $2,740 per building. Net Lease Portfolio by Brand As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 26 Industry No. of Buildings Square Feet Investment (1) Percent of Total Investment Annualized Minimum Rent (1) Percent of Total Annualized Minimum Rent Coverage 1. Travel Centers 182 5,238,765 $ 3,352,096 64.9% $ 249,293 66.3% 1.93x 2. Restaurants-Quick Service 230 636,087 305,949 5.9% 20,662 5.5% 2.67x 3. Restaurants-Casual Dining 59 412,762 213,689 4.1% 13,189 3.5% 1.15x 4. Movie Theaters 22 1,152,845 190,725 3.7% 15,091 4.0% 0.01x 5. Health and Fitness 14 870,841 189,215 3.7% 11,844 3.2% 1.24x 6. Grocery Stores 19 1,020,819 129,219 2.5% 9,123 2.4% 4.69x 7. Home Goods and Leisure 21 695,119 127,379 2.5% 10,107 2.7% 2.02x 8. Medical, Dental Office 70 405,779 116,678 2.3% 9,014 2.4% 3.54x 9. Automotive Equipment & Services 64 379,992 102,384 2.0% 7,114 1.9% 3.28x 10. Automotive Dealers 9 172,251 64,756 1.3% 5,354 1.4% 7.12x 11. Entertainment 4 199,853 61,436 1.2% 4,265 1.1% 0.20x 12. General Merchandise Stores 5 406,786 56,321 1.1% 3,833 1.0% 3.42x 13. Educational Services 9 220,758 55,647 1.0% 4,303 1.1% 1.58x 14. Building Materials 26 424,998 28,987 0.5% 2,447 0.7% 6.74x 15. Car Washes 5 41,456 28,658 0.6% 2,086 0.6% 4.90x 16. Miscellaneous Manufacturing 6 593,472 26,984 0.5% 1,825 0.5% 13.53x 17. Drug Stores and Pharmacies 8 82,543 23,970 0.5% 1,576 0.4% 1.88x 18. Sporting Goods 2 113,616 14,220 0.3% 926 0.2% 4.39x 19. Other (2) 5 153,550 11,837 0.2% 2,549 0.8% 2.68x 20. Legal Services 5 25,429 11,362 0.1% 1,024 0.3% 2.06x 21. Dollar Stores 3 27,593 2,971 0.1% 186 —% 3.67x 22. Vacant 30 177,294 49,546 1.0% — —% n/a Total 798 13,452,608 $ 5,164,029 100.0% $ 375,811 100.0% 2.19x (1) Includes six net lease properties with an aggregate of 45,745 square feet and an aggregate carrying value of $3,106 classified as held for sale. (2) Consists of miscellaneous businesses with an average investment of $2,367 per building. Net Lease Portfolio by Industry As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 27 Tenant Brand Affiliation No. of Buildings Square Feet Investment (1) Percent of Total Investment Annualized Minimum Rent (1) Percent of Total Annualized Minimum Rent Weighted Average Lease Term Coverage 1. TravelCenters of America Inc. TravelCenters of America / Petro Stopping Centers 179 5,190,696 $ 3,310,415 64.1 % $ 246,110 65.5 % 11.89 1.90x (2) (3) 2. American Multi-Cinema, Inc. AMC Theatres 11 575,967 102,580 2.0 % 8,637 2.3 % 1.84 -0.03x 3. Universal Pool Co., Inc. The Great Escape 14 542,666 98,242 1.9 % 7,140 1.9 % 6.42 2.02x 4. Healthy Way of Life II, LLC Life Time Fitness 3 420,335 92,617 1.8 % 5,770 1.5 % 14.26 1.52x (2) 5. Styx Acquisition, LLC Buehler's Fresh Foods 5 502,727 76,536 1.5 % 5,657 1.5 % 14.59 4.79x (2) 6. Professional Resource Development, Inc. Heartland Dental 59 234,274 61,120 1.2 % 4,493 1.2 % 5.00 3.38x 7. Express Oil Change, L.L.C. Express Oil Change 23 83,825 49,724 1.0 % 3,379 0.9 % 14.01 4.14x 8. Regal Cinemas, Inc. Regal Cinemas 6 266,546 44,476 0.9 % 3,854 1.0 % 6.67 0.01x 9. Pilot Travel Centers LLC Flying J Travel Plaza 3 48,069 41,681 0.8 % 3,183 0.8 % 7.73 4.18x 10. Automotive Remarketing Group, Inc. Automotive Remarketing Group 6 72,338 34,314 0.7 % 3,216 0.9 % 14.09 8.08x Sub-total, Top 10 309 7,937,443 3,911,705 75.9 % 291,439 77.5 % 11.39 2.01x 11. Other (4) Various 489 5,515,165 1,252,324 24.1 % 84,372 22.5 % 8.33 2.81x Total 798 13,452,608 $ 5,164,029 100.0 % $ 375,811 100.0 % 10.70 2.19x (1) Includes six net lease properties with an aggregate of 45,745 square feet and an aggregate carrying value of $3,106 classified as held for sale. (2) Leases subject to full or partial guarantee. (3) TA is our largest tenant. As of March 31, 2021, we leased 179 travel centers (134 under the TravelCenters of America brand and 45 under the Petro Stopping Centers brand) to a subsidiary of TA under five master leases that expire in 2029, 2031, 2032, 2033 and 2035, respectively. TA has two renewal options for 15 years each for all of the travel centers. In addition to the payment of our minimum rent, these leases provide for payment to us of percentage rent based on increases in total non-fuel revenues over base levels (3.5% of non- fuel revenues above threshold amounts defined in the leases). TA's remaining deferred rent obligation of $35,228 is due in quarterly installments of $4,404 through January 31, 2023. (4) Consists of 158 tenants with an average investment of $7,926. Net Lease Portfolio by Tenant (Top 10) As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 28 Year (1) Square Feet Annualized Minimum Rent Expiring (2) Percent of Total Annualized Minimum Rent Expiring Cumulative % of Total Annualized Minimum Rent Expiring 2021 319,951 3,305 0.9% 0.9% 2022 317,105 4,428 1.2% 2.1% 2023 320,423 3,978 1.1% 3.2% 2024 787,547 11,602 3.1% 6.3% 2025 434,424 8,986 2.4% 8.7% 2026 901,606 10,244 2.7% 11.4% 2027 1,042,655 14,423 3.8% 15.2% 2028 553,330 9,611 2.6% 17.8% 2029 1,321,924 47,705 12.7% 30.5% 2030 209,200 5,185 1.4% 31.9% 2031 1,472,458 50,121 13.3% 45.2% 2032 1,233,445 52,069 13.9% 59.1% 2033 1,107,227 53,382 14.2% 73.3% 2034 134,640 4,523 1.2% 74.5% 2035 2,577,853 84,235 22.4% 96.9% 2036 320,792 5,385 1.4% 98.3% 2037 — — — 98.3% 2038 10,183 416 0.1% 98.4% 2039 185,437 6,061 1.6% 100.0% 2040 1,739 152 —% 100.0% Total 13,251,939 $ 375,811 100.0% Weighted Average Lease Term 9.2 years 10.7 years (1) The year of lease expiration is pursuant to contract terms. (2) Includes six net lease properties with an aggregate of 45,745 square feet and an aggregate carrying value of $3,106 and annual minimum rent of $240 classified as held for sale. Net Lease Portfolio - Expiration Schedule As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 29 As of and For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Properties (end of period) 798 799 804 809 813 Total square feet 13,452,608 13,455,405 13,682,477 13,728,893 14,511,567 Square feet leased 13,251,939 13,284,343 13,424,005 13,548,122 14,262,947 Percentage leased 98.5 % 98.7 % 98.1 % 98.7 % 98.3 % As of and For the Three Months Ended 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Vacant properties beginning of period 18 14 15 17 17 Vacant property sales (1) (4) (3) (4) (5) Lease terminations 13 8 2 2 5 Vacant properties end of the period 30 18 14 15 17 Net Lease Portfolio - Occupancy Summary As of March 31, 2021 (dollars in thousands) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 30 Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of the applicable Securities and Exchange Commission, or SEC, rules, including FFO, Normalized FFO, EBITDA, Hotel EBITDA, Adjusted Hotel EBITDA, EBITDAre and Adjusted EBITDAre. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) as presented in our condensed consolidated statements of income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss). We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs. FFO and Normalized FFO: We calculate funds from operations, or FFO, and Normalized FFO as shown on page 9. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net income (loss), calculated in accordance with GAAP, excluding any gain or loss on sale of properties and loss on impairment of real estate assets, if any, plus real estate depreciation and amortization, less any unrealized gains and losses on equity securities, as well as adjustments to reflect our share of FFO attributable to an investee and certain other adjustments currently not applicable to us. In calculating Normalized FFO, we adjust for the items shown on page 9. FFO and Normalized FFO are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to satisfy our REIT distribution requirements, limitations in our credit agreement and public debt covenants, the availability to us of debt and equity capital, our distribution rate as a percentage of the trading price of our common shares, or dividend yield, and to the dividend yield of other REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do. EBITDA, EBITDAre and Adjusted EBITDAre: We calculate earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre as shown on page 10. EBITDAre is calculated on the basis defined by Nareit, which is EBITDA, excluding gains and losses on the sale of real estate, loss on impairment of real estate assets, if any, and adjustments to reflect our share of EBITDAre attributable to an investee. In calculating Adjusted EBITDAre, we adjust for the items shown on page 10. Other real estate companies and REITs may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than we do. Hotel EBITDA and Adjusted Hotel EBITDA: We define Hotel EBITDA as hotel operating revenues less hotel operating expenses of all managed and leased hotels, prior to any adjustments required for presentation in our condensed consolidated statements of income (loss) in accordance with GAAP. Adjusted Hotel EBITDA excludes certain items we believe do not reflect the ongoing operating performance of our hotels. We believe that Hotel EBITDA and Adjusted Hotel EBITDA provide useful information to management and investors as key measures of the profitability of our hotel operations. Other Definitions Adjusted Total Assets and Total Unencumbered Assets: Adjusted total assets and total unencumbered assets include original cost of real estate assets calculated in accordance with GAAP before impairment write-downs, if any, and exclude depreciation and amortization, accounts receivable and intangible assets. Adjusted Hotel EBITDA Margin: is the percentage of Adjusted Hotel EBITDA of hotel operating revenues. Annualized Dividend Yield: Annualized dividend yield is the annualized dividend paid during the period divided by the closing price of our common shares at the end of the period. Average Daily Rate: ADR represents rooms revenue divided by the total number of room nights sold in a given period. ADR provides useful insight on pricing at our hotels and is a measure widely used in the hotel industry. Chain Scale: As characterized by STR, a data benchmark and analytics provider for the lodging industry. Comparable Hotels Data: We present RevPAR, ADR and occupancy for the periods presented on a comparable basis to facilitate comparisons between periods. We generally define comparable hotels as those that we owned and were open and operating for the entire periods being compared. For the three months ended March 31, 2021 and 2020, we excluded six hotels from our comparable results. Four were closed for major renovations and two suspended operations during part of the periods presented. Consolidated Income Available for Debt Service: Consolidated income available for debt service, as defined in our debt agreements, is earnings from operations excluding interest expense, unrealized gains and losses on equity securities, depreciation and amortization, loss on asset impairment, unrealized appreciation on assets held for sale, gains and losses on early extinguishment of debt, gains and losses on sales of property and amortization of deferred charges. Non-GAAP Financial Measures and Certain Definitions RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 31 Coverage: We define net lease coverage as earnings before interest, taxes, depreciation, amortization and rent, or EBITDAR, divided by the annual minimum rent due to us weighted by the minimum rent of the property to total minimum rents of the net lease portfolio. EBITDAR amounts used to determine rent coverage are generally for the latest twelve month period reported based on the most recent operating information, if any, furnished by the tenant. Operating statements furnished by the tenant often are unaudited and, in certain cases, may not have been prepared in accordance with GAAP and are not independently verified by us. Tenants that do not report operating information are excluded from the coverage calculations. In instances where we do not have financial information for the most recent quarter from our tenants, we have calculated an implied EBITDAR for the 2021 first quarter using industry benchmark data to more accurately reflect the impact of COVID-19 on our tenants’ operations. We believe using only financial information from the earlier periods could be misleading as it would not reflect the negative impact those tenants experienced as a result of the COVID-19 pandemic. As a result, we believe using this industry benchmark data provides a more accurate estimated representation of recent operating results and coverage for those tenants. Debt: Debt amounts reflect the principal balance as of the date reported. Net debt means total debt less unrestricted cash and cash equivalents as of the date reported. FF&E Reserve: Various percentages of total sales at certain of our hotels are escrowed as reserves for future renovations or refurbishments, or FF&E reserve escrows. We own all the FF&E reserve escrows for our hotels. FF&E Reserve Deposits Not Funded by Hotel Operations: The operating agreements for our hotels generally provide that, if necessary, we will provide FF&E funding in excess of escrowed reserves. To the extent we make such fundings, our contractual annual minimum returns or rents generally increase by a percentage of the amounts we fund. Gross Book Value of Real Estate Assets: Gross book value of real estate assets is real estate properties at cost plus acquisition related costs, if any, before purchase price allocations, less impairment write-downs, if any. Investment: We define hotel investment as historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any, and excludes capital improvements made from FF&E reserves funded from hotel operations that do not result in increases in minimum returns or rents. We define net lease investment as historical cost of our properties plus capital improvements funded by us less impairment write-downs, if any. Minimum Return/Rent: Each of our management agreements or leases with hotel operators provides for payment to us of an annual minimum return or minimum rent, respectively. Certain of these minimum payment amounts are secured by full or limited guarantees or security deposits. In addition, certain of our hotel management agreements provide for payment to us of additional amounts to the extent of available cash flows as defined in the management agreement. Payments of these additional amounts are not guaranteed or secured by deposits. Each of our agreements with our net lease tenants provides for payment to us of minimum rent. Certain of these minimum payment amounts are secured by full or limited guarantees. Annualized minimum rent amounts represent cash rent amounts due to us and exclude adjustments, if any, necessary to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis or any reimbursement of expenses paid by us. Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Occupancy is an important measure of the utilization rate and demand of our hotels. Revenue per Available Room: RevPAR represents rooms revenue divided by the total number of room nights available to guests for a given period. RevPAR is an industry metric correlated to occupancy and ADR and helps measure performance over comparable periods. Total Gross Assets: Total gross assets is total assets plus accumulated depreciation. Non-GAAP Financial Measures and Certain Definitions (Continued) RETURN TO TABLE OF CONTENTS
Supplemental Q1 2021 32 This supplemental operating and financial data may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever we use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may” and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. The information contained in our filings with the SEC, including under “Risk Factors” in our periodic reports, or incorporated therein, identifies important factors that could cause our actual results to differ materially from those stated in or implied by our forward-looking statements. Our filings with the SEC are available on the SEC's website at www.sec.gov. You should not place undue reliance upon our forward-looking statements. Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise. Warning Concerning Forward-Looking Statements RETURN TO TABLE OF CONTENTS