Pebblebrook Hotel Trust (PEB) 2019年年度報告「NYSE」.pdf

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1、 2019 Annual Report Property LocationsColumbia River Gorge,WASan Francisco,CASanta Cruz,CAWashington,DCChicago,ILBoston,MAMiami,FLWest Los Angeles,CASanta Monica,CADel Mar,CASan Diego,CASeattle,WAPortland,ORNaples,FLPhiladelphia,PANashville,TNKey West,FLNew York City,NYBoston,MAHyatt Regency Boston

2、HarborRevere Hotel Boston CommonThe Liberty,A Luxury Collection Hotel,BostonThe Westin Copley Place,BostonW BostonChicago,ILHotel Chicago Downtown,Autograph CollectionThe Westin Michigan Avenue ChicagoSan Francisco,CAArgonaut HotelLos Angeles,CAChaminade Resort&SpaChamberlain West Hollywood HotelHar

3、bor Court Hotel San FranciscoGrafton on SunsetHotel SperoHotel Palomar Los Angeles Beverly HillsHotel VitaleLe Mridien Delfina Santa MonicaHotel Zelos San FranciscoLe Parc Suite HotelHotel Zephyr Fishermans WharfMondrian Los AngelesHotel Zeppelin San FranciscoMontrose West HollywoodHotel Zetta San F

4、ranciscoViceroy Santa Monica HotelHotel Zoe Fishermans WharfW Los Angeles-West Beverly HillsSir Francis DrakeThe Marker San FranciscoNashville,TNVilla Florence San Francisco on Union SquareUnion Station Hotel Nashville,Autograph CollectionSeattle,WANew York City,NYHotel Monaco SeattleThe Roger New Y

5、orkHotel Vintage SeattlePhiladelphia,PASouthern FloridaSofitel Philadelphia at Rittenhouse SquareHotel Colonnade Coral Gables,Autograph CollectionLaPlaya Beach Resort&ClubPortland,ORSouthernmost Beach ResortHotel Vintage PortlandThe Marker Key WestSkamania LodgeThe Heathman HotelWashington,DCThe Hot

6、el ZagsGeorge HotelThe Nines,a Luxury Collection Hotel,PortlandHotel Monaco Washington DCHotel Zena Washington DCSan Diego,CAViceroy Washington DCEmbassy Suites San Diego Bay DowntownHilton San Diego Gaslamp QuarterLAuberge Del MarParadise Point Resort&SpaSan Diego Mission Bay ResortSolamar HotelThe

7、 Westin San Diego Gaslamp QuarterTO OUR FELLOW SHAREHOLDERS Pebblebrook Hotel Trusts 10th year as a public company proved to be transformational and successful as we executed on our business strategies and commitments to you,our fellow shareholders,following the closing of our$5.1 billion acquisitio

8、n of LaSalle Hotel Properties towards the end of 2018.Since our initial public offering in December 2009,weve grown our company to be the largest owner of urban and resort lifestyle hotels in the United States.Our strategies of optimizing both the operational efficiency and the quality of our proper

9、ties through highly creative multidimensional redevelopments,as well as the implementation of our best practices and more recently-developed portfolio-wide initiatives will continue to lead us toward achieving our mission:“To deliver long-term industry-leading total returns to our shareholders,inclu

10、ding a reliable stream of income,through opportunistic investment in high-quality lodging properties,utilizing a conservative capital structure.”In 2019,our portfolio experienced Adjusted EBITDAre growth of 87.8%and Adjusted FFO per diluted share growth of 7.3%,representing significant growth,which

11、was boosted by the recent doubling in size of our portfolio.Throughout 2019,we distributed$1.52 per share in dividends to common shareholders,which was in line with our dividend payout in 2018.On a Same-Property basis,we achieved RevPAR growth of 1.2%,outperforming the U.S.hotel industrys 0.9%increa

12、se for the year,illustrating that our portfolio gained market share and outpaced the industry.We continued to execute on our strategic disposition plan to reduce overall leverage and to improve the quality of our portfolio.Since the acquisition of LaSalle Hotel Properties,weve sold 15 hotels for$1.7

13、 billion of gross sales proceeds at a combined cap rate of 5.6%and an EBITDA multiple of 15.3x based on 2018 operating numbers.Thirteen of these properties were legacy LaSalle hotels,which sold at an average 5.4%net operating income cap rate and 15.8x EBITDA multiple,reflecting higher prices than wh

14、at we paid for those assets when purchasing LaSalle.We also executed on 12 property transitions ranging from third-party management changes to adding to our proprietary“Unofficial Z Collection,”to signing license agreements with Margaritaville Enterprises LLC and converting one of our resorts to an

15、independent lifestyle resort.During 2019,we completed over$160.0 million of capital reinvestments to drive value and unlock potential across our portfolio.Finally,in 2019,we published our inaugural ESG(Environmental,Social,and Governance)report,highlighting the benefits of our years-long sustainable

16、 investment strategies.This report is available on our website,and we encourage you to read it.As 2020 began,the economic outlook was more positive and seemingly less uncertain than 2019.We experienced improvements in hotel demand growth,which started in November 2019 and were continuing into 2020.H

17、owever,concerns surrounding the COVID-19 outbreak,which at first appeared to pose only a minor threat to hotel demand,has rapidly become a global pandemic,affecting millions of people around the world.This has caused unprecedented declines in travel due to mandated government restrictions,corporate

18、policy shifts,health official warnings,behavioral recommendations to avoid gathering in groups and social distancing,which seem to increase by the day.Effectively,travel demand,whether for business or leisure purposes,has been eliminated until more normal behavior is recommended and resumes.Followin

19、g the numerous travel policy restrictions,government mandates,and health official recommendations,we made the difficult decision to temporarily suspend operations across the vast majority of our hotels starting in mid-March 2020.We swiftly reduced operations across our portfolio in light of the rapi

20、dly evolving pandemic situation,and most importantly,we moved quickly to protect the health and safety of our guests and the more than 8,000 people who work at our hotels,as well as our communities,during this unimaginable time.Our asset managers are working hand-in-hand with our hotel operating par

21、tners to significantly reduce operating expenses,conserve cash,and protect our properties,not only physically,but also their long-term value for our shareholders and stakeholders.In addition to the temporary suspension of operations,we have taken aggressive steps to protect our asset values and limi

22、t our overall cash needs.In mid-March 2020,we postponed all non-essential capital investments other than those for the completion of our 2020 major projects,which had been underway for many months,allowing us to preserve approximately$50.0 million in capital for the year.Additionally,we reduced our

23、regular quarterly common dividend per share to$0.01,conserving$50.0 million of cash per calendar quarter.Corporately,our executive officers and our Board of Trustees volunteered to substantially reduce their compensation for 2020,including meaningful salary reductions(I,for example,have chosen to fo

24、rego my salary for the remainder of 2020)and the forfeiture of certain long-term retention share awards.To adhere to our core value of“all for one and one for all,”every corporate Pebblebrook employee also took salary reductions,must receive shares in lieu of cash bonuses,if earned,and many are forf

25、eiting restricted stock awards.We are demonstrating our united efforts to reduce our corporate overhead while recognizing that almost all of our hardworking hotel employees of our hotel operating partners furloughed as a result of COVID-19 face extremely challenging times ahead.I personally,and our

26、entire senior leadership team,have been working tirelessly with other industry leaders in conjunction with our political leaders to provide comprehensive financial support for the hotel employees and their families across our portfolio and those throughout our industry.In response to the inconceivab

27、le,rapid elimination of most travel demand,and out of an abundance of caution,we took the decisive step to draw down the available balance on our entire$650.0 million unsecured credit facility,increasing our liquidity to a sufficient level to meet our companys ongoing operational needs through what

28、we hope is a short-lived situation.As of late March,we have$740.0 million of cash on hand to get us through this challenging period,which we hope will be reasonably short-lived,yet we must plan for the worst and work hard and hope for the best.Our seasoned executive team has managed through numerous

29、 crises,and we are taking all steps to conserve cash,reduce costs and safeguard the value of our properties and our company for our shareholders,to weather the storm.Despite the near-term economic impact from the COVID-19 pandemic,as well as the global uncertainty created by the virus,we remain conf

30、ident about our ability to drive effective and efficient operations,and we look forward to unlocking future value once weve emerged from this tragic,unprecedented and unimaginable period.We are extremely well prepared to respond appropriately,and we look forward to reopening all of our hotels and re

31、sorts and welcoming back our hotel workers as soon as this global crisis ends.From the bottom of our hearts,we wish all our employees,shareholders and other stakeholders health and safety throughout the balance of 2020 and beyond.Sincerely,Jon E.Bortz Chairman,President and Chief Executive Officer$1

32、.00$1.17$1.47$1.96$2.50$2.78$2.57$2.45$2.63$0.48$0.48$0.64$0.92$1.24$1.52$1.52$1.52$1.52$0.00$0.50$1.00$1.50$2.00$2.50$3.00201120122013201420152016201720182019Adjusted FFO per ShareDividend Paid per SharePerformance Summary 300%33%25%294%17%2011 2019 Adjusted FFO per Share CAGR:13%(1)Source:Bloomber

33、g(2)Source:Company earnings releases,available at (3)Source:Company filings1-Year Total Return:2019(1)Adjusted FFO per Share(2)and Dividends Paid per Share(3)33%44%28%35%3-Year Total Return:2016-2019(1)5-Year Total Return:2014-2019(1)23%11%8%5%31%29%25%25%17%0%-5%5%15%25%35%S&P 500NAREIT EquityIndex

34、Russell 2000Dow JonesIndustrial AverageBloomberg HotelREIT IndexPebblebrook16%15%10%9%3%1%0%5%10%15%20%Dow Jones IndustrialAverageS&P 500NAREIT Equity IndexRussell 2000Bloomberg Hotel REITIndexPebblebrook13%12%8%8%1%-6%-10%-5%0%5%10%15%Dow Jones IndustrialAverageS&P 500NAREIT Equity IndexRussell 200

35、0Bloomberg Hotel REITIndexPebblebrook 7%This page intentionally left blank UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2019 OR TRANSITION REPO

36、RT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to .Commission File Number 001-34571 PEBBLEBROOK HOTEL TRUST (Exact Name of Registrant as Specified in Its Charter)Maryland 27-1055421(State of Incorporation or Organization)(I.R.S.Employer Identi

37、fication No.)4747 Bethesda Avenue,Suite 1100 Bethesda,Maryland 20814(Address of Principal Executive Offices)(Zip Code)(240)507-1300(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of Each Class Trading Symbol(s)Name of Each Exchange on

38、 Which Registered Common Shares,$0.01 par value per share PEB New York Stock Exchange 6.50%Series C Cumulative Redeemable Preferred Shares PEB-PC New York Stock Exchange 6.375%Series D Cumulative Redeemable Preferred Shares PEB-PD New York Stock Exchange 6.375%Series E Cumulative Redeemable Preferre

39、d Shares PEB-PE New York Stock Exchange 6.30%Series F Cumulative Redeemable Preferred Shares PEB-PF New York Stock Exchange Securities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities

40、 Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No 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

41、 the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to

42、 be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-a

43、ccelerated filer,or a smaller reporting company.See definition of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company

44、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 s

45、hell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the 129,144,513 common shares of beneficial interest of the registrant held by non-affiliates of the registrant was$3.6 billion based on the closing sale price on the New York Stock Exchange for such comm

46、on shares of beneficial interest as of June 30,2019.The number of common shares of beneficial interest outstanding as of February 14,2020 was 130,958,991._ DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrants Definitive Proxy Statement for its 2020 Annual Meeting of Shareholders(to be fil

47、ed with the Securities and Exchange Commission on or before April 30,2020)are incorporated by reference into this Annual Report on Form 10-K in response to Part III,Items 10,11,12,13 and 14.Pebblebrook Hotel Trust TABLE OF CONTENTS Item No.Page Forward-Looking Statements 3 PART I 1.Business 4 1A.Ris

48、k Factors 8 1B.Unresolved Staff Comments 30 2.Properties 30 3.Legal Proceedings 34 4.Mine Safety Disclosures 34 PART II 5.Market for Registrants Common Equity,Related Shareholder Matters and Issuer Purchases of Equity Securities 34 6.Selected Financial Data 38 7.Managements Discussion and Analysis o

49、f Financial Condition and Results of Operations 40 7A.Quantitative and Qualitative Disclosures About Market Risk 50 8.Financial Statements and Supplementary Data 50 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 50 9A.Controls and Procedures 51 9B.Other Inform

50、ation 51 PART III 10.Trustees,Executive Officers and Corporate Governance 51 11.Executive Compensation 51 12.Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 51 13.Certain Relationships and Related Transactions,and Trustee Independence 52 14.Principal Ac

51、countant Fees and Services 52 PART IV 15.Exhibits and Financial Statement Schedules 52 3 FORWARD-LOOKING STATEMENTS This report,together with other statements and information publicly disseminated by us,contains certain forward-looking statements within the meaning of Section 27A of the Securities A

52、ct of 1933,as amended(the Securities Act),and Section 21E of the Securities Exchange Act of 1934,as amended(the Exchange Act).We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act

53、 of 1995 and include this statement for purposes of complying with these safe harbor provisions.Forward-looking statements,which are based on certain assumptions and describe our future plans,strategies and expectations,are generally identifiable by use of the words may,will,should,potential,could,s

54、eek,assume,forecast,believe,expect,intend,anticipate,estimate,project or similar expressions.Forward-looking statements in this report include,among others,statements about our business strategy,including acquisition and development strategies,industry trends,estimated revenues and expenses,estimate

55、d costs and durations of renovation or restoration projects,estimated insurance recoveries,our ability to realize deferred tax assets and expected liquidity needs and sources(including capital expenditures and our ability to obtain financing or raise capital).You should not rely on forward-looking s

56、tatements since they involve known and unknown risks,uncertainties and other factors that are,in some cases,beyond our control and which could materially affect actual results,performance or achievements.Factors that may cause actual results to differ materially from current expectations include,but

57、 are not limited to:risks associated with the hotel industry,including competition,changes in visa and other travel policies by the U.S.government making it less convenient,more difficult or less desirable for international travelers to enter the U.S.,increases in employment costs,energy costs and o

58、ther operating costs,or decreases in demand caused by events beyond our control including,without limitation,actual or threatened terrorist attacks,natural disasters,cyber-attacks,any type of flu or disease-related pandemic,or downturns in general and local economic conditions;the availability and t

59、erms of financing and capital and the general volatility of securities markets;our dependence on third-party managers of our hotels,including our inability to implement strategic business decisions directly;risks associated with the U.S.and global economies,the cyclical nature of hotel properties,an

60、d the real estate industry,including environmental contamination and costs of complying with new or existing laws,including the Americans with Disabilities Act and similar laws;interest rate increases;our possible failure to qualify as a real estate investment trust(REIT)under the Internal Revenue C

61、ode of 1986,as amended(the Code),and the risk of changes in laws affecting REITs;the timing and availability of potential hotel acquisitions,our ability to identify and complete hotel acquisitions and our ability to complete hotel dispositions in accordance with our business strategy;the possibility

62、 of uninsured losses;risks associated with redevelopment and repositioning projects,including delays and cost overruns;and the other factors discussed under the heading Risk Factors in this Annual Report on Form 10-K.Accordingly,there is no assurance that our expectations will be realized.Except as

63、otherwise required by the federal securities laws,we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein(or elsewhere)to reflect any change in our expectations with regard thereto or any change in events,conditions or

64、 circumstances on which any such statement is based.The Company,we or us mean Pebblebrook Hotel Trust,a Maryland real estate investment trust,and one or more of its subsidiaries(including Pebblebrook Hotel,L.P.,our operating partnership),or,as the context may require,Pebblebrook Hotel Trust only or

65、Pebblebrook Hotel,L.P.only.4 PART I Item 1.Business.General Pebblebrook Hotel Trust is an internally managed hotel investment company,organized in October 2009 to opportunistically acquire and invest in hotel properties located primarily in major U.S.cities,with an emphasis on the major gateway coas

66、tal markets.As of December 31,2019,the Company owned 56 hotels with a total of 14,013 guest rooms.Substantially all of the Companys assets are held by,and all of the operations are conducted through,Pebblebrook Hotel,L.P.(our“Operating Partnership”).The Company is the sole general partner of the Ope

67、rating Partnership.At December 31,2019,the Company owned 99.7%of the common limited partnership units issued by the Operating Partnership(common units).The remaining 0.3%of the common units are owned by the other limited partners of the Operating Partnership.For the Company to qualify as a REIT unde

68、r the Code,it cannot operate the hotels it owns.Therefore,the Operating Partnership and its subsidiaries lease the hotel properties to our taxable REIT subsidiary(TRS)lessees,including subsidiaries of Pebblebrook Hotel Lessee,Inc.(collectively with its subsidiaries,“PHL”),which in turn engage third-

69、party eligible independent contractors to manage the hotels.PHL is consolidated into the Companys financial statements.Business Objectives and Strategies Acquisitions/Investments We invest in hotel properties located primarily within major U.S.cities,including Atlanta,Boston,Chicago,Key West,Los Ang

70、eles,Miami,Nashville,Naples,New York,Philadelphia,Portland,Santa Monica,San Diego,San Francisco,Seattle and Washington,D.C.,with an emphasis on major gateway urban markets.We believe these markets have barriers-to-entry and provide diverse sources of meeting and room night demand generators.In addit

71、ion,we also opportunistically target investments in resort properties located near our primary urban target markets,as well as in select destination resort markets such as south Florida and southern California.We focus on both branded and independent full-service hotels in the“upper upscale”segment

72、of the lodging industry.The full-service hotels on which we focus our investment activity generally have one or more restaurants,lounges,meeting facilities and other amenities,as well as high levels of customer service.We believe that our target markets,including the major gateway markets,are charac

73、terized by barriers-to-entry and that room-night demand and average daily rate(ADR)growth of these types of hotels will outperform the national average over the long-term,as they have in past cyclical recoveries and growth periods.We perform and utilize extensive research to evaluate any target mark

74、et and property,including a detailed review of the long-term economic outlook,trends in local demand generators,competitive environment,property systems and physical condition and property financial performance.Specific acquisition criteria may include,but are not limited to,the following:premier lo

75、cations,facilities and other competitive advantages that are not easily replicated;barriers-to-entry in the market,such as scarcity of development sites,regulatory hurdles,high per-room development costs and long lead times for new development;acquisition prices at a discount to replacement cost;pro

76、perties not subject to long-term management contracts with hotel management companies;potential return on investment initiatives,including redevelopment,rebranding,redesign,expansion and change of management;opportunities to implement value-added operational improvements;and 5 strong demand growth c

77、haracteristics supported by favorable demographic indicators.We believe that upper-upscale,full-service hotels and resorts and upscale,select-service hotels located in major U.S.urban,convention and drive-to and destination resort markets are likely to generate the most favorable returns on investme

78、nt in the lodging industry over the long-term.However,short-term increases in supply above historical averages in certain markets may temporarily affect these long-term favorable returns.Nationally,new hotel supply growth has increased from its historically low levels and is generally in-line with d

79、emand growth.Industry occupancy levels are expected to remain flat over the near term.Supply growth has increased in certain of our markets which has limited our hotels ability to increase room rates.Despite uncertainty related to international trade wars,international travel restrictions and politi

80、cal factors,economic fundamentals are stable and employment levels remain strong.We believe that portfolio diversification will allow us to benefit from growth in various customer segments,including business transient,leisure transient and group and convention room-night demand,as well as mitigate t

81、he negative impact from increases in hotel room supply.We generally seek to enter into flexible management contracts,when possible,with third-party hotel management companies for the operation of our hotels that provide us with the ability to replace operators and/or reposition properties,to the ext

82、ent that we determine to do so and align our operators with our objective of maximizing our return on investment.In addition,we believe that flexible management contracts facilitate the sale of hotels,and we may seek to sell hotels opportunistically if we believe sales proceeds may be used to repay

83、debt or invested in other hotel properties that offer more attractive risk-adjusted returns.We may engage in full or partial redevelopment,renovation and repositioning of certain properties,as we seek to maximize the financial performance of our hotels.In addition,we may acquire properties that requ

84、ire significant capital improvement,renovation or refurbishment.We also may acquire hotel and resort properties that we believe would benefit from significant redevelopment or expansion,including,for example,adding rooms,meeting facilities or other amenities.We may consider acquiring outstanding deb

85、t secured by a hotel or resort property from lenders and investors if we believe we can foreclose on or acquire ownership of the property in the near-term.In connection with our acquisitions,generally we do not intend to originate any debt financing or purchase any debt where we do not expect to gai

86、n ownership of the underlying property.Additionally,we have co-invested,and may in the future co-invest,in hotels with third parties through partnerships,joint ventures or other entities,acquiring non-controlling interests in or sharing responsibility for a property,partnership,joint venture or othe

87、r entity.Asset Management While we do not operate our hotel properties,both our asset management team and our executive management team monitor and work cooperatively with our hotel managers by advising and making recommendations in all aspects of our hotels operations,including property positioning

88、 and repositioning,revenue and expense management,operations analysis,physical design,renovation and capital improvements,guest experience and overall strategic direction.We believe we can add significant value to our portfolio through our intensive asset management strategies.Our executives and ass

89、et management team have significant experience in hotel operations and creating and implementing innovative asset management initiatives.We have developed strategic short-and long-term capital investment plans to enhance our hotels profitability through the strategic use of,among others,expansions,a

90、dditions,renovations,technology upgrades and modifications,and energy efficiency improvements.We are also focused on revenue and expense management at our properties.We work closely with our hotel operators to evaluate optimal market mix and pricing strategies,ensure quality staffing and appropriate

91、 management focus,implement best practices to minimize expenses and aggressively monitor and evaluate our hotels operations and performance.Financing Strategies 6 Over time,we intend to finance our long-term growth with issuances of common and preferred equity securities and debt financings having s

92、taggered maturities.Our debt includes senior unsecured credit facilities,term loans,unsecured notes,mortgage debt secured by our hotel properties or our leasehold interests on our hotel properties subject to ground leases and may include other unsecured debt in the future.We anticipate using our sen

93、ior unsecured revolving credit facilities,term loans,senior unsecured notes,common and preferred equity issuances,and mortgage debt financings to fund future acquisitions as well as for property redevelopments,return on investment initiatives and working capital requirements.Subject to market condit

94、ions,we intend to repay amounts outstanding under our senior unsecured revolving credit facilities from time to time with proceeds from periodic common and preferred equity issuances,long-term debt financings,cash flows from operations and opportunistic or strategic dispositions.When purchasing hote

95、l properties,we may issue limited partnership interests in our Operating Partnership as full or partial consideration to sellers who may desire to take advantage of tax deferral on the sale of a hotel or participate in the potential appreciation in value of our common shares of beneficial interest,o

96、r common shares.To date,we have not issued any limited partnership interests in our Operating Partnership to purchase hotel properties.Competition We compete for hotel investment opportunities with institutional investors,private equity investors,other REITs and numerous local,regional,national and

97、international owners,including franchisors,in each of our target markets.Some of these entities have substantially greater financial resources than we do and may be able and willing to accept more risk than we can prudently manage.Competition generally may increase the bargaining power of property o

98、wners seeking to sell and reduce the number of suitable investment opportunities offered to us or purchased by us.The hotel industry is highly competitive.Our hotels compete with other hotels,and alternative lodging marketplaces,for guests in our markets.Competitive factors include,among others,loca

99、tion,convenience,brand affiliation,room rates,range of services,facilities and guest amenities or accommodations offered and quality of guest service.Competition in the markets in which our hotels operate includes competition from existing,newly renovated and newly developed hotels in the relevant s

100、egments.Competition can adversely affect the occupancy,ADR and room revenue per available room(RevPAR)of our hotels,and thus our financial results,and may require us to provide additional amenities,incur additional costs or make capital improvements that we otherwise might not choose to make,which m

101、ay adversely affect our profitability.Seasonality Demand in the lodging industry is affected by recurring seasonal patterns which are greatly influenced by overall economic cycles,geographic locations,weather and the customer mix at the hotels.Generally,our hotels have lower revenue,operating income

102、 and cash flow in the first quarter and higher revenue,operating income and cash flow in the third quarter.Regulations Our hotel properties are subject to various federal,state and local environmental laws.Under these laws,courts and government agencies have the authority to require us,as owner of a

103、 contaminated property,to clean up the property,even if we did not know of or were not responsible for the contamination.These laws also apply to persons who owned a property at the time it became contaminated,and therefore it is possible we could incur these costs even after we sell a property.In a

104、ddition to the costs of cleanup,environmental contamination can affect the value of a property and,therefore,an owners ability to borrow using the property as collateral or to sell the property.Under the environmental laws,courts and government agencies also have the authority to require that a pers

105、on who sent waste to a waste disposal facility,such as a landfill or an incinerator,pay for the clean-up of that facility if it becomes contaminated and threatens human health or the environment.Furthermore,various court decisions have established that third parties may recover damages for injury ca

106、used by property contamination.For instance,a person exposed to asbestos while staying in a hotel may seek to recover damages if he or she 7 suffers injury from the asbestos.Lastly,some of these environmental laws restrict the use of a property or place conditions on various activities.An example wo

107、uld be laws that require a business using chemicals(such as swimming pool chemicals at a hotel property)to manage them carefully and to notify local officials that the chemicals are being used.We could be responsible for any of the costs discussed above.The costs to clean up a contaminated property,

108、to defend against a claim,or to comply with environmental laws could be material and could adversely affect the funds available for distribution to our shareholders.Prior to closing a property acquisition,we obtain Phase I environmental site assessments,or ESAs,in order to attempt to identify potent

109、ial environmental concerns at the properties.These assessments are carried out in accordance with an appropriate level of due diligence and generally include a physical site inspection,a review of relevant federal,state and local environmental and health agency database records,one or more interview

110、s with appropriate site-related personnel,review of the propertys chain of title and review of historic aerial photographs and other information on past uses of the property.We may also conduct limited subsurface investigations and test for substances of concern where the results of the Phase I ESAs

111、 or other information indicates possible contamination or where our consultants recommend such procedures.However,these Phase I ESAs or other investigations may not reveal all environmental costs that might have a material adverse effect on our business,assets,results of operations or liquidity and

112、may not identify all potential environmental liabilities.We believe that our hotels are in compliance,in all material respects,with all federal,state and local environmental ordinances and regulations regarding hazardous or toxic substances and other environmental matters,the violation of which coul

113、d have a material adverse effect on us.We have not received written notice from any governmental authority of any material noncompliance,liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties.Our properties must comply wit

114、h Title III of the Americans with Disabilities Act(the ADA)to the extent that such properties are“public accommodations”as defined by the ADA.The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is read

115、ily achievable.We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA.However,noncompliance with the ADA could result in litigation,retrofit costs and imposition of fin

116、es or an award of damages to private litigants.Additionally,properties which we may acquire may not be in compliance with the requirements of the ADA,and we endeavor to identify such noncompliance prior to our acquisition.The obligation to make readily achievable accommodations is an ongoing one,and

117、 we will continue to assess our properties and to make alterations as appropriate in this respect.Tax Status We have elected to be taxed as a REIT under Sections 856 through 860 of the Code.As a result,we generally are not subject to corporate federal income tax on that portion of our REIT taxable i

118、ncome that we currently distribute to our shareholders.A REIT is subject to numerous organizational and operational requirements,including requirements concerning the nature of our gross income and assets and specifying that we must distribute at least 90 percent of our REIT taxable income(determine

119、d without regard to the deduction for dividends paid and excluding net capital gains)each year.We will be subject to federal income tax on our taxable income at regular corporate rates if we fail to qualify as a REIT for federal income tax purposes in any taxable year,or to the extent we distribute

120、less than 100 percent of our REIT taxable income.We will also not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost.Even if we continue to qualify as a REIT for federal income tax purposes,we will be s

121、ubject to certain state and local income,franchise and property taxes.For us to qualify as a REIT under the Code,we cannot operate the hotels we own and acquire.Therefore,our Operating Partnership and its subsidiaries lease our hotel properties to our TRS lessees who in turn engage third-party eligi

122、ble independent contractors to manage our hotels.The earnings of TRS lessees are subject to taxation like other regular C corporations.Joint Venture 8 We hold a 99.99%controlling interest in The Liberty,A Luxury Collection Hotel,Boston.Since we hold a controlling interest,the joint venture has been

123、consolidated in our financial statements.The 0.01%interest of the third-party partner is included in non-controlling interests in the consolidated balance sheets.Employees We currently employ 58 full-time employees.None of our employees is a member of a union;however,some employees of the hotel mana

124、gers at several of our hotels are currently represented by labor unions and are subject to collective bargaining agreements.Available Information Our Internet website is located at .Copies of the charters of the committees of our board of trustees,our code of business conduct and ethics and our corp

125、orate governance guidelines are available on our website.All reports that we have filed with the United States Securities and Exchange Commission(the SEC)including this Annual Report on Form 10-K and our current reports on Form 8-K,can be obtained free of charge from the SECs website at www.sec.gov

126、or through our website.Item 1A.Risk Factors.The following discussion concerns some of the risks associated with our business and should be considered carefully.These risks are interrelated and you should treat them as a whole.Additional risks and uncertainties not presently known to us may also mate

127、rially and adversely affect our business operations,the value of our shares and our ability to pay dividends to our shareholders.In connection with the forward-looking statements that appear in this Annual Report on Form 10-K,in these risk factors and elsewhere,you should carefully review the sectio

128、n entitled“Forward-Looking Statements.”Risks Related to Our Business and Properties We depend on the efforts and expertise of our executive officers and would be adversely affected by the loss of their services.We depend on the efforts and expertise of our Chairman,President and Chief Executive Offi

129、cer,as well as our other executive officers,to execute our business strategy.The loss of their services,and our inability to quickly identify and hire suitable replacements,could have an adverse effect on our business activities,including,without limitation,relationships with shareholders,lenders,ma

130、nagement companies,joint venture partners and other industry personnel.Our returns could be negatively impacted if the third-party management companies that operate our hotels do not manage our hotel properties effectively.Because U.S.federal income tax laws restrict REITs and their subsidiaries fro

131、m operating or managing a hotel,we do not operate or manage any of our hotel properties.Instead,we lease all of our hotel properties to subsidiaries that qualify as TRSs,under applicable REIT laws,and our TRS lessees retain third-party managers to operate our hotels pursuant to management contracts.

132、Our cash flow from the hotels may be adversely affected if our managers fail to provide quality services and amenities or if they or their affiliates fail to maintain a quality brand name.In addition,our managers or their affiliates may manage,and in some cases may own,invest in or provide credit su

133、pport or operating guarantees,to hotels that compete with hotel properties that we own or acquire,which may result in conflicts of interest and decisions regarding the operation of our hotels that are not in our best interests.We do not have the authority to require any hotel property to be operated

134、 in a particular manner or to govern any particular aspect of the daily operations of any hotel property(for example,setting room rates).Thus,even if we believe our hotels are being operated inefficiently or in a manner that does not result in satisfactory occupancy rates,RevPAR and ADR,we cannot fo

135、rce the management company to change its method of operating our hotels.We generally will attempt to resolve issues 9 with our managers through discussions and negotiations.However,if we are unable to reach satisfactory results through discussions and negotiations,we may choose to litigate the dispu

136、te or submit the matter to third-party dispute resolution.We can only seek redress if a management company violates the terms of the applicable management contract with a TRS lessee,and then only to the extent of the remedies provided for under the terms of the management contract.Additionally,in th

137、e event that we need to replace any management company,we may be required by the terms of the management contract to pay substantial termination fees and may experience significant disruptions at the affected hotels.Our TRS lessee structure subjects us to the risk of increased hotel operating expens

138、es.Our leases with our TRS lessees require our TRS lessees to pay rent based in part on revenues from our hotels.Our operating risks include decreases in hotel revenues and increases in hotel operating expenses,which would adversely affect our TRS lessees ability to pay rent due under the leases,inc

139、luding but not limited to increases in:wage and benefit costs,which may include an increase in minimum wages and health benefit costs;repair and maintenance expenses;property taxes;insurance costs;and other operating expenses.Increases in these operating expenses can have a significant adverse impac

140、t on our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.Our ability to make distributions to our shareholders is subject to fluctuations in our financial performance,operating results and capital improvements

141、requirements.To maintain our qualification as a REIT for U.S.federal income tax purposes,we are required to distribute at least 90 percent of our REIT taxable income(determined without regard to the deduction for dividends paid and excluding any net capital gains)each year to our shareholders and we

142、 generally expect to make distributions in excess of such amount.In the event of downturns in our operating results,unanticipated capital improvements to our hotel properties or other factors,we may be unable to declare or pay distributions to our shareholders.The timing and amount of distributions

143、are in the sole discretion of our board of trustees which will consider,among other factors,our financial performance,any debt service obligations,any debt covenants and capital expenditure requirements.We cannot assure you that we will generate sufficient cash in order to fund distributions.We inve

144、st primarily in the upper-upscale segment of the lodging market,which is highly competitive and generally subject to greater volatility than most other market segments and could negatively affect our profitability.The upper-upscale segment of the hotel business is highly competitive.Our hotel proper

145、ties compete on the basis of location,room rates,quality,service levels,reputation and reservations systems,among many factors.There are many competitors in the upper-upscale segment,and many of these competitors may have substantially greater marketing and financial resources than we have.This comp

146、etition could reduce occupancy levels and RevPAR at our hotels.In addition,in periods of weak demand,as may occur during a general economic recession,profitability is adversely affected by the relatively high fixed costs of operating upper-upscale hotels.Restrictive covenants in our management contr

147、acts could preclude us from taking actions with respect to the sale or refinancing of a hotel property that would otherwise be in our best interest.We may enter into management contracts that contain some restrictive covenants or acquire properties subject to existing management contracts that do no

148、t allow the flexibility we seek,including management contracts that restrict our ability to terminate the contract or require us to pay significant termination fees.For example,the terms of some management contracts may restrict our ability to sell a property unless the purchaser is not a competitor

149、 of the manager and assumes the related management contract and meets specified other conditions which may preclude us from taking actions that would otherwise be in our best interest or could cause us to incur substantial expense.Due to our concentration in hotel investments primarily in major gate

150、way urban markets,a downturn in the lodging industry generally or a regional downturn in the markets in which we operate would adversely affect our operations and financial condition.Our primary business is hotel-related.Therefore,a downturn in the lodging industry,in general,and the segments and ma

151、rkets(especially West Coast major gateway metropolitan markets)in which we operate,in particular,would have a material 10 adverse effect on our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.Any joint venture

152、investments that we may make in the future could be adversely affected by our lack of sole decision-making authority,our reliance on our co-venturers financial condition and disputes between us and our co-venturers.We may co-invest in hotels in the future with third parties through partnerships,join

153、t ventures or other entities,acquiring non-controlling interests in or sharing responsibility for a property,partnership,joint venture or other entity.In this event,we would not be in a position to exercise sole decision-making authority regarding the property,partnership,joint venture or other enti

154、ty.Investments through partnerships,joint ventures,or other entities may,under certain circumstances,involve risks not present were a third party not involved,including the possibility that partners or co-venturers might become bankrupt,fail to fund their share of required capital contributions,make

155、 dubious business decisions or block or delay necessary decisions.Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals,and may be in a position to take actions contrary to our policies or objectives.Such investmen

156、ts may also have the potential risk of impasses on decisions,such as a sale,because neither we nor the partner or co-venturer would have full control over the partnership or joint venture.Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our

157、 expenses and prevent our officers and/or trustees from focusing their time and effort on our business.Consequently,action by,or disputes with,partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk.In addition,we may in certain cir

158、cumstances be liable for the actions of our third-party partners or co-venturers.Our hotels operated under franchise agreements are subject to risks arising from adverse developments with respect to the franchise brand and to costs associated with maintaining the franchise license.Certain of our hot

159、el properties operate under franchise agreements and we anticipate that some of the hotels we acquire in the future will operate under franchise agreements.We are therefore subject to the risks associated with concentrating hotel investments in several franchise brands,including reductions in busine

160、ss following negative publicity related to one of the brands or the general decline of a brand.Maintenance of franchise licenses for branded hotel properties is subject to franchisors operating standards and other terms and conditions including the requirement to make certain capital improvements.Fr

161、anchisors periodically inspect hotel properties to ensure that we and our lessees and management companies follow their standards.Failure by us,one of our TRS lessees or one of our third-party management companies to maintain these standards or other terms and conditions could result in a franchise

162、license being canceled.If a franchise license is canceled due to our failure to make required improvements or to otherwise comply with its terms,we also may be liable to the franchisor for a termination payment,which varies by franchisor and by hotel property.The loss of a franchise license could ma

163、terially and adversely affect the operations and the underlying value of the hotel property because of the loss of associated name recognition,marketing support and centralized reservation system provided by the franchisor and adversely affect our revenues,financial condition,results of operations,t

164、he market price of our common shares and our ability to make distributions to our shareholders.Debt service obligations could adversely affect our overall operating results,may require us to sell hotel properties,may jeopardize our qualification as a REIT and could adversely affect our ability to ma

165、ke distributions to our shareholders and the market price of our common shares.Our business strategy includes the use of both secured and unsecured debt to finance long-term growth.Incurring debt subjects us to many risks,including the risks that our cash flow from operations will be insufficient to

166、 make required payments of principal and interest,our debt may increase our vulnerability to adverse economic and industry conditions,we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt,and the terms of any refinancing will not be as favorabl

167、e as the terms of the debt being refinanced.We have placed and will continue to place mortgages on certain of our hotel properties to secure debt.To the extent we cannot meet any of our debt service obligations,we may be required to sell or we will risk losing to foreclosure some or all of 11 our mo

168、rtgaged hotel properties.If we are required to sell one or more of our hotel properties to meet debt service obligations,we may have to accept unfavorable terms.Also,covenants applicable to debt could impair our planned investment strategy and,if violated,result in a default.If we violate covenants

169、relating to indebtedness,we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms,if at all.In addition,future indebtedness agreements may require that we meet certain covenant tes

170、ts in order to make distributions to our shareholders.Higher interest rates could increase debt service requirements on any of our floating rate debt,including our senior unsecured revolving credit facilities,and could reduce the amounts available for distribution to our shareholders,as well as redu

171、ce funds available for our operations,future business opportunities or other purposes.We have obtained,and we may in the future obtain,one or more forms of interest rate protection in the form of swap agreements,interest rate cap contracts or similar agreements that are consistent with our intention

172、 to remain qualified as a REIT to“hedge”against the possible negative effects of interest rate fluctuations.However,such hedging incurs costs and we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements

173、 will honor their obligations thereunder.Adverse economic conditions could also cause the terms on which we borrow to be unfavorable.Our senior executive officers have broad discretion to make investments,and they may make investments where the returns are substantially below expectations or which r

174、esult in net operating losses.Our senior executive officers have broad discretion,within the general investment criteria established by our board of trustees,to invest our capital and to determine the timing of such investments.In addition,our investment policies may be revised from time to time at

175、the discretion of our board of trustees,without a vote of our shareholders.Such discretion could result in investments that may not yield returns consistent with expectations.Some of our hotels are subject to rights of first offer which may adversely affect our ability to sell those properties on fa

176、vorable terms or at all.We are subject to a franchisors or operators right of first offer,in some instances.These third-party rights may adversely affect our ability to timely dispose of these properties on favorable terms,or at all.The purchase or sale of properties we put under contract may not be

177、 consummated.From time to time,we enter into purchase and sale agreements for hotel properties.These transactions,whether or not consummated,require substantial time and attention from management.Furthermore,potential acquisitions and potential dispositions require significant expense,including expe

178、nses for due diligence,marketing,legal fees and related overhead.To the extent we do not consummate one or more of the transactions,these expenses will not be offset by revenues or proceeds from these properties or dispositions.If we cannot obtain financing,our growth will be limited.To maintain our

179、 qualification as a REIT for U.S.federal income tax purposes,we are required to distribute at least 90 percent of our REIT taxable income(determined without regard to the deduction for dividends paid and excluding any net capital gains)each year to our shareholders and we generally expect to make di

180、stributions in excess of such amount.As a result,our ability to retain earnings to fund acquisitions,redevelopment and development or other capital expenditures is and will continue to be limited.Although our business strategy contemplates future access to debt financing(in addition to our senior un

181、secured revolving credit facilities and term loans)to fund acquisitions,redevelopment,development,return on investment initiatives and working capital requirements,there can be no assurance that we will be able to obtain such financing on favorable terms or at all.Events in financial markets have ad

182、versely impacted the credit markets,and they may do so in the future,and,as a result,credit can become significantly more expensive and difficult to obtain,if available at all.Tightening credit markets may have an adverse effect on our ability to obtain financing on favorable terms,if at all,thereby

183、 increasing financing costs and/or requiring us to accept financing with increased restrictions and/or significantly higher interest rates.If adverse conditions in the credit marketsin particular with respect to real estate or lodging industry finance-materially deteriorate,our business could be mat

184、erially and adversely affected.12 Our cash and cash equivalents are maintained in a limited number of financial institutions and the funds in those institutions may not be fully or federally insured.We maintain cash balances in a limited number of financial institutions.Our cash balances are general

185、ly in excess of federally insured limits.The failure or collapse of one or more of these financial institutions may materially adversely affect our ability to recover our cash balances.Our conflicts of interest policy may not adequately address all of the conflicts of interest that may arise with re

186、spect to our activities.In order to avoid any actual or perceived conflicts of interest with our trustees,officers or employees,we have adopted a conflicts of interest policy to specifically address some of the potential conflicts relating to our activities.Although under this policy any transaction

187、,agreement or relationship in which any of our trustees,officers or employees has an interest must have the approval of a majority of our disinterested trustees,there is no assurance that this policy will be adequate to address all of the conflicts that may arise or will address such conflicts in a

188、manner that is favorable to us.Risks Related to Debt and Financing Our existing indebtedness contains financial covenants that could limit our operations and our ability to make distributions to our shareholders.The credit agreements that govern our existing senior unsecured revolving credit facilit

189、ies and unsecured term loan facilities contain financial and operating covenants,such as net worth requirements,fixed charge coverage,debt ratios and other limitations that restrict our ability to make distributions or other payments to our stockholders,sell all or substantially all of our assets an

190、d engage in mergers,consolidations and certain acquisitions without the consent of the lenders.In addition,property-level debt we enter into in the future may contain restrictions(including cash management provisions)that may under circumstances specified in the loan agreements prohibit our subsidia

191、ries that own our hotels from making distributions or paying dividends,repaying loans to us or other subsidiaries or transferring any of their assets to us or another subsidiary which could adversely affect our ability to make distributions to our shareholders.Failure to meet our financial covenants

192、 could result from,among other things,changes in our results of operations,the incurrence of additional debt or changes in general economic conditions.Such failures could cause one or more of our lenders to accelerate the timing of payments and could have a material adverse effect on our business,fi

193、nancial condition,results of operations and our ability to make distributions to our shareholders.The terms of our debt may restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders.Mortgage loan agreements we may enter into in the fu

194、ture may contain“cash trap”provisions that could limit our ability to make distributions to our shareholders.Mortgage loan agreements that we may enter into in the future may contain cash trap provisions that may be triggered if the performance of the hotels securing the loans declines below a thres

195、hold.If these provisions are triggered,substantially all of the profit generated by the hotel will be deposited directly into a lockbox account and then swept into a cash management account for the benefit of the lender.In that event,cash would be distributed to us only after certain items are paid,

196、including deposits into leasing and maintenance reserves and the payment of debt service,insurance,taxes,operating expenses and extraordinary capital expenditures and leasing expenses.This could adversely affect our liquidity and our ability to make distributions to our shareholders.There is refinan

197、cing risk associated with our debt.Our typical debt contains limited principal amortization;therefore,the vast majority of the principal must be repaid at the maturity of the loan in a so-called“balloon payment.”At the maturity of these loans,assuming we do not have sufficient funds to repay the deb

198、t,we will need to refinance the debt.If the credit environment is constrained at the time of our debt maturities,we would have a very difficult time refinancing debt or refinancing terms may be at substantially higher interest rates and/or lower proceeds.If we are unable to refinance our debt on acc

199、eptable terms,we may be forced to choose from a number of unfavorable options.These options include agreeing to otherwise unfavorable financing terms on one or more of our unencumbered assets,selling one or more hotels at disadvantageous terms,including unattractive prices,or defaulting on the 13 mo

200、rtgage and permitting the lender to foreclose.Any one of these options could have a material adverse effect on our business,financial condition,results of operations and our ability to make distributions to our shareholders.If we default on our secured debt,the lenders may foreclose on our hotels.Al

201、l of our indebtedness for borrowed money,except our senior unsecured revolving credit facility,term loans and senior unsecured notes,is secured by either single property first mortgage liens or leasehold interests under the ground leases on the applicable hotel.If we default on any of the secured lo

202、ans,the applicable lender will be able to foreclose on the property pledged to secure the loan.In addition to causing us to lose the property,a foreclosure may result in taxable income.Under the Code,a foreclosure would be treated as a sale of the property for a purchase price equal to the outstandi

203、ng balance of the debt secured by the mortgage.If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property,we would recognize taxable income on foreclosure even though we did not receive any cash proceeds.As a result,we may then be required to identify and ut

204、ilize other sources of cash for distributions to our shareholders.If this occurs,our financial condition,cash flow and ability to satisfy our other debt obligations or ability to pay distributions may be adversely affected.Acquiring outstanding debt secured by a hotel or resort property may expose u

205、s to risks of costs and delays in acquiring the underlying property.We may acquire outstanding debt secured by a hotel or resort property from lenders and investors if we believe we can ultimately foreclose or otherwise acquire ownership of the underlying property in the near-term through foreclosur

206、e,deed-in-lieu of foreclosure or other means.However,if we do acquire such debt,borrowers may seek to assert various defenses to our foreclosure or other actions and we may not be successful in acquiring the underlying property on a timely basis,or at all,in which event we could incur significant co

207、sts and experience significant delays in acquiring such properties,all of which could adversely affect our financial performance and reduce our expected returns from such investments.In addition,we may not earn a current return on such investments particularly if the loan that we acquire is in defau

208、lt.Changes in the method of determining the London Interbank Offered Rate(“LIBOR”),or the replacement of LIBOR with an alternative reference rate,may adversely affect our financial results.As of December 31,2019,all of the debt outstanding under our unsecured term loans and our senior unsecured revo

209、lving credit facilities was indexed to LIBOR.In July 2017,the Financial Conduct Authority(“FCA”),which regulates LIBOR,announced its intention to phase out LIBOR rates by the end of 2021.We cannot predict the further effect of the FCAs announcement,any changes in the methods by which LIBOR is determ

210、ined or any other reforms to LIBOR that may be enacted in the United Kingdom,the European Union or elsewhere.Such developments may cause LIBOR to perform differently than in the past,or cease to exist.In addition,any other legal or regulatory changes made by the FCA,ICE Benchmark Administration Limi

211、ted,the European Money Markets Institute,the European Commission or any other successor governance or oversight body,or future changes adopted by such body,in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in,among other things,a sudden or pr

212、olonged increase or decrease in LIBOR,a delay in the publication of LIBOR,and changes in the rules or methodologies in LIBOR,which may discourage market participants from continuing to administer or to participate in LIBORs determination,and,in certain situations,could result in LIBOR no longer bein

213、g determined and published.If a published U.S.dollar LIBOR rate is unavailable after 2021,the interest rates on our debt which is indexed to LIBOR will be determined using alternative methods,which may result in interest obligations which are more than or do not otherwise correlate over time with th

214、e payments that would have been made on such debt if U.S.dollar LIBOR was available in its current form.Further,the same costs and risks that may lead to the unavailability of U.S.dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine.Any of these propo

215、sals or consequences could have a material adverse effect on our financing costs,and as a result,our financial condition,operating results and cash flows.Risks Related to the Lodging Industry Economic conditions may reduce demand for hotel properties and adversely affect hotel profitability.14 The p

216、erformance of the lodging industry has historically been closely linked to the performance of the general economy and,specifically,growth in U.S.GDP.It is also sensitive to business and personal discretionary spending levels.Declines in corporate travel budgets and consumer demand due to adverse gen

217、eral economic conditions,such as declines in U.S.GDP,risks affecting or reducing travel patterns(such as governmental restrictions on in-bound international travel),lower consumer confidence or adverse political conditions can lower the revenues and profitability of hotel properties and therefore th

218、e net operating profits of our TRS lessees to whom we lease our hotel properties.Another domestic or global economic downturn may lead to a significant decline in demand for products and services provided by the lodging industry,lower occupancy levels and significantly reduced room rates.We cannot p

219、redict the pace or duration of the global economic cycles or the cycles in the lodging industry.A period of economic weakness would likely have an adverse impact on our revenues and negatively affect our financial condition,results of operations,the market price of our common shares and our ability

220、to make distributions to our shareholders.Our operating results and ability to make distributions to our shareholders may be adversely affected by various operating risks common to the lodging industry.Our hotel properties have different economic characteristics than many other real estate assets an

221、d a hotel REIT is structured differently than many other types of REITs.Our TRS lessees engage hotel managers pursuant to management contracts and pay the managers fees for managing the hotels.The TRS lessees receive all the operating profit or losses of the hotels.Moreover,virtually all hotel guest

222、s stay at a hotel for only a few nights at a time,so the rate and occupancy at each of our hotels change daily.As a result,we may have highly volatile earnings.In addition,our hotel properties are subject to various operating risks common to the lodging industry,many of which are beyond our control,

223、including the following:competition from other hotel properties and non-hotel properties that provide nightly and short-term rentals in our markets;over-building of hotels in our markets,which could adversely affect occupancy and revenues at our hotel properties;dependence on business and commercial

224、 travelers,conventions and tourism;increases in energy costs,airplane fares,government taxes and fees,and other expenses affecting travel,which may affect travel patterns and reduce the number of business and commercial travelers and tourists;increases in operating costs due to inflation and other f

225、actors that may not be offset by increased room rates;changes in interest rates and in the availability,cost and terms of debt financing;changes in governmental laws and regulations(including minimum wage increases),fiscal policies and zoning ordinances and the related costs of compliance with laws

226、and regulations,fiscal policies and ordinances;adverse effects of international,national,regional and local economic and market conditions;labor strikes or disruptions;unforeseen events beyond our control,such as terrorist attacks,cyber-attacks,travel-related health concerns and restrictions as a re

227、sult of pandemics and epidemics such as H1N1 influenza(swine flu),avian bird flu,Zika virus,SARS,MERS,and COVID-19(coronavirus),political instability,regional hostilities,imposition of taxes or surcharges by regulatory authorities,travel-related accidents and unusual weather patterns,including natur

228、al disasters such as hurricanes,tsunamis or earthquakes;strength of the U.S.dollar which may reduce in-bound international travel and encourage out-bound international travel;adverse effects of a downturn in the lodging industry;and 15 risks generally associated with the ownership of hotel propertie

229、s and real estate,as we discuss in more detail below.These factors could reduce the revenues and net operating profits of our TRS lessees,which in turn could adversely affect our financial condition,results of operations,the market price of our common shares,and our ability to make distributions to

230、our shareholders.Competition for acquisitions may reduce the number of properties we can acquire.We compete for investment opportunities with entities that may have substantially greater financial and other resources than we have.These entities generally may be able to accept more risk than we can p

231、rudently manage.This competition may generally limit the number of suitable investment opportunities offered to us or the number of properties that we are able to acquire.This competition may also increase the bargaining power of property owners seeking to sell to us,making it more difficult for us

232、to acquire new properties on attractive terms.The seasonality of the lodging industry may cause fluctuations in our quarterly revenues that cause us to borrow money to fund distributions to our shareholders.The lodging industry is seasonal in nature.This seasonality can be expected to cause quarterl

233、y fluctuations in our revenues.Our quarterly earnings may be adversely affected by factors outside our control,including weather conditions and poor economic factors.As a result,we may have to enter into short-term borrowings in certain quarters in order to offset these fluctuations in revenues and

234、to make distributions to our shareholders.The cyclical nature of the lodging industry may cause the returns from our investments to be less than we expect.The lodging industry is highly cyclical in nature.Fluctuations in lodging demand and,therefore,hotel operating performance,are caused largely by

235、general economic and local market conditions,which subsequently affect levels of business and leisure travel.In addition to general economic conditions,new hotel room supply is an important factor that can affect lodging industry fundamentals,and over-building has the potential to exacerbate the neg

236、ative impact of poor economic conditions.Room rates and occupancy,and thus RevPAR,tend to increase when demand growth exceeds supply growth.A decline in lodging demand,or a continued growth in lodging supply,could result in continued deterioration in lodging industry fundamentals and returns that ar

237、e substantially below expectations,or result in losses,which could adversely affect our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.Capital expenditure requirements at our properties may be costly and requi

238、re us to incur debt,postpone improvements,reduce distributions or otherwise adversely affect the results of our operations and the market price of our common shares.Some of the hotel properties we acquire need renovations and capital improvements at the time of acquisition and all the hotel properti

239、es we have acquired and will acquire in the future will have an ongoing need for renovations and other capital improvements,including replacement,from time to time,of furniture,fixtures and equipment.The franchisors,if any,of our hotel properties also require periodic capital improvements as a condi

240、tion to our maintaining the franchise licenses.In addition,our lenders often require that we set aside annual amounts for capital improvements to our hotel properties.These capital improvements may give rise to the following risks:possible environmental problems;construction cost overruns and delays

241、;the possibility that revenues will be reduced while rooms or restaurants are out of service due to capital improvement projects;a possible shortage of available cash to fund capital improvements and the related possibility that financing for these capital improvements may not be available to us on

242、attractive terms;and uncertainties as to market demand or a loss of market demand after capital improvements have begun.16 The costs of renovations and capital improvements could adversely affect our financial condition,results of operations,the market price of our common shares and our ability to m

243、ake distributions to our shareholders.Hotel and resort development and redevelopment is subject to timing,budgeting and other risks that may adversely affect our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.

244、We may engage in hotel development and redevelopment if suitable opportunities arise.Hotel development and redevelopment involves a number of risks,including risks associated with:construction delays or cost overruns that may increase project costs;the receipt of zoning,occupancy and other required

245、governmental permits and authorizations;development costs incurred for projects that are not pursued to completion;acts of God such as earthquakes,hurricanes,floods or fires that could adversely impact a project;the negative impact of construction on operating performance during and soon after the c

246、onstruction period;the ability to raise capital;and governmental restrictions on the nature or size of a project.We cannot assure you that any development or redevelopment project will be completed on time or within budget.Our inability to complete a project on time or within budget could adversely

247、affect our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.The increasing use by consumers of Internet travel intermediaries and alternative lodging marketplaces may reduce our revenues.Some of our hotel rooms

248、are booked through Internet travel intermediaries,such as T,E and P.As bookings through these intermediaries increase,these intermediaries may be able to obtain higher commissions,reduced room rates or other significant contract concessions from the management companies that operate the hotels we ow

249、n and acquire.Moreover,some of these Internet travel intermediaries are attempting to offer hotel rooms as a commodity,by increasing the importance of price and general indicators of quality(such as“three-star downtown hotel”),at the expense of brand identification or quality of product or service.T

250、hese intermediaries hope that consumers will eventually develop brand loyalties to their reservations system rather than to lodging brands or properties.Additional sources of competition,such as alternative lodging marketplaces like Airbnb,may,as they become more accepted,lead to a reduced demand fo

251、r conventional hotel guest rooms and to an increased supply of lodging alternatives.If the amount of bookings made through Internet travel intermediaries or the use of alternative lodging marketplaces prove to be more significant than we expect,profitability may be lower than expected,and our financ

252、ial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders may be adversely affected.We may be adversely affected by increased use of business-related technology which may reduce the need for business-related travel.The increas

253、ed use of teleconference and video-conference technology by businesses could result in decreased business travel as companies increase the use of technologies that allow multiple parties from different locations to participate at meetings without traveling to a centralized meeting location.To the ex

254、tent that such technologies play an increased role in day-to-day business and the necessity for business-related travel decreases,hotel room demand may decrease and our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareh

255、olders may be adversely affected.We and our hotel managers rely on information technology in our operations,and any material failure,inadequacy,interruption or security failure of that technology could harm our business.We and our hotel managers rely on information technology networks and systems,in

256、cluding the Internet,to process,transmit and store electronic information,and to manage or support a variety of business processes,including financial 17 transactions and records,personal identifying information,reservations,billing and operating data.We purchase some of our information technology f

257、rom vendors,on whom our systems depend.We rely on commercially available systems,software,tools and monitoring to provide security for processing,transmission and storage of confidential customer information,such as individually identifiable information,including information relating to financial ac

258、counts.Recently,a number of hotels and hotel management companies have been subject to successful cyber-attacks,including those seeking guest credit card information.Although we have taken steps to protect the security of our information systems and the data maintained in those systems,it is possibl

259、e that our safety and security measures will not be able to prevent the systems improper functioning or damage,or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks.Security breaches,including physical or electronic break-ins,computer virus

260、es,ransomware,attacks by hackers and similar breaches,can create system disruptions,shutdowns or unauthorized disclosure of confidential information or theft of corporate funds and expose us to claims by guests whose personal information is accessed.Any failure to maintain proper function,security a

261、nd availability of our information systems could interrupt our operations,damage our reputation,subject us to liability claims or regulatory penalties and could have a material adverse effect on our business,financial condition and results of operations.Many of our hotel managers carry cyber insuran

262、ce policies to protect and offset a portion of potential costs that may be incurred from a security breach.Additionally,we currently have cyber insurance policies to provide supplemental coverage above the coverage carried by our third-party managers.Despite various precautionary steps to protect ou

263、r hotels from losses resulting from cyber-attacks,however,any occurrence of a cyber-attack could still result in losses at our properties,which could affect our results of operations.We are not aware of any cyber incidents that we believe to be material or that could have a material adverse effect o

264、n our business,financial condition and results of operations.We are subject to risks associated with the employment of hotel personnel,particularly with hotels that employ unionized labor.Our third-party hotel managers are responsible for hiring and maintaining the labor force at each of our hotels.

265、Although we do not directly employ or manage employees at our hotels,we are subject to risks associated with the employment of hotel personnel,particularly at those hotels with unionized labor.From time to time,strikes,lockouts,public demonstrations or other negative actions and publicity may disrup

266、t hotel operations.In addition,we may be affected by shortages of qualified labor.If our managers are unable to hire qualified labor,our hotel customers may not receive adequate service.We also may incur increased legal costs and indirect labor costs as a result of contract disputes or other events.

267、The resolution of labor disputes or new or re-negotiated labor contracts could lead to increased labor costs,either by increases in wages or benefits or by changes in work rules that raise hotel operating costs.Furthermore,collective bargaining agreements,negotiated between the hotel managers and la

268、bor unions,may limit the ability of the hotel managers to reduce the size of hotel workforces during economic downturns.We do not have the ability to control negotiations between hotel managers and labor unions.In addition,we believe that unions are generally becoming more aggressive about organizin

269、g workers at hotels in certain locations.Potential labor activities at these hotels could significantly increase the administrative,labor and legal expenses of the third-party management companies operating these hotels and reduce the profits we receive.If additional employees at our hotels become u

270、nionized,this could have a material adverse effect on our business,financial condition and results of operations.Terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand.Previous terrorist attacks and subsequent terrorist alerts have adversely affected the U

271、.S.travel and hospitality industries over the past several years,often disproportionately to the effect on the overall economy.The impact that terrorist attacks in the U.S.or elsewhere could have on domestic and international travel and our business in particular cannot be definitively determined,bu

272、t any such attacks or the threat of such attacks could have a material adverse effect on our business,our ability to finance our business,our ability to insure our properties and our results of operations and financial condition.Uninsured and underinsured losses could result in a loss of capital.We

273、maintain comprehensive property insurance on each of our hotel properties,including liability,fire and extended coverage,of the type and amount we believe are customarily obtained for or by hotel owners.There are no assurances that 18 coverage will remain available at reasonable rates.Various types

274、of catastrophic losses,like earthquakes and floods,and losses from terrorist activities,may not be insurable in whole or in part or may not be available on terms that we consider acceptable.In the event of a substantial loss,our insurance coverage may not be sufficient to cover the full market value

275、 or replacement cost of our lost investment.Should an uninsured loss or a loss in excess of insured limits occur,we could lose all or a portion of the capital we have invested in a hotel property,as well as the anticipated future revenue from the property.In that event,we might nevertheless remain o

276、bligated for any mortgage debt or other financial obligations related to the property.Inflation,changes in building codes and ordinances,environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroy

277、ed.Under those circumstances,the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.Our hotels may be subject to unknown or contingent liabilities which could cause us to incur substantial costs.The hotel properties that we own or

278、may acquire are or may be subject to unknown or contingent liabilities for which we may have no recourse,or only limited recourse,against the sellers.In general,the representations and warranties provided under the transaction agreements related to the sales of the hotel properties may not survive t

279、he closing of the transactions.While we will seek to require the sellers to indemnify us with respect to breaches of representations and warranties that survive,such indemnification may be limited and subject to various materiality thresholds,a significant deductible or an aggregate cap on losses.As

280、 a result,there is no guarantee that we will recover any amounts with respect to losses due to breaches by the sellers of their representations and warranties.In addition,the total amount of costs and expenses that may be incurred with respect to liabilities associated with these hotels may exceed o

281、ur expectations,and we may experience other unanticipated adverse effects,all of which may adversely affect our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.Noncompliance with environmental laws and regulati

282、ons could subject us to fines and liabilities which could adversely affect our operating results.Our hotel properties are subject to various federal,state and local environmental laws.Under these laws,courts and government agencies have the authority to require us,as owner of a contaminated property

283、,to clean up the property,even if we did not know of or were not responsible for the contamination.These laws also apply to persons who owned a property at the time it became contaminated,and therefore it is possible we could incur cleanup costs even after we sell some of the properties we acquire.I

284、n addition to the costs of cleanup,environmental contamination can affect the value of a property and,therefore,an owners ability to borrow funds using the property as collateral or to sell the property.Under the environmental laws,courts and government agencies also have the authority to require th

285、at a person who sent waste to a waste disposal facility,such as a landfill or an incinerator,pay for the clean-up of that facility if it becomes contaminated and threatens human health or the environment.A person that arranges for the disposal or transports for disposal or treatment of a hazardous s

286、ubstance at a property owned by another may be liable for the costs of removal or remediation of hazardous substances released into the environment at that property.Furthermore,various court decisions have established that third parties may recover damages for injury caused by property contamination

287、.For instance,a person exposed to asbestos while staying in a hotel may seek to recover damages if he or she suffers injury from the asbestos.Also,some of these environmental laws restrict the use of a property or place conditions on various activities.An example would be laws that require a busines

288、s using chemicals(such as swimming pool chemicals at a hotel property)to manage them carefully and to notify local officials that the chemicals are being used.We could be responsible for any of the costs discussed above.The costs to clean up a contaminated property,to defend against a claim,or to co

289、mply with environmental laws could be material and could adversely affect our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.As a result,we may become subject to material environmental liabilities.We can make

290、no assurances that future laws or regulations will not impose material environmental liabilities or that the current environmental condition of our hotel properties will not be affected by the condition of the properties in the vicinity of our hotel properties(such as the presence of leaking undergr

291、ound storage tanks)or by third parties unrelated to us.19 Our hotel properties may contain or develop harmful mold,which could lead to liability for adverse health effects and costs of remediating the problem.When excessive moisture accumulates in buildings or on building materials,mold growth may o

292、ccur,particularly if the moisture problem remains undiscovered or is not addressed over a period of time.Some molds may produce airborne toxins or irritants.Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms,includ

293、ing allergic or other reactions.Some of our properties may contain microbial matter such as mold and mildew.The presence of significant mold at any of our hotel properties could require us to undertake a costly remediation program to contain or remove the mold from the affected property.The presence

294、 of significant mold could expose us to liability from hotel guests,hotel employees and others if property damage or health concerns arise.Compliance with the Americans with Disabilities Act could require us to incur substantial costs.Under the ADA,all public accommodations must meet various federal

295、 requirements related to access and use by disabled persons.While we believe that our hotels are substantially in compliance with these requirements,a determination to the contrary could require removal of access barriers and non-compliance could result in litigation costs,costs to remediate deficie

296、ncies,U.S.government fines or damages to private litigants.If we are required to make substantial modifications to our hotel properties,whether to comply with the ADA or other changes in governmental rules and regulations,our financial condition,results of operations,the market price of our common s

297、hares and our ability to make distributions to our shareholders could be adversely affected.The nature of the operations of our hotels exposes us to the risk of claims and litigation that may arise in the normal course of business.As owners of hotel properties,we face potential claims,litigation and

298、 threatened litigation from guests,visitors to our properties,contractors,sub-contractors and others.These claims and proceedings are inherently uncertain and their costs and outcomes cannot be predicted with certainty.Regardless of their outcomes,such claims and legal proceedings can have an advers

299、e impact on us because of the legal and other costs,diversion of management time and resources and other factors.Although we and our hotel management companies maintain insurance covering some of these matters,it is possible that one or more claims,suits or proceedings may not be covered by insuranc

300、e and could result in substantial costs,judgments,fines and penalties that could adversely affect our business,consolidated financial position,results of operations or cash flows.A delay in approving a budget and/or continuing appropriation legislation to fund the operations of the federal governmen

301、t,failure to raise the borrowing limit for the federal government,and other legislative changes and governmental disruptions could affect travel directly and indirectly and may thereby negatively impact our revenues and cash available for distributions.The delay in approving a budget and continuing

302、appropriation legislation to fund the operations of the federal government caused many federal agencies to cease or curtail some activities during the fourth quarter of 2013 and for an even longer period of time beginning in the fourth quarter of 2018.In April 2013,the Federal Aviation Administratio

303、n announced the implementation of furloughs of air traffic controllers,resulting in flight delays throughout the United States until the U.S.Congress passed a bill suspending such furloughs.There can be no assurance that similar action or inaction by federal or state government agencies,or other eff

304、orts to reduce government expenditures or growth,will not occur again in future periods,resulting in difficulties and discouraging travel or meetings and conferences.The reduction in income from both businesses and federal government employees and the possibility of another federal government impass

305、e may adversely affect consumer confidence or may discourage both business and leisure travel,resulting in the deferral or cancellation of travel and a negative effect on our group and transient revenues in the future.Such impacts could have a material adverse impact on our consolidated financial st

306、atements.General Risks Related to the Real Estate Industry 20 Illiquidity of real estate investments could significantly impede our ability to sell hotels or otherwise respond to adverse changes in the performance of our hotel properties.Because real estate investments are relatively illiquid,our ab

307、ility to promptly sell one or more hotel properties for reasonable prices in response to changing economic,financial and investment conditions will be limited.The real estate market is affected by many factors beyond our control,including:adverse changes in international,national,regional and local

308、economic and market conditions;changes in interest rates and in the availability,cost and terms of debt financing;changes in governmental laws and regulations,fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations,fiscal policies and ordinances;the ongoin

309、g need for capital improvements,particularly in older structures;changes in operating expenses;and civil unrest,acts of God,including earthquakes,floods,wildfires and other natural disasters,which may result in uninsured losses,and acts of war or terrorism.We have acquired hotels,and may acquire add

310、itional hotels in the future,subject to ground leases or other leasehold interests.Sales of property subject to such leases may require the consent of the lessors.This consent requirement may make it more difficult or expensive to sell or finance the hotels subject to ground leases or other leasehol

311、d interests.We may decide to sell hotel properties in the future.We cannot predict whether we will be able to sell any hotel property for the price or on the terms set by us,or whether any price or other terms offered by a prospective purchaser would be acceptable to us.We also cannot predict the le

312、ngth of time needed to find a willing purchaser and to close the sale of a hotel property.We may be required to expend funds to correct defects or to make improvements before a hotel property can be sold.We cannot assure you that we will have funds available to correct those defects or to make those

313、 improvements.In acquiring a hotel property,we may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose other restrictions,such as a limitation on the amount of debt that can be placed or repaid on that property.These factors and any othe

314、rs that would impede our ability to respond to adverse changes in the performance of the hotel properties or a need for liquidity could adversely affect our financial condition,results of operations,the market price of our common shares and our ability to make distributions to our shareholders.If st

315、ates and localities in which we own material amounts of property or conduct material amounts of business raise their income and property tax rates or amend their tax regimes in a manner that increases our state and local tax liabilities,we would have less cash available for distribution to our share

316、holders and the market price of our shares could be adversely affected.We and our subsidiaries are subject to income tax and other taxes by states and localities in which we conduct business.Additionally,we are and will continue to be subject to property taxes in states and localities in which we ow

317、n property,and our TRS lessees are and will continue to be subject to federal,state and local corporate income tax.States and localities may seek additional sources of revenue to reduce budget deficits and otherwise improve their financial condition or provide more services,they may,among other step

318、s,raise income and property tax rates and/or amend their tax regimes to eliminate for state income tax purposes the favorable tax treatment REITs enjoy for U.S.federal income tax purposes.We cannot predict when or if any states or localities would make any such changes,or what form those changes wou

319、ld take.If states and localities in which we own material amounts of property or conduct material amounts of business make changes to their tax rates or tax regimes that increase our state and local tax liabilities,such increases would reduce the amount of cash available for distribution to our shar

320、eholders and could adversely affect the market price of our shares.The costs of compliance with or liabilities under environmental laws could significantly reduce our profitability.21 Operating expenses at our hotels could be higher than anticipated due to the cost of complying with existing or futu

321、re environmental laws and regulations.In addition,an owner of real property can face liability for environmental contamination created by the presence or discharge of hazardous substances on the property.We may face liability regardless of:our lack of knowledge of the contamination;the timing of the

322、 contamination;the cause of the contamination;or the party responsible for the contamination of the property.Environmental laws also impose ongoing compliance requirements on owners and operators of real property.Environmental laws potentially affecting us address a wide variety of matters,including

323、,but not limited to,asbestos-containing building materials,storage tanks,storm water and wastewater discharges,lead-based paint,mold/mildew and hazardous wastes.Failure to comply with these laws could result in fines and penalties and/or expose us to third-party liability.Some of our properties may

324、have conditions that are subject to these requirements,and we could be liable for such fines or penalties and/or liable to third parties.Certain hotel properties we own or may own in the future may contain,or may have contained,asbestos-containing building materials(ACBMs).Environmental laws require

325、 that ACBMs be properly managed and maintained and may impose fines and penalties on building owners and operators for failure to comply with these requirements.Also,certain properties may be adjacent or near other properties that have contained or currently contain storage tanks for the storage of

326、petroleum products or other hazardous or toxic substances.These operations create a potential for the release of petroleum products or other hazardous or toxic substances.Third parties may be permitted by law to seek recovery from owners or operators for property damage and/or personal injury associ

327、ated with exposure to contaminants,including,but not limited to,petroleum products,hazardous or toxic substances and asbestos fibers.We have obtained Phase I environmental site assessments(ESAs)on our hotel properties and expect to do so for hotel properties we acquire in the future.ESAs are intende

328、d to evaluate information regarding the environmental condition of the surveyed property and surrounding properties based generally on visual observations,interviews and certain publicly available databases.These assessments do not typically take into account all environmental issues including,but n

329、ot limited to,testing of soil or groundwater or the possible presence of asbestos,lead-based paint,radon,wetlands or mold.As a result,these assessments may fail to reveal all environmental conditions,liabilities or compliance concerns.Material environmental conditions,liabilities or compliance conce

330、rns may arise after the ESAs and future laws,ordinances or regulations may impose material additional environmental liability.We cannot assure you that costs of future environmental compliance will not affect our ability to make distributions to our shareholders or that such costs or other remedial

331、measures will not be material to us.The presence of hazardous substances on a property may limit our ability to sell the property on favorable terms or at all,and we may incur substantial remediation costs.The discovery of material environmental liabilities at our properties could subject us to unan

332、ticipated significant costs,which could significantly reduce our profitability and the cash available for distribution to our shareholders.Risks Related to Our Organization and Structure Provisions of our declaration of trust may limit the ability of a third party to acquire control of us by authori

333、zing our board of trustees to authorize issuances of additional securities.Our declaration of trust authorizes our board of trustees to issue up to 500,000,000 common shares and up to 100,000,000 preferred shares.In addition,our board of trustees may,without shareholder approval,amend our declaration of trust to increase the aggregate number of our shares or the number of shares of any class or se