ASHFORD HOSPITALITY TRUST INCAHT
ASHFORD HOSPITALITY TRUST INC Leases Disclosure
Leases
The majority of our leases, as lessee, are operating ground leases. We also have operating equipment leases, such as copier and vehicle leases, at our hotel properties. Some leases include one or more options to renew, with renewal terms that can extend the lease term from one year to 99 years. The exercise of lease renewal options is at our sole discretion. Some leases have variable payments, however, if variable payments are contingent, they are not included in the ROU assets and liabilities. Our lease of a single hotel property in Marietta, Georgia, is considered a finance lease.
The discount rate used to calculate the lease liability and ROU asset related to our ground leases is based on our incremental borrowing rate (“IBR”), as the rate implicit in each lease is not readily determinable. The IBR is determined at commencement of the lease, or upon modification of the lease, as the interest rate a lessee would have to pay to borrow on a fully collateralized basis over a similar term and at an amount equal to the lease payments in a similar economic environment.
As of December 31, 2025 and 2024, our leased assets and liabilities consisted of the following (in thousands):
| Lease Classification | December 31, 2025 | December 31, 2024 | ||||||||||||||||||
| Assets | ||||||||||||||||||||
| Operating lease right-of-use assets | Operating lease right-of-use assets | $ | 43,582 | $ | 43,780 | |||||||||||||||
Finance lease asset | 15,627 | 16,167 | ||||||||||||||||||
| Total leased assets | $ | 59,209 | $ | 59,947 | ||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Operating lease liabilities | Operating lease liabilities | $ | 44,045 | $ | 44,369 | |||||||||||||||
Finance lease liability | Finance lease liability | 17,536 | 17,992 | |||||||||||||||||
| Total leased liabilities | $ | 61,581 | $ | 62,361 | ||||||||||||||||
We incurred the following lease costs related to our leases (in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||
| Lease cost | Classification | 2025 | 2024 | 2023 | ||||||||||||||||||||||
| Operating lease cost | ||||||||||||||||||||||||||
| Rent expense | Hotel operating expenses - other (1) | $ | 3,260 | $ | 4,084 | $ | 4,351 | |||||||||||||||||||
| Finance lease cost | ||||||||||||||||||||||||||
| Amortization of lease assets | Depreciation and amortization | $ | 540 | $ | 540 | $ | 537 | |||||||||||||||||||
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(1) For the years ended December 31, 2025, 2024, and 2023, operating lease cost includes approximately $1.5 million, $1.0 million and $1.1 million, respectively, of variable lease cost associated primarily with the ground leases and $(122,000), $(122,000) and $(15,000), respectively of net amortization costs related to the intangible assets and liabilities that were reclassified to “operating lease right-of-use assets” upon adoption of ASC 842. Short-term lease costs in aggregate are immaterial.
Other information related to leases is as follows:
| Year Ended December 31, | |||||||||||||||||
| Supplemental Cash Flows Information | 2025 | 2024 | 2023 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases (in thousands) | $ | 2,706 | $ | 2,707 | $ | 2,647 | |||||||||||
| Weighted Average Remaining Lease Term | |||||||||||||||||
Operating leases (1) | 66 years | 66 years | 67 years | ||||||||||||||
Finance lease (2) | 29 years | 30 years | 31 years | ||||||||||||||
| Weighted Average Discount Rate | |||||||||||||||||
Operating leases (1) | 5.27 | % | 5.27 | % | 5.26 | % | |||||||||||
| Finance lease | 10.68 | % | 10.68 | % | 10.68 | % | |||||||||||
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(1) Calculated using the lease term, excluding extension options, and our calculated discount rates of the ground leases and owner managed leases.
(2) Represents our finance lease with the city of Marietta, Georgia, which terminates December 31, 2054.
Future minimum lease payments due under non-cancellable leases as of December 31, 2025 were as follows (in thousands):
| Operating Leases | Finance Lease | ||||||||||
| 2026 | $ | 3,455 | $ | 2,284 | |||||||
| 2027 | 3,417 | 1,904 | |||||||||
| 2028 | 3,403 | 1,904 | |||||||||
| 2029 | 3,282 | 1,904 | |||||||||
| 2030 | 3,208 | 1,904 | |||||||||
| Thereafter | 189,644 | 48,110 | |||||||||
Total future minimum lease payments (1) | 206,409 | 58,010 | |||||||||
| Less: interest | 162,364 | 40,474 | |||||||||
| Present value of lease liabilities | $ | 44,045 | $ | 17,536 | |||||||
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(1) Based on payment amounts as of December 31, 2025.
Other Finance Liability
On November 10, 2021, 815 Commerce LLC, a subsidiary of 815 Commerce MM, entered into a purchase and sale agreement. Pursuant to the purchase and sale agreement, 815 Commerce LLC sold its land and building in Fort Worth, Texas (the “Property”) for $30.4 million. Concurrent with the sale of the Property, 815 Commerce LLC entered into a 99-year lease agreement (the “Lease Agreement”), whereby 815 Commerce LLC will lease back the Property at an annual rental rate of approximately $1.5 million, subject to annual rent increases of 2.0%. Under the Lease Agreement, 815 Commerce LLC has a purchase option between 90-180 days prior to the commencement of the 36th lease year.
In accordance with ASC 842, Leases, this transaction was recorded as a failed sale and leaseback as there are not alternative assets, substantially the same as the transferred asset, readily available in the marketplace for the repurchase option to qualify as a sale leaseback. Upon consolidation of 815 Commerce LLC in May 2023, the Company utilized a discount rate of 8.2% to determine the fair value of the finance liability. The finance liability of $27.2 million is included in “other liabilities” on the Company’s consolidated balance sheet as of December 31, 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 23, 2026 | Showing above |
| 2024 | Mar 21, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Mar 10, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 12, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.