Braemar Hotels & Resorts Inc.BHR

Braemar Hotels & Resorts Inc. Leases Disclosure

10-KFiled Mar 12, 20262 min read
Leases
We have operating ground leases and 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 to 50 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. We have no finance leases as of December 31, 2025.
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):
December 31, 2025December 31, 2024
Assets
Operating lease right-of-use assets$30,743 $34,852 
Liabilities
Operating lease liabilities$20,058 $19,984 
We incurred the following lease costs related to our operating leases (in thousands):
Year Ended December 31,
Classification 202520242023
Operating lease cost (1)
Hotel operating expenses - other$2,308 $4,505 $6,757 
Operating lease asset impairment
Impairment charges
3,498 — — 
_______________________________________
(1) For the years ended December 31, 2025, 2024 and 2023, operating lease cost includes approximately $416,000, $934,000 and $2.3 million, respectively, of variable lease cost associated with the ground leases. Additionally, we recorded $(21,000), $451,000 and $474,000, respectively, of amortization costs related to the intangible assets 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,
202520242023
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases (in thousands)
$1,030 $3,288 $3,310 
Weighted Average Remaining Lease Term
Operating leases (1)
40 years41 years43 years
Weighted Average Discount Rate
Operating leases (1)
5.30 %5.25 %4.98 %
_______________________________________
(1)     Calculated using the lease term, excluding extension options, and discount rates of the ground leases.
Future minimum lease payments due under non-cancellable leases as of December 31, 2025 were as follows (in thousands):
Operating Leases
2026$1,259 
20271,162 
20281,164 
20291,144 
20301,159 
Thereafter51,571 
Total future minimum lease payments (1)
57,459 
Less: interest(37,401)
Present value of operating lease liabilities$20,058 
_______________________________________
(1)     Based on payment amounts as of December 31, 2025.

Historical Timeline

Fiscal YearFiled
2025Mar 12, 2026Showing above
2024Mar 12, 2025
2023Mar 14, 2024
2022Mar 10, 2023
2021Mar 10, 2022
2020Mar 5, 2021
2019Mar 13, 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.

Other Available Disclosures

Income TaxesRevenueEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew Standards