SOHON

• RevPAR trends: Q2 composite portfolio RevPAR down, with impact of DOGE program spending cuts and tariff policies. Highlights of key assets: Hotel Ballast in Wilmington had solid performance, DoubleTree Philadelphia Airport had solid Q2 despite market ADR softness, Hyde Beach House had strong results. Portfolio profitability: Hotel EBITDA margin declined 2.5% y-o-y in Q2, but operators maintained rate discipline. Corporate activity: Proactively managing debt maturities, engaged consultant for loan extension at The Georgian Terrace Hotel, confident in addressing Hollywood mortgage maturity. Capital expenditures: Anticipated ~$7.1M for routine CAPEX, ~$5.6M for product improvement plans at DoubleTree properties.

• Projected total revenue for full year 2025 is in the range of $185.2 million to $188.2 million, midpoint represents a 2.6% increase over prior year. - Hotel EBITDA projected in the range of $45.3 million to $45.8 million, midpoint represents a 2.6% decrease from prior year. - Adjusted FFO projected in the range of $6.9 million to $7.5 million or $0.34 to $0.37 per share.

For the second quarter, total revenue was approximately $48.8 million, a 3.7% decrease from the same quarter in 2024. Year-to-date total revenue was approximately $97.1 million, a 0.1% decrease from the prior year. Hotel EBITDA for the quarter was approximately $13.9 million, a 11.5% decrease from Q2 2024. Year-to-date hotel EBITDA was approximately $26.8 million, a 4.4% decrease from the prior year. Adjusted FFO for Q2 was approximately $4.8 million, a decrease of approximately $2.7 million from Q2 2024. Year-to-date adjusted FFO was approximately $9.3 million, a decrease of $3.4 million from the prior year. The composite portfolio RevPAR decreased 5.4% in Q2 2025, driven by a 3.5% occupancy decrease and 1.9% ADR decrease. Stripping out Tampa, composite RevPAR decreased slightly better than 5%, with a 2.3% occupancy decrease and 2.8% ADR decrease. YTD composite portfolio RevPAR decreased 0.5%, driven by a 0.9% occupancy increase and 1.5% rate decrease. Stripping out Tampa, composite RevPAR decreased 0.1%, driven by a 2.1% occupancy increase and 2.1% rate decrease.

• Macro economic uncertainty and softening demand. - DOGE-related spending cuts and tariff policies impacting group and business traveler demand. - Mortgage market challenges with loan maturities and refinancing difficulties. - Elevated interest rates, persistent inflationary pressures, and geopolitical uncertainty affecting consumer and corporate sentiment.

Q: David, you mentioned Savannah was hard hit in the quarter. Can you talk more about Savannah?

A: Savannah had an outsized negative impact. Transient travel was off and there was government business impacted by DOGE-related activities. Group bookings in Savannah were affected as groups were hesitant to overspend on banquet and catering due to uncertain funding outlook.

Q: Your guidance reduction, is this reflecting further government-related pullback or is the second quarter level the new pace?

A: The guidance reduction reflects our most recent forecast for the entire year, based on current trends in group and leisure bookings across the portfolio.

Q: Are there other asset sales planned besides the parking garage at Georgian Terrace?

A: There are options being explored, including tapping into equity in hotels for refinancing and considering sale of other tangential assets if necessary, though not the preferred option.

Q: Why is the mortgage market for hotels still challenged given hotels have fully recovered since the pandemic?

A: Debt yields are still stubbornly high compared to pre-pandemic levels. Interest rates are elevated, debt service coverage ratios and covenants are tougher, and lenders are cautious, creating a challenging mortgage market for hotels.