v3.26.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2026
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Ashford Inc.
Advisory Agreement with Ashford Trust OP
Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman, Mr. Monty J. Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc.
On March 27, 2026, the Company entered into the Advisory Agreement with Ashford Inc. and Ashford LLC. The Advisory Agreement amends and restates the terms of the Third Amended and Restated Advisory Agreement, dated as of March 12, 2024 and extends the initial term of the Advisory Agreement to December 31, 2055 with two 20-year possible extensions.
Under our Advisory Agreement, we pay advisory fees to Ashford LLC. Advisory fees consist of base fees and incentive fees. We pay a monthly base fee in an amount equal to 1/12 of (i) 0.70% of the Total Market Capitalization (the “TMC”) (as defined in our Advisory Agreement) of the Company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our Advisory Agreement), if any, on the last day of the prior month during which the advisory agreement was in effect. The Advisory Agreement also provides for, among other things, (i) the potential for the TMC component of the calculation of the Net Asset Fee Adjustment to be reduced from 70 basis points to: 50 basis points if the TMC is greater than or equal to $4 billion, 30 basis points if the TMC is greater than or equal to $5 billion and zero basis points if the TMC is $6 billion or greater.
However, the Base Fee (as defined in our Advisory Agreement) shall in no event for any month be less than the Minimum Base Fee as provided by the Advisory Agreement. The Company shall pay the Base Fee or the Minimum Base Fee (as defined in our Advisory Agreement) on the fifth business day of each month.
The Minimum Base Fee for Ashford Trust for each quarter is equal to the greater of:
(i) 90% of the base fee paid for the same month in the prior fiscal year; and
(ii) 1/12th of the G&A Ratio (as defined in the advisory agreement) for the most recently completed fiscal quarter multiplied by the TMC.
We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the Advisory Agreement is terminated at other than year-end). In each year that the Company’s total shareholder return exceeds the average total shareholder return for the peer group, the Company shall pay to Ashford LLC an incentive fee. The incentive fee, if any, subject to the Fixed Charge Coverage Ratio Condition (as defined in the Advisory Agreement), shall be payable in arrears in three equal annual installments.
We reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the Advisory Agreement. We also record equity-based compensation expense for equity grants of common stock and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services. Under the Advisory Agreement, the Company may also grant cash incentive awards to employees, officers, affiliates and representatives of Ashford LLC.
Under our Advisory Agreement, Ashford Trust OP is obligated to indemnify Ashford LLC for any and all tax liabilities arising from asset dispositions, deemed distributions, or fair market value and tax basis adjustments occurring since January 1, 2024. As of March 31, 2026, the Company has accrued a liability of $9.7 million related to this obligation, which is included in “due to Ashford Inc., net” in our consolidated balance sheet. See note 14.
If we terminate the Advisory Agreement without cause or upon a change of control, we will be required to pay on or before the termination date Ashford LLC a termination fee equal to the following: the present value of a payment stream calculated by assuming that Foregone Adjusted EBITDA (as defined in the Advisory Agreement) will be earned annually over a subsequent period of 30 years, discounted at two percent per annum, as reasonably calculated by Ashford LLC (the “Termination Fee”).
Notwithstanding the foregoing, through December 31, 2026, following a breach of the asset disposition limits that would otherwise constitute a company change of control and trigger a termination fee, no company change of control shall automatically be deemed to have occurred for at least six months, after which Ashford LLC will have 18 months to trigger a company change of control at any time, provided that the Company’s Annualized Portfolio Cash Flow (as defined in the Advisory Agreement) must be less than $65 million at the time of triggering. Additionally, upon a company change of control or similar scenario, Ashford LLC may begin escrowing the termination fee; provided that the Company must be restored to the same condition within 30 days if a change of control does not ultimately occur.
The following table summarizes the advisory services fees incurred (in thousands):
Three Months Ended March 31,
20262025
Advisory services fee
Base advisory fee$8,308 $8,069 
Reimbursable expenses (1)
11,687 3,182 
Equity-based compensation (2)
28 (67)
Incentive fee— 93 
Total advisory services fee$20,023 $11,277 
________
(1)Reimbursable expenses include overhead, internal audit, risk management advisory, asset management services, deferred cash awards and certain tax obligations.
(2)Equity-based compensation is associated with equity grants of Ashford Trust’s common stock, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.
Limited Waivers Under Advisory Agreement with Ashford Trust OP
On March 13, 2026, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “2026 Advisory Agreement Limited Waiver”). Pursuant to the 2026 Advisory Agreement Limited Waiver, the Company, the Operating Partnership, TRS, Ashford Inc. and Ashford LLC waived the operation of any provision in our advisory agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during calendar year 2026, cash incentive compensation to employees and other representatives of Ashford Inc. and Ashford LLC.
On December 9, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “December 2025 Limited Waiver”). The December 2025 Limited Waiver permits the Company, Ashford Trust OP, Ashford TRS, Ashford Inc. and Ashford LLC to proceed with the Retention Agreement and related reimbursements for severance or non‑compete payments to Stephen Zsigray without triggering restrictions under the Advisory Agreement, and it is effective solely for this specific instance.
On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “2025 Limited Waiver”). Pursuant to the Limited Waiver, the Company, Ashford Trust OP, Ashford TRS, Ashford Inc. and Ashford LLC waived the operation of any provision in our Advisory Agreement that would otherwise limit the ability of the Company in its discretion, at the Company’s cost and expense, to award during the first and second fiscal quarters of calendar year 2025, cash incentive compensation to employees and other representatives of the Advisor.
Promissory Note with Ashford LLC
Ashford Trust OP holds a promissory note with Ashford LLC to allow Ashford Trust OP to draw up to $40 million in cash through November 15, 2026 to fund permitted costs (as defined in the promissory note). Funds advanced under the promissory note bear interest at an annual rate of 10% which may be paid in cash or paid in-kind at Ashford OP’s discretion. As of March 31, 2026, no amount had been drawn under the promissory note.
Advisory Agreement with Stirling OP
Prior to September 2, 2025, Stirling REIT Advisors, LLC (“Stirling Advisor”), a subsidiary of Ashford Inc., and Stirling OP were party to an advisory agreement. On September 2, 2025, the advisory agreement between Stirling Advisor and Stirling OP was terminated when the Company became the sole remaining unit holder and general partner of Stirling OP. See note 2. The following table summarizes the advisory services fees incurred by Stirling OP prior to the termination of the Stirling OP advisory agreement (in thousands):
Three Months Ended March 31,
2025
Advisory services fee
Base advisory fee$126 
Reimbursable expenses (1)
26 
Performance participation fee
116 
Total advisory services fee$268 
________
(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.
Warwick
Pursuant to the Company’s hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage, which includes worker’s compensation, general liability and auto liability coverages. The hotel management companies procure worker’s compensation insurance, the expenses of which are passed through to the Company. Under the Advisory Agreement and hotel management agreements, Ashford Inc. secures general liability and auto liability policies to cover Ashford Trust, Braemar, their hotel managers, as needed, and Ashford Inc. The total cost estimates covered by such policies are based on the collective pool of risk exposures from each party. Ashford Inc. delegates the management of the casualty insurance program to Warwick Insurance Company, LLC (“Warwick”), a subsidiary of Ashford Inc., which issues policies covering general liability, workers’ compensation and auto liability losses. Each year Ashford Inc. collects funds from Ashford Trust, Braemar and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.
Cash Management
The Company, Ashford Inc. and Braemar Hotels & Resorts Inc. (“Braemar”) are subject to an agreement pursuant to which Ashford LLC is to implement the REIT’s cash management strategies. This includes actively managing the REIT’s excess cash by primarily investing in short-term U.S. Treasury securities. The annual fee is 20 basis points (“bps”) of the average daily balance of the funds managed by Ashford LLC and is payable monthly in arrears.
Lismore
We engage Lismore or its subsidiaries to provide debt placement services, assist with loan modifications or refinancings on our behalf and provide brokerage services. During the three months ended March 31, 2026 and 2025, we incurred fees of $0 and $1.8 million, respectively.
Ashford Securities
The Company, Braemar and Ashford Inc. are party to the Fourth Amended and Restated Contribution Agreement with respect to funding certain expenses of Ashford Securities LLC, a subsidiary of Ashford Inc. (“Ashford Securities”). Effective December 9, 2025, the Parties entered into the Wind‑Down and Investor Servicing Cost Sharing Agreement providing for the orderly wind‑down of Ashford Securities as a FINRA member and SEC‑registered broker‑dealer and allocating all related wind‑down and investor servicing costs among the Parties based on each Party’s proportion of outstanding shares in applicable investment products as of each quarterly measurement date. The agreement supersedes prior cost‑allocation terms solely with respect to these wind‑down and servicing obligations and remains in effect until completion of the wind‑down and the end of all related servicing requirements.
As of March 31, 2026, Ashford Trust has funded approximately $17.0 million and had a $2.4 million payable. As of December 31, 2025, Ashford Trust had funded approximately $17.0 million and had a $2.4 million payable. The payables were included in “due to Ashford Inc., net” on our consolidated balance sheets.
The table below summarizes the amount Ashford Trust has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):
Three Months Ended March 31,
Line Item20262025
Corporate, general and administrative$299 $1,580 
Design and Construction Services
Premier Project Management LLC (“Premier”), as a subsidiary of Ashford Inc., provides design and construction services to our hotels, including construction management, interior design, architectural services and the purchasing, freight management and supervision of installation of FF&E and related services. Pursuant to the design and construction services agreement, we pay Premier: (a) design and construction fees of up to 4% of project costs; and (b) market service fees at current market rates with respect to construction management, interior design, architecture, FF&E purchasing, FF&E expediting/freight management, FF&E warehousing and FF&E installation and supervision.
The design and construction services agreement provides for an initial term of ten years for each hotel. The term may be renewed by Premier, at its option, for three successive periods of seven years each, and, thereafter, a final term of four years; provided that, at the time the option to renew is exercised, Premier is not then in default under the design and construction services agreement. The design and construction services agreement also: (i) provides that fees will be payable monthly as the service is delivered based on percentage completion; (ii) allows a project management fee to be paid on a development, together with (and not in lieu of) the development fee; and (iii) fixes the fees for FF&E purchasing, expediting, freight management and warehousing at 8%.
Hotel Management Services
As of March 31, 2026, Remington Hospitality managed 45 of our 63 hotel properties.
We pay monthly hotel management fees equal to the greater of approximately $18,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met, and other general and administrative expense reimbursements primarily related to accounting services. Our hotel management agreement also requires that we fund property-level operating costs including the hotel manager's payroll and related costs.
Our hotel management agreement provides for an initial term of ten years as to each hotel. The term may be renewed by Remington Hospitality, at its option, for three successive periods of seven years each, and, thereafter, a final term of four years; provided that, at the time the option to renew is exercised, Remington Hospitality is not then in default under the hotel management agreement. The hotel management agreement also provides that Remington Hospitality may charge market premiums for its self-insured health plans to its hotel employees, the cost of which is an operating expense of the hotel properties. The amount of group services charged per room per month at each hotel is capped at $39.47 (subject to annual increases equal to the greater of 3% or the percentage change in the Consumer Price Index over the preceding annual period) (the “Cap”). Any unpaid balance will be paid by Ashford TRS and the Cap will not apply to certain hotels for whom the lessee is not a direct or indirect wholly-owned subsidiary of Ashford TRS.