v3.26.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2026
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Ashford Inc.
Advisory Agreement
Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman, Mr. Monty Bennett, also serves as chairman of the board of directors and is the chief executive officer of Ashford Inc. Under our advisory agreement, we pay advisory fees to Ashford LLC. We pay a monthly base fee equal to 1/12 of the sum of (i) 0.70% of the total market capitalization of our 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 our advisory agreement was in effect; provided, however, in no event would the base fee for any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the fifth business day of each month.
The minimum base fee for Braemar for each month is equal to the greater of:
▪90% of the base fee paid for the same month in the prior year; and
▪1/12 of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.
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). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group, we pay Ashford LLC an incentive fee over the following three years, subject to the Fixed Charge Coverage Ratio (“FCCR”) Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also 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, PSUs and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.
The following table summarizes the advisory services fees incurred (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Advisory services fee
Base advisory fee$4,030 $3,539 $11,587 $10,592 
Reimbursable expenses (1)
3,468 3,825 10,595 10,403 
Equity-based compensation (2)
— 75 — (24)
Incentive fee— 476 — 746 
Total$7,498 $7,915 $22,182 $21,717 
________
(1)Reimbursable expenses include overhead, internal audit, risk management advisory, asset management services and deferred cash awards.
(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.
On August 26, 2025, Braemar entered into a Letter Agreement with Ashford Inc. to explore a potential sale of Braemar. Pursuant to the Letter Agreement, Braemar and Ashford Inc. agreed that the termination fee payable to Ashford Inc. under the advisory agreement was $574.8 million (exclusive of accrued fees). However, Braemar and Ashford Inc. agreed to the payment of a discounted aggregate amount of $480.0 million plus accrued fees (the “Company Sale Fee”). Ashford Inc. received a $17.0 million payment upon execution of the agreement. The $17.0 million payment would be credited against other amounts due to Ashford Inc. from Braemar if the sale of the Company did not occur before July 1, 2028. The payment was presented in “deposit paid to Ashford Inc.” on the condensed consolidated balance sheets as of December 31, 2025.
On December 22, 2025, Braemar entered into an amendment to the Letter Agreement. The Amendment was entered into in order to eliminate unintended ambiguity regarding the circumstances under which the termination fees become due and payable to Ashford Inc. and the timing of payment in order to more fully reflect the parties’ original intent under the Letter Agreement and ensure consistency across potential transaction structures in how the proceeds from a Company Sale Transaction (as defined in the Letter Agreement) are applied. Specifically, the Amendment revised the definition of “Company Sale Transaction” to clarify that it is a Company Change of Control (as defined in the advisory agreement). Pursuant to the Amendment, Braemar and Ashford Inc. further agreed that the Company Sale Fee (as defined in the Letter Agreement) would
be paid directly to Ashford Inc. from Net Sale Proceeds (as defined in the Amendment) of a Company Sale Transaction (as defined in the Amendment), after payment of any Master Agreement Termination Fee (as defined in the Amendment), but before any other payments, dividends or distributions are made. In the event that Braemar’s assets are sold in more than one Company Sale Transaction and the Net Sale Proceeds from a particular Company Sale Transaction were insufficient to pay the Company Sale Fee and accrued fees in full, the Amendment provided that the Net Sale Proceeds from subsequent sales or dispositions of assets would be applied towards the payment of the Company Sale Fee until the Company Sale Fee was paid in full.
The Amendment further provided that upon the complete satisfaction and discharge of the Company Sale Fee, and the Master Agreement Termination Fee (if applicable), each of the Company and Ashford Inc. could terminate the advisory agreement upon providing 60 days’ prior written notice to the other. The Amendment further provided that in the case of a sale or disposition of assets representing 50% or more of the Gross Asset Value (as defined in the advisory agreement and calculated as of January 1, 2025) of all of Braemar’s assets, the buyer must pay directly to Ashford Inc. the cash proceeds from such sale or disposition transaction necessary to satisfy the Master Agreement Termination Fee, and the related master agreements would terminate upon closing of such transaction. If proceeds were insufficient to pay the Master Agreement Termination Fee, proceeds from subsequent sales would be applied until the fee was paid in full. Additionally, upon the approval of a plan of liquidation by Braemar’s stockholders, the master agreements would terminate, subject to payment of the Master Agreement Termination Fee.
On July 14, 2026, the Company completed the sale of The Ritz-Carlton Sarasota, the Bardessono Hotel and Spa and the Hotel Yountville. Upon closing, the Company Sale Fee was triggered under the Advisory Agreement with Ashford Inc., and as a result, the Company incurred a related liability of $480.0 million during the third quarter of 2026. The $17.0 million payment previously paid by the Company to Ashford Inc. was credited against the Company Sale Fee. The Company subsequently paid $173.0 million to Ashford Inc. from proceeds from the sale to pay down a portion of the Company Sale Fee. The Company additionally completed the sale of the Pier House Resort & Spa on August 12, 2026, and paid $92.0 million to Ashford Inc. from proceeds from the sale to pay down a portion of the Company Sale Fee. The Company recorded a liability of $198.0 million in “due to Ashford Inc., net” as of September 30, 2026 for the remaining unpaid portion of the Company Sale Fee.
Allocation Agreement
On October 6, 2026, the Company, Ashford Hospitality Trust, Inc. and Ashford Inc. entered into a Cooperation and Settlement Agreement (the “Settlement Agreement”) with Al Shams Investments Limited (“Al Shams”), the Company’s largest stockholder, resolving claims Al Shams had asserted or threatened to assert. Under the settlement, the Company agreed to pay Al Shams $25.0 million in settlement of the disputed claims plus $15.0 million in expense reimbursement, payable in installments (collectively the “Settlement Payment”). Also on October 6, 2026, the Company and Ashford Inc. entered into an Allocation Agreement (the “Allocation Agreement”), under which the Company and Ashford Inc. each bear 50% of the Settlement Payment, net of applicable insurance proceeds, which are currently estimated to be between $29.5 million and $32.0 million. The Company’s net cost of the Settlement Payment after application of any applicable insurance proceeds and contributions made by Ashford Inc. under the Allocation Agreement is currently estimated to be between $4.0 million and $5.3 million. The Settlement Payment is payable in three installments: $20.0 million, which was paid on October 6, 2026, $10.0 million due in February 2027 and $10.0 million due in June 2027.
The Company accounted for the Settlement Agreement as a recognized subsequent event. As of September 30, 2026, the Company recognized a liability of $40.0 million in “accounts payable and accrued expenses” for the Settlement Payment. The Company also recognized an insurance recovery receivable of $16.0 million in “other assets,” representing its 50% share of the estimated insurance proceeds under the Allocation Agreement, and a receivable from Ashford Inc. of $20.0 million in “due to Ashford Inc., net,” representing Ashford Inc.’s 50% share of the Settlement Payment. The Company recognized a net charge of $4.0 million in “corporate general and administrative” in its condensed consolidated statements of operations for the three and nine months ended September 30, 2026.
Other Agreements under the Advisory Agreement
On March 10, 2025, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “March 2025 Limited Waiver”). Pursuant to the March 2025 Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor 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 2025, cash incentive compensation to employees and other representatives of the Advisor.
On March 13, 2026, we entered into a Limited Waiver Under Advisory Agreement with Ashford Inc. and Ashford LLC (the “March 2026 Limited Waiver”). Pursuant to the March 2026 Limited Waiver, the Company, the Operating Partnership, TRS and the Advisor 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 the Advisor.
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 workers’ compensation, general liability and auto liability coverages. The hotel management companies procure workers’ compensation insurance, the expenses of which are passed through to the Company. Under the advisory agreements 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.
Lismore
We engage Lismore or its subsidiaries to provide debt placement services and assist with loan modifications or refinancings on our behalf and brokerage services.
For both the three and nine months ended September 30, 2026, we incurred no fees from Lismore or its subsidiaries. For the three and nine months ended September 30, 2025, we incurred fees from Lismore or its subsidiaries of $0 and $1.7 million, respectively.
Ashford Securities
The Company, Ashford Trust, and Ashford Inc. were 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”). As of September 30, 2026, Braemar has funded approximately $13.7 million.
The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Line Item2026202520262025
Corporate general and administrative
$— $— $435 $— 
Design and Construction Services
Premier Project Management LLC (“Premier”), 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) for the following services: (i) architectural (6.5% of total construction costs); (ii) construction management for projects without a general contractor (10% of total construction costs); (iii) interior design (6% of the purchase price of the FF&E designed or selected by Premier); and (iv) FF&E purchasing (8% of the purchase price of FF&E purchased by Premier; provided that if the purchase price exceeds $2.0 million for a single hotel in a calendar year, then the purchasing fee is reduced to 6% of the FF&E purchase price in excess of $2.0 million for such hotel in such calendar year). Such fees are payable monthly as the service is delivered based on percentage complete, as reasonably determined by Premier for each service, or payable as set forth in other agreements.
Hotel Management Services
As of September 30, 2026, Remington Hospitality managed two of our eight 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.
Investment in OpenKey
The Company previously held an investment in OpenKey, Inc. (“OpenKey”), a subsidiary of Ashford Inc., with a carrying value of $0 as of December 31, 2025. During the fourth quarter of 2025, Ashford Inc., Ashford Trust and Braemar entered into a purchase and sale agreement to sell OpenKey. The transaction closed in January 2026.
The Company also previously had a loan funding agreement with Ashford Inc. and OpenKey. During the fourth quarter of 2025, we determined that the full amount of the note receivable was not collectible and the note receivable was impaired. As of September 30, 2026 and December 31, 2025, the carrying amount of the note receivable was $0 and $89,000, respectively included in “investment in unconsolidated entity” on our condensed consolidated balance sheets. During the nine months ended September 30, 2026, the Company received proceeds of approximately $58,000 related to the note receivable with OpenKey and wrote off the remaining $31,000 balance.
Consulting Agreement with Blackwells
Effective July 6, 2026, the Company entered into a consulting agreement with Blackwells Capital LLC and Jason Aintabi (collectively, “Blackwells”), pursuant to which Blackwells agreed to provide advisory and consulting services to the Company and its affiliates on an as-requested basis.
In exchange for these services, the Company agreed to pay Blackwells a monthly fee of $100,000 for up to twelve months, with total compensation capped at $1.0 million. Blackwells is engaged as an independent contractor, with no entitlement to employee benefits, expense reimbursement, or tax withholding by the Company. The consulting agreement has a one-year term but may be terminated by the Company at any time upon written notice, with fees prorated for any partial month. The Company paid Blackwells $300,000 during the three and nine months ended September 30, 2026 under the consulting agreement.