945394--2/24/2010--HOSPITALITY_PROPERTIES

related topics

{investment, property, distribution}

{debt, indebtedness, cash}

{tax, income, asset}

{loan, real, estate}

{interest, director, officer}

{acquisition, growth, future}

{provision, law, control}

{cost, operation, labor}

{stock, price, share}

{stock, price, operating}

{operation, natural, condition}

{cost, regulation, environmental}

{capital, credit, financial}

{financial, litigation, operation}

{cost, contract, operation}

{competitive, industry, competition}

Risks Related to Our Business Financial markets are still recovering from a period of disruption and recession, which has adversely impacted our tenants and operators and may jeopardize their abilities to pay our rents and returns. A majority of our rents and returns are guaranteed by the parent companies of our tenants and operators, but these guarantees may not ensure that payments due to us will be made. Certain managers and tenants have failed to pay the full amounts due to us, and the security deposits applied to cover the shortages will not provide cash flow to us. We may be unable to access the capital necessary to repay debts, invest in our properties, fund acquisitions, or fund required distributions to remain a REIT. We have substantial debt obligations and may incur additional debt. Financial difficulties at TA could continue or worsen. Inherent risks in the hotel industry could affect our business. Events beyond our control, including wars, terrorism, natural disasters or pandemics could significantly reduce the financial results experienced in the hotel industry generally and the financial performance of our hotels. If these or similar problems occur, persist or recur, our operating and financial results may be harmed by declines in average daily room rates and/or occupancy. We are not permitted to operate our properties and we are dependent on the managers and tenants of our properties. We depend on a limited number of operators for our properties and we have a high concentration of our properties with a limited number of operators and their brands. Increasing interest rates may adversely affect us and the value of your investment in our shares. We are subject to risks arising from litigation. We may be unable to provide the funding required for the refurbishment of our properties. Some of our management agreements and leases limit our ability to sell or finance some of our properties. Acquisitions that we make may not be successful. We face competition for the acquisition of properties. Real estate ownership creates risks and liabilities. Acquisition and ownership of real estate is subject to environmental and climate change risks, and compliance with environmental and climate change laws may be costly. Risks Related to Our Taxation The loss of our tax status as a REIT for U.S. federal income tax purposes could have significant adverse consequences. Distributions to shareholders generally will not qualify for reduced tax rates. Risks Related to Our Relationship with RMR Our management structure and our manager's other activities may create conflicts of interest. Our management agreements with RMR were negotiated between affiliated parties and may not be as favorable to us as they would have been if negotiated between unaffiliated parties. Our management agreements with RMR may discourage our change of control. The potential for conflicts of interest as a result of our management structure may provoke dissident shareholder activities that result in significant costs. We depend upon RMR to manage our business and implement our growth strategy. Risks Related to Our Organization and Structure Ownership limitations and anti-takeover provisions in our declaration of trust, bylaws and rights agreement, as well as certain provisions of Maryland law, may prevent shareholders from receiving a takeover premium or implementing changes. Our rights and the rights of our shareholders to take action against our trustees and officers are limited. Disputes with TA and RMR and shareholder litigation against us or our trustees and officers may be referred to arbitration proceedings. We may change our operational and investment policies without shareholder approval. Risks Related to Our Securities We suspended distributions on our common shares in 2009, and there is no assurance that we will make distributions in the future. Our Board of Trustees has the discretion to change our distribution policy from time to time. Any notes we may issue will be effectively subordinated to the debts of our subsidiaries and to our secured debt. Our notes may permit redemption before maturity, and our noteholders may be unable to reinvest proceeds at the same or a higher rate. There may be no public market for notes we may issue and one may not develop. We may not have the cash necessary to pay the principal return and any net amount upon the conversion of our convertible notes or to repurchase the convertible notes or other debt on specified dates or following certain change in control transactions. Rating agency downgrades may increase our cost of capital.

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945394--2/24/2010--HOSPITALITY_PROPERTIES_TRUST