The non-traded hospitality REIT posted net income of $1.5 million while navigating share repurchase limitations, a key refinancing, and geopolitical headwinds threatening travel demand.

March 24, 2026

Portfolio Generates $32.8 Million in Revenue

Procaccianti Hotel REIT, Inc., a Maryland-based non-traded real estate investment trust focused on select-service hotel properties, has released its annual report for the fiscal year ended December 31, 2025, detailing the financial performance and strategic positioning of its five-hotel portfolio across four states.

The company, headquartered in Cranston, Rhode Island, reported total revenues of $32.8 million for 2025, up from $31.9 million the prior year, driven primarily by room revenue growth at several of its properties. Net income attributable to common stockholders came in at approximately $1.5 million, roughly flat with 2024, while funds from operations attributable to common stockholders totaled approximately $5.0 million.

The REIT’s portfolio consists of 559 rooms spread across five select-service hotels: the SpringHill Suites Wilmington in North Carolina, the Staybridge Suites St. Petersburg in Florida, the Hotel Indigo Traverse City and the Cherry Tree Inn and Suites in Michigan, and the Hilton Garden Inn Providence in Rhode Island. The company holds 100% ownership in three of the properties and a 51% interest in the remaining two through a convertible fund structure.

Net Asset Value and Share Valuation

As of the March 31, 2025 valuation date, the board of directors established an estimated net asset value of $10.17 per Class K and Class K-I share, $7.14 per Class A share, and $0.00 per Class B share, bringing the total estimated NAV to approximately $59.2 million. The underlying real estate was valued at $125.4 million, offset by $64.8 million in mortgage debt and other liabilities.

Mixed Property-Level Performance

Room revenue performance varied across the portfolio. The Hilton Garden Inn Providence was the standout performer, with room revenues climbing 12.12% year over year, driven by increases in both occupancy and average daily rate. The company attributed the occupancy gains in part to a strike by unionized hospital workers near the property. The Hotel Indigo Traverse City also posted gains, with room revenues up 4.23% largely due to a 7.34% increase in average daily rate.

However, the Staybridge Suites St. Petersburg saw revenues decline 7.39% as both occupancy and ADR fell, while the SpringHill Suites Wilmington experienced a 4.37% drop due to lower occupancy.

Across the full portfolio, the average occupancy rate for 2025 was 70.80%, compared to 71.52% in the prior year, while ADR increased from $192.25 to $197.66. Revenue per available room rose from $137.50 to $139.94.

Hilton Garden Inn Refinancing and A Share Distributions

A significant financial event during the year was the refinancing of the mortgage on the Hilton Garden Inn Providence, which closed on July 10, 2025. The new loan carries a fixed interest rate of 6.10% through July 2030, with interest-only payments for the first two years before transitioning to a 25-year amortization schedule. Of the $19.2 million in refinancing proceeds, approximately $2.0 million was allocated to fund a portion of accrued distributions owed to Class A shareholders, and $743,386 was designated for renovation funding.

On July 31, 2025, the company paid $2.4 million in accumulated distributions to A Share stockholders, covering the period from the company’s inception in September 2016 through June 30, 2024. Total outstanding debt as of year-end stood at approximately $67.4 million, including roughly $23.7 million in variable-rate debt.

Share Repurchase Shortfalls Continue

The company continued to face challenges with its share repurchase program, a recurring theme as previously reported. During 2025, the company repurchased approximately $820,524 in shares but was unable to fulfill all outstanding requests due to insufficient net proceeds from its distribution reinvestment plan, which serves as the primary funding source for buybacks.

As of December 31, 2025, there were 97 outstanding and unfulfilled repurchase requests covering 365,274 K Shares and 32,295 K-I Shares. The company’s board subsequently determined in early March 2026 that only approximately 3.6% of remaining repurchase requests could be honored on a prorated basis for the fourth quarter of 2025, after deceased stockholder requests were fulfilled in full.

The DRIP generated $821,480 in proceeds during 2025. As of March 23, 2026, approximately 5,995,631 shares of common stock were outstanding, held by roughly 1,135 stockholders of record. No public trading market exists for the shares, and the company has no current plans to list on a national exchange.

Liquidity Timeline and Market Outlook

The company’s charter requires that if a liquidity event is not initiated by August 13, 2028 — the seventh anniversary of the public offering’s termination — the board must adopt a resolution declaring a plan of liquidation advisable and submit it to stockholders for a vote, unless postponed by a majority of directors including independent directors.

In its market outlook, the company cited challenging interest rates, inflation, rising insurance premiums, labor costs, and political discord as factors likely to stifle business travel recovery through 2026. GDP growth is expected to slow to 2.0% in 2026, down from 2.3% in 2025. More acutely, the company identified the 2026 war in Iran as a near-term challenge that has severely disrupted global travel, with major Middle Eastern aviation hubs experiencing closures or significant restrictions, and anticipated reduced international travel to the U.S. as a result.

Advisory Agreement Amendment Extends Fee Terms

In a notable corporate governance development, the company entered into a Second Amended and Restated Advisory Agreement with its external advisor, PHA, on January 19, 2026. The amendment removed the previously established August 2026 deadline after which asset management fees would cease to accrue and interest on deferred acquisition and disposition fees would stop accumulating, effectively extending PHA’s fee entitlements indefinitely.

The company is externally managed by PHA, an affiliate of its sponsor, Procaccianti Companies, Inc. It has no employees of its own and relies on affiliated entities for all management, advisory, and property management services.