Market Overview

Condor Hospitality Trust Reports Second Quarter 2018 Results

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Condor Hospitality Trust, Inc. (NYSE:CDOR) (the "Company")
today announced results for the second quarter ended June 30, 2018.

SECOND QUARTER RELEASE FINANCIAL HIGHLIGHTS

  • Revenue of $17.8 million a 25% Increase to Revenue of $14.3 million
    in Last Year's Second Quarter
  • Net Earnings Attributable to Common Shareholders of $2.7 million,
    or $0.23 per Diluted Share, compared to $4.7 million, or $0.37 per
    share in Last Year's Second Quarter, which included an incremental
    $3.0 million Net Gain on Disposition of Assets; excluding Last Year's
    additional Net Gain on Disposition of Assets, the increase in Net
    Earnings Attributable to Common Shareholders would have been 62%
    versus Last Year's Second Quarter
  • Adjusted Funds from Operations Increased to $4.2 million, or $0.34
    per Diluted Share, a 48% increase from $2.8 million in Last Year's
    Second Quarter
  • Hotel EBITDA Increased to $8.0 million from $5.7 million, and
    Adjusted EBITDAre Increased 60% Over Last Year's Second Quarter
  • Achieved 4.6% Second Quarter Same-Store RevPAR Growth over Prior
    Year*
  • Expanded Second Quarter Same-Store Hotel EBITDA Margin by 230 Basis
    Points to 39.4% over Prior Year*

SECOND QUARTER PORTFOLIO ACCOMPLISHMENTS

  • Sold One Legacy Asset Generating $7.1 million in Gross Proceeds
  • Placed One Legacy Asset Under Contract for Sale with Expected Gross
    Proceeds of $5.1 million

*New investment platform hotels only; Includes results prior to our
ownership to illustrate same-store performance

MANAGEMENT COMMENTARY

Bill Blackham, Condor's Chief Executive Officer, commented:

"Condor continues to grow new investment platform hotel revenues,
operating income, and financial metrics as we once again delivered
robust operating results in the second quarter of 2018. Through our
differentiated investment strategy, we achieved 4.6% same-store RevPAR
growth and expanded hotel EBITDA margins by 230 bps on our new
investment platform hotels. Our investment strategy and asset management
efforts are responsible for another quarter of extremely favorable
operating performance.

We also continued to push towards the complete transformation of the
portfolio in the second quarter. We sold one legacy hotel asset for
gross proceeds of $7.1 million and placed an additional legacy hotel
under contract for sale with expected gross proceeds of $5.1 million. We
now have only two legacy hotels remaining, one of which is under
contract to be sold. Additionally, during the quarter we made
significant progress towards making additional acquisitions that match
our investment strategy. When the next acquisition is announced and
subsequently completed, it would be the sixteenth new investment
platform hotel in our portfolio of high-quality, select-service assets
in attractive growth markets."

FINANCIAL SUMMARY

At June 30, 2018, the Company's total portfolio included 17 hotels,
representing 2,088 rooms.

           

Total Company Financial Results

($ in millions except per share amounts)

 
Three months ended June 30, Six months ended June 30,
2018 2017 Change 2018 2017 Change
Revenue $ 17.8 $ 14.3 25.1% $ 34.5 $ 24.6 40.2%
Net Earnings (Loss) Attributable to Common Shareholders $ 2.7 $ 4.7 -41.1% $ 3.4 $ (9.3) N/A
Diluted Earnings (Loss) per Share $ 0.23 $ 0.37 -37.8% $ 0.28 $ (1.28) N/A
 
Funds from Operations (FFO)* $ 3.8 $ 2.6 44.2% $ 7.0 $ 1.9 273.1%
FFO per Diluted Share* $ 0.30 $ 0.18 66.7% $ 0.56 $ (1.35) N/A
Adjusted FFO* $ 4.2 $ 2.8 47.7% $ 7.7 $ 3.2 143.4%
Adjusted FFO per Diluted Share* $ 0.34 $ 0.24 41.7% $ 0.63 $ 0.40 57.5%
 
Hotel EBITDA* $ 8.0 $ 5.7 41.5% $ 15.4 $ 9.7 59.0%
Adjusted EBITDAre* $ 6.6 $ 4.1 59.7% $ 12.4 $ 6.6 88.0%
*Please see the Reg. G reconciliation tables at the end of this
release.

NEW INVESTMENT PLATFORM

At June 30, 2018, the Company's new investment platform included 15
hotels, representing 1,908 rooms.

           

New Investment Platform Operational Results**

($ in millions except per share amounts and operating metrics)

 
Three months ended June 30, Six months ended June 30,
2018 2017 Change 2018 2017 Change
Same-Store RevPAR $ 104.95 $ 100.37 4.6% $ 103.49 $ 99.27 4.2%
Same-Store Occupancy 84.00% 82.01% 2.4% 81.88% 80.70% 1.5%
Same-Store ADR $ 124.95 $ 122.40 2.1% $ 126.39 $ 123.01 2.8%
 
Same-Store Hotel EBITDA*^ $ 6.6 $ 5.7 15.4% $ 12.8 $ 11.9 7.9%
Same-Store Hotel EBITDA Margin* 39.4% 37.1% 2.3% 39.2% 37.9% 1.3%
*Please see the Reg. G reconciliation tables at the end of this
release.
**Financial results presented above include results from prior to
our ownership.
^ Due to differences in the allocation of JV preferred returns, JV
activity was approximately 42% attributed to Condor in the second
quarter of 2017 (to bring total year to date allocations to 80% in
2017) and 80% attributed to Condor in the second quarter of 2018.
Year to date allocations are at 80% for both periods presented.

LEGACY PLATFORM

At June 30, 2018, the Company's legacy platform included 2 hotels,
representing 180 rooms.

           

Legacy Platform Operational Results*

($ in millions except per share amounts and operating metrics)

 
Three months ended June 30, Six months ended June 30,
2018 2017 Change 2018 2017 Change
Same-Store RevPAR $ 51.47 $ 55.67 -7.5% $ 45.28 $ 50.48 -10.3%
Same-Store Occupancy 73.20% 79.31% -7.7% 66.09% 75.40% -12.3%
Same-Store ADR $ 70.31 $ 70.19 0.2% $ 68.51 $ 66.95 2.3%
 
Same-Store Hotel EBITDA* $ 0.3 $ 0.4 -12.9% $ 0.5 $ 0.6 -14.4%
Same-Store Hotel EBITDA Margin* 35.5% 37.7% -2.2% 31.1% 32.8% -1.7%
* Please see the Reg. G reconciliation tables at the end of this
release.

PORTFOLIO ACTIVITY

The Company's investment strategy is to assemble a portfolio of
premium-branded, select-service hotels in the top 100 Metropolitan
Statistical Areas ("MSAs") with a particular focus on MSAs ranked
between 20 to 60. Since restarting its portfolio transformation in 2015,
the Company has acquired 14 high-quality select-service hotels
representing 1,808 rooms in its target markets for a total purchase
price of approximately $277 million. Additionally, during this time, the
Company has sold 53 legacy assets for a total gross sales price of
approximately $161 million.

Acquisitions

During the second quarter of 2018, the Company did not acquire any
hotels. However, during the quarter we made significant progress towards
making additional acquisitions that match our investment strategy.

Dispositions

During the second quarter of 2018, the Company sold the Comfort Suites
in Fort Wayne, IN for $7.1 million. Net proceeds from the sales were
applied to outstanding debt on the Company's $150 million secured credit
facility. The Company has only two legacy hotels remaining in the
portfolio, and one of these hotels, the Super 8 in Creston, IA, is
currently under contract for sale with expected gross proceeds of $5.1
million.

The Company continues to evaluate all capital raising alternatives and
opportunities to grow through the continued acquisition of high-quality,
select-service assets primarily in secondary markets

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

As of June 30, 2018, the Company had cash and cash equivalents
(including restricted cash) of $11.3 million and available revolver
borrowing capacity of $5.7 million. As of June 30, 2018, the Company had
total outstanding long-term debt of $142.2 million associated with
assets held for use with a weighted average maturity of 2.6 years and a
weighted average interest rate of 4.76%.

During the second quarter of 2018, the Company sold 16,140 shares of
common stock under the ATM program at an average sales price of $10.40
per share for net proceeds totaling approximately $0.2 million.

CAPITAL INVESTMENTS

The Company invested $1.2 million in capital improvements throughout the
portfolio in the quarter ended June 30, 2018, to upgrade its properties
and maintain brand standards.

                 

OUTLOOK AND GUIDANCE

 
2018 Outlook ($ in millions except per share amounts)     Low         High    
RevPAR growth (13 new investment platform hotels owned as of
December 31, 2017)
3.0% 4.5%
2018 Outlook
Forecast hotel revenue $ 74.0 $ 75.4
Forecast net earnings $ 1.7 $ 2.5
Forecast earnings per share - Diluted $ 0.09 $ 0.16
Forecast Hotel EBITDA* $ 28.8 $ 29.7
Forecast AFFO per common share and common unit - Diluted* $ 1.13 $ 1.19
*Please see the Reg. G reconciliation tables at the end of this
release.

DIVIDENDS

On May 23, 2018, the Board of Directors declared a quarterly cash common
stock dividend of $0.195 per share for the second quarter of 2018. The
common stock dividend represented an annualized yield of approximately
7.6% based on the closing price of the Company's common shares on May
22, 2018. The second quarter dividend was paid on July 3, 2018 to
shareholders of record as of June 15, 2018.

EARNINGS CALL

The Company will conduct its quarterly conference call on Wednesday,
August 8, 2018, at 9:00 AM ET. To participate in the conference call,
dial 1-877-425-9470 [International: 1-201-389-0878] approximately ten
minutes before the call begins.

A live webcast of the Earnings Call will also be available through the
Company's website. To access, log on to http://condorhospitality.com
ten minutes prior to the call. A replay of the conference call webcast
will be archived and available online through the Investor Relations
section of http://condorhospitality.com.

About Condor Hospitality Trust, Inc.

Condor Hospitality Trust, Inc. (NYSE:CDOR) is a
self-administered real estate investment trust that specializes in the
investment and ownership of upper midscale and upscale, premium-branded,
select-service, extended-stay, and limited-service hotels in the top 100
Metropolitan Statistical Areas ("MSAs") with a particular focus on the
top 20 to 60 MSAs. The Company currently owns 17 hotels in 9 states.
Condor's hotels are franchised by a number of the industry's most
well-regarded brand families including Hilton, Marriott, and
InterContinental Hotels.

Forward-Looking Statement

Certain matters within this press release are discussed using
forward-looking language as specified in the Private Securities
Litigation Reform Act of 1995, and, as such, may involve known and
unknown risks, uncertainties and other factors that may cause the actual
events, results or performance to differ from those projected presented
in the forward-looking statement. These forward-looking statements are
based on assumptions that management has made in light of experience in
the business in which the Company operates, as well as other factors
management believes to be appropriate under the circumstances. As you
read and consider this release, you should understand that these
statements are not guarantees of events, performance or results. They
involve risks, uncertainties (some of which are beyond the Company's
control) and assumptions. Although management believes that these
forward-looking statements are based on reasonable assumptions, you
should be aware that many factors could affect events, performance or
results and cause them to differ materially from those anticipated in
the forward-looking statements. These factors include among other
things, risk factors described from time to time in the Company's
filings with the Securities and Exchange Commission. The Company
cautions that any forward-looking statement included in this press
release is made as of the date of this press release and the Company
does not undertake to update any forward-looking statement.

SELECTED FINANCIAL DATA:

   

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited - In thousands, except share and per share data)

 
As of
June 30, 2018 December 31, 2017
 

Assets

Investment in hotel properties, net $ 238,364 $ 205,730
Investment in unconsolidated joint venture 7,078 7,747
Cash and cash equivalents 5,920 5,441
Restricted cash, property escrows 5,419 4,894
Accounts receivable, net 1,953 1,707
Prepaid expenses and other assets 2,719 3,220
Derivative assets, at fair value 975 391
Investment in hotel properties held for sale, net   1,205   13,850
Total Assets $ 263,633 $ 242,980
 

Liabilities and Equity

 
Liabilities
Accounts payable, accrued expenses, and other liabilities $ 7,099 $ 7,046
Dividends and distributions payable 2,479 2,470
Convertible debt, at fair value 1,050 1,069
Long-term debt, net of deferred financing costs 139,300 112,621
Long-term debt related to hotel properties held for sale, net of
deferred financing costs
  2,352   7,960
Total Liabilities 152,280 131,166
 
Equity
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:
6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000
shares outstanding, liquidation preference of $9,395
10,050 10,050
Common stock, $.01 par value, 200,000,000 shares authorized;
11,881,570 and 11,833,573 shares outstanding
119 118
Additional paid-in capital 231,474 230,727
Accumulated deficit   (131,739)   (130,489)
Total Shareholders' Equity 109,904 110,406
Noncontrolling interest in consolidated partnership (Condor
Hospitality Limited Partnership), redemption value of $962 and $871
  1,449   1,408
Total Equity 111,353 111,814
       
Total Liabilities and Equity $ 263,633 $ 242,980
       

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited - In thousands, except per share data)

 
Three months ended June 30, Six months ended June 30,
2018   2017 2018   2017
Revenue
Room rentals and other hotel services $ 17,834 $ 14,252 $ 34,513 $ 24,613
Operating Expenses
Hotel and property operations 10,756 9,224 21,170 16,837
Depreciation and amortization 2,444 1,769 4,703 2,820
General and administrative 1,605 1,511 3,474 3,003
Acquisition and terminated transactions 71 215 90 717
Equity transactions   -   -   -   343
Total operating expenses   14,876   12,719   29,437   23,720
Operating income 2,958 1,533 5,076 893
Net gain on disposition of assets 1,895 4,852 1,871 4,849
Equity in earnings of joint venture 63 25 292 136
Net gain on derivatives and convertible debt 156 227 603 402
Other expense, net (20) (39) (34) (40)
Interest expense (2,091) (1,092) (4,019) (2,063)
Loss on debt extinguishment - - - (800)
Impairment (loss) recovery, net   -   (479)   93   (750)
Earnings before income taxes 2,961 5,027 3,882 2,627
Income tax expense   (54)   (35)   (183)   (35)
Net earnings 2,907 4,992 3,699 2,592
Earnings attributable to noncontrolling interest   (21)   (67)   (27)   (17)
Net earnings attributable to controlling interests 2,886 4,925 3,672 2,575
Dividends declared and in kind dividends deemed on preferred stock   (145)   (271)   (289)   (11,874)
Net earnings (loss) attributable to common shareholders $ 2,741 $ 4,654 $ 3,383 $ (9,299)
 

Earnings per Share

Total - Basic Earnings (Loss) per Share $ 0.23 $ 0.40 $ 0.28 $ (1.28)
Total - Diluted Earnings (Loss) per Share $ 0.23 $ 0.37 $ 0.28 $ (1.28)

Reconciliation of Non-GAAP Financial Measures (Unaudited)

Non-GAAP financial measures are measures of our historical financial
performance that are different from measures calculated and presented in
accordance with accounting principles generally accepted in the United
States of America ("GAAP"). We report Funds from Operations ("FFO"),
Adjusted FFO ("AFFO"), Earnings Before Interest, Taxes, Depreciation,
and Amortization ("EBITDA"), EBITDA for real estate ("EBITDAre"),
Adjusted EBITDAre, and Hotel EBITDA as non-GAAP measures that we
believe are useful to investors as key measures of our operating results
and which management uses to facilitate a periodic evaluation of our
operating results relative to those of our peers. Our non-GAAP measures
should not be considered as an alternative to U.S. GAAP net earnings as
an indication of financial performance or to U.S. GAAP cash flows from
operating activities as a measure of liquidity. Additionally, these
measures are not indicative of funds available to fund cash needs or our
ability to make cash distributions as they have not been adjusted to
consider cash requirements for capital expenditures, property
acquisitions, debt service obligations, or other commitments.

FFO and AFFO

The following table reconciles net earnings to FFO and AFFO for the
three and six months ended June 30, 2018 and 2017 (in thousands). All
amounts presented include our portion of the results of our
unconsolidated Atlanta JV.

       
Three months ended June 30, Six months ended June 30,

Reconciliation of Net earnings to FFO and
AFFO

2018 2017 2018 2017
Net earnings $ 2,907 $ 4,992 $ 3,699 $ 2,592
Depreciation and amortization expense 2,444 1,769 4,703 2,820
Depreciation and amortization expense from JV 292 214 577 568
Net gain on disposition of assets (1,895) (4,852) (1,871) (4,849)
Net loss on disposition of assets from JV 7 2 14 3
Impairment loss (recovery), net   -   479   (93)   750
FFO 3,755 2,604 7,029 1,884
Dividends declared and in kind dividends deemed on preferred stock   (145)   (271)   (289)   (11,874)
FFO attributable to common shares and common units 3,610 2,333 6,740 (9,990)
Net gain on derivatives and convertible debt (156) (227) (603) (402)
Net loss on derivative from JV - 2 - 2
Acquisition and terminated transactions expense 71 215 90 717
Equity transactions expense - - - 343
Loss on debt extinguishment - - - 800
Stock-based compensation and LTIP expense 263 80 665 157
Amortization of deferred financing fees 364 280 717 416
Amortization of deferred financing fees from JV 46 33 91 90
Non-recurring dividends above stated rates declared and in kind
dividends deemed on preferred stock
  -   127   -   11,030
AFFO attributable to common shares and common units $ 4,198 $ 2,843 $ 7,700 $ 3,163
 
FFO attributable to common shares and common units - Basic Shares $ 3,610 $ 2,333 $ 6,740 $ (9,990)
Convertible note interest and fair value adjustments 17 (9) 13 -
Preferred dividends and fair value adjustments   158   (95)   337   -
FFO attributable to common shares and common units - Diluted
Shares
$ 3,785 $ 2,229 $ 7,090 $ (9,990)
 
FFO per common share and common unit - Basic $ 0.30 $ 0.20 $ 0.57 $ (1.35)
FFO per common share and common unit - Diluted $ 0.30 $ 0.18 $ 0.56 $ (1.35)
 
Weighted average common shares and common units - Basic FFO 11,875,093 11,705,933 11,855,295 7,421,791
Weighted average common shares and common units - Diluted FFO 12,648,633 12,494,519 12,641,162 7,421,791
 
AFFO attributable to common shares and common units - Basic Shares $ 4,198 $ 2,843 $ 7,700 $ 3,163
Convertible note interest 16 16 32 32
Preferred dividends at stated rates   145   144   289   650
AFFO attributable to common shares and common units - Diluted
Shares
$ 4,359 $ 3,003 $ 8,021 $ 3,845
 
AFFO per common share and common unit - Basic $ 0.35 $ 0.24 $ 0.65 $ 0.43
AFFO per common share and common unit - Diluted $ 0.34 $ 0.24 $ 0.63 $ 0.40
 
Weighted average common shares and common units – Basic AFFO 11,875,093 11,705,933 11,855,295 7,421,791
Weighted average common shares and common units – Diluted AFFO 12,648,633 12,494,519 12,641,162 9,496,127

We calculate FFO in accordance with the standards established by the
National Association of Real Estate Investment Trusts ("NAREIT"), which
defines FFO as net earnings or loss computed in accordance with GAAP,
excluding gains or losses from sales of real estate assets, impairment,
and the depreciation and amortization of real estate assets. FFO is
calculated both for the Company in total and as FFO attributable to
common shares and common units, which is FFO reduced by preferred stock
dividends. AFFO is FFO attributable to common shares and common units
adjusted to exclude items we do not believe are representative of the
results from our core operations, including non-cash gains or losses on
derivatives and convertible debt, stock-based compensation expense,
amortization of certain fees, losses on debt extinguishment, and in-kind
dividends above stated rates, and cash charges for acquisition and
equity transaction costs. All REITs do not calculate FFO and AFFO in the
same manner; therefore, our calculation may not be the same as the
calculation of FFO and AFFO for similar REITs.

We consider FFO to be a useful additional measure of performance for an
equity REIT because it facilitates an understanding of the operating
performance of our properties without giving effect to real estate
depreciation and amortization, which assumes that the value of real
estate assets diminishes predictably over time. Since real estate values
have historically risen or fallen with market conditions, we believe
that FFO provides a meaningful indication of our performance. We believe
that AFFO provides useful supplemental information to investors
regarding our ongoing operating performance that, when considered with
net income and FFO, is beneficial to an investor's understanding of our
operating performance. We present FFO and AFFO per common share and
common unit because our common units are redeemable for common shares.
We believe it is meaningful for the investor to understand FFO and AFFO
applicable to common shares and common units.

EBITDA, EBITDAre, Adjusted EBITDAre, and Hotel EBITDA

The following table reconciles net earnings to EBITDA, EBITDAre,
Adjusted EBITDAre, and Hotel EBITDA for the three and six months
ended June 30, 2018 and 2017 (in thousands). All amounts presented our
portion of the results of our unconsolidated Atlanta JV.

       
Three months ended June 30, Six months ended June 30,

Reconciliation of Net earnings to EBITDA,
EBITDAre, Adjusted EBITDAre, and Hotel EBITDA

2018 2017 2018 2017
Net earnings $ 2,907 $ 4,992 $ 3,699 $ 2,592
Interest expense 2,091 1,092 4,019 2,063
Interest expense from JV 518 330 1,010 992
Loss on debt extinguishment - - - 800
Income tax expense 54 35 183 35
Depreciation and amortization expense 2,444 1,769 4,703 2,820
Depreciation and amortization expense from JV   292   214   577   568
EBITDA 8,306 8,432 14,191 9,870
Net gain on disposition of assets (1,895) (4,852) (1,871) (4,849)
Net loss on disposition of assets from JV 7 2 14 3
Impairment loss (recovery), net   -   479   (93)   750
EBITDAre 6,418 4,061 12,241 5,774
Net gain on derivatives and convertible debt (156) (227) (603) (402)
Net loss on derivative from JV - 2 - 2
Stock-based compensation and LTIP expense 263 80 665 157
Acquisition and terminated transactions expense 71 215 90 717
Equity transactions expense   -   -   -   343
Adjusted EBITDAre 6,596 4,131 12,393 6,591
General and administrative expense, excluding stock compensation and
LTIP expense
1,342 1,431 2,809 2,846
Other expense, net 20 39 34 40
Unallocated hotel and property operations expense   59   65   148   197
Hotel EBITDA $ 8,017 $ 5,666 $ 15,384 $ 9,674
 
Revenue $ 17,834 $ 14,252 $ 34,513 $ 24,613
JV revenue   2,484   1,851   5,102   4,840
Condor and JV revenue $ 20,318 $ 16,103 $ 39,615 $ 29,453
Hotel EBITDA as a percentage of revenue 39.5% 35.2% 38.8% 32.8%

We calculate EBITDA, EBITDAre, and Adjusted EBITDAre by
adding back to net earnings or loss certain non-operating expenses and
certain non-cash charges which are based on historical cost accounting
that we believe may be of limited significance in evaluating current
performance. We believe these adjustments can help eliminate the
accounting effects of depreciation and amortization and financing
decisions and facilitate comparisons of core operating profitability
between periods. In calculating EBITDA, we add back to net earnings or
loss interest expense, loss on debt extinguishment, income tax expense,
and depreciation and amortization expense. NAREIT adopted EBITDAre
in order to promote an industry-wide measure of REIT operating
performance. We adjust EBITDA by adding back net gain/loss on
disposition of assets and impairment charges to calculate EBITDAre.
To calculate Adjusted EBITDAre, we adjust EBITDAre to add
back acquisition and terminated transactions expense and equity
transactions expense, which are cash charges. We also add back stock
–based compensation expense and gain/loss on derivatives and convertible
debt, which are non-cash charges. EBITDA, EBITDAre, and Adjusted
EBITDAre, as presented, may not be comparable to similarly titled
measures of other companies.

We believe EBITDA, EBITDAre, and Adjusted EBITDAre to be
useful additional measures of our operating performance, excluding the
impact of our capital structure (primarily interest expense), our asset
base (primarily depreciation and amortization expense), and other items
we do not believe are representative of the results from our core
operations.

The Company further excludes general and administrative expenses, other
non-operating income or expense, and certain hotel and property
operations expenses that are not allocated to individual properties in
assessing hotel performance (primarily certain general liability and
other insurance costs, land lease costs, and office and banking fees)
from Adjusted EBITDAre to calculate Hotel EBITDA. Hotel EBITDA,
as presented, may not be comparable to similarly titled measures of
other companies.

Hotel EBITDA is intended to isolate property level operational
performance over which the Company's hotel operators have direct
control. We believe Hotel EBITDA is helpful to investors as it better
communicates the comparability of our hotels' operating results for all
of the Company's hotel properties and is used by management to measure
the performance of the Company's hotels and the effectiveness of the
operators of the hotels.

Same-Store Revenue and Hotel EBITDA

The following tables present our same-store revenue, Hotel EBITDA, and
Hotel EBITDA margin broken down by property type for the three and six
months ended June 30, 2018 and 2017 (in thousands) and reconcile these
same-store measures to total revenue and Hotel EBITDA as presented
above. Same-store results include all our hotels owned at June 30, 2018,
with the exception of the Austin TownePlace Suites (opened on January 3,
2017) and the Summerville Home2 Suites (opened on July 18, 2017), for
which prior period results are not available for all periods presented,
and reflect the performance of these hotels during the entire period,
regardless of our ownership during the period presented. Results for the
hotels for periods prior to our ownership were provided to us by prior
owners and have not been adjusted by us or audited or reviewed by our
independent auditors. All amounts presented operations as well as our
portion of the results of our unconsolidated Atlanta Aloft JV. Results
for periods prior to the Company's ownership have not been included in
the Company's actual consolidated financial statements and are included
here only for comparison purposes.

       
Revenue - Reconciliation of Same-Store to Actual
Three months ended June 30, Six months June 30,
2018 2017 2018 2017
Condor and JV Revenue - Actual* $ 20,318 $ 16,103 $ 39,615 $ 29,453
Revenue earned on properties owned at June 30, 2018 prior to the
Company's ownership, excluding the Austin TownePlace Suites and the
Summerville Home2 Suites
- 3,228 - 10,190
Revenue earned on properties disposed of prior to June 30, 2018
during the period of ownership
(496) (2,909) (1,657) (6,425)
Revenue earned on Austin TownePlace Suites and Summerville Home2
Suites subsequent to ownership
  (2,161)   -   (3,574)   -
Total Revenue - Same-Store* $ 17,661 $ 16,422 $ 34,384 $ 33,218
 
Revenue - Same-Store by Type
Three months ended June 30, Six months June 30,
2018 2017 2018 2017
New investment platform* $ 16,729 $ 15,414 $ 32,745 $ 31,402
Legacy held for use 333 426 598 805
Legacy held for sale   599   582   1,041   1,011
Total Revenue - Same-Store* $ 17,661 $ 16,422 $ 34,384 $ 33,218
 
Hotel EBITDA - Reconciliation of Same-Store to Actual
Three months ended June 30, Six months June 30,
2018 2017 2018 2017
Condor and JV Hotel EBITDA - Actual* $ 8,017 $ 5,666 $ 15,384 $ 9,674
Hotel EBITDA earned on properties owned at June 30, 2018 prior to
the Company's ownership, excluding the Austin TownePlace Suites and
the Summerville Home2 Suites
- 1,237 - 4,230
Hotel EBITDA earned on properties disposed of prior to June 30, 2018
during the period of ownership
(101) (808) (345) (1,415)
Hotel EBITDA earned on Austin TownePlace Suites and Summerville
Home2 Suites subsequent to ownership
  (992)   -   (1,699)   -
Total Hotel EBITDA - Same-Store* $ 6,924 $ 6,095 $ 13,340 $ 12,489
 
Hotel EBITDA - Same-Store by Type
Three months ended June 30, Six months June 30,
2018 2017 2018 2017
New investment platform* $ 6,593 $ 5,715 $ 12,830 $ 11,893
Legacy held for use 74 116 117 193
Legacy held for sale   257   264   393   403
Total Hotel EBITDA - Same-Store* $ 6,924 $ 6,095 $ 13,340 $ 12,489
 
Hotel EBITDA Margin by Property Type
Three months ended June 30, Six months June 30,
2018 2017 2018 2017
New investment platform 39.4% 37.1% 39.2% 37.9%
Legacy held for use 22.2% 27.2% 19.6% 24.0%
Legacy held for sale   42.9%   45.4%   37.8%   39.9%
Total Portfolio - Same-Store   39.2%   37.1%   38.8%   37.6%
* Due to differences in the allocation of JV preferred returns, JV
activity was approximately 42% attributed to Condor in the second
quarter of 2017 (to bring total year to date allocations to 80% in
2017) and 80% attributed to Condor in the second quarter of 2018.
Year to date allocations are at 80% for both periods presented.

Non-GAAP Measures Included in 2018 Guidance and Outlook

The following tables reconcile forecast net earnings to forecast FFO and
AFFO and forecast EBITDA, EBITDAre, Adjusted EBITDAre, and
Hotel EBITDA for the year ending December 31, 2018 (in millions, except
per share amounts) using the definitions of these non-GAAP measures as
discussed above.

             
2018 Outlook ($ in millions except per share amounts) Low High
RevPAR growth (13 new investment platform hotels owned as of
December 31, 2017)
3.0% 4.5%
2018 Outlook
Forecast hotel revenue $ 74.0 $ 75.4
Forecast net earnings $ 1.7 $ 2.5
Forecast earnings per share - Diluted $ 0.09 $ 0.16
Forecast Hotel EBITDA* $ 28.8 $ 29.7
Forecast AFFO per common share and common unit - Diluted* $ 1.13 $ 1.19
 
 
Low High
Forecast net earnings $ 1.7 $ 2.5
Interest expense 8.5 8.5
Depreciation and amortization expense       11.4         11.4    
Forecast EBITDA 21.5 22.4
Net gain on disposition of assets       -         -    
Forecast EBITDAre 21.5 22.4
Acquisitions and terminated transactions expense - -
Stock-based compensation and LTIP expense       1.0         1.0    
Forecast Adjusted EBITDAre 22.5 23.4
Cash general and administrative expense and other expenses       6.3         6.3    
Forecast Hotel EBITDA   $   28.8     $   29.7    
 
 
Low High
Forecast net earnings $ 1.7 $ 2.5
Depreciation and amortization expense 11.4 11.4
Net gain on disposition of assets       -         -    
Forecast FFO 13.1 13.9
Preferred dividends       (0.6)         (0.6)    
Forecast FFO attributable to common shares and common units 12.5 13.3
Acquisitions and terminated transactions expense - -
Stock-based compensation and LTIP expense 1.0 1.0
Amortization of deferred financing fees       0.2       0.2    
Forecast AFFO attributable to common shares and common units -
Basic
  $   13.7     $   14.5    
 
Forecast AFFO attributable to common shares and common units -
Diluted
$ 14.3 $ 15.1
Forecast AFFO per common share and common unit - Diluted $ 1.13 $ 1.19
Diluted common shares and common units 12.7 12.7

Condor Hospitality Trust, Inc. Operating Statistics

The following tables present our same-store occupancy, ADR, and RevPAR
for all our hotels owned at June 30, 2018, with the exception of the
Austin TownePlace Suites (opened on January 3, 2017) and Summerville, SC
Home2 Suites (opened on July 18, 2017), for which prior period results
are not available for all periods presented. Same-store occupancy, ADR,
and RevPAR reflect the performance of hotels during the entire period,
regardless of our ownership during the period presented. Results for the
hotels for periods prior to our ownership were provided to us by prior
owners and have not been adjusted by us or audited or reviewed by our
independent auditors. The performance metrics for the hotel acquired
through our Atlanta JV, also presented below, reflect 100% of the
operating results of the property, including our interest and the
interest of our partner.

           
Three months ended June 30,
2018 2017
Occupancy ADR RevPAR Occupancy ADR RevPAR
Solomons Hilton Garden Inn 81.67% $ 122.71 $ 100.22 80.71% $ 118.33 $ 95.51
Atlanta Hotel Indigo 81.23% $ 100.03 $ 81.25 72.87% $ 99.97 $ 72.85
Jacksonville Courtyard by Marriott 83.29% $ 122.33 $ 101.88 76.12% $ 116.95 $ 89.02
San Antonio SpringHill Suites 89.02% $ 143.42 $ 127.67 77.95% $ 133.54 $ 104.09
Leawood Aloft 78.73% $ 132.74 $ 104.50 86.50% $ 128.70 $ 111.33
Lexington Home2 Suites 83.00% $ 122.70 $ 101.84 86.86% $ 125.25 $ 108.79
Round Rock Home2 Suites 88.33% $ 121.28 $ 107.13 84.97% $ 123.42 $ 104.87
Tallahassee Home2 Suites 87.99% $ 116.02 $ 102.09 86.79% $ 123.59 $ 107.26
South Haven Home2 Suites 91.40% $ 120.36 $ 110.01 93.84% $ 121.43 $ 113.95
Lake Mary Hampton Inn & Suites 82.10% $ 132.43 $ 108.72 84.58% $ 118.26 $ 100.03
Austin Residence Inn 84.10% $ 132.67 $ 111.58 81.23% $ 134.29 $ 109.08
El Paso Fairfield Inn 86.39% $ 100.19 $ 86.55 69.67% $ 103.24 $ 71.93
Wholly owned new investment platform properties 84.49% $ 122.07 $ 103.14 81.62% $ 120.81 $ 98.61
Atlanta Aloft JV 81.20% $ 141.89 $ 115.21 84.16% $ 131.12 $ 110.35
Total new investment platform 84.00% $ 124.95 $ 104.95 82.01% $ 122.40 $ 100.37
 
Legacy hotel held for sale 83.09% $ 64.96 $ 53.97 81.14% $ 64.63 $ 52.44
Legacy hotel held for use 53.26% $ 87.15 $ 46.42 75.62% $ 82.21 $ 62.17
Total legacy 73.20% $ 70.31 $ 51.47 79.31% $ 70.19 $ 55.67
                   
Total Same-Store Portfolio 82.95% $ 120.29 $ 99.79 81.74% $ 117.51 $ 96.05
 
Austin TownePlace Suites (1) 83.85% $ 115.88 $ 97.17 63.97% $ 112.67 $ 72.07
Summerville Home2 Suites (1) 88.03% $ 140.30 $ 123.51 - $ - $ -
1 | Excluded from the Total new investment platform calculation
because the hotel was not operational for the entirety of the six
months ended June 30, 2017 (prior period results are not available
for all periods presented)
             
Six months ended June 30,
2018 2017
Occupancy ADR RevPAR Occupancy ADR RevPAR
Solomons Hilton Garden Inn 77.56 % $ 124.13 $ 96.28 77.17 % $ 118.50 $ 91.44
Atlanta Hotel Indigo 81.18 % $ 104.14 $ 84.54 73.47 % $ 102.22 $ 75.09
Jacksonville Courtyard by Marriott 84.16 % $ 117.77 $ 99.11 76.07 % $ 115.90 $ 88.16
San Antonio SpringHill Suites 87.70 % $ 143.35 $ 125.71 79.71 % $ 137.17 $ 109.34
Leawood Aloft 71.11 % $ 130.41 $ 92.74 80.28 % $ 127.51 $ 102.37
Lexington Home2 Suites 78.78 % $ 113.57 $ 89.47 80.58 % $ 116.23 $ 93.66
Round Rock Home2 Suites 87.41 % $ 120.73 $ 105.53 85.17 % $ 123.30 $ 105.01
Tallahassee Home2 Suites 86.12 % $ 123.09 $ 106.00 83.81 % $ 124.22 $ 104.11
South Haven Home2 Suites 86.36 % $ 115.91 $ 100.09 91.54 % $ 116.66 $ 106.79
Lake Mary Hampton Inn & Suites 84.15 % $ 143.81 $ 121.01 84.73 % $ 125.41 $ 106.27
Austin Residence Inn 83.77 % $ 133.90 $ 112.17 79.41 % $ 137.81 $ 109.44
El Paso Fairfield Inn 81.18 % $ 99.96 $ 81.15 73.76 % $ 106.58 $ 78.62
Wholly owned new investment platform properties 82.15 % $ 122.79 $ 100.87 80.24 % $ 121.16 $ 97.22
Atlanta Aloft JV 80.35 % $ 147.26 $ 118.32 83.34 % $ 133.09 $ 110.92
Total new investment platform 81.88 % $ 126.39 $ 103.49 80.70 % $ 123.01 $ 99.27
 
Legacy hotel held for sale 74.33 % $ 63.47 $ 47.18 73.57 % $ 62.21 $ 45.77
Legacy hotel held for use 49.46 % $ 83.79 $ 41.44 79.09 % $ 75.83 $ 59.98
Total legacy 66.09 % $ 68.51 $ 45.28 75.40 % $ 66.95 $ 50.48
                   
Total Same-Store Portfolio 80.35 % $ 121.79 $ 97.87 80.19 % $ 117.92 $ 94.56
 
Austin TownePlace Suites (1) 83.21 % $ 121.19 $ 100.84 61.87 % $ 110.65 $ 68.46
Summerville Home2 Suites (1) 87.66 % $ 130.22 $ 114.15 - $ - $ -
 
1 | Excluded from the Total new investment platform calculation
because the hotel was not operational for the entirety of the six
months ended June 30, 2017
 
                       
Condor Hospitality Trust, Inc.
Property List | As of the Date of this Release
                                     
New Investment Platform | Acquired from January 1, 2012 - August
7, 2018

Hotel Name

City

State

Rooms

Acquisition Date

Purchase Price (in
millions)

1 Hilton Garden Inn Dowell/Solomons MD 100 05/25/2012 $11.5
2 SpringHill Suites San Antonio TX 116 10/01/2015 $17.5
3 Courtyard by Marriott Jacksonville FL 120 10/02/2015 $14.0
4 Hotel Indigo College Park GA 142 10/02/2015 $11.0
5 Aloft1 Atlanta GA 254 08/22/2016 $43.6
6 Aloft Leawood KS 156 12/14/2016 $22.5
7 Home2 Suites Lexington KY 103 03/24/2017 $16.5
8 Home2 Suites Round Rock TX 91 03/24/2017 $16.8
9 Home2 Suites Tallahassee FL 132 03/24/2017 $21.5
10 Home2 Suites Southaven MS 105 04/14/2017 $19.0
11 Hampton Inn & Suites Lake Mary FL 130 06/19/2017 $19.3
12 Fairfield Inn & Suites El Paso TX 124 08/31/2017 $16.4
13 Residence Inn Austin TX 120 08/31/2017 $22.4
14 TownePlace Suites Austin TX 122 01/18/2018 $19.8
15 Home2 Suites Summerville SC 93 02/21/2018 $16.3
Total New Investment Platform 1,908 $288.1
 
Current Legacy Hotel Portfolio                  

Hotel Name

City

State

Rooms

Acquisition Date

Status (2)

16 Super 8 Creston IA 121 09/19/1978 HFS
17 Quality Inn Solomons MD 59 06/01/1986 Hold
Total 180
 
Total Portfolio | As of August 7, 2018 2,088
                                     
1 | Owned 80% by Condor
2| HFS indicates the asset was marketed as held for sale at June 30,
2018
 
                       
 
53 Dispositions | For Period January 1, 2015 - August 7, 2018

Hotel Name

City

State

Rooms

Disposition Date

Gross Proceeds
(in millions)

1 Super 8 West Plains MO 49 01/15/2015 $1.5
2 Super 8 Green Bay WI 83 01/29/2015 $2.2
3 Super 8 Columbus GA 74 03/16/2015 $0.9
4 Sleep Inn & Suites Omaha NE 90 03/19/2015 $2.9
5 Savannah Suites Chamblee GA 120 04/01/2015 $4.4
6 Savannah Suites Augusta GA 172 04/01/2015 $3.4
7 Super 8 Batesville AR 49 04/30/2015 $1.5
8 Days Inn Ashland KY 63 07/01/2015 $2.2
9 Comfort Inn Alexandria VA 150 07/13/2015 $12.0
10 Days Inn Alexandria VA 200 07/13/2015 $6.5
11 Super 8 Manhattan KS 85 08/28/2015 $3.2
12 Quality Inn Sheboygan WI 59 10/06/2015 $2.3
13 Super 8 Hays KS 76 10/14/2015 $1.9
14 Days Inn Glasgow KY 58 10/16/2015 $1.8
15 Super 8 Tomah WI 65 10/21/2015 $1.4
16 Rodeway Inn Fayetteville NC 120 11/03/2015 $2.6
17 Savannah Suites Savannah GA 160 12/22/2015 $4.0
Total 2015 1,673 $54.7
18 Super 8 Kirksville MO 61 01/04/2016 $1.5
19 Super 8 Lincoln NE 133 01/07/2016 $2.8
20 Savannah Suites Greenville SC 170 01/08/2016 $2.7
21 Super 8 Portage WI 61 03/30/2016 $2.4
22 Super 8 O'Neill NE 72 04/25/2016 $1.7
23 Quality Inn Culpeper VA 49 05/10/2016 $2.2
24 Super 8 Storm Lake IA 59 05/19/2016 $2.8
25 Clarion Inn Cleveland TN 59 05/24/2016 $2.2
26 Super 8 Coralville IA 84 05/26/2016 $3.4
27 Super 8 Keokuk IA 61 05/27/2016 $2.2
28 Comfort Inn Chambersburg PA 63 06/06/2016 $2.1
29 Super 8 Pittsburg KS 64 08/08/2016 $1.6
30 Super 8 Mount Pleasant IA 54 09/09/2016 $1.9
31 Quality Inn Danville KY 63 09/19/2016 $2.3
32 Super 8 Menomonie WI 81 09/26/2016 $3.0
33 Comfort Inn Glasgow KY 60 10/14/2016 $2.4
34 Days Inn Sioux Falls SD 86 11/04/2016 $2.1
35 Comfort Inn Shelby NC 76 11/07/2016 $4.1
36 Comfort Inn Rocky Mount VA 61 11/17/2016 $2.2
37 Days Inn Farmville VA 59 11/17/2016 $2.4
38 Comfort Suites Marion IN 62 11/18/2016 $3.0
39 Comfort Inn Farmville VA 50 11/30/2016 $2.6
40 Quality Inn Princeton WV 50 12/05/2016 $2.1
41 Super 8 Burlington IA 62 12/21/2016 $2.8
42 Savannah Suites Atlanta GA 164 12/22/2016 $2.9
Total 2016 1,864 $61.4
43 Comfort Inn New Castle PA 79 03/27/2017 $2.5
44 Super 8 Billings MT 106 03/28/2017 $4.2
45 Comfort Inn Harlan KY 61 04/03/2017 $1.9
46 Comfort Suites Lafayette IN 62 04/18/2017 $3.9
47 Key West Inn Key Largo FL 40 05/17/2017 $7.6
48 Quality Inn Morgantown WV 81 08/30/2017 $2.6
49 Days Inn Bossier City LA 176 09/13/2017 $1.4
50 Comfort Inn & Suites Warsaw IN 71 12/20/2017 $5.0
Total 2017 676 $29.1
51 Supertel Inn/Conference Center Creston IA 41 01/25/2018 $2.1
52 Comfort Suites South Bend IN 135 03/15/2018 $6.1
53 Comfort Suites Ft. Wayne IN 127 05/30/2018 $7.1
Total 2018 303 $15.3
   
      Total Dispositions                 4,516           $160.5
 
                       
Acquisitions | For Period January 1, 2015 - August 7, 2018

Hotel Name

City

State

Rooms

Acquisition Date

Purchase Price (in
millions)

1 SpringHill Suites San Antonio TX 116 10/01/2015 $17.5
2 Courtyard by Marriott Jacksonville FL 120 10/02/2015 $14.0
3 Hotel Indigo College Park GA 142 10/02/2015 $11.0
4 Aloft1 Atlanta GA 254 08/22/2016 $43.6
5 Aloft Leawood KS 156 12/14/2016 $22.5
6 Home2 Suites Lexington KY 103 03/24/2017 $16.5
7 Home2 Suites Round Rock TX 91 03/24/2017 $16.8
8 Home2 Suites Tallahassee FL 132 03/24/2017 $21.5
9 Home2 Suites Southaven MS 105 04/14/2017 $19.0
10 Hampton Inn & Suites Lake Mary FL 130 06/19/2017 $19.3
11 Fairfield Inn & Suites El Paso TX 124 08/31/2017 $16.4
12 Residence Inn Austin TX 120 08/31/2017 $22.4
13 TownePlace Suites Austin TX 122 01/18/2018 $19.8
14 Home2 Suites Summerville SC 93 02/21/2018 $16.3
Total Acquisitions 1,808 $276.6
 

1 | Owned 80% by Condor

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