2Q26 Lodging REIT Preview: Raising estimates and price targets across the board, while downgrading APLE to Equal Weight (from Overweight). Given the recent surge in valuations, we remain cautious on the setup into earnings.

Research evidence excerpt

2Q26 Lodging REIT Preview: Raising estimates and price targets across the board, while downgrading APLE to Equal Weight (from Overweight). Given the recent surge in valuations, we remain cautious on the setup into earnings.

Barclays | U.S. REITs

(that is, as compared to our entire REIT coverage, beyond just hotels) than where we began the

year. We also maintain some residual concern that the select-service categories (Upscale and

Upper Midscale specifically) continue to broadly underperform industry average RevPAR growth

(Figure 26), though that is not the main thrust of our downgrade, and we still view APLE as a

best in class lodging REIT generally.

Additional sector thoughts into earnings:

• Industry fundamentals continue to exceed expectations while also creating tougher

comps for 2027: Total US RevPAR grew +3.9% in 2Q, including ADR growth of +2.9% and

occupancy +1.1%, and roughly in line with 1Q's +3.8% (Figure 26). Given their superior

geographic footprints (as well as chain scale segmentation) relative to the industry, we

expect the REITs generally to post mid- to high-single-digit top line growth for the quarter,

and even higher EBITDA / FFO growth amid positive operating leverage (Figure 10).

Looking ahead, industry comps generally get easier through the end of 2026 (partly

reflective of last year's government shutdown-related disruptions), while significantly

tougher in 2027. Also note, the general comps setup for next year is tougher at the higher-

end chain scales, and generally gets easier as you move downscale. Nor is the setup for

individual markets uniform over the next 12+ months, which is obviously a major factor in

REIT-specific performance (Figure 25 & Figure 26). Our RevPAR growth forecasts in 2027 do to

some extent reflect this observation.