{"url_path":"/sec/cik-0001745032/10-k/2026/item-2","section_key":"item-2","section_title":"Item 2 Properties.","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1745032/0001104659-26-062807-index.html","accession_number":"0001104659-26-062807","cik":"0001745032","ticker":null,"issuer_name":"Lodging Fund REIT III, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1745032/0001104659-26-062807-index.html","primary_entity_key":"0001745032","primary_entity_name":"Lodging Fund REIT III, Inc."},"word_count":1175,"has_tables":true,"body_markdown":"Item 2. Properties.\n\nOur principal executive offices are located at 1635 43rd Street South, Suite 205, Fargo, North Dakota 58103. Our telephone number is (701) 630-6500. We lease our offices from an unrelated third party.\n\nHotel Properties\n\nAs of December 31, 2025, we consolidated fourteen hotel properties, consisting of thirteen hotel properties owned by us and an equity and profits interest in the parent of the entity which holds as leasehold interest in one hotel property. The following table provides summary information regarding the hotel properties owned by us as of December 31, 2025:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​**\n\n​\n\n**  ​**\n\n​\n\n**  ​**\n\n​\n\n**  ​**\n\n**Number**\n\n**  ​**\n\n​\n\n​\n\n**  ​**\n\n​\n\n​\n\n**  ​**\n\n​\n\n​\n\n**  ​**\n\n​\n\n** **\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**Date**\n\n​\n\n**of Guest**\n\n​\n\n**Purchase**\n\n​\n\n**Transaction**\n\n​\n\n**Total**\n\n​\n\n**%  **\n\n** **\n\n**Hotel**\n\n​\n\n**Property Type**\n\n​\n\n**Location**\n\n​\n\n**Purchased**\n\n​\n\n**Rooms**\n\n​\n\n**Price**\n\n​\n\n**Costs**\n\n​\n\n**Purchase Price**\n\n​\n\n**Interest**\n\n**  ​**\n\nHoliday Inn Express\n(the “Cedar Rapids Property)\n\n  ​\n\nLimited-Service\n\n  ​\n\nCedar Rapids, IA\n\n  ​\n\nNovember 30, 2018\n\n  ​\n\n83\n\n  ​\n\n$\n\n7,700,000\n\n  ​\n\n$\n\n158,333\n\n  ​\n\n$\n\n7,858,333\n\n  ​\n\n100\n\n%\n\nHampton Inn\n(the “Eagan Property”)\n\n  ​\n\nLimited-Service\n\n  ​\n\nEagan, MN\n\n  ​\n\nJune 19, 2019\n\n  ​\n\n122\n\n  ​\n\n \n\n13,950,000\n\n  ​\n\n \n\n278,333\n\n  ​\n\n \n\n14,228,333\n\n  ​\n\n100\n\n%\n\nHome2 Suites\n(the “Lubbock Home2 Property”)\n\n  ​\n\nExtended-Stay\n\n  ​\n\nLubbock, TX\n\n​\n\nDecember 30, 2019\n\n​\n\n100\n\n​\n\n​\n\n14,150,000\n\n​\n\n​\n\n284,776\n\n  ​\n\n \n\n14,434,776\n\n  ​\n\n100\n\n%\n\nFairfield Inn & Suites\n(the \"Lubbock Property\")\n\n​\n\nLimited-Service\n\n  ​\n\nLubbock, TX\n\n​\n\nJanuary 8, 2020\n\n​\n\n101\n\n​\n\n​\n\n15,150,000\n\n​\n\n​\n\n496,431\n\n​\n\n​\n\n15,646,431\n\n​\n\n100\n\n%\n\nHomewood Suites\n(the \"Southaven Property\")\n\n​\n\nExtended-Stay\n\n​\n\nSouthaven, MS\n\n​\n\nFebruary 21, 2020\n\n \n\n99\n\n​\n\n​\n\n20,500,000\n\n \n\n​\n\n445,090\n\n \n\n​\n\n20,945,090\n\n​\n\n100\n\n%\n\nCourtyard by Marriott\n(the \"Aurora Property\")\n\n​\n\nSelect-Service\n\n​\n\nAurora, CO\n\n​\n\nFebruary 4, 2021\n\n​\n\n141\n\n​\n\n​\n\n23,610,000\n\n​\n\n​\n\n458,129\n\n​\n\n​\n\n24,068,129\n\n​\n\n100\n\n%\n\nHoliday Inn\n(the \"El Paso HI Property\")\n\n​\n\nSelect-Service\n\n​\n\nEl Paso, TX\n\n​\n\nMay 12, 2021\n\n​\n\n175\n\n​\n\n​\n\n10,300,000\n\n​\n\n​\n\n361,019\n\n​\n\n​\n\n10,661,019\n\n​\n\n100\n\n%\n\nHilton Garden Inn\n(the \"Houston Property\")\n\n​\n\nSelect-Service\n\n​\n\nHouston, TX\n\n​\n\nAugust 3, 2021\n\n​\n\n182\n\n​\n\n​\n\n19,910,000\n\n​\n\n​\n\n918,353\n\n​\n\n​\n\n20,828,353\n\n​\n\n100\n\n%\n\nSheraton Hotel\n(the \"Northbrook Property\")\n\n​\n\nFull-Service\n\n​\n\nNorthbrook, IL\n\n​\n\nDecember 3, 2021\n\n​\n\n160\n\n​\n\n​\n\n11,400,000\n\n​\n\n​\n\n340,005\n\n​\n\n​\n\n11,740,005\n\n​\n\n100\n\n%\n\nCourtyard by Marriott\n(the \"El Paso Airport Property\")\n\n​\n\nSelect-Service\n\n​\n\nEl Paso, TX\n\n​\n\nFebruary 8, 2022\n\n​\n\n90\n\n​\n\n​\n\n15,120,000\n\n​\n\n​\n\n333,234\n\n​\n\n​\n\n15,453,234\n\n​\n\n100\n\n%\n\nFairfield Inn & Suites\n(the \"Lakewood Property\")\n\n​\n\nLimited-Service\n\n​\n\nLakewood, CO\n\n​\n\nMarch 29, 2022\n\n​\n\n142\n\n​\n\n​\n\n18,800,000\n\n​\n\n​\n\n862,117\n\n​\n\n​\n\n19,662,117\n\n​\n\n100\n\n%\n\nResidence Inn\n(the \"Fort Collins Property\")\n\n​\n\nExtended-Stay\n\n​\n\nFort Collins, CO\n\n​\n\nAugust 3, 2022\n\n​\n\n113\n\n​\n\n​\n\n15,800,000\n\n​\n\n​\n\n546,009\n\n​\n\n​\n\n16,346,009\n\n​\n\n100\n\n%\n\nHoliday Inn Express\n(the \"Wichita Property\")\n\n​\n\nLimited-Service\n\n​\n\nWichita, KS\n\n​\n\nDecember 22, 2022\n\n​\n\n84\n\n​\n\n​\n\n7,400,000\n\n​\n\n​\n\n234,310\n\n​\n\n​\n\n7,634,310\n\n​\n\n100\n\n%\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n1,592\n\n​\n\n$\n\n193,790,000\n\n​\n\n$\n\n5,716,139\n\n​\n\n$\n\n199,506,139\n\n​\n\n​\n\n​\n\n​\n\nOn August 10, 2022, we acquired a 24.9% equity and profits interest in High Desert Garden Holdings, LLC, which is the parent of the entity which holds a leasehold interest in the Hilton Garden Inn, located in El Paso, Texas (the “El Paso University Property”) in exchange for a capital contribution of $3.2 million. The El Paso University Property is a select-service hotel with 153 guest rooms. See Note 3 “Investment In Hotel Properties” of the notes to the consolidated financial statements included as part of this Annual Report on Form 10-K for additional information regarding this transaction.\n\nFor a description of the debt associated with each of these hotel properties, see Part II. Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt.”\n\n39\n\n[Table of Contents](#TOC)\n\nManagement Agreements\n\nHotel Equities Agreement\n\nAs of December 31, 2025, eight of our hotel properties were subject to management agreements with Hotel Equities with an initial term expiring on December 31 of the fifth full calendar year following the effective date of the agreement. The agreement will automatically renew for successive five-year periods unless terminated earlier in accordance with its terms. These properties were previously managed by NHS. On February 10, 2025, we terminated the management agreements with NHS and entered into new agreements with Hotel Equities Group, LLC (“Hotel Equities”). See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Subsequent Events”.\n\nVista Host Agreement\n\nAs of December 31, 2025, our Southaven Property was subject to a management agreement with Vista Host Inc. (“Vista”) with an initial term expiring on February 21, 2025 and automatically renewed for additional successive terms of five years each unless terminated earlier in accordance with its terms.\n\nAimbridge Agreement\n\nAs of December 31, 2025, each of our Houston Property, El Paso Property, El Paso Airport Property and El Paso University Property was subject to a management agreement with Interstate Management Company, LLC (“Aimbridge”). The Aimbridge agreement for the Houston Property had an initial term expiring on August 3, 2024 and automatically renewed for additional successive terms of one year each unless terminated earlier in accordance with its terms. The Aimbridge agreement for the El Paso Airport Property and the El Paso University Property has an initial term expiring on February 8, 2027 and August 10, 2027, respectively, both of which will automatically renew for one (1) year periods unless terminated earlier in accordance with its terms. The Aimbridge agreement for the El Paso Property has an initial term expiring February 28, 2028, which will automatically renew for one (1) year periods unless terminated earlier in accordance with its terms. The\n\nKAJ Agreement\n\nAs of December 31, 2025, the Wichita Property was subject to a management agreement with KAJ Hospitality Inc. (“KAJ”), each with an initial term expiring December 22, 2027, of which automatically renews for successive one-year periods, unless terminated in accordance with its terms.\n\nFranchise Agreements\n\nAs of December 31, 2025, all of our hotel properties were operated under franchise agreements with initial terms of 10 to 18 years. Franchise agreements allow the hotel properties to operate under the respective brands. Pursuant to the franchise agreements, we pay a royalty fee of 5% to 6% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs. Certain hotels are also charged a program fee of generally between 3% and 4% of room revenue. We paid an initial fee of $50,000 to $175,000 at the time of entering into each franchise agreement which is being amortized over the term of each agreement."}