(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Large accelerated filer | ¨ | x | |||||||||
Non-accelerated filer | ¨ | Smaller reporting company | |||||||||
Emerging growth company |
Class | Outstanding at August 3, 2021 | ||||
Common Shares of Beneficial Interest ($0.01 par value per share) |
Page | ||||||||
Item1. | ||||||||
Item2. | ||||||||
Item3. | ||||||||
Item4. | ||||||||
Item1. | ||||||||
Item1A. | ||||||||
Item2. | ||||||||
Item3. | ||||||||
Item4. | ||||||||
Item5. | ||||||||
Item6. |
June 30, 2021 | December 31, 2020 | ||||||||||
(unaudited) | |||||||||||
Assets: | |||||||||||
Investment in hotel properties, net | $ | $ | |||||||||
Investment in hotel properties under development | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Right of use asset, net | |||||||||||
Hotel receivables (net of allowance for doubtful accounts of $ | |||||||||||
Deferred costs, net | |||||||||||
Prepaid expenses and other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Equity: | |||||||||||
Mortgage debt, net | $ | $ | |||||||||
Revolving credit facility | |||||||||||
Construction loan | |||||||||||
Accounts payable and accrued expenses | |||||||||||
Distributions and losses in excess of investments in unconsolidated real estate entities | |||||||||||
Lease liability, net | |||||||||||
Distributions payable | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Equity: | |||||||||||
Shareholders’ Equity: | |||||||||||
Preferred shares, $ | |||||||||||
Common shares, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total shareholders’ equity | |||||||||||
Noncontrolling Interests: | |||||||||||
Noncontrolling interest in Operating Partnership | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Room | $ | $ | $ | $ | |||||||||||||||||||
Food and beverage | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Reimbursable costs from unconsolidated real estate entities | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Hotel operating expenses: | |||||||||||||||||||||||
Room | |||||||||||||||||||||||
Food and beverage | |||||||||||||||||||||||
Telephone | |||||||||||||||||||||||
Other hotel operating | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Franchise and marketing fees | |||||||||||||||||||||||
Advertising and promotions | |||||||||||||||||||||||
Utilities | |||||||||||||||||||||||
Repairs and maintenance | |||||||||||||||||||||||
Management fees | |||||||||||||||||||||||
Insurance | |||||||||||||||||||||||
Total hotel operating expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Impairment loss on investment in unconsolidated real estate entities | |||||||||||||||||||||||
Property taxes, ground rent and insurance | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Other charges | |||||||||||||||||||||||
Reimbursable costs from unconsolidated real estate entities | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating loss before gain (loss) on sale of hotel property | ( | ( | ( | ( | |||||||||||||||||||
Gain (loss) on sale of hotel property | ( | ||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | |||||||||||||||||||
Interest and other income | |||||||||||||||||||||||
Interest expense, including amortization of deferred fees | ( | ( | ( | ( | |||||||||||||||||||
Loss from unconsolidated real estate entities | ( | ( | ( | ||||||||||||||||||||
Gain on sale of investment in unconsolidated real estate entities | |||||||||||||||||||||||
Loss before income tax expense | ( | ( | ( | ( | |||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net loss | ( | ( | ( | ( | |||||||||||||||||||
Net loss attributable to noncontrolling interests | |||||||||||||||||||||||
Net loss attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Loss per Common Share - Basic: | |||||||||||||||||||||||
Net loss attributable to common shareholders (Note 11) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Loss per Common Share - Diluted: | |||||||||||||||||||||||
Net loss attributable to common shareholders (Note 11) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Distributions declared per common share: | $ | $ | $ | $ |
Three months ended June 30, 2020 and 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Additional Paid - In Capital | Retained earnings (distributions in excess of retained earnings) | Total Shareholders’ Equity | Noncontrolling Interest in Operating Partnership | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 1, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Balance, April 1, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of preferred shares, net of offering costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2020 and 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Additional Paid - In Capital | Retained earnings (distributions in excess of retained earnings) | Total Shareholders’ Equity | Noncontrolling Interest in Operating Partnership | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares pursuant to Equity Incentive Plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared on common shares ($ | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Distributions declared on LTIP units ($ | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2021 | $ | $ | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of preferred shares, net of offering costs of $ | — | 0 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares pursuant to Equity Incentive Plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares, net of offering costs of $ | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited distributions declared on LTIP units | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Reallocation of noncontrolling interest | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | $ | $ | $ | $ | ( | $ | $ | $ |
For the six months ended | |||||||||||
June 30, | |||||||||||
2021 | 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of deferred franchise fees | |||||||||||
Amortization of deferred financing fees included in interest expense | |||||||||||
Loss on sale of hotel property | |||||||||||
Gain on sale of investment in unconsolidated real estate entities | ( | ||||||||||
Impairment loss on investment in unconsolidated real estate entities | |||||||||||
Share based compensation | |||||||||||
Accelerated share based compensation for employee severance | |||||||||||
Loss from unconsolidated real estate entities | |||||||||||
Changes in assets and liabilities: | |||||||||||
Right of use asset | |||||||||||
Hotel receivables | ( | ||||||||||
Deferred costs | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable and accrued expenses | ( | ||||||||||
Lease liability | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Improvements and additions to hotel properties | ( | ( | |||||||||
Investment in hotel properties under development | ( | ( | |||||||||
Proceeds from sale of unconsolidated real estate entity | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Borrowings on revolving credit facility | |||||||||||
Repayments on revolving credit facility | ( | ( | |||||||||
Borrowings on construction loan | |||||||||||
Payments on mortgage debt | ( | ( | |||||||||
Payment of financing costs | ( | ( | |||||||||
Payment of offering costs on common shares | ( | ( | |||||||||
Proceeds from issuance of common shares | |||||||||||
Payment of offering costs on preferred shares | ( | ||||||||||
Proceeds from issuance of preferred shares | |||||||||||
Distributions-common shares/units | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net change in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Capitalized interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Residence Inn Mission Valley, CA | $ | $ | $ | $ | |||||||||||||||||||
Total | $ | $ | $ | $ |
June 30, 2021 | December 31, 2020 | ||||||||||
Land and improvements | $ | $ | |||||||||
Building and improvements | |||||||||||
Furniture, fixtures and equipment | |||||||||||
Renovations in progress | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Investment in hotel properties, net | $ | $ |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Total hotel operating expenses | |||||||||||||||||||||||
Hotel operating (loss) income | $ | $ | ( | $ | $ | ||||||||||||||||||
Impairment loss | $ | $ | $ | $ | |||||||||||||||||||
Loss from continuing operations | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Gain (loss) on sale of hotels | ( | ||||||||||||||||||||||
Net loss | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Loss allocable to the Company | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Basis difference adjustment | |||||||||||||||||||||||
Total loss from unconsolidated real estate entities attributable to the Company | $ | $ | ( | $ | ( | $ | ( |
Collateral | Interest Rate | Maturity Date | 6/30/21 Property Carrying Value | Balance Outstanding on Loan as of | |||||||||||||||||||||||||
June 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||
Revolving Credit Facility (1) | % | March 8, 2022 | $ | $ | $ | ||||||||||||||||||||||||
Construction loan (2) | % | August 3, 2024 | |||||||||||||||||||||||||||
Residence Inn by Marriott New Rochelle, NY | % | September 1, 2021 | |||||||||||||||||||||||||||
Homewood Suites by Hilton San Antonio, TX | % | February 6, 2023 | |||||||||||||||||||||||||||
Residence Inn by Marriott Vienna, VA | % | February 6, 2023 | |||||||||||||||||||||||||||
Courtyard by Marriott Houston, TX | % | May 6, 2023 | |||||||||||||||||||||||||||
Hyatt Place Pittsburgh, PA | % | July 6, 2023 | |||||||||||||||||||||||||||
Residence Inn by Marriott Bellevue, WA | % | December 6, 2023 | |||||||||||||||||||||||||||
Residence Inn by Marriott Garden Grove, CA | % | April 6, 2024 | |||||||||||||||||||||||||||
Residence Inn by Marriott Silicon Valley I, CA | % | July 1, 2024 | |||||||||||||||||||||||||||
Residence Inn by Marriott Silicon Valley II, CA | % | July 1, 2024 | |||||||||||||||||||||||||||
Residence Inn by Marriott San Mateo, CA | % | July 1, 2024 | |||||||||||||||||||||||||||
Residence Inn by Marriott Mountain View, CA | % | July 6, 2024 | |||||||||||||||||||||||||||
SpringHill Suites by Marriott Savannah, GA | % | July 6, 2024 | |||||||||||||||||||||||||||
Hilton Garden Inn Marina del Rey, CA | % | July 6, 2024 | |||||||||||||||||||||||||||
Homewood Suites by Hilton Billerica, MA | % | December 6, 2024 | |||||||||||||||||||||||||||
Hampton Inn & Suites Houston Medical Center, TX | % | January 6, 2025 | |||||||||||||||||||||||||||
Total debt before unamortized debt issue costs | $ | $ | $ | ||||||||||||||||||||||||||
Unamortized mortgage debt issue costs | ( | ( | |||||||||||||||||||||||||||
Total debt outstanding | $ | $ |
Amount | |||||
2021 (remaining six months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total debt before unamortized debt issue costs | $ | ||||
Unamortized mortgage debt issue costs | ( | ||||
Total debt outstanding | $ |
Record Date | Payment Date | Common share distribution amount | LTIP unit distribution amount | |||||||||||||||||||||||
January | 1/31/2020 | 2/28/2020 | $ | $ | ||||||||||||||||||||||
February | 2/28/2020 | 3/27/2020 | ||||||||||||||||||||||||
1st Quarter 2020 | $ | $ | ||||||||||||||||||||||||
Total 2020 | $ | $ |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Dividends paid on unvested shares and units | ( | ||||||||||||||||||||||
Net loss attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average number of common shares - basic | |||||||||||||||||||||||
Unvested shares | |||||||||||||||||||||||
Weighted average number of common shares - diluted | |||||||||||||||||||||||
Basic loss per Common Share: | |||||||||||||||||||||||
Net loss attributable to common shareholders per weighted average basic common share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted loss per Common Share: | |||||||||||||||||||||||
Net loss attributable to common shareholders per weighted average diluted common share | $ | ( | $ | ( | $ | ( | $ | ( |
For the six months ended | For the year ended | ||||||||||||||||||||||
June 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
Number of Shares | Weighted-Average Grant Date Fair Value | Number of Shares | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||
Non-vested at beginning of the period | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ||||||||||||||||||||||
Forfeited | |||||||||||||||||||||||
Non-vested at end of the period | $ | $ | |||||||||||||||||||||
For the six months ended | For the year ended | ||||||||||||||||||||||
June 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
Number of Units | Weighted-Average Grant Date Fair Value | Number of Units | Weighted-Average Grant Date Fair Value | ||||||||||||||||||||
Non-vested at beginning of the period | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Forfeited | ( | $ | $ | ||||||||||||||||||||
Non-vested at end of the period | $ | $ |
Relative TSR Hurdles (Percentile) | Payout Percentage | ||||||||||
Threshold | |||||||||||
Target | |||||||||||
Maximum |
Grant Date | Number of Units Granted | Estimated Value Per Unit | Volatility | Dividend Yield | Risk Free Interest Rate | |||||||||||||||
Outperformance Plan LTIP Unit Awards | 6/1/2015 | $ | ||||||||||||||||||
2016 Time-Based LTIP Unit Awards | 1/28/2016 | $ | ||||||||||||||||||
2016 Performance-Based LTIP Unit Awards | 1/28/2016 | $ | ||||||||||||||||||
2017 Time-Based LTIP Unit Awards | 3/1/2017 | $ | ||||||||||||||||||
2017 Performance-Based LTIP Unit Awards | 3/1/2017 | $ | ||||||||||||||||||
2018 Time-Based LTIP Unit Awards | 3/1/2018 | $ | ||||||||||||||||||
2018 Performance-Based LTIP Unit Awards | 3/1/2018 | $ | ||||||||||||||||||
2019 Time-Based LTIP Unit Awards | 3/1/2019 | $ | ||||||||||||||||||
2019 Performance-Based LTIP Unit Awards | 3/1/2019 | $ | ||||||||||||||||||
2020 Time-Based LTIP Unit Awards | 3/1/2020 | $ | ||||||||||||||||||
2020 Performance-Based LTIP Unit Awards | 3/1/2020 | $ | ||||||||||||||||||
2021 Time-Based LTIP Unit Awards | 3/1/2021 | $ | ||||||||||||||||||
2021 Performance-Based LTIP Unit Awards | 3/1/2021 | $ |
Total Future Lease Payments | |||||
Amount | |||||
2021 (remaining six months) | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less: Imputed interest | ( | ||||
Present value of lease liabilities | $ |
Total Future Lease Payments | |||||
Amount | |||||
2021 | $ | ||||
2022 | |||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less: Imputed interest | ( | ||||
Present value of lease liabilities | $ |
Right of Use Asset | Lease Liability | ||||||||||
Balance as of January 1, 2021 | $ | $ | |||||||||
Amortization | ( | ( | |||||||||
Balance as of June 30, 2021 | $ | $ |
Lease Term and Discount Rate | June 30, 2021 | ||||
Weighted-average remaining lease term (years) | |||||
Weighted-average discount rate |
For the three months ended | |||||||||||||||||
June 30, 2021 | June 30, 2020 | % Change | |||||||||||||||
Room | $ | 46,514 | $ | 18,389 | 152.9 | % | |||||||||||
Food and beverage | 756 | 117 | 546.2 | % | |||||||||||||
Other | 2,647 | 873 | 203.2 | % | |||||||||||||
Cost reimbursements from unconsolidated real estate entities | 327 | 794 | (58.8) | % | |||||||||||||
Total revenue | $ | 50,244 | $ | 20,173 | 149.1 | % |
For the three months ended June 30, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Percentage Change | |||||||||||||||||||||||||||||||||
Same Property (39 hotels) | Actual (39 hotels) | Same Property (39 hotels) | Actual (40 hotels) | Same Property (39 hotels) | Actual (39/40 hotels) | ||||||||||||||||||||||||||||||
Occupancy | 68.2 | % | 68.2 | % | 33.2 | % | 33.8 | % | 105.4 | % | 101.8 | % | |||||||||||||||||||||||
ADR | $ | 127.06 | $ | 127.06 | $ | 96.53 | $ | 98.20 | 31.6 | % | 29.4 | % | |||||||||||||||||||||||
RevPAR | $ | 86.63 | $ | 86.63 | $ | 32.05 | $ | 33.17 | 170.3 | % | 161.2 | % |
For the three months ended | |||||||||||||||||
June 30, 2021 | June 30, 2020 | % Change | |||||||||||||||
Hotel operating expenses: | |||||||||||||||||
Room | $ | 9,486 | $ | 4,517 | 110.0 | % | |||||||||||
Food and beverage | 491 | 128 | 283.6 | % | |||||||||||||
Telephone | 348 | 351 | (0.9) | % | |||||||||||||
Other hotel operating | 544 | 182 | 198.9 | % | |||||||||||||
General and administrative | 5,056 | 3,360 | 50.5 | % | |||||||||||||
Franchise and marketing fees | 4,091 | 1,636 | 150.1 | % | |||||||||||||
Advertising and promotions | 835 | 854 | (2.2) | % | |||||||||||||
Utilities | 2,352 | 1,863 | 26.2 | % | |||||||||||||
Repairs and maintenance | 2,720 | 1,640 | 65.9 | % | |||||||||||||
Management fees | 1,760 | 848 | 107.5 | % | |||||||||||||
Insurance | 707 | 361 | 95.8 | % | |||||||||||||
Total hotel operating expenses | $ | 28,390 | $ | 15,740 | 80.4 | % |
For the three months ended | |||||||||||||||||
June 30, 2021 | June 30, 2020 | % Change | |||||||||||||||
Mortgage debt interest | $ | 5,268 | $ | 5,811 | (9.3) | % | |||||||||||
Credit facility interest and unused fees | 1,065 | 1,278 | (16.7) | % | |||||||||||||
Interest rate cap | (4) | — | — | % | |||||||||||||
Construction loan interest | 495 | — | — | % | |||||||||||||
Capitalized interest | (842) | (318) | 164.8 | % | |||||||||||||
Amortization of deferred financing costs | 374 | 263 | 42.2 | % | |||||||||||||
Total | $ | 6,356 | $ | 7,034 | (9.6) | % |
For the six months ended | |||||||||||||||||
June 30, 2021 | June 30, 2020 | % Change | |||||||||||||||
Room | $ | 75,905 | $ | 71,437 | 6.3 | % | |||||||||||
Food and beverage | 1,120 | 2,180 | (48.6) | % | |||||||||||||
Other | 4,218 | 4,391 | (3.9) | % | |||||||||||||
Cost reimbursements from unconsolidated real estate entities | 1,114 | 2,374 | (53.1) | % | |||||||||||||
Total revenue | $ | 82,357 | $ | 80,382 | 2.5 | % |
For the six months ended June 30, | |||||||||||||||||||||||||||||||||||
2021 | 2020 | Percentage Change | |||||||||||||||||||||||||||||||||
Same Property (39 hotels) | Actual (39 hotels) | Same Property (39 hotels) | Actual (40 hotels) | Same Property (39 hotels) | Actual (39/40 hotels) | ||||||||||||||||||||||||||||||
Occupancy | 60.0 | % | 60.0 | % | 47.7 | % | 48.2 | % | 25.8 | % | 24.5 | % | |||||||||||||||||||||||
ADR | $ | 118.38 | $ | 118.38 | $ | 133.21 | $ | 133.57 | (11.1) | % | (11.4) | % | |||||||||||||||||||||||
RevPAR | $ | 71.08 | $ | 71.08 | $ | 63.49 | $ | 64.44 | 12.0 | % | 10.3 | % |
For the six months ended | |||||||||||||||||
June 30, 2021 | June 30, 2020 | % Change | |||||||||||||||
Hotel operating expenses: | |||||||||||||||||
Room | $ | 16,653 | $ | 17,912 | (7.0) | % | |||||||||||
Food and beverage | 775 | 2,018 | (61.6) | % | |||||||||||||
Telephone | 748 | 730 | 2.5 | % | |||||||||||||
Other hotel operating | 909 | 992 | (8.4) | % | |||||||||||||
General and administrative | 8,870 | 8,636 | 2.7 | % | |||||||||||||
Franchise and marketing fees | 6,688 | 6,356 | 5.2 | % | |||||||||||||
Advertising and promotions | 1,592 | 2,364 | (32.7) | % | |||||||||||||
Utilities | 4,638 | 4,378 | 5.9 | % | |||||||||||||
Repairs and maintenance | 5,180 | 5,101 | 1.5 | % | |||||||||||||
Management fees | 2,956 | 2,872 | 2.9 | % | |||||||||||||
Insurance | 1,356 | 721 | 88.1 | % | |||||||||||||
Total hotel operating expenses | $ | 50,365 | $ | 52,080 | (3.3) | % |
For the six months ended | |||||||||||||||||
June 30, 2021 | June 30, 2020 | % Change | |||||||||||||||
Mortgage debt interest | $ | 10,624 | $ | 11,649 | (8.8) | % | |||||||||||
Credit facility interest and unused fees | 2,168 | 2,321 | (6.6) | % | |||||||||||||
Interest rate cap | (44) | — | — | % | |||||||||||||
Construction loan interest | 845 | — | — | % | |||||||||||||
Capitalized interest | (1,532) | (595) | 157.5 | % | |||||||||||||
Amortization of deferred financing costs | 765 | 492 | 55.5 | % | |||||||||||||
Total | $ | 12,826 | $ | 13,867 | (7.5) | % |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Funds From Operations (“FFO”): | |||||||||||||||||||||||
Net loss | $ | (8,718) | $ | (27,193) | $ | (6,016) | $ | (55,304) | |||||||||||||||
(Gain) loss on sale of hotel property | (28) | (2) | 15 | (3) | |||||||||||||||||||
(Gain) loss on sale of assets within the unconsolidated real estate entities | — | (7) | — | 1 | |||||||||||||||||||
Gain on sale of investment in unconsolidated real estate entities | — | — | (23,817) | — | |||||||||||||||||||
Depreciation | 13,292 | 13,606 | 26,566 | 26,607 | |||||||||||||||||||
Impairment loss on investment in unconsolidated real estate entities | — | — | — | 15,282 | |||||||||||||||||||
Impairment loss from unconsolidated real estate entities | — | — | — | 1,388 | |||||||||||||||||||
Adjustments for unconsolidated real estate entity items | — | 937 | 568 | 2,863 | |||||||||||||||||||
FFO attributable to common share and unit holders | 4,546 | (12,659) | (2,684) | (9,166) | |||||||||||||||||||
Other charges | 322 | 215 | 377 | 2,984 | |||||||||||||||||||
Adjustments for unconsolidated real estate entity items | — | 5 | 46 | 5 | |||||||||||||||||||
Adjusted FFO attributable to common share and unit holders | $ | 4,868 | $ | (12,439) | $ | (2,261) | $ | (6,177) | |||||||||||||||
Weighted average number of common shares and units | |||||||||||||||||||||||
Basic | 49,613,586 | 47,676,905 | 48,823,781 | 47,586,456 | |||||||||||||||||||
Diluted | 49,794,765 | 47,676,905 | 48,823,781 | 47,586,456 |
For the three months ended | For the six months ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”): | |||||||||||||||||||||||
Net loss | $ | (8,718) | $ | (27,193) | $ | (6,016) | $ | (55,304) | |||||||||||||||
Interest expense | 6,356 | 7,034 | 12,826 | 13,867 | |||||||||||||||||||
Depreciation and amortization | 13,353 | 13,667 | 26,687 | 26,729 | |||||||||||||||||||
Adjustments for unconsolidated real estate entity items | — | 1,828 | 1,184 | 5,901 | |||||||||||||||||||
EBITDA | 10,991 | (4,664) | 34,681 | (8,807) | |||||||||||||||||||
Impairment loss on investment in unconsolidated real estate entities | — | — | — | 15,282 | |||||||||||||||||||
Impairment loss from unconsolidated real estate entities | — | — | — | 1,388 | |||||||||||||||||||
(Gain) loss on sale of hotel property | (28) | (2) | 15 | (3) | |||||||||||||||||||
(Gain) loss on the sale of assets within unconsolidated real estate entities | — | (7) | — | 1 | |||||||||||||||||||
Gain on sale of investment in unconsolidated real estate entities | — | — | (23,817) | — | |||||||||||||||||||
EBITDAre | 10,963 | (4,673) | 10,879 | 7,861 | |||||||||||||||||||
Other charges | 322 | 215 | 377 | 2,984 | |||||||||||||||||||
Adjustments for unconsolidated real estate entity items | — | 5 | 46 | 7 | |||||||||||||||||||
Share based compensation | 1,194 | 1,145 | 2,351 | 2,350 | |||||||||||||||||||
Adjusted EBITDA | $ | 12,479 | $ | (3,308) | $ | 13,653 | $ | 13,202 |
For the three months ended | For the six months ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Net loss | $ | (8,718) | $ | (27,193) | $ | (6,016) | $ | (55,304) | ||||||||||||||||||
Add: | Interest expense | 6,356 | 7,034 | 12,826 | 13,867 | |||||||||||||||||||||
Depreciation and amortization | 13,353 | 13,667 | 26,687 | 26,729 | ||||||||||||||||||||||
Corporate general and administrative | 4,316 | 2,487 | 7,844 | 5,252 | ||||||||||||||||||||||
Other charges | 322 | 215 | 377 | 2,984 | ||||||||||||||||||||||
Loss from unconsolidated real estate entities | — | 1,578 | 1,231 | 5,251 | ||||||||||||||||||||||
Impairment loss on investment in unconsolidated real estate entities | — | — | — | 15,282 | ||||||||||||||||||||||
Loss on sale of hotel property | — | — | 15 | — | ||||||||||||||||||||||
Less: | Interest and other income | (28) | (39) | (102) | (120) | |||||||||||||||||||||
Gain on sale of hotel property | (28) | (2) | — | (3) | ||||||||||||||||||||||
Gain on sale of investment in unconsolidated real estate entities | — | — | (23,817) | — | ||||||||||||||||||||||
Adjusted Hotel EBITDA | $ | 15,573 | $ | (2,253) | $ | 19,045 | $ | 13,938 |
Payments Due by Period | |||||||||||||||||||||||||||||
Contractual Obligations | Total | Less Than One Year | One to Three Years | Three to Five Years | More Than Five Years | ||||||||||||||||||||||||
Corporate office lease (1) | $ | 4,582 | $ | 419 | $ | 1,727 | $ | 1,814 | $ | 622 | |||||||||||||||||||
Revolving credit facility, including interest (2) | 130,891 | 2,115 | 128,776 | — | — | ||||||||||||||||||||||||
Construction loan (2) | 34,176 | 1,068 | 4,274 | 28,834 | — | ||||||||||||||||||||||||
Ground leases | 71,632 | 609 | 2,438 | 2,487 | 66,098 | ||||||||||||||||||||||||
Property loans, including interest (2) | 482,318 | 14,731 | 147,374 | 320,213 | — | ||||||||||||||||||||||||
Total | $ | 723,599 | $ | 18,942 | $ | 284,589 | $ | 353,348 | $ | 66,720 |
2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | Total/ Weighted Average | Fair Value | ||||||||||||||||||||||||||||||||||||||||
Floating rate: | |||||||||||||||||||||||||||||||||||||||||||||||
Debt | — | $128,000 | — | $ | 27,573 | — | — | $ | 155,573 | $ | 155,604 | ||||||||||||||||||||||||||||||||||||
Average interest rate | — | 3.11% | — | 7.75 | % | — | — | 3.94 | % | ||||||||||||||||||||||||||||||||||||||
Fixed rate: | |||||||||||||||||||||||||||||||||||||||||||||||
Debt | $4,566 | $9,249 | $ | 117,875 | $ | 296,617 | $ | 15,935 | — | $ | 444,242 | $ | 452,728 | ||||||||||||||||||||||||||||||||||
Average interest rate | 4.63 | % | 4.63 | % | 4.66 | % | 4.64 | % | 4.25 | % | — | 4.63 | % |
Exhibit Number | Description of Exhibit | |||||||
Articles of Amendment and Restatement of Chatham Lodging Trust (1) | ||||||||
Second Amended and Restated Bylaws of Chatham Lodging Trust(2) | ||||||||
Articles Supplementary to the Company's Declaration of Trust designating the 6.625% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share(3) | ||||||||
Second Amendment to the Agreement of Limited Partnership of Chatham Lodging, L.P.(4) | ||||||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section302 of the Sarbanes-Oxley Act of 2002 | ||||||||
32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002 | |||||||
101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the interactive date file because its XBRL tags are embedded within the inline XBRL document. |
* | Furnished herewith. Such certification shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. | ||||
(1) | Incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed with the SEC on February 29, 2016 (File No. 001-34693). | ||||
(2) | Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on April 21, 2015 (File No. 001-34693). | ||||
(3) | Incorporated by reference to Exhibit 3.3 of the Company's Registration Statement on Form 8-A filed with the SEC on June 25, 2021 (File No. 001-34693). | ||||
(4) | Incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K filed with the SEC on June 28, 2021 (File No. 001-34693). |
CHATHAM LODGING TRUST | |||||||||||
Dated: | August 3, 2021 | By: /s/ JEREMY B. WEGNER | |||||||||
Jeremy B. Wegner | |||||||||||
Senior Vice President and Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer and duly authorized officer of the registrant) |
CHATHAM LODGING TRUST | ||||||||
Dated: | August 3, 2021 | /s/ JEFFREY H. FISHER | ||||||
Jeffrey H. Fisher | ||||||||
Chairman,PresidentandChiefExecutiveOfficer |
CHATHAM LODGING TRUST | ||||||||
Dated: | August 3, 2021 | /s/ JEREMY B. WEGNER | ||||||
Jeremy B. Wegner | ||||||||
Senior Vice President and Chief Financial Officer |
CHATHAM LODGING TRUST | ||||||||
Dated: | August 3, 2021 | /s/ JEFFREY H. FISHER | ||||||
Jeffrey H. Fisher | ||||||||
Chairman, President and Chief Executive Officer | ||||||||
/s/ JEREMY B. WEGNER | ||||||||
Jeremy B. Wegner | ||||||||
Senior Vice President and Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts related to receivables | $ 278 | $ 248 |
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred shares, shares issued (in shares) | 4,800,000 | 0 |
Preferred shares, shares outstanding (in shares) | 4,800,000 | 0 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, shares issued (in shares) | 48,756,555 | 46,973,473 |
Common shares, shares outstanding (in shares) | 48,756,555 | 46,973,473 |
Consolidated Statements of Operations - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Total revenue | $ 50,244,000 | $ 20,173,000 | $ 82,357,000 | $ 80,382,000 |
Total hotel operating expenses | 28,390,000 | 15,740,000 | 50,365,000 | 52,080,000 |
Depreciation and amortization | 13,353,000 | 13,667,000 | 26,687,000 | 26,729,000 |
Impairment loss on investment in unconsolidated real estate entities | 0 | 0 | 0 | 15,282,000 |
Property taxes, ground rent and insurance | 5,954,000 | 5,892,000 | 11,833,000 | 11,990,000 |
General and administrative | 4,316,000 | 2,487,000 | 7,844,000 | 5,252,000 |
Other charges | 322,000 | 215,000 | 377,000 | 2,984,000 |
Reimbursable costs from unconsolidated real estate entities | 327,000 | 794,000 | 1,114,000 | 2,374,000 |
Total operating expenses | 52,662,000 | 38,795,000 | 98,220,000 | 116,691,000 |
Operating loss before gain (loss) on sale of hotel property | (2,418,000) | (18,622,000) | (15,863,000) | (36,309,000) |
Gain (loss) on sale of hotel property | 28,000 | 2,000 | (15,000) | 3,000 |
Operating income (loss) | (2,390,000) | (18,620,000) | (15,878,000) | (36,306,000) |
Interest and other income | 28,000 | 39,000 | 102,000 | 120,000 |
Interest expense, including amortization of deferred fees | (6,356,000) | (7,034,000) | (12,826,000) | (13,867,000) |
Loss from unconsolidated real estate entities | 0 | (1,578,000) | (1,231,000) | (5,251,000) |
Gain on sale of investment in unconsolidated real estate entities | 0 | 0 | 23,817,000 | 0 |
Loss before income tax expense | (8,718,000) | (27,193,000) | (6,016,000) | (55,304,000) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | (8,718,000) | (27,193,000) | (6,016,000) | (55,304,000) |
Net loss attributable to noncontrolling interests | 160,000 | 366,000 | 114,000 | 694,000 |
Net loss attributable to common shareholders | $ (8,558,000) | $ (26,827,000) | $ (5,902,000) | $ (54,610,000) |
Loss per Common Share - Basic: | ||||
Net loss attributable to common shareholders (in dollars per share) | $ (0.18) | $ (0.57) | $ (0.12) | $ (1.16) |
Loss per Common Share - Diluted: | ||||
Net loss attributable to common shareholders (in dollars per share) | $ (0.18) | $ (0.57) | $ (0.12) | $ (1.16) |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 48,637,484 | 46,960,289 | 47,935,130 | 46,954,411 |
Diluted (in shares) | 48,637,484 | 46,960,289 | 47,935,130 | 46,954,411 |
Distributions declared per common share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0.22 |
Room | ||||
Total revenue | $ 46,514,000 | $ 18,389,000 | $ 75,905,000 | $ 71,437,000 |
Total hotel operating expenses | 9,486,000 | 4,517,000 | 16,653,000 | 17,912,000 |
Food and beverage | ||||
Total revenue | 756,000 | 117,000 | 1,120,000 | 2,180,000 |
Total hotel operating expenses | 491,000 | 128,000 | 775,000 | 2,018,000 |
Other | ||||
Total revenue | 2,647,000 | 873,000 | 4,218,000 | 4,391,000 |
Reimbursable costs from unconsolidated real estate entities | ||||
Total revenue | 327,000 | 794,000 | 1,114,000 | 2,374,000 |
Telephone | ||||
Total hotel operating expenses | 348,000 | 351,000 | 748,000 | 730,000 |
Other hotel operating | ||||
Total hotel operating expenses | 544,000 | 182,000 | 909,000 | 992,000 |
General and administrative | ||||
Total hotel operating expenses | 5,056,000 | 3,360,000 | 8,870,000 | 8,636,000 |
Franchise and marketing fees | ||||
Total hotel operating expenses | 4,091,000 | 1,636,000 | 6,688,000 | 6,356,000 |
Advertising and promotions | ||||
Total hotel operating expenses | 835,000 | 854,000 | 1,592,000 | 2,364,000 |
Utilities | ||||
Total hotel operating expenses | 2,352,000 | 1,863,000 | 4,638,000 | 4,378,000 |
Repairs and maintenance | ||||
Total hotel operating expenses | 2,720,000 | 1,640,000 | 5,180,000 | 5,101,000 |
Management fees | ||||
Total hotel operating expenses | 1,760,000 | 848,000 | 2,956,000 | 2,872,000 |
Insurance | ||||
Total hotel operating expenses | $ 707,000 | $ 361,000 | $ 1,356,000 | $ 721,000 |
Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Issuance of shares, net of offering costs | $ 1 | $ 3 | ||
Distributions declared per common share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0.22 |
LTIP units, distributions per unit (in dollars per share) | $ 0.22 | |||
Preferred Shares | ||||
Issuance of shares, net of offering costs | $ 3,780 | $ 3,780 | ||
Common Shares | ||||
Issuance of shares, net of offering costs | $ 292 | $ 811 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Jun. 30, 2020 |
---|---|---|
Statement of Cash Flows [Abstract] | ||
Accrued distributions payable | $ 147 | $ 469 |
Accrued share based compensation | 200 | 225 |
Accounts payable and accrued expenses | $ 2,712 | $ 1,554 |
Organization |
6 Months Ended |
---|---|
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Chatham Lodging Trust (“we,” “us” or the “Company”) was formed as a Maryland real estate investment trust (“REIT”) on October 26, 2009. The Company is internally-managed and invests primarily in upscale extended-stay and premium-branded select-service hotels. The Company has elected to be treated as a REIT for federal income tax purposes. The net proceeds from any share offerings or issuances are contributed to Chatham Lodging, L.P., our operating partnership (the “Operating Partnership”), in exchange for partnership interests. Substantially all of the Company’s assets are held by, and all operations are conducted through, the Operating Partnership. Chatham Lodging Trust is the sole general partner of the Operating Partnership and owns 100.0% of the common units of limited partnership interest in the Operating Partnership. Certain of the Company’s executive officers hold vested and unvested long-term incentive plan units in the Operating Partnership ("LTIP units"), which are presented as non-controlling interests on our consolidated balance sheets. As of June 30, 2021, the Company wholly owned 39 hotels with an aggregate of 5,900 rooms located in 15 states and the District of Columbia. As of June 30, 2021, the Company held a 10% noncontrolling interest in a joint venture (the "Inland JV") with affiliates of Colony Capital, Inc. ("CLNY"), which owns 48 hotels acquired from Inland American Real Estate Trust, Inc. ("Inland"), comprising an aggregate of 6,402 rooms. As of June 30, 2021, the Inland JV hotels are in receivership. Prior to March 18, 2021, the Company also held a 10.3% noncontrolling interest in a joint venture (the “NewINK JV”) with affiliates of CLNY, which owned 46 hotels with an aggregate of 5,948 rooms. Chatham sold its interest in the NewINK JV in March 2021 for $2.8 million. We sometimes use the term "JVs", which refers collectively to the NewINK JV and Inland JV. To qualify as a REIT, the Company cannot operate the hotels. Therefore, the Operating Partnership and its subsidiaries lease the Company's wholly owned hotels to taxable REIT subsidiary lessees (“TRS Lessees”), which are wholly owned by the Company’s taxable REIT subsidiary (“TRS”) holding company. The Company indirectly owns its 10% interest in the 48 Inland JV hotels through the Operating Partnership. All of the Inland JV hotels are leased to TRS Lessees, in which the Company indirectly owns noncontrolling interests through its TRS holding company. Each hotel is leased to a TRS Lessee under a percentage lease that provides for rental payments equal to the greater of (i) a fixed base rent amount or (ii) a percentage rent based on hotel revenue. The initial term of each of the TRS leases is 5 years. Lease revenue from each TRS Lessee is eliminated in consolidation. The TRS Lessees have entered into management agreements with third-party management companies that provide day-to-day management for the hotels. As of June 30, 2021, Island Hospitality Management LLC (“IHM”), which is 100% owned by Jeffrey H. Fisher, the Company's Chairman, President and Chief Executive Officer, managed all 39 of the Company’s wholly owned hotels. As of June 30, 2021, all of the Inland JV hotels were managed by other management companies.
|
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. These unaudited consolidated financial statements, in the opinion of management, include all adjustments consisting of normal, recurring adjustments which are considered necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of equity, and consolidated statements of cash flows for the periods presented. Interim results are not necessarily indicative of full year performance due to seasonal and other factors, including the timing of the acquisition or sale of hotels. The consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited financial statements prepared in accordance with GAAP, and the related notes thereto as of December 31, 2020, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
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Disposition of Hotel Properties |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposition of Hotel Properties | Disposition of Hotel Properties On November 24, 2020, the Company sold the Residence Inn Mission Valley hotel in San Diego, CA for $67.0 million and recognized a gain on sale of the hotel property of $21.1 million. The balance of the mortgage loan of $26.7 million was repaid with proceeds from the sale. Additional proceeds were used to repay amounts outstanding on the Company's revolving credit facility. The sale did not represent a strategic shift that had or will have a major effect on the Company's operations and financial results and did not qualify to be reported as discontinued operations. During the three and six months ended June 30, 2021 and 2020, the Company's consolidated statements of operations included operating income related to the disposed hotel as follows (in thousands):
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Allowance for Doubtful Accounts |
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Jun. 30, 2021 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts | Allowance for Doubtful AccountsThe Company maintains an allowance for doubtful accounts at a level believed to be adequate to absorb estimated probable losses. That estimate is based on past loss experience, current economic and market conditions and other relevant factors. The allowance for doubtful accounts was $0.3 million and $0.2 million as of June 30, 2021 and December 31, 2020, respectively. |
Investment in Hotel Properties |
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Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Hotel Properties | Investment in Hotel Properties Investment in hotel properties,net Investment in hotel properties, net as of June 30, 2021 and December 31, 2020 consisted of the following (in thousands):
Investment in hotel properties under development We are developing a hotel in the Warner Center submarket of Los Angeles, CA on a parcel of land owned by us. We have incurred $58.9 million of costs to date, which includes $6.6 million of land acquisition costs and $52.3 million of other development costs.
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Investment in Unconsolidated Entities |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Entities | Investment in Unconsolidated Entities On June 9, 2014, the Company acquired a 10.3% interest in the NewINK JV, a joint venture between affiliates of NorthStar Realty Finance Corp. ("NorthStar") and the Operating Partnership. NorthStar merged with Colony Capital, Inc. ("Colony") on January 10, 2017 to form a new company, CLNY, which owned a 89.7% interest in the NewINK JV. Chatham sold its interest in the NewINK JV in March 2021 for $2.8 million which resulted in Chatham recording a gain on sale of investment in unconsolidated real estate entities of $23.8 million during the six months ended June 30, 2021. The Company accounted for this investment under the equity method. On November 17, 2014, the Company acquired a 10.0% interest in the Inland JV, a joint venture between affiliates of NorthStar and the Operating Partnership. NorthStar merged with Colony on January 10, 2017 to form a new company, CLNY, which owns a 90% interest in the Inland JV. The value of Inland JV assets and liabilities were adjusted to reflect estimated fair market value at the time Colony merged with NorthStar. The Company serves as managing member of the Inland JV. The Company accounts for this investment under the equity method. During the three and six months ended June 30, 2021 and 2020, the Company received no cash distributions from the Inland JV. The Company’s ownership interest in the Inland JV is subject to change in the event that either the Company or CLNY calls for additional capital contributions to the JV necessary for the conduct of business, including contributions to fund costs and expenses related to capital expenditures. In connection with the non-recourse mortgage loan secured by the Inland JV properties, the Operating Partnership provided the lender with customary environmental indemnities, as well as a guarantee of certain customary non-recourse carve-out provisions such as fraud, material and intentional misrepresentations and misapplication of funds. In some circumstances, such as the bankruptcy, the guarantee is for the full amount of the outstanding debt, but in most circumstances, the guarantee is capped at 20% of the debt outstanding at the time in question. In connection with the Inland JV loan, the Operating Partnership has entered into a contribution agreement with its JV partner whereby the JV partner is, in most cases, responsible to cover such JV partner’s pro rata share of any amounts due by the Operating Partnership under the guarantee and environmental indemnities. CLNY may also approve certain actions by the JV without the Company’s consent, including certain property dispositions conducted at arm’s length, certain actions related to the restructuring of the applicable JV and removal of the Company as managing member in the event the Company fails to fulfill its material obligations under the applicable joint venture agreement. During the three months ended March 31, 2020, the Company determined that an other than temporary decline in the value of its equity investment in the Inland JV had occurred. The Inland JV’s operating performance has been significantly impacted by the COVID-19 pandemic. The Inland JV has high leverage, limited liquidity and limited ability to fund the level of operating losses caused by the COVID-19 pandemic for a sustained period of time. Based on these factors, we assessed that the fair market value of our equity investment in the Inland JV is zero and the Company did not consider the investment recoverable and therefore recorded an impairment of $15.3 million on the investment. Since the Company’s basis in the Inland JV is now zero and we expect that ongoing losses are not sustainable, we stopped recording any equity income or losses from the Inland JV as of March 31, 2020. On April 9, 2020 the Inland JV failed to make a debt service payment related to its $780.0 million loan and has not made any of its subsequent monthly debt service payments. The failure to make the required debt service payments is an event of default under the Inland loan agreement. The Inland JV has not been successful in negotiating a forbearance agreement with its lenders. At the direction of the special servicer for the Inland JV loan, control of Inland JV properties has transitioned to a court appointed receiver. The receiver, LW Hospitality Advisors, has been appointed for Inland JV hotels, and has replaced IHM with new hotel management companies. The Inland JV debt is non-recourse to Chatham with the exception of customary non-recourse carve-out provisions such as fraud, material and intentional misrepresentations and misapplication of funds. A default under the Inland JV loan agreement does not trigger a cross-default under any of Chatham’s debt agreements. The Company's recorded investments in the NewINK JV and the Inland JV were $0.0 million and $0.0 million, respectively, at June 30, 2021. The following table sets forth the combined components of net income (loss), including the Company’s share, related to all JVs for the three and six months ended June 30, 2021 and 2020 (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company’s mortgage loans are collateralized by first-mortgage liens on certain of the Company’s properties. The mortgage loans are non-recourse except for instances of fraud or misapplication of funds. Mortgage and revolving credit facility debt consisted of the following (dollars in thousands):
1.The interest rate for the revolving credit facility is variable and based on LIBOR (subject to a 0.5% floor) plus a spread of 2.5% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. At June 30, 2021 and December 31, 2020, the Company had $128.0 million and $135.3 million, respectively, of outstanding borrowings under its $250.0 million revolving credit facility. The credit facility provides two six-month extension options that would extend the final maturity to March 8, 2023 if exercised. 2.On August 4, 2020, a subsidiary of Chatham entered into an agreement with affiliates of Mack Real Estate Credit Strategies to obtain a $40 million loan to fund the remaining construction costs of the Warner Center hotel development. The loan has an initial term of 4 years and there are two six-month extension options. The rate on the loan is LIBOR, subject to a 0.25% floor, plus a spread of 7.5%. The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. All of the Company's mortgage loans are fixed-rate. Rates take into consideration general market conditions, quality and estimated value of collateral and maturity of debt with similar credit terms and are classified within level 3 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt as of June 30, 2021 and December 31, 2020 was $452.7 million and $462.6 million, respectively. The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with similar maturity and is classified within level 3 of the fair value hierarchy. As of June 30, 2021, the Company’s variable rate debt consisted of its revolving credit facility and construction loan. The estimated fair value of the Company’s variable rate debt as of June 30, 2021 and December 31, 2020 was $155.6 million and $148.6 million, respectively. On December 16, 2020, the Company, entered into a Third Amendment to the Company’s Amended and Restated Credit Agreement, dated as of March 8, 2018 (as amended by the Credit Agreement Amendment, and as previously amended by that certain First Amendment to the Amended and Restated Credit Agreement, dated as of May 6, 2020, and as further amended by that certain Second Amendment to Amended and Restated Credit Agreement, dated as of July 23, 2020), with certain lenders for whom Barclays Bank PLC is acting as the administrative agent. The amendment provides for the waiver of certain financial covenants through December 31, 2021 and allows the Company to borrow up to the entire $250.0 million facility size during this period. During this covenant waiver period, the Company will be required to maintain a minimum liquidity of $25.0 million which will include both unrestricted cash and credit facility availability. In connection with the amendment, the Company added 6 hotels to the credit facility’s borrowing base which now has a total of 24 properties. The amendment provided the Company’s credit facility lenders with pledges of the equity in the 24 borrowing base hotels. The amendment places additional limits on the Company’s ability to incur debt, pay dividends, and make capital expenditures during the covenant waiver period. During the covenant waiver period interest will be calculated as LIBOR (subject to a 0.5% floor) plus a spread of 2.50% if borrowings remain at or below $200.0 million and a spread of 3.0% if borrowings exceed $200.0 million. As of June 30, 2021, the Company was in compliance with all of its modified financial covenants. Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of June 30, 2021, the debt service coverage ratios or debt yields for all of our mortgage loans were below the minimum thresholds such that the cash trap provision of each respective loan could be enforced. As of June 30, 2021, none of our mortgage debt lenders has enforced cash trap provisions. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements. Future scheduled principal payments of debt obligations as of June 30, 2021, for the current year and each of the next five calendar years and thereafter are as follows (in thousands):
Accounting for Derivative Instruments The Company has entered into interest rate cap agreements to hedge against interest rate fluctuations related to the construction loans for the Warner Center hotel. The Company records its derivative instruments on the balance sheet at their estimated fair values. Changes in the fair value of the derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship. The Company's interest rate caps are not designated as a hedge but to eliminate the incremental cost to the Company if the one-month LIBOR were to exceed 3.5%. Accordingly, the interest rate caps are recorded on the balance sheet under prepaid expenses and other assets at the estimated fair value and realized and unrealized changes in the fair value are reported in the consolidated statement of operations. As of June 30, 2021, the fair value of the interest rate caps were $53 thousand.
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Income Taxes |
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Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s TRS is subject to federal and state income taxes. Income tax expense was zero for the three and six months ended June 30, 2021 and 2020. As of each reporting date, the Company's management considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets. The Company's TRS is expecting continued taxable losses in 2021. As of June 30, 2021, the TRS continues to recognize a full valuation allowance equal to 100% of the net deferred tax assets due to the uncertainty of the TRS's ability to utilize these net deferred tax assets. Management will continue to monitor the need for a valuation allowance.
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Dividends Declared and Paid |
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Dividends Declared and Paid | Dividends Declared and Paid The Company suspended dividends beginning after the payment of the March 27, 2020 dividend due to a decline in operating performance caused by the COVID-19 pandemic. During the three months ended March 31, 2020, the Company declared total common share dividends of $0.22 per share and distributions on LTIP units of $0.22 per unit. There were no dividends declared during the three and six months ended June 30, 2021. The dividends and distributions paid during the three months ended March 31, 2020 were as follows:
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Shareholders' Equity |
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Jun. 30, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Common Shares The Company is authorized to issue up to 500,000,000 common shares of beneficial interest, $0.01 par value per share ("common shares"). Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Holders of the Company’s common shares are entitled to receive dividends when authorized by the Company's Board of Trustees. As of June 30, 2021, 48,756,555 common shares were outstanding. In December 2017, the Company established an At the Market Equity Offering ("Prior ATM Plan") whereby, from time to time, we may publicly offer and sell our common shares having an aggregate maximum offering price of up to $100 million by means of ordinary brokers’ transactions on the New York Stock Exchange (the "NYSE"), in negotiated transactions or in transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended. The Company filed a $100 million registration statement for a new ATM program (the "ATM Plan" and together with the Prior ATM Plan, the "ATM Plans") on March 5, 2021 to replace the prior program. At the same time, the Company entered into sales agreements with Cantor Fitzgerald & Co., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., BTIG, LLC, Citigroup Global Markets Inc., Regions Securities LLC, Stifel, Nicolaus & Company, Incorporated and Wells Fargo Securities as sales agents. During the three months ended June 30, 2021, the Company issued 237,114 shares under the ATM Plan at an average price of $13.80, which generated $3.3 million of proceeds. As of June 30, 2021, there was approximately $77.5 million available for issuance under the ATM Plan. In December 2017, the Company established a $50 million dividend reinvestment and stock purchase plan (the "Prior DRSPP"). We filed a new $50 million shelf registration statement for the dividend reinvestment and stock purchase plan (the "New DRSPP" and together with the Prior DRSPP, the "DRSPPs") on December 22, 2020 to replace the prior program. Under the DRSPPs, shareholders may purchase additional common shares by reinvesting some or all of the cash dividends received on the Company's common shares. Shareholders may also make optional cash purchases of the Company's common shares subject to certain limitations detailed in the prospectus for the DRSPPs. During the three months ended June 30, 2021, the Company issued 1,240 shares under the New DRSPP at a weighted average price of $13.26, which generated $16 thousand of proceeds. As of June 30, 2021, there was approximately $48.0 million available for issuance under the New DRSPP. Preferred Shares The Company is authorized to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 par value per share, in one or more series. On June 30, 2021, the Company issued 4,800,000 6.625% Series A Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share (the “Series A Preferred Shares”), and received net proceeds of approximately $116.2 million. The Series A Preferred Shares rank senior to the Company’s common shares with respect to the payment of dividends and distributions of assets in the event of a liquidation, dissolution, or winding up. The Series A Preferred Shares do not have any maturity date and are not subject to mandatory redemptions or sinking fund requirements. The distribution rate is 6.625% per annum of the $25.00 liquidation preference, which is equivalent to $1.65625 per annum per Series A Preferred Share. Distributions on the Series A Preferred Shares will be payable quarterly in arrears with the first distribution on the Series A Preferred Shares paid on October 15, 2021. The Company may not redeem the Series A Preferred Shares before June 30, 2026 except in limited circumstances to preserve the Company's status as a REIT for federal income tax purposes and upon the occurrence of a change of control. On and after June 30, 2026, the Company may, at its option, redeem the Series A Preferred Shares, in whole or from time to time in part, by paying $25.00 per share, plus any accrued and unpaid distributions to, but not including, the date of redemption. Upon the occurrence of a change of control, as defined in the Company's declaration of trust, the result of which the Company’s common shares and the common securities of the acquiring or surviving entity are not listed on the New York Stock Exchange, the NYSE MKT or NASDAQ, or any successor exchanges, the Company may, at its option, redeem the Preferred Shares in whole or in part within 120 days following the change of control by paying $25.00 per share, plus any accrued and unpaid distributions through the date of redemption. If the Company does not exercise its right to redeem the Preferred Shares upon a change of control, the holders of the Preferred Shares have the right to convert some or all of their shares into a number of the Company’s common shares based on defined formulas subject to share caps. The share cap on each Series A Preferred Share is 3.701 common shares. As of June 30, 2021, 4,800,000 preferred shares were issued and outstanding. Operating Partnership Units Holders of common units in the Operating Partnership, if and when issued, will have certain redemption rights, which will enable the unit holders to cause the Operating Partnership to redeem their units in exchange for, at the Company’s option, cash per unit equal to the market price of the Company’s common shares at the time of redemption or for the Company’s common shares on a one-for-one basis. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of share splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of limited partners or shareholders. As of June 30, 2021, there were 976,102 vested Operating Partnership LTIP units held by current and former employees.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The two-class method is used to determine earnings per share because unvested restricted shares and unvested LTIP units are considered to be participating shares. The LTIP units held by the non-controlling interest holders, which may be converted to common shares of beneficial interest, have been excluded from the denominator of the diluted earnings per share calculation as there would be no effect on the amounts since limited partners' share of income or loss would also be added back to net income or loss. Unvested restricted shares, unvested long-term incentive plan units and unvested Class A Performance LTIP units that could potentially dilute basic earnings per share in the future would not be included in the computation of diluted loss per share, for the periods where a loss has been recorded, because they would have been anti-dilutive for the periods presented. The following is a reconciliation of the amounts used in calculating basic and diluted net income per share (in thousands, except share and per share data):
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Equity Incentive Plan |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Incentive Plan | Equity Incentive Plan The Company maintains its Equity Incentive Plan to attract and retain independent trustees, executive officers and other key employees and service providers. The plan provides for the grant of options to purchase common shares, share awards, share appreciation rights, performance units and other equity-based awards. The plan was amended and restated as of May 17, 2013 to increase the maximum number of shares available under the plan to 3,000,000 shares. Share awards under this plan generally vest over to five years, though compensation for the Company’s independent trustees includes share grants that vest immediately. The Company pays dividends on unvested shares and units, except for performance-based shares and outperformance based units, for which dividends on unvested performance-based shares and units are accrued and not paid until those shares or units vest. Certain awards may provide for accelerated vesting if there is a change in control. In January 2021 and 2020, the Company issued 40,224 and 24,516 common shares, respectively, to its independent trustees as compensation for services performed in 2020 and 2019, respectively. As of June 30, 2021, there were 589,804 common shares available for issuance under the Equity Incentive Plan. Restricted Share Awards From time to time, the Company may award restricted shares under the Equity Incentive Plan as compensation to officers, employees and non-employee trustees. The Company recognizes compensation expense for the restricted shares on a straight-line basis over the vesting period based on the fair market value of the shares on the date of issuance. A summary of the Company’s restricted share awards for the six months ended June 30, 2021 and the year ended December 31, 2020 is as follows:
As of June 30, 2021 and December 31, 2020, there were $14.0 thousand and $28.5 thousand, respectively, of unrecognized compensation costs related to restricted share awards. As of June 30, 2021, these costs were expected to be recognized over a weighted–average period of approximately 0.5 years. For the three months ended June 30, 2021 and 2020, the Company recognized approximately $7.2 thousand and $7.3 thousand, respectively, and for the six months ended June 30, 2021 and 2020, the Company recognized approximately $14.5 thousand and $15.5 thousand, respectively, of expense related to the restricted share awards. Long-Term Incentive Plan Awards LTIP units are a special class of partnership interests in the Operating Partnership which may be issued to eligible participants for the performance of services to or for the benefit of the Company. Under the Equity Incentive Plan, each LTIP unit issued is deemed equivalent to an award of one common share thereby reducing the number of shares available for other equity awards on a one-for-one basis. A summary of the Company's LTIP Unit awards for the six months ended June 30, 2021 and the year ended December 31, 2020 is as follows:
Time-Based LTIP Awards On March 1, 2021, the Company’s Operating Partnership, upon the recommendation of the Compensation Committee, granted 132,381 time-based awards (the “2021 Time-Based LTIP Unit Award”). The grants were made pursuant to award agreements that provide for time-based vesting (the "LTIP Unit Time-Based Vesting Agreement"). Time-based LTIP Unit Awards will vest ratably provided that the recipient remains employed by the Company through the applicable vesting date, subject to acceleration of vesting in the event of the recipient’s death, disability, termination without cause or resignation with good reason, or in the event of a change of control of the Company. Prior to vesting, a holder is entitled to receive distributions on the LTIP Units that comprise the 2021 Time-Based LTIP Unit Awards and the prior year LTIP unit Awards set forth in the table above. Performance-Based LTIP Awards On March 1, 2021, the Company's Operating Partnership, upon the recommendation of the Compensation Committee, also granted 198,564 performance-based awards (the "2021 Performance-Based LTIP Unit Awards"). The grants were made pursuant to award agreements that have market based vesting conditions. The Performance-Based LTIP Unit Awards are comprised of Class A Performance LTIP Units that will vest only if and to the extent that (i) the Company achieves certain long-term market based TSR criteria established by the Compensation Committee and (ii) the recipient remains employed by the Company through the applicable vesting date, subject to acceleration of vesting in the event of the recipient’s death, disability, termination without cause or resignation with good reason, or in the event of a change of control of the Company. Compensation expense is based on an estimated value of $15.91 per 2021 Performance-Based LTIP Unit Award, which takes into account that some or all of the awards may not vest if long-term market based TSR criteria are not met during the vesting period. The 2021 Performance-Based LTIP Unit Awards may be earned based on the Company’s relative TSR performance for the three-year period beginning on March 1, 2021 and ending on February 28, 2024. The 2021 Performance-Based LTIP Unit Awards, if earned, will be paid out between 50% and 150% of target value as follows:
Payouts at performance levels in between the hurdles will be calculated by straight-line interpolation. The Company estimated the aggregate compensation cost to be recognized over the service period determined as of the grant date under ASC 718, excluding the effect of estimated forfeitures, using a Monte Carlo approach. In determining the discounted value of the LTIP units, the Company considered the inherent uncertainty that the LTIP units would never reach parity with the other common units of the Operating Partnership and thus have an economic value of zero to the grantee. Additional factors considered in estimating the value of LTIP units included discounts for illiquidity; expectations for future dividends; risk free interest rates; stock price volatility; and economic environment and market conditions. The grant date fair values of the LTIPs and the assumptions used to estimate the values are as follows:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Residence Inn Gaslamp hotel is subject to a ground lease with an expiration date of January 31, 2065 with an extension option by the Company of up to three additional terms of ten years each. Monthly payments are currently approximately $44,400 per month and increase 10% every five years. The hotel is subject to annual supplemental rent payments calculated as 5% of gross revenues during the applicable lease year, minus 12 times the monthly base rent scheduled for the lease year. The Residence Inn New Rochelle is subject to an air rights lease and garage lease that each expire on December 1, 2104. The lease agreements with the City of New Rochelle cover the space above the parking garage that is occupied by the hotel as well as 128 parking spaces in a parking garage that is attached to the hotel. The annual base rent for the garage lease is the hotel’s proportionate share of the city’s adopted budget for the operations, management and maintenance of the garage and established reserves to fund for the cost of capital repairs. Aggregate rent for 2021 is approximately $30,000 per quarter. The Hilton Garden Inn Marina del Rey hotel is subject to a ground lease with an expiration date of December 31, 2067. Minimum monthly payments are currently approximately $47,500 per month and a percentage rent payment less the minimum rent is due in arrears equal to 5% to 25% of gross income based on the type of income. The Company entered into a corporate office lease in September 2015. The lease is for a term of 11 years and includes a 12-month rent abatement period and certain tenant improvement allowances. The Company has a renewal option of up to two successive terms of 5 years each. The Company shares the space with related parties and is reimbursed for the pro-rata share of rentable space occupied by the related parties. The Company is the lessee under ground, air rights, garage and office lease agreements for certain of its properties, all of which qualify as operating leases as of June 30, 2021. These leases typically provide multi-year renewal options to extend term as lessee at the Company's option. Option periods are included in the calculation of the lease obligation liability only when options are reasonably certain to be exercised. In calculating the Company's lease obligations under the various leases, the Company uses discount rates estimated to be equal to what the Company would have to pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment. The following is a schedule of the minimum future payments required under the ground, air rights, garage leases and office lease as of June 30, 2021, for each of the next five calendar years and thereafter:
The following is a schedule of the minimum future payments required under the ground, air rights, garage leases and office lease as of December 31, 2020, for each of the next five calendar years and thereafter:
For the six months ended June 30, 2021, the Company incurred $0.7 million of fixed lease payments and $60.2 thousand of variable lease payments, which are included in property taxes, ground rent and insurance in our consolidated statement of operations. The following table includes information regarding the right of use assets and lease liabilities of the Company as of June 30, 2021:
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The nature of the operations of the Company's hotels exposes those hotels, the Company and the Operating Partnership to the risk of claims and litigation in the normal course of their business. IHM was a defendant in several class action lawsuits in the state of California. The first class action lawsuit was filed in the Santa Clara County Superior Court on October 21, 2016 under the title Ruffy, et al, v. Island Hospitality Management, LLC, et al. Case No. 16-CV-301473 (“Ruffy”) and the second class action lawsuit was filed on March 21, 2018 under the title Doonan, et al, v. Island Hospitality Management, LLC, et al. Case No 18-CV-325187 (“Doonan”). The class actions related to hotels operated by IHM in the state of California and owned by affiliates of the Company and the NewINK JV, and/or certain third parties. The complaints alleged various wage and hour law violations based on alleged misclassification of certain hotel managerial staff and violation of certain California statutes regarding incorrect information contained on employee paystubs. The plaintiffs sought injunctive relief, money damages, penalties, and interest. A settlement agreement has been negotiated and approved by the applicable courts for Ruffy and Doonan. In August 2020, a payment of $0.1 million, which represents the Company’s total exposure to the Ruffy and Doonan litigations based on standard indemnification obligations under hotel management agreements with IHM, was paid related to this lawsuit settlement. In addition, IHM was a defendant in the following series of interrelated class action lawsuits: Perez et al. v. Island Hospitality Management III LLC et al. (United States District Court for the Central District of California, Case No. 2:18-cv-04903-DMG-JPR) filed on March 15, 2018, Cruz v. Island Hospitality Management III LLC (Santa Clara County Superior Court Case No. 19CV353655) filed on August 19, 2019, Leon et al. v. Island Hospitality Management III LLC (Orange County Superior Court Case No. 30-2019-01050719-CU-OE-CXC) filed on April 2, 2019, and Vela v. Island Hospitality Management LLC et al. (San Diego County Superior Court, Case No. 37-2019-0003525) filed on July 9, 2019 (collectively the “Perez class actions”). The Perez class actions also related to hotels operated by IHM in the state of California and owned by affiliates of the Company and the NewINK JV, and/or certain third parties. The complaints alleged various wage and hour law violations based on alleged violation of certain California statutes regarding rest and meal breaks and wage statements. The plaintiffs sought injunctive relief, money damages, penalties, and interest. In September 2020, a payment of $0.6 million, which represents the Company’s total exposure to the Perez class actions based on standard indemnification obligations under hotel management agreements with IHM, was paid related to this lawsuit settlement. Management Agreements The management agreements with IHM have an initial term of five years and automatically renew for two five-year periods unless IHM provides written notice to us no later than 90 days prior to the then current term’s expiration date of its intent not to renew. The IHM management agreements provide for early termination at the Company’s option upon sale of any IHM-managed hotel for no termination fee, with six months advance notice. The IHM management agreements may be terminated for cause, including the failure of the managed hotel to meet specified performance levels. Base management fees are calculated as a percentage of the hotel's gross room revenue. If certain financial thresholds are met or exceeded, an incentive management fee is calculated as 10% of the hotel's net operating income less fixed costs, base management fees and a specified return threshold. The incentive management fee is capped at 1% of gross hotel revenues for the applicable calculation. Management fees totaled approximately $1.8 million and $0.8 million for the three months ended June 30, 2021 and 2020, respectively, and $3.0 million and $2.9 million for the six months ended June 30, 2021 and 2020, respectively. Franchise Agreements The fees associated with the franchise agreements are calculated as a specified percentage of the hotel's gross room revenue. Franchise and marketing fees totaled approximately $4.1 million and $1.6 million for the three months ended June 30, 2021 and 2020, respectively, and $6.7 million and $6.4 million for the six months ended June 30, 2021 and 2020, respectively. The initial term of the agreements range from 10 to 30 years with the weighted average expiration being August 2030.
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Prior to March 18, 2021, Mr. Fisher owned 52.5% of IHM. During the six months ended June 30, 2021, Mr. Fisher acquired the remaining 47.5% ownership interest and as of June 30, 2021, Mr. Fisher owns 100% of IHM. As of June 30, 2021, the Company had hotel management agreements with IHM to manage all 39 of its wholly owned hotels. Hotel management, revenue management and accounting fees accrued or paid to IHM for the hotels owned by the Company for the three months ended June 30, 2021 and 2020 were $1.8 million and $0.8 million, respectively, and for the six months ended June 30, 2021 and 2020 were $3.0 million and $2.9 million, respectively. At June 30, 2021 and December 31, 2020, the amounts due to IHM were $0.5 million and $0.3 million, respectively. The Company also provided services to an entity Castleblack Owner Holding, LLC ("Castleblack"), which sold on March 24, 2021 as part of the larger CLNY transaction, was 97.5% owned by affiliates of CLNY and 2.5% owned by Mr. Fisher. During the six months ended June 30, 2021 and 2020 the Company received $23 thousand and $49 thousand, respectively, for these services. Cost reimbursements from unconsolidated real estate entities revenue represent reimbursements of costs incurred on behalf of the NewINK JV, Inland JV, Castleblack and IHM. These costs relate primarily to corporate payroll costs at the NewINK JV, Inland JV and Castleblack where the Company is the employer and office expenses shared with these entities and IHM. As the Company records cost reimbursements based upon costs incurred with no added markup, the revenue and related expense has no impact on the Company’s operating income or net income. Cost reimbursements are recorded based upon the occurrence of a reimbursed activity. Various shared office expenses and rent are paid by the Company and allocated to the NewINK JV, the Inland JV, Castleblack and IHM based on the amount of square footage occupied by each entity.
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn July 1, 2021, the Company applied the net proceeds received from the Series A Preferred Share offering to repay $116.0 million of borrowings on its revolving credit facility. |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial information. These unaudited consolidated financial statements, in the opinion of management, include all adjustments consisting of normal, recurring adjustments which are considered necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of equity, and consolidated statements of cash flows for the periods presented. Interim results are not necessarily indicative of full year performance due to seasonal and other factors, including the timing of the acquisition or sale of hotels. The consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited financial statements prepared in accordance with GAAP, and the related notes thereto as of December 31, 2020, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
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Disposition of Hotel Properties (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | During the three and six months ended June 30, 2021 and 2020, the Company's consolidated statements of operations included operating income related to the disposed hotel as follows (in thousands):
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Investment in Hotel Properties (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Hotel Properties | Investment in hotel properties, net as of June 30, 2021 and December 31, 2020 consisted of the following (in thousands):
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Investment in Unconsolidated Entities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Income From Joint Venture | The following table sets forth the combined components of net income (loss), including the Company’s share, related to all JVs for the three and six months ended June 30, 2021 and 2020 (in thousands):
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Mortgage and Revolving Credit Facility Debt | Mortgage and revolving credit facility debt consisted of the following (dollars in thousands):
1.The interest rate for the revolving credit facility is variable and based on LIBOR (subject to a 0.5% floor) plus a spread of 2.5% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. At June 30, 2021 and December 31, 2020, the Company had $128.0 million and $135.3 million, respectively, of outstanding borrowings under its $250.0 million revolving credit facility. The credit facility provides two six-month extension options that would extend the final maturity to March 8, 2023 if exercised. 2.On August 4, 2020, a subsidiary of Chatham entered into an agreement with affiliates of Mack Real Estate Credit Strategies to obtain a $40 million loan to fund the remaining construction costs of the Warner Center hotel development. The loan has an initial term of 4 years and there are two six-month extension options. The rate on the loan is LIBOR, subject to a 0.25% floor, plus a spread of 7.5%.
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Future Scheduled Principal Payments of Debt Obligations | Future scheduled principal payments of debt obligations as of June 30, 2021, for the current year and each of the next five calendar years and thereafter are as follows (in thousands):
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Dividends Declared and Paid (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends Declared and Paid | The dividends and distributions paid during the three months ended March 31, 2020 were as follows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Amounts Used in Calculating Basic and Diluted Net Income (Loss) Per Share | The following is a reconciliation of the amounts used in calculating basic and diluted net income per share (in thousands, except share and per share data):
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Equity Incentive Plan (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Share Awards | A summary of the Company’s restricted share awards for the six months ended June 30, 2021 and the year ended December 31, 2020 is as follows:
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Schedule of Long Term Incentive Unit Awards | A summary of the Company's LTIP Unit awards for the six months ended June 30, 2021 and the year ended December 31, 2020 is as follows:
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Schedule of Performance-Based Long-Term Incentive Plan Payout Unit Awards | The 2021 Performance-Based LTIP Unit Awards, if earned, will be paid out between 50% and 150% of target value as follows:
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Schedule of Share-based Payment Award, Valuation Assumptions | The grant date fair values of the LTIPs and the assumptions used to estimate the values are as follows:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Lease, Liability, Maturity | The following is a schedule of the minimum future payments required under the ground, air rights, garage leases and office lease as of June 30, 2021, for each of the next five calendar years and thereafter:
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Lessee Operating Lease Liability Maturity, Ground, Air Rights, Garage And Office Leases | The following is a schedule of the minimum future payments required under the ground, air rights, garage leases and office lease as of December 31, 2020, for each of the next five calendar years and thereafter:
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Schedule of Right of Use Asset and Liability | The following table includes information regarding the right of use assets and lease liabilities of the Company as of June 30, 2021:
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Lease, Cost |
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Disposition of Hotel Properties (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Nov. 24, 2020 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain on sale of property | $ 28 | $ 2 | $ (15) | $ 3 | |||
Disposal group, disposed of by sale, not discontinued operations | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposal group, operating income | $ 0 | $ 395 | 0 | 1,147 | |||
Disposal group, disposed of by sale, not discontinued operations | Residence Inn Mission Valley San Diego, CA | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Amount sold in disposition | $ 67,000 | ||||||
Gain on sale of property | 21,100 | ||||||
Mortgage loan amount | $ 26,700 | ||||||
Disposal group, operating income | $ 0 | $ 395 | $ 0 | $ 1,147 |
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Receivables [Abstract] | ||
Allowance for doubtful accounts related to receivables | $ 278 | $ 248 |
Investment in Hotel Properties - Schedule of Investments in Hotel Properties (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Investments, All Other Investments [Abstract] | ||
Land and improvements | $ 287,049 | $ 287,049 |
Building and improvements | 1,198,985 | 1,195,276 |
Furniture, fixtures and equipment | 86,792 | 84,381 |
Renovations in progress | 7,479 | 11,225 |
Investment in hotel properties, at cost | 1,580,305 | 1,577,931 |
Less: accumulated depreciation | (339,322) | (312,757) |
Investment in hotel properties, net | $ 1,240,983 | $ 1,265,174 |
Investment in Hotel Properties - Narrative (Details) - California $ in Millions |
Jun. 30, 2021
USD ($)
|
---|---|
Schedule of Investments [Line Items] | |
Cost incurred | $ 58.9 |
Land | |
Schedule of Investments [Line Items] | |
Cost incurred | 6.6 |
Other Development Costs | |
Schedule of Investments [Line Items] | |
Cost incurred | $ 52.3 |
Debt - Future Scheduled Principal Payments of Debt Obligations (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Disclosure [Abstract] | ||
2021 (remaining six months) | $ 4,566 | |
2022 | 137,249 | |
2023 | 117,875 | |
2024 | 324,190 | |
2025 | 15,935 | |
Thereafter | 0 | |
Total debt before unamortized debt issue costs | 599,815 | $ 609,741 |
Unamortized mortgage debt issue costs | (778) | (971) |
Total debt outstanding | $ 599,037 | $ 608,770 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Income Tax Contingency [Line Items] | ||||
Tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
TRS | ||||
Income Tax Contingency [Line Items] | ||||
Percentage of voting interests of gross deferred tax asset | 100.00% |
Dividends Declared and Paid (Details) - $ / shares |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Feb. 28, 2020 |
Jan. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
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Equity [Abstract] | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.11 | $ 0.11 | $ 0 | $ 0 | $ 0.22 | $ 0 | $ 0.22 | $ 0.22 |
LTIP units, distributions per unit (in dollars per share) | $ 0.11 | $ 0.11 | $ 0.22 | $ 0.22 | $ 0.22 |
Equity Incentive Plan - Summary of Restricted Share Awards (Details) - Restricted Stock - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
Number of Shares | ||
Nonvested at beginning of the period (in shares) | 1,667 | 5,001 |
Granted (in shares) | 0 | 0 |
Vested (in shares) | 0 | (3,334) |
Forfeited (in shares) | 0 | 0 |
Nonvested at end of the period (in shares) | 1,667 | 1,667 |
Weighted - Average Grant Date Fair Value | ||
Nonvested at beginning of the period (in dollars per share) | $ 17.40 | $ 18.33 |
Granted (in dollars per share) | 0 | 0 |
Vested (in dollars per share) | 0 | 18.80 |
Forfeited (in dollars per share) | 0 | 0 |
Nonvested at end of the period (in dollars per share) | $ 17.40 | $ 17.40 |
Equity Incentive Plan - Schedule of LTIP Unit Awards (Details) - Long Term Incentive Plan Units - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
Number of Shares | ||
Nonvested at beginning of the period (in shares) | 669,609 | 598,320 |
Granted (in shares) | 330,945 | 325,507 |
Vested (in shares) | (219,451) | (254,218) |
Forfeited (in shares) | (16,925) | 0 |
Nonvested at end of the period (in shares) | 764,178 | 669,609 |
Weighted - Average Grant Date Fair Value | ||
Nonvested at beginning of the period (in dollars per share) | $ 15.73 | $ 18.30 |
Granted (in dollars per share) | 14.55 | 13.42 |
Vested (in dollars per share) | 16.39 | 18.82 |
Forfeited (in dollars per share) | 17.02 | 0 |
Nonvested at end of the period (in dollars per share) | $ 15.00 | $ 15.73 |
Equity Incentive Plan - Schedule of Performance-Based Long-Term Incentive Plan Payout Awards (Details) |
Mar. 01, 2021 |
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Relative TSR Hurdles (Percentile) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Threshold (in percentage) | 25.00% |
Target (in percentage) | 50.00% |
Maximum (in percentage) | 75.00% |
Payout Percentage | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Threshold (in percentage) | 50.00% |
Target (in percentage) | 100.00% |
Maximum (in percentage) | 150.00% |
Leases - Schedule of Operating Lease Maturity (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
2021 (remaining six months) | $ 1,028 | |
2022 | 2,071 | |
2023 | 2,093 | |
2024 | 2,115 | |
2025 | 2,186 | |
Thereafter | 66,720 | |
Total lease payments | 76,213 | |
Less: Imputed interest | (53,242) | |
Present value of lease liabilities | $ 22,971 | $ 23,233 |
Leases - Schedule of Ground, Air Rights, Garage and Office Leases (Details) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2021 | $ 2,051 |
2022 | 2,071 |
2023 | 2,093 |
2024 | 2,115 |
2025 | 2,186 |
Thereafter | 66,720 |
Total lease payments | 77,236 |
Less: Imputed interest | (54,003) |
Present value of lease liabilities | $ 23,233 |
Leases - Schedule of Right of Use Asset and Lease Liability (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Right of Use Asset | |
Beginning balance | $ 20,641 |
Amortization | (324) |
Ending balance | 20,317 |
Lease Liability | |
Beginning balance | 23,233 |
Amortization | (262) |
Ending balance | $ 22,971 |
Leases - Lease Cost (Details) |
Jun. 30, 2021 |
---|---|
Leases [Abstract] | |
Weighted-average remaining lease term (years) | 40 years 6 months 25 days |
Weighted-average discount rate | 6.58% |
Related Party Transactions (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2021
USD ($)
hotel
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2021
USD ($)
hotel
|
Jun. 30, 2020
USD ($)
|
Mar. 17, 2021 |
Dec. 31, 2020
USD ($)
|
|
Related Party Transaction [Line Items] | ||||||
Management fees recorded within hotel other operating expenses | $ 1,800 | $ 800 | $ 3,000 | $ 2,900 | ||
Amounts due to related party | $ 500 | $ 500 | $ 300 | |||
Island Hospitality Management Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage in related party owned by the company's chairman | 100.00% | 100.00% | 52.50% | |||
Percentage of voting interests acquired | 47.50% | |||||
Number of hotels managed by related party | hotel | 39 | 39 | ||||
NorthStar Realty Finance Corp | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage in related party owned by the company's chairman | 2.50% | 2.50% | ||||
Ownership percentage in related party owned by third party | 97.50% | 97.50% | ||||
Services provided | $ 23 | $ 49 | $ 23 | $ 49 |
Subsequent Events (Details) $ in Millions |
Jul. 01, 2021
USD ($)
|
---|---|
Subsequent Event | Senior Unsecured Revolving Credit Facility | |
Subsequent Event [Line Items] | |
Repayments of credit facility | $ 116.0 |
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