10-Q

.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
		FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2017
		OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from ______ to ______.
		Commission file number: 001-34087
CONDOR HOSPITALITY TRUST, INC.
	(Exact name of registrant as specified in its charter)
Maryland (State or other jurisdiction of incorporation or organization)			52-1889548 (IRS Employer Identification Number)
4800 Montgomery Lane Ste. 220, Bethesda, MD 20814 (Address of principal executive offices) Telephone number: (402) 371-2520

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES ☒NO  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES ☒NO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of “large accelerated file,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer  ☐
Non-accelerated filer  ☐(Do not check if a smaller reporting company)	Small reporting company  ☒
	Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act YES☐NO ☐

Indicate by check mark whether the registrant is a shell company (as described in Rule 12b-2 of the Exchange Act).YES ☐NO ☒

As of July 31, 2017 there were 11,630,357shares of common stock, par value $.01 per share, outstanding.

Condor Hospitality Trust, Inc. and Subsidiaries

Table of Contents

			Page Number
Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016	3
	Consolidated Statements of Operations for the Three and SixMonthsended June 30, 2017 and 2016	4
	Consolidated Statements of Equity for the Six  Monthsended June 30, 2017 and 2016	5
	Consolidated Statements of Cash Flows for the Six  Monthsended June 30, 2017 and 2016	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	52
Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	54

2

PART I.  FINANCIAL INFORMATION

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

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

		As of
	June 30,		December 31,
	2017		2016
Assets
Investment in hotel properties, net	$	187,737	$	96,158
Investment in unconsolidated joint venture		8,772		9,036
Cash and cash equivalents		5,930		8,326
Restricted cash, property escrows		4,542		5,350
Accounts receivable, net of allowance for doubtful accounts of $25 and $21		1,727		1,416
Prepaid expenses and other assets		1,614		1,666
Derivative assets, at fair value		339		-
Investment in hotel properties held for sale, net		3,800		18,713
Total Assets	$	214,461	$	140,665
Liabilities and Equity
Liabilities
Accounts payable, accrued expenses, and other liabilities	$	6,882	$	4,698
Dividends payable		2,267		1,125
Derivative liabilities, at fair value		-		8
Convertible debt, at fair value		1,050		1,315
Long-term debt, net of deferred financing costs		90,176		56,775
Long-term debt related to hotel properties held for sale, net of deferred financing costs		421		5,945
Total Liabilities		100,796		69,866
Equity
Shareholders' equity
Preferred stock,  40,000,000 shares authorized:
6.25% Series D, 6,700,000 shares authorized, $.01 par value, 6,245,156 shares outstanding, liquidation preference of $63,427		-		61,333
6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000 shares outstanding, liquidation preference of $9,250		10,050		-
Common stock, $.01 par value, 200,000,000 shares authorized; 11,628,139 and 762,590 shares outstanding		116		8
Additional paid-in capital		228,069		118,655
Accumulated deficit		(125,843)		(112,024)
Total Shareholders' Equity		112,392		67,972
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $786 and $2,008		1,273		2,827
Total Equity		113,665		70,799
Total Liabilities and Equity	$	214,461	$	140,665

See accompanying notes to consolidated financial statements.

3

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited - In thousands, except per share data)

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Revenue
Room rentals and other hotel services	$	14,252	$	14,155	$	24,613	$	26,658
Operating Expenses
Hotel and property operations		9,224		9,889		16,837		19,600
Depreciation and amortization		1,769		1,289		2,820		2,698
General and administrative		1,511		1,277		3,003		2,725
Acquisition and terminated transactions		215		53		717		147
Equity transactions		-		-		343		-
Total operating expenses		12,719		12,508		23,720		25,170
Operating income		1,533		1,647		893		1,488
Net gain on disposition of assets		4,852		8,856		4,849		12,223
Equity in earnings of joint venture		25		-		136		-
Net gain on derivatives and convertible debt		227		162		402		6,279
Other income (expense), net		(39)		23		(40)		2
Interest expense		(1,092)		(1,248)		(2,063)		(2,577)
Loss on debt extinguishment		-		(976)		(800)		(1,149)
Impairment loss, net		(479)		(121)		(750)		(914)
Earnings from continuing operations before income taxes		5,027		8,343		2,627		15,352
Income tax expense		35		-		35		-
Earnings from continuing operations		4,992		8,343		2,592		15,352
Gain from discontinued operations, net of tax		-		-		-		678
Net earnings		4,992		8,343		2,592		16,030
Earnings attributable to noncontrolling interest		(67)		(178)		(17)		(567)
Net earnings attributable to controlling interests		4,925		8,165		2,575		15,463
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(271)		(1,057)		(11,874)		(18,797)
Net earnings (loss) attributable to common shareholders	$	4,654	$	7,108	$	(9,299)	$	(3,334)
Earnings per Share
Continuing operations - Basic	$	0.40	$	9.36	$	(1.28)	$	(5.25)
Discontinued operations - Basic		-		-		-		0.86
Total - Basic Earnings per Share	$	0.40	$	9.36	$	(1.28)	$	(4.39)
Continuing operations - Diluted	$	0.37	$	1.17	$	(1.28)	$	(5.25)
Discontinued operations - Diluted		-		-		-		0.86
Total - Diluted Earnings per Share	$	0.37	$	1.17	$	(1.28)	$	(4.39)
See accompanying notes to consolidated financial statements.

4

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Equity

(Unaudited - In thousands, except per share amounts)

	Six months ended June 30, 2016
	Shares of Preferred stock		Preferred stock		Shares of Common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total Shareholders' equity		Noncontrolling interest		Total equity
Balance at December 31, 2015		3,803	$	38		760	$	8	$	138,428	$	(105,858)	$	32,616	$	1,879	$	34,495
Stock-based compensation		-		-		-		-		54		-		54		-		54
Long-term incentive plan		-		-		-		-		-		-		-		85		85
Series D Preferred dividends declared		-		-		-		-		-		(1,139)		(1,139)		-		(1,139)
Redemption of Series A and B Preferred		(803)		(8)		-		-		(7,390)		(5,107)		(12,505)		-		(12,505)
Exchange of Series C Preferred and issuance of Series D Preferred		3,245		61,351		-		-		(12,517)		(20,417)		28,417		-		28,417
Net earnings		-		-		-		-		-		15,463		15,463		567		16,030
Balance at June 30, 2016		6,245	$	61,381		760	$	8	$	118,575	$	(117,058)	$	62,906	$	2,531	$	65,437

	Six months ended June 30, 2017
	Shares of Preferred stock		Preferred stock		Shares of Common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total Shareholders' equity		Noncontrolling interest		Total equity
Balance at December 31, 2016		6,245	$	61,333		763	$	8	$	118,655	$	(112,024)	$	67,972	$	2,827	$	70,799
Stock-based compensation		-		-		88		1		71		-		72		-		72
Long-term incentive plan		-		-		-		-		-		-		-		85		85
Conversion of Series D Preferred to common stock and issuance of Series E Preferred		(5,320)		(51,283)		6,005		60		61,273		(11,030)		(980)		-		(980)
Issuance of Common stock		-		-		4,772		47		45,841		-		45,888		-		45,888
Fractional common shares settled in reverse stock split		-		-		-		-		(1)		-		(1)		-		(1)
Issuance of common units		-		-		-		-		-		-		-		285		285
Cancellation of LTIP units		-		-		-		-		1,941				1,941		(1,941)		-
Series D Preferred dividends declared		-		-		-		-		-		(650)		(650)		-		(650)
Series E Preferred dividends declared		-		-		-		-		-		(194)		(194)		-		(194)
Common stock dividends declared ($0.39 dividend per share)		-		-		-		-		-		(4,520)		(4,520)		-		(4,520)
Warrant exchange		-		-		-		-		289		-		289		-		289
Net earnings		-		-		-		-		-		2,575		2,575		17		2,592
Balance at June 30, 2017		925	$	10,050		11,628	$	116	$	228,069	$	(125,843)	$	112,392	$	1,273	$	113,665

See accompanying notes to consolidated financial statements.

5

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited – In thousands)

	Six months ended June 30,
		2017		2016
Cash flows from operating activities:
Net earnings	$	2,592	$	16,030
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization expense		2,820		2,698
Net gain on disposition of assets		(4,849)		(12,904)
Net gain on derivatives and convertible debt		(402)		(6,279)
Equity in earnings of joint venture		(136)		-
Amortization of deferred financing costs		416		349
Loss on extinguishment of debt		800		1,149
Impairment loss		750		914
Stock-based compensation and long term incentive plan expense		157		139
Warrant issuance costs		289		12
Changes in operating assets and liabilities:
Increase in assets		(341)		(1,150)
Increase in liabilities		1,895		1,283
Net cash provided by operating activities		3,991		2,241
Cash flows from investing activities:
Additions to hotel properties		(1,554)		(1,890)
Distribution in excess of cumulative earnings from joint venture		400		-
Hotel acquisitions		(83,619)		-
Proceeds from sale of hotel assets		19,300		24,957
Net change in capital expenditure escrows		1,033		920
Net cash provided by (used in) investing activities		(64,440)		23,987
Cash flows from financing activities:
Deferred financing costs		(3,550)		(21)
Proceeds from long-term debt		109,000		10,040
Principal payments on long-term debt		(87,422)		(27,313)
Debt early extinguishment penalties		(454)		(939)
Proceeds from common stock issuance		45,888		-
Series A and B Preferred Stock redemption, including accumulated dividends		-		(20,167)
Series D Preferred Stock issuance		-		28,930
Series E Preferred Stock issuance costs		(1,130)		-
Cash dividends paid to common shareholders		(2,402)		-
Cash dividends paid to preferred shareholders		(1,820)		(2,623)
Other items		(57)		(6)
Net cash provided by (used in) financing activities		58,053		(12,099)
Increase (decrease) in cash and cash equivalents		(2,396)		14,129
Cash and cash equivalents, beginning of period		8,326		4,870
Cash and cash equivalents, end of period	$	5,930	$	18,999
Supplemental cash flow information:
Interest paid	$	1,651	$	2,279
Income taxes paid	$	88	$	-
Schedule of noncash investing and financing activities:
Fair value of CHLP common units issued in acquisitions	$	285	$	-
In kind dividends deemed on preferred stock	$	9,900	$	20,218
Debt assumed in acquisition	$	9,096	$	-
See accompanying notes to consolidated financial statements.

6

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

NOTE 1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Condor Hospitality Trust, Inc. (“CDOR,” “Condor,” or the “Company”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. CDOR is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high quality select service, limited service, extended stay, and compact full service hotels.  As of June 30,  2017, the Company owned 19 hotels in 11 states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).

Condor, through its wholly owned subsidiary Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (“CHLP”), for which we serve as general partner.  CHLP, including its various subsidiaries, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of 16 properties held by TRS Leasing, Inc.) and conducts all of its operations. At June 30, 2017, the Company owned 99.4% of the partnership operating units (“partnership units”) of CHLP with the remaining partnership units owned by other limited partners. The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, CHLP and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. CHLP, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. References to “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.  The results of the hotels acquired in and since 2015, because of their locations and chain scale, are expected to be less seasonal in nature than our legacy portfolio of assets.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of CHLP and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented. Certain amounts in the notes to the financial statements may be slightly different than previously reported due to rounding of fractional shares as a result of the reverse stock split.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.  These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the financial statements for the periods presented. Interim results are not necessarily indicative of full-year performance for the year ending December 31, 2017 or any future period. These consolidated financial

7

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period.  Actual results could differ from those estimates.  Because the state of the economy and the real estate market can significantly impact hotel operating performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties and franchise fees are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment. 

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method. Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the consolidated statements of cash flows using the cumulative distributions approach. Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture. Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

8

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold prior to that balance sheet date, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

Historically, we have presented the results of operations of hotel properties that have been sold or are considered held for sale as discontinued operations in all periods presented.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 changed the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted this pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Impairment Losses

On a quarterly basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s fair value.

At the end of each reporting period, if the fair value of a held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the decision not to sell.

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code provisions, a trust which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

9

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS using the asset and liability method.  Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of available evidence, including tax planning strategies and projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain liabilities and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3: Unobservable inputs for which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions or valuation techniques may have a material effect on estimated fair value measurements.  We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings.  This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 (see Note 7).

Recently Adopted Accounting Standards

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies certain of the criteria for determining whether derivative features in a hybrid financial instrument should be separately recognized.  ASU 2014-16 is effective for fiscal years beginning after December 15, 2015 and permits either a retrospective or cumulative effect transition method.  ASU 2014-16 was adopted by the Company on January 1, 2016 and was utilized in determining the accounting for the 6.25%Series D Cumulative

10

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Convertible Preferred Stock (“Series D Preferred Stock”) issued in March 2016 and the 6.25% Series E Cumulative Convertible Preferred Stock (“Series E Preferred Stock”) issued in March 2017 (see Note 10).

In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance effecting both the VIE and VOE consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Company adopted this standard on January 1, 2016 and concluded that CHLP now meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company continues to consolidate CHLP. The Company’s sole significant asset is its investment in CHLP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of CHLP. All of the Company’s debt is an obligation of CHLP.  This ASU was also used in the determination of the accounting for the Atlanta JV entered into in August 2016 (see Note 4).

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the consolidated balance sheet as a direct deduction from the associated debt liability.  The Company adopted this standard on January 1, 2016 and presents all debt issuance costs as a direct deduction from the carrying value of the debt liability. Adoption of this standard was applied retrospectively for all periods presented, effecting only the presentation of the consolidated balance sheet. The adoption of this standard did not have a material impact on the Company's financial position and had no impact on the results of operations or cash flows.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard will be effective for the Company on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has begun to evaluate each of its revenue streams under the new model. Based on preliminary assessments, the Company does not expect the adoption of this guidance to materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of or accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU-2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted

11

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

cash equivalents in the statement of cash flows. This guidance is effective for the Company for years beginning after December 15, 2017, including interim periods within those years and should be applied retroactively. Early adoption is permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis and we do not expect the determination to materially change the recognition of the assets and liabilities acquired. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.

Reclassifications

Certain amounts in prior year financial statements have been reclassified to conform to current year presentation.

Liquidity

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our$150,000 secured revolvingcredit facility (the “credit facility”), and the release of restricted cash upon the satisfaction of usage requirements.  At June 30, 2017, the Company had $5,930 of cash and cash equivalents on hand and $18,961 of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to June 30, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1,296 through September 30, 2018.  We alsopresently expect to invest approximately $4,000 to $5,000in capital expenditures related to hotel properties we currently own through September 30, 2018.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.

12

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

NOTE 2.  INVESTMENT IN HOTEL PROPERTIES

Investments in hotel properties consisted of the following at June 30, 2017 and December 31, 2016:

	As of
	June 30, 2017						December 31, 2016
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	526	$	20,043	$	20,569	$	2,392	$	14,020	$	16,412
Buildings, improvements, vehicle		4,896		165,627		170,523		23,118		85,565		108,683
Furniture and equipment		1,879		19,399		21,278		5,233		12,108		17,341
Initial franchise fees		31		1,444		1,475		194		668		862
Construction-in-progress		-		277		277		23		63		86
Investment in hotel properties		7,332		206,790		214,122		30,960		112,424		143,384
Less accumulated depreciation		(3,532)		(19,053)		(22,585)		(12,247)		(16,266)		(28,513)
Investment in hotel properties, net	$	3,800	$	187,737	$	191,537	$	18,713	$	96,158	$	114,871

NOTE 3.  ACQUISITION OF HOTEL PROPERTIES

During the six months ended June 30, 2017, the Company acquired five wholly owned hotel properties.  The allocation of the purchase price based on fair value, which was determined using Level 3 fair value inputs, was as included in the table below. 

	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt originated at acquisition		Issuance of CHLP partnership units		Net cash
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Total		$	6,022	$	80,002	$	7,033	$	98	$	(155)	$	93,000	$	82,863	$	285	$	9,852

(1) The Lake Mary purchase price is subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieves a stipulated hotel net operating income level in 2017.  This contingent consideration is included in the purchase price allocation at its estimated fair value on the date of the acquisition.

The total purchase price of$93,000 for these hotels was funded with the assumption of one loan with an aggregate outstanding principal balance of $9,096,  draws on the credit facility totaling $73,767, the issuance of 1,211,648

13

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

partnership units from CHLP with a total value at issuance of $285, and cash of $9,852.The assumed loan bears interest at a fixed rate of 4.54%, requires monthly principal and interest payments of $48, and matures on August 1, 2024.

During the three and six months ended June 30, 2017, included in the consolidated statement of operations from the hotels we acquired during the six months ended June 30, 2017 is revenue totaling $4,325 and $4,630, respectively, and net earnings, excluding the consideration of acquisition costs, totaling $831 and $968, respectively.

The Company had no acquisitions of wholly owned properties during the six months ended June 30, 2016.

Pro Forma Results

In addition to the five properties discussed above, the Company also entered into the Atlanta JV which then acquired one hotel in August of 2016 (see Note 4) and the Company acquired one wholly owned property, the Aloft Leawood / Overland Park (Kansas City), for a purchase price of $22,500 on December 14, 2016.  The following condensed pro forma financial data is presented as if all acquisitions completed in 2016 and 2017, including that completed by the Atlanta JV, had been completed on January 1, 2016.  Supplemental pro forma earnings were adjusted to exclude all acquisition expense recognized in the periods presented as if these acquisition costs had been incurred in prior periods but were not adjusted to remove the results of hotels sold during and between the periods.  Results for periods prior to the Company’s ownership are based on information provided by the prior owners, adjusted for differences in interest expense, depreciation expense, and management fees following the Company’s ownership.  The condensed pro forma financial data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the acquisitions had been consummated on January 1, 2016, nor do they purport to represent the results of operations for future periods.

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total revenue	$	15,442	$	20,949	$	30,594	$	39,443
Operating income	$	2,229	$	3,477	$	3,272	$	4,520
Net earnings (loss) attributable to common shareholders	$	5,127	$	7,883	$	(8,066)	$	(2,764)
Net earnings (loss) per share attributable to common shareholders - Basic	$	0.44	$	10.37	$	(1.11)	$	(3.64)
Net earnings (loss) per share attributable to common shareholders - Diluted	$	0.41	$	1.26	$	(1.11)	$	(3.64)

NOTE 4.  INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

On August 1, 2016, the Company entered into a joint venture with Three Wall Capital LLC and certain of its affiliates (“TWC”) to acquire an Aloft hotel in downtown Atlanta, Georgia for $44,550 on August 22, 2016.  The Company accounts for the Atlanta JV under the equity method.  Condor owns 80% of the Atlanta JV with TWC owning the remaining 20%.  The Atlanta JV is comprised of two companies: Spring Street Hotel Property II LLC, of which CHLP indirectly owns an 80% equity interest, and Spring Street Hotel OpCo II LLC, of which our TRS indirectly owns an 80% equity interest.  TWC owns the remaining 20% equity interest in these two companies.

The purchase price for the Atlanta Aloft was partially paid with $33,750 of proceeds from a term loan secured by the property. The term loan, obtained from LoanCore Capital Credit REIT LLC, has an initial term of 24 months with three12-month extension periods, which may be exercised at the Atlanta JV’s option subject to certain conditions and fees.  The interest rate is a floating rate calculated on the one-month LIBOR plus 5.0%, and as a condition to closing, the Atlanta JV purchased a LIBOR cap of 3.0%.  The current interest rate on the loan is 6.19%.  The loan is non-recourse to the Atlanta JV, subject to specified exceptions.  The loan is also non-recourse to Condor, except for certain customary carve-outs which are guaranteed by the Company.

14

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Under the Atlanta JV agreement, the Atlanta JV is managed by TWC in accordance with business plans and budgets approved by both partners.  Major decisions as detailed in the agreement also require joint approval.  Condor may remove TWC as manager of the Atlanta JV and appoint a new manager only upon the occurrence of certain events.  The Atlanta Aloft hotel is managed by Boast Hotel Management Company LLC (“Boast”), an affiliate of TWC.  The Atlanta JV paid to Boast total management fees of $93and $182for the three and six months ended June 30, 2017.

Net cash flow from the Atlanta JV will be distributed each fiscal year first with a 10% preferred return on capital contributions to Condor, second with a 10% preferred return on capital contributions to TWC, and third with any remainder distributed to the partners based on their pro-rata equity ownership. Profits are allocated in the same proportion as net cash flow. Losses are allocated based on pro-rata equity ownership. The Atlanta JV agreement also includes buy-sell rights for both members (generally after three years of hotel ownership for Condor and after five years for TWC) and Condor has a purchase option for TWC’s Atlanta JV ownership interest exercisable between the third and fifth anniversary of the hotel closing.

The following tables represent the total assets, liabilities, equity, and components of net earnings, including the Company’s share, of the Atlanta JV as of and for the three and six months ended June 30, 2017:

	As of June 30, 2017
Investment in hotel properties, net	$	48,659
Cash and cash equivalents		1,860
Restricted cash, property escrows		910
Accounts receivable, prepaid expenses, and other assets		485
Total Assets	$	51,914
Accounts payable, accrued expenses, and other liabilities	$	1,491
Land option liability		6,190
Long-term debt, net of deferred financing costs		33,268
Total Liabilities		40,949
Condor equity		8,772
TWC equity		2,193
Total Equity		10,965
Total Liabilities and Equity	$	51,914

	Three months ended June 30, 2017		Six months ended June 30, 2017
Revenue
Room rentals and other hotel services	$	3,061	$	6,050
Operating Expenses
Hotel and property operations		2,062		3,923
Depreciation and amortization		412		823
Total operating expenses		2,474		4,746
Operating income		587		1,304
Net loss on disposition of assets		(3)		(4)
Net loss on derivative		(2)		(2)
Interest expense		(523)		(1,128)
Net earnings	$	59	$	170
Condor allocated earnings	$	25	$	136
TWC allocated earnings		34		34
Net earnings	$	59	$	170

15

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

NOTE 5.DISPOSITIONS OF HOTEL PROPERTIES AND DISCONTINUED OPERATIONS

As of June 30, 2017, the Company had two hotels classified as held for sale. At the beginning of 2017, the Company had seven hotels held for sale and during the three and six months ended June 30, 2017soldthree and five properties, respectively.  None of the hotels reclassified as held for sale since the Company’s adoption of ASU 2014-08 on October 1, 2014 represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.  As a result, only hotels classified as held for sale prior to October 1, 2014 (excluding those subsequently reclassified as held for use),  the last of which was sold in January 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations.

In the three months ended June 30, 2017 and 2016, the Company sold three and seven hotels, respectively, resulting in total gains of $5,031 and $8,886,  respectively, all of which was included in continuing operations.  In the six months ended June 30, 2017 and 2016, the Company sold five and 11 hotels, respectively, resulting in total gains of $5,031 and $12,945,  respectively, of which $5,031 and $12,264, respectively, was included in continuing operations.  The hotels sold during the three months ended March 31, 2017 had been previously impaired and recoveries of impairment totaling $80 were recognized upon their sale.

The Company allocates interest expense to discontinued operations for debt that is to be assumed or that is required to be repaid as a result of disposal transactions. The following table sets forth the components of discontinued operations for the six months ended June 30, 2016, all of which was recognized in the first quarter of 2016:  

	Six months ended June 30, 2016
Revenue	$	6
Hotel and property operations expense		(4)
Net gain (loss) on disposition of assets		681
Interest expense		(5)
Gain from discontinued operations, net of tax	$	678
Capital expenditures	$	-

NOTE 6.  LONG-TERM DEBT

On March 1, 2017, a significant portion of the Company’s debt (including all debt outstanding at December 31, 2016 with the exception of the two variable rate Western Alliance Bank loans and the two fixed rate Great Western Bank loans) was refinanced with the credit facility that matures on March 1, 2020.  The credit agreement was entered into with KeyBank National Association, as administrative agent and lender, KeyBanc Capital Markets Inc. and The Huntington National Bank, as joint leader arrangers, and other lenders and agents party thereto.

The original credit agreement provided for a $90,000 senior secured credit facility and includes an accordion feature that would allow the credit facility to be increased to $400,000 with additional lender commitments. On May 11, 2017, the Company closed on an increase in the credit facility from $90,000 to $150,000 with the credit facility continuing to retain its $400,000 accordion feature.  Available borrowing capacity under the credit facility is based on a borrowing base formula for the pool of hotel properties securing the facility. As of the closing date, the collateral pool consisted of 14 hotel properties and total available borrowing capacity under the credit facility was$41,050.  At June 30, 2017, following the subsequent purchases and sales of hotels subsequent to March 1, 2017

16

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

(see Notes 3 and 5) and the common stock equity raise (see Note 9), the collateral pool consisted of 14 hotel properties andtotal available borrowing capacity under the  credit facility totaled $73,743.

The credit facility is guaranteed by the Company and its material subsidiaries that do not have stand-alone financing. Borrowings under the credit facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage). The credit facility matures in March 2020 and has twoone-year extension options, subject to certain conditions, including the completion of specific capital achievements. The credit facility contains customary representations and warranties, covenants and events of default.

Upon the closing of the credit facility, $34,250 was immediately drawn down to repay existing debt and related expenses.  Prior to June 30, 2017, net proceeds from the Company’s hotel sales (see Note 5) were used to pay down a total of $17,218 on the credit facility, proceeds from the credit facility totaling $74,750 were used to fund the Company’s acquisitions plus related expenses (see Note 3), and a portion of the proceeds from the Company’s common stock offering totaling $37,000 (see Note 9) was used to pay down the credit facility.

Long-term debt related to wholly owned properties, including debt related to hotel properties held for sale, consisted of the following loans payable at June 30, 2017 and December 31, 2016:

Lender		Balance at June 30, 2017	Interest rate at June 30, 2017	Maturity	Amortization provision	Properties encumbered at June 30, 2017		Balance at December 31, 2016
Fixed rate debt
Great Western Bank (1)	$	14,143	4.33%	12/2021	25 years	1	$	14,326
Great Western Bank (1)		1,498	4.33%	12/2021	7 years	-		1,599
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18		9,069	4.54%	08/2024	25 years	1		-
Western Alliance Bank		-	-	-	-	-		4,806
Western Alliance Bank		-	-	-	-	-		2,803
Cantor Commercial Real Estate Lending		-	-	-	-	-		5,713
Morgan Stanley Mortgage Capital Holdings, LLC		-	-	-	-	-		912
Total fixed rate debt		24,710						30,159
Variable rate debt
Western Alliance Bank		4,824	4.46% (2)	11/2020	25 years	1		4,882
Western Alliance Bank		9,747	4.46% (2)	11/2020	25 years	1		9,863
KeyBank credit facility (3)		54,782	3.72% (4)	03/2020	Interest only	14		-
The Huntington National Bank		-	-	-	-	-		7,361
LMREC 2015 - CREI, Inc. (Latitude)		-	-	-	-	-		11,124
Total variable rate debt		69,353				18		33,230
Total long-term debt	$	94,063					$	63,389
Less: Deferred financing costs		(3,466)						(669)
Total long-term debt, net of deferred financing costs		90,597						62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $24 and $55		(421)						(5,945)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,442 and $614	$	90,176					$	56,775

(1) Both loans are collateralized by Aloft Leawood

(2)  90-day LIBORplus3.25%

(3) Total unused availability under this credit facility was $18,961at June 30, 2017; commitment fee on unused facility is 0.20%

(4) Borrowings under the facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage);  30-day LIBOR for $50,000 notional capped at 2.5% after giving effect to market rate cap (see Note 8)

17

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below based on its contractual maturity although the balances are expected to be repaid within one year upon the sale of the related hotel properties. Aggregate annual principal payments on debt for the remainder of 2017 and thereafter are as follows:

	Held for sale		Held for use		Total
Remainder of 2017	$	-	$	509	$	509
2018		-		1,057		1,057
2019		-		1,105		1,105
2020		445		68,822		69,267
2021		-		13,867		13,867
Thereafter		-		8,258		8,258
Total	$	445	$	93,618	$	94,063

Financial Covenants

The Company’s debt agreements contain requirements as to the maintenance of minimum levels of debt service and fixed charge coverage, required loan-to-value and leverage ratios, required levels of tangible net worth, and place certain restrictions on dividends.  As of June 30, 2017, we were in compliance with our financial covenants.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. As of June 30, 2017, we are not in default of any of our loans.

NOTE 7.  CONVERTIBLE DEBT AT FAIR VALUE

As part of an agreement entered into on March 16, 2016 (the “Exchange Agreement”) with Real Estate Strategies, L.P. (“RES”) (see Note 10), the Company issued to RES a Convertible Promissory Note (the “Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012 initially convertible into shares of Series D Preferred Stock, which could be subsequently converted into 97,269 shares of common stock.  Following the conversion of all of the outstanding Series D Preferred Stock into common stock and the issuance of the Series E Preferred Stock on March 1, 2017, the Note was amended to be convertible directly into 97,269 shares of common stock at any time at the option of RES or automatically when the Series E Preferred Stock is required to be converted or is redeemed in whole (see Note 10).  The Note is not convertible to the extent at the time the conversion would cause RES, together with its affiliates, to beneficially own more than 49% of the voting stock of the Company.  Any conversion reduces the principal amount of the Note proportionally. 

The Company has made an irrevocable election to record this Convertible Debt in its entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of this Note. As such, gains and losses on the Note are included in net gain on derivatives and convertible debt within net earnings each reporting period. Gains (losses) related to this Note were recognized totaling $25 and $208 during the three months ended June 30, 2017 and 2016, respectively,and $265 and ($179) during the six months ended June 30, 2017 and 2016, respectively.  The fair value of the Note was determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options. The fair value of the Note on the date of issuance was determined to be equal to its principal amount. Interest expense related to this Note is recorded separately from other changes in its fair value within interest expense each period.

18

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

The following table represents the difference between the fair value and the unpaid principal balance of the Note as of June  30, 2017:

	Fair value as of June 30, 2017		Unpaid principal balance as of June 30, 2017		Fair value carrying amount over/(under) unpaid principal
6.25% Convertible Debt	$	1,050	$	1,012	$	38

NOTE 8. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Our determination of fair value measurements is based on the assumptions that market participants would use in pricing the asset or liability. At June 30, 2017, the Company’s convertible debt (see Note 7) and certain derivative instruments were the only financial instruments measured in the financial statements at fair value on a recurring basis.  Nonrecurring fair value measurements were utilized in the determination of the fair value of acquired properties in 2017 (see Note 3), in the accounting for the Company’sequity transactions that occurred in March 2016 and 2017 (see Note 10),  and in the valuation of the stock-based compensation grants (see Note 12) and impaired hotels during the three and sixmonths ended June 30, 2017 and 2016.

Derivative Instruments

Currently, the Company uses derivatives, such as interest rate swaps and caps, to manage its interest rate risk.  The fair value of interest rate positions is determined using the standard market methodology of netting discounted expected future cash receipts and payments. Variable interest rates used in the calculation of projected receipts and payments on the positions are based on expectations of future interest rates derived from observable market interest rate curves and volatilities.  Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements.  The Company believes it minimizes this credit risk by transacting with major creditworthy financial institutions.  These interest rate positions at June 30, 2017 and December 31, 2016 are as follows:

Associated debt	Type	Terms	Effective date	Maturity date		Notional amount at June 30, 2017		Notional amount at December 31, 2016
Credit facility	Cap	Caps 30-day LIBOR at 2.50%	03/2017	03/2019	$	50,000	$	-
Huntington	Swap	Swaps 30-day LIBOR + 2.25% for fixed rate of 4.13% cancellable at Company's option anytime after 11/01/2018 without penalty	11/2015	11/2020	$	-	$	7,361
Latitude	Cap	Caps 30-day LIBOR at 1.0%	03/016	06/2017	$	-	$	11,124

Additionally, prior to the execution of the Exchange Agreement (see Note 10) on March 16, 2016, which extinguished the instrument, the Company was required to bifurcate and include on the consolidated balance sheet at fair value the embedded conversion option in the 6.25%Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”) due to the presence of an antidilution provision that required an adjustment in the common stock conversion ratio should subsequent issuances of the Company’s common stock be issued below the instrument’s original conversion price of $52.00 per share.

Similarly, at December 31, 2015, prior to the execution of the Exchange Agreement, the terms of the common stock warrants issued to the holders of the Series C Preferred Stock (see Note 10) also included an antidilution provision that required a reduction in the warrant’s exercise price of $62.40 should the conversion ratio of the Series C Preferred Stock be adjusted due to its antidilution provisions. Accordingly, the warrants did not qualify for equity classification, and, as a result, the fair value of the warrants was shown as a derivative liability on the consolidated

19

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

balance sheet.  With the execution of the Exchange Agreement, this provision of these warrants was effectively eliminated and the conversion price was locked permanently at its current amount on the date of the extinguishment of the Series C Preferred Stock ($12.48).  Following this modification of terms, the warrants qualified for equity classification and were reclassified to additional paid-in capital at their fair value of $611on the date of the modification.

The fair value of the derivative liabilities recognized in connection with the Series C Preferred Stock was determined using the Monte Carlo simulation method. The Monte Carlo simulation method is a generally accepted statistical method used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and its peer group and minimize standard error.

Included in the Series E Preferred Stock issued on March 1, 2017 is a redemption right that allows the Company, upon the occurrence of a Qualified Offering (defined as a single offering of common stock of at least $50,000 or up to three offerings in the aggregate of at least $75,000, all with certain minimum prices per share and a potential make whole payment required in certain scenarios), to redeem up to a total of 490,250 shares of Series E Preferred Stock for specific percentages of its liquidation preference (see Note 10).  Because this redemption right is contingent upon the occurrence of a Qualified Offering, the Company was required to bifurcate and include on the consolidated balance sheet at fair value the embedded redemption right.This option was determined to be an asset with a fair value on the date of issuance of $150 using a trinomial lattice-based model, considered a Level 3 fair value measurement.  A Qualified Offering was completed on March 29, 2017 (see Note 9).

All derivatives recognized by the Company are reported as either derivative assets or liabilities on the consolidated balance sheets and are adjusted to their fair value at each reporting date. All gains and losses on derivative instruments are included in net gain on derivatives and convertible debt and with the exception of realized gains and losses related to the interest rate instruments, which are included in interest expense on the consolidated statements of operations. Net gains (losses) of $202 and ($46) for the three months ended June 30, 2017 and 2016, respectively, and $137 and $6,458 for the six months ended June 30, 2017 and 2016, respectively, were recognized related to derivative instruments.

Recurring Fair Value Measurements

The following tables provide the fair value of the Company’s financial assets and (liabilities) carried at fair value and measured on a recurring basis:

	Fair value at
	June 30, 2017		Level 1		Level 2		Level 3
Interest rate derivatives	$	6	$	-	$	6	$	-
Series E Preferred embedded redemption option		333		-		-		333
Convertible debt		(1,050)		-		-		(1,050)
Total	$	(711)	$	-	$	6	$	(717)

	Fair value at
	December 31, 2016		Level 1		Level 2		Level 3
Interest rate derivatives	$	(8)	$	-	$	(8)	$	-
Convertible debt		(1,315)		-		-		(1,315)
Total	$	(1,323)	$	-	$	(8)	$	(1,315)

There were no transfers between levels during the three or six months ended June 30, 2017 or 2016.

The following tables present a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related gains and losses recorded in the consolidated statements of operations during the periods:

20

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

	Three months ended June 30,
	2017						2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Convertible debt
Fair value, beginning of period	$	93	$	(1,075)	$	(982)	$	(1,399)
Net gains recognized in earnings		240		25		265		208
Purchase and issuances		-		-		-		-
Sales and settlements		-		-		-		-
Gross transfers into Level 3		-		-		-		-
Gross transfers out of Level 3		-		-		-		-
Fair value, end of period	$	333	$	(1,050)	$	(717)	$	(1,191)
						-
Total unrealized gains during the period included in earnings related to instruments held at end of period	$	240	$	25	$	265	$	208

	Six months ended June 30,
		2017						2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Series C Preferred embedded derivative		RES warrant derivative		Convertible debt		Total
Fair value, beginning of period	$	-	$	(1,315)	$	(1,315)	$	(6,271)	$	(2,411)	$	-	$	(8,682)
Net gains (losses) recognized in earnings		183		265		448		4,848		1,800		(179)		6,469
Purchase and issuances		150		-		150		-		-		(1,012)		(1,012)
Sales and settlements		-		-		-		1,423		-		-		1,423
Gross transfers into Level 3		-		-		-		-		-		-		-
Gross transfers out of Level 3		-		-		-		-		611 (1)		-		611
Fair value, end of period	$	333	$	(1,050)	$	(717)	$	-	$	-	$	(1,191)	$	(1,191)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	183	$	265	$	448	$	-	$	-	$	(179)	$	(179)

(1) RES warrants were permanently reclassified to additional paid-in capital as discussed above

Fair Value of Long-Term Debt

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of debt obligations with similar credit risks. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. Both the carrying valueand estimated fair value of the Company’s long-term debt are presented net of deferred financing costs in the table below:

	Carrying value as of				Estimated fair value as of
	June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Held for use	$	90,176	$	56,775	$	90,175	$	56,842
Held for sale		421		5,945		421		6,378
Total	$	90,597	$	62,720	$	90,596	$	63,220

21

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Impaired Hotel Properties

In the performance of impairment analysis for both held for sale and held for use properties, fair value is determined with the assistance of independent real estate brokers and through the use of operating results and revenue multiples based on the Company’s experience with hotel sales as well as available industry information.  For held for sale properties, estimated selling costs are based on our experience with similar asset sales.  These are considered Level 3 inputs.The amount of impairment and recovery of previously recorded impairment recognized in the three and six months ended June 30, 2017 and 2016 is shown in the tables below:

	Three months ended June 30,
	2017			2016
	Number of hotels		Impairment (loss) recovery	Number of hotels		Impairment (loss) recovery
Held for sale hotels:
Impairment loss	2	$	(479)	1	$	(5)
Impairment recovery	-		-	-		-
Sold hotels:
Impairment loss	-		-	1		(116)
Impairment recovery	-		-	-		-
Total net impairment loss:	2	$	(479)	2	$	(121)

	Six months ended June 30,
	2017			2016
	Number of hotels		Impairment (loss) recovery	Number of hotels		Impairment (loss) recovery
Held for sale hotels:
Impairment loss	2	$	(830)	1	$	(512)
Impairment recovery	-		-	-		-
Sold hotels:
Impairment loss	-		-	2		(402)
Impairment recovery	2		80	-		-
Total net impairment loss:	4	$	(750)	3	$	(914)

NOTE 9.COMMON STOCK

The Company’s common stock is duly authorized, fully paid, and non-assessable. 

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock (adjusted for the reverse stock split discussed below) at $10.40 per share pursuant to the terms of the preferred stock (see Note 10).

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash.  A total of 73 shares   were settled for $1. Unless otherwise noted, impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented.

On March 29, 2017, the Company closed an underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50. Net proceeds, after the payment of related expenses, from this offering totaled $45,888.

NOTE 10.PREFERRED STOCK

On March 16, 2016, the Company entered into a series of agreements providing for:

22

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

· the issuance and sale of Condor’s Series D Preferred Stock under a private transaction to SREP III Flight-Investco, L.P. (“SREP”), an affiliate of StepStone Group LP;

· the exchange of all of Condor’s outstanding Series C Preferred Stock for Series D Preferred Stock; and

· the cash redemption of all of Condor’s outstanding 8% Series A Cumulative Preferred Stock (“Series A Preferred Stock”) and 10% Series B Cumulative Preferred Stock (“Series B Preferred Stock”).

In connection with these transactions, the Company and SREP entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) dated March 16, 2016 pursuant to which Condor issued and sold 3,000,000 shares of Series D Preferred Stock to SREP on the March 16, 2016 for an aggregate purchase price of $30,000. The Stock Purchase Agreement required that $20,147 of the purchase price be deposited into an escrow account for the purpose of effecting the redemption of the Series A and Series B Preferred Stock and that the remaining amount of the purchase price be delivered to Condor. 

Simultaneously, the Company entered into the Exchange Agreement with RES pursuant to which all 3,000,000 outstanding shares of Series C Preferred Stock were exchanged for 3,000,000 shares of Series D Preferred Stock. Under the Exchange Agreement, in lieu of payment of accrued and unpaid dividends in the amount of $4,947 on the Series C Preferred Stock, Condor (a) paid to RES an amount of cash equal to $1,484, (b) issued to RES 245,156 shares of Series D Preferred Stock (such that RES, IRSA and their affiliates do not beneficially own in excess of 49% of the voting stock of Condor) and (c) issued to RES a convertible promissory note, bearing interest at 6.25% per annum, in the principal amount of $1,012 (see Note 7).

Pursuant to the Stock Purchase Agreement, on April 15, 2016, Condor redeemed all of the outstanding Series A and Series B Preferred Stock,in accordance with redemption notices issued on March16, 2016, as follows:

· all 803,270 outstanding shares of the Series A Preferred Stock at the redemption price of $10.00 per share plus $2.084940 per share in accrued and unpaid dividends (plus compounded interest) through the redemption date for a total redemption price of $9,707; and

· all 332,500 outstanding shares of the Series B Preferred Stock at the redemption price of $25.00 per share plus $6.354167 per share in accrued and unpaid dividends through the redemption date for a total redemption price of $10,425.

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock. The terms of the Series D Preferred Stock provided for automatic conversion following certain future common stock offerings, and also provided for potential additional payments to the holders depending on the sales price of common stock in the offerings. As a result of the voluntary conversion, the holders are no longer entitled to the potential payments. To induce the holders of the Series D Preferred Stock to voluntarily convert their shares, the Company issued the holders 925,000 shares of a new series of preferred stock, the Series E Preferred Stock.

The effect of these transactions on the Company’s preferred stock and the key terms of the remaining series of the Company’s preferred stock are discussed individually below.

Series A Preferred Stock

On April 15, 2016, the remaining 803,270 outstanding shares of Series A Preferred Stock were redeemed.

The difference between the recorded value of the Series A Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series A Preferred Stock plus related expenses, a total of $2,326, was recorded as a reduction of accumulated deficit during the six months ended June 30, 2016 as the amount is considered a deemed dividend on the Series A Preferred Stock. $2,288 of this amount was recorded during the three months ended March 31, 2016 upon the Series A Preferred Stock becoming mandatorily redeemable and liability classified prior to its redemption.  Of these amounts,  $38 and $874 for the three and six months ended June 30, 2016, respectively, was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividends that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

23

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Series B Redeemable Preferred Stock

On April 15, 2016, the remaining 332,500 shares of Series B Preferred Stock were redeemed.

The difference between the recorded value of the Series B Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series B Preferred Stock, a total $2,781, was recorded as a reduction of accumulated deficit during the six months ended June 30, 2016 as the amount is considered a deemed dividend on the Series B Preferred Stock.  $2,740 of this amount was recorded during the three months ended March 31, 2016 upon the Series B Preferred Stock becoming mandatorily redeemable and liability classified prior to its redemption.  Of these amounts,  $41 and $911 for the three and six months ended June 30, 2016, respectively, was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earningsattributable to common shareholders in previous periods.

Series C Convertible Preferred Stock and Warrants

On March 16, 2016, the Series C Preferred Stock was extinguished under the Exchange Agreement discussed above.  Upon this extinguishment, the difference between the recorded value of the Series C Preferred Stock prior to the exchange and the fair value of the consideration received in the exchange, a total of $20,366, was recorded as a reduction of accumulated deficit as the amount is considered a deemed dividend on the Series C Preferred Stock.  Of this amount, $15,874 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

On January 24, 2017, the Company exchanged 23,160 new warrants (the “New Warrants”) to purchase common stock of the Company for 576,923 warrants (the “Old Warrants”) held by RES. The number of New Warrants issued in exchange for the Old Warrants equals the number of shares of common stock issuable upon exercise of the Old Warrants pursuant to a cashless exercise provisions of the Old Warrants. The New Warrants are exercisable for 23,160 shares of common stock, have an exercise price of $0.0065 for each common share, and expire on January 24, 2019.On the date of the exchange, the New Warrants had a fair value in excess of the Old Warrants of $289, which is reflected as other expense and an increase in additional paid-in capital as the exchange is assumed to be equivalent to the modification of an equity classified instrument.  The New Warrants remain outstanding in their entirety at June 30, 2017.

Series D Convertible Preferred Stock

Following the execution of the Stock Purchase Agreement and Exchange Agreement on March 16, 2016, there were 6,245,156 shares of Series D Preferred Stock outstanding. 

The Series D Preferred stockholders ranked senior to the Company’s common stock and any other preferred stock issuances and received preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly in arrears on each March 31,June 30, September 30, and December 31, or, if not a business day, the next succeeding business day, of the $10.00 face value per share.  Dividends on the Series D Preferred Stock accrued whether or not the Company had earnings, whether or not there were funds legally available for the payment of such dividends, whether or not such dividends were declared, and whether or not such dividends were prohibited by agreement. If the dividends on the Series D Preferred Stock had been in arrears for four consecutive quarters, then upon notice by holders of in the aggregate not less than 40% of the outstanding Series D Preferred Stock, the Company would (a) take all appropriate action reasonably within its means to maximize the assets legally available for paying such dividends and to monetize such assets (for example, but without limiting the generality of the foregoing, by selling or liquidating all of some of the Company’s assets or by selling the Company as a going concern), (b) pay out of all such assets legally available (including any proceeds from any sale or liquidation of such assets) the maximum possible amount of such unpaid dividends, and (c) thereafter, at any time and from time to time when additional assets of the Company (including any proceeds from any sale or liquidation of such assets) became legally available to pay such unpaid dividends, pay such remaining unpaid dividends until all dividends accumulated on the Series D Preferred Stock had been fully paid.  Dividends were paid when due throughout the life of the instrument.

24

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Each share of Series D Preferred Stock was convertible, at the option of the holder, at any time into a number of shares of common stock determined by dividing the conversion price of $10.40 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. The conversion price was subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends.  Each outstanding share of Series D Preferred Stock would be converted into a number of shares of common stock determined by dividing the conversion price of $10.40 into the $10.00 face value per share, which was equal to a rate of 0.9615385 shares of common stock for each share of Series D Preferred Stock, automatically upon closing of a Qualified Offering without any further action by the holders of such shares or the Company.

The Series D Preferred Stock was redeemable by the Company at any time subject to certain restrictions, in whole or in a partial redemption of up to $30,000, at $12.00 per share on or before March 16, 2019, $13.00 per share from March 16, 2019 to March 16, 2020, and $14.00 per share on or after March 16, 2020, plus all accrued and unpaid dividends.  If a Qualified Offering had not occurred on or before September 30, 2021, holders that hold in the aggregate not less than 40% of the outstanding shares of the Series D Preferred Stock had the right to elect to have the Company fully liquidate in a commercially reasonable manner as determined by the Board of Directors of the Company to provide for liquidation distributions to the holders of the Series D Preferred Stock in an amount per share equal to $14.00 in cash plus accrued and unpaid dividends.  Once this right had been exercised and the Company had been notified, the dividend rate on the Series D Preferred Stock after September 30, 2021 would increase from 6.25% per annum to 12.5% per annum. The holders of Series D Preferred Stock voted their Series D Preferred Stock as a single class with the holders of the common stock on all matters submitted to such holders for vote or consent. For each such vote or consent, each share of Series D Preferred Stock entitled the holder to cast one vote for each whole vote (rounded to the nearest whole number) that such holder would be entitled to cast had such holder converted its Series D Preferred Stock into shares of common stock as of the date immediately prior to the record date for determining the shareholders of the Company eligible to vote on any such matter.

The fair value of the Series D Preferred Stock was determined to be equal to its face value on the date of issuance.

As discussed above, on February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock.  At the time of conversion, the Series D Preferred Stock holders were issued 925,000 shares of newly created Series E Preferred Stock.

Series ERedeemable Convertible Preferred Stock

Following the voluntary conversion of the Series D Preferred Stock on February 28, 2017, the only shares of preferred stock outstanding are925,000 shares of Series E Preferred Stock. 

The Series E Preferred Stock ranks senior to the Company’s common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly of the $10.00 face value per share. If the Company fails to pay a dividend then during the period that dividends are not paid, the dividend rate increases to 9.50% per annum. Dividends on the Series E Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement.

Each share of Series E Preferred Stock is convertible, at the option of the holder, at any time on or after February 28, 2019, into a number of shares of common stock determined by dividing the conversion price of $13.845 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. Upon liquidation, each share of Series E Preferred Stock is entitled to $10.00 per share and accrued and unpaid dividends. The conversion price is subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends. Following a specific equity offering or offerings, from time to time a number of shares of Series E Preferred Stock automatically converts into common stock if the common stock trades at 120% of the conversion price for 60 trading days, and the number of shares converted will be determined by certain trading volumes measures.

25

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

The Company has rights to redeem up to 490,250 shares of the Series E Preferred Stock at prices from 110% to 130% of its liquidation value.  The holders have put rights commencing March 16, 2021 to put the Series E Preferred Stock to the Company at 130% of its liquidation preference, which the Company can satisfy with cash or common stock. The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of Condor, related party transactions exceeding $120, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from Condor’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock or commitment or agreement to do any of the foregoing.

RES and SREP are the only shareholders of the Series E Preferred Stock.  RES and SREP are also parties to director designation agreements pursuant to which each of RES and SREP have rights to designate directors for election, the number of which is determined by the percentage voting power they have in the election of directors.  All of the directors designated by RES and SREP have been determined by the Company’s Board of Directors to be independent under applicable stock exchange rules.  However, notwithstanding that all of the directors designed by RES and SREP are independent directors under exchange rules and neither RES or SREP may alone designate a majority of the Company’s Board of Directors, because RES and SREP hold all of the Series E Preferred Stock and the directors designated by them collectively constitute a majority of the Board of Directors, as of March 31, 2017, they were deemed to have potential influence on the put and call options discussed above, and therefore the Series E Preferred Stock was at that time classified as temporary equity.  During the three months ended June 30, 2017, the Board of Directors established a special committee, which excludes the directors designated by RES and SREP, with the sole power to govern the put and call options, and as such, the Series E Preferred Stock was reclassified into permanent equity during that period.

The Series E Preferred Stock was determined to have a fair value of $9,900 on the date of issuance as measured using a trinomial lattice-based model.  From this value, the embedded redemption option (see Note 8), which was determined to be an asset with a fair value on the date of issuance of $150 using the same model, was bifurcated and will be accounted for at fair value at each period end.  These are considered Level 3 fair value measurements.  The issuance of the Series E Preferred Stock is considered an inducement to convert the Series D Preferred Stock to common stock and as such, its fair value at issuance, plus related expenses totaling $127 and $1,130 in the three and six months ended June 30, 2017, respectively, are reflected as a reduction of retained earnings and an increase in dividends declared and undeclared and in kind dividends deemed on preferred stock.

Impact of Preferred Stock on Net Earnings (Loss) Attributable to Common Shareholders

The components of dividends declared and undeclared and in kind dividends deemed on preferred stock are as follows:

26

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Preferred A dividends accrued at stated rate	$	-	$	32	$	-	$	222
Preferred A additional deemed dividends upon redemption		-		6		-		652
Preferred B dividends accrued at stated rate		-		35		-		243
Preferred B additional deemed dividends upon redemption		-		6		-		668
Preferred C dividends accrued at stated rate		-		-		-		455
Preferred C additional deemed dividends at exchange		-		-		-		15,419
Preferred D dividends accrued at stated rate		-		978		650		1,138
Preferred D inducement to convert		127		-		11,030		-
Preferred E dividends accrued at stated rate		144		-		194		-
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$	271	$	1,057	$	11,874	$	18,797

NOTE 11.  NONCONTROLLING INTEREST OF PARTNERSHIP UNITS IN CHLP

Noncontrolling interest in CHLP represents the limited partners’ proportionate share of the equity in the operating partnership and long-term incentive plan (“LTIP”) units (see Note 12).  Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of CHLP during the period. 

Our ownership interest in CHLP as of June 30, 2017 was99.4% and as of December 31, 2016 was 97.8%, which includes consideration of the partnership units of the limited partners as well as the LTIP units. At June 30, 2017 and December 31, 2016,  3,821,439 and 7,872,943 CHLP partnership units owned by minority interest holders were outstanding, respectively, which includes3,821,439 and2,609,791partnership units held by limited partners, respectively, and 5,263,152 LTIP units outstanding at December 31, 2016 that were subsequently cancelled on June 28, 2017 (see Note 12). The combined redemption value for the partnership units and LTIP units was $786and $2,008 at June 30, 2017 and December 31, 2016, respectively.

Each limited partner of CHLP may, subject to certain limitations, require that CHLP redeem all or a portion of his or her partnership units at any time after a specified period following the date the units were acquired, by delivering a redemption notice to CHLP. When a limited partner tenders partnership units for redemption, the Company can, at its sole discretion, choose to purchase the units for either (1) a number of shares of Company common stock at a rate of one share of common stock for each 52partnership units redeemed or (2) cash in an amount equal to the market value of the number of shares of Company common stock the limited partner would have received if the Company chose to purchase the units for common stock. Nopartnership units were redeemed during the three or sixmonths endedJune 30, 2017 or 2016.

NOTE 12.  STOCK-BASED COMPENSATION

The Company previously had in place a 2006 Stock Plan which had been approved by the Company’s shareholders. The 2006 StockPlan authorized the grant of stock options, stock appreciation rights, restricted stock, and stock bonuses of up to 9,615 shares of common stock. The 2006 Stock Plan expired on December 31, 2015.  As a replacement for the 2006 Stock Plan, the Board of Directors adopted the Condor 2016 Stock Plan, which was approved by the Company’s shareholders at the annual shareholders meeting on June 15, 2016.  The 2016 Stock Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units, and other forms of stock-based compensation.  The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 461,538.  As of June 30, 2017, there were 371,012 common shares available for issuance under the 2016 Stock Plan.

27

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Equity-based compensation is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the requisite service period. Stock-based compensation awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement.  Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock and as noncontrolling interest for LTIP awards of CHLP partnership units.  The Company has elected to account for forfeitures of stock-based compensation as they occur.

Service Condition Share Awards

On March 31, 2017, the Company granted awards of13,656 restrictedshares of common stock to two executive officers for incentive performance pursuant to their annual incentive objectives.  On June 28, 2017, the Company granted an award of 73,385restricted shares of common stock awards to one executive officer.  All of the shares of restricted stock just described were issued under the 2016 Stock Plan and have five year ratable vesting periods based on continued employment.  Dividends paid on these restricted shares during the vesting period are not forfeited in the event that the shares fail to vest. The following table presents a summary of the service condition unvested share activity for the six months ended June 30, 2017:

	Shares	Weighted-average grant date fair value
Unvested at December 31, 2016	-	$	-
Granted	87,041	$	10.60
Vested	-	$	-
Forfeited	-	$	-
Unvested at June 30, 2017	87,041	$	10.60

The fair value of the service condition unvested share awards was determined based on the closing price of the Company’s common stock on the grant date.The total unrecognized compensation cost related to service condition unvested share awards at June 30, 2017 was $960, which is expected to be recognized over weighted-average remaining service period of 4.9 years.

Market Based Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain market share prices of common stock are attained.  Any such shares, if earned, willbe issued under the 2016 Stock Plan or another shareholder approved plan.  The executive officer will earn and be issued 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days.

The compensation cost related to awards that are contingent upon achieving a market based criteria is measured at the fair value of the award on the date of grant using the Monte Carlo simulation, including consideration of the market criteria, and amortized on a straight line basis over the derived performance period which is also estimated using this model.  The grant date fair value of this award was determined using the following assumptions:

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Volatility	25.0	%
Stock price	$                                                                 10.60
Dividend yield	7.4	%
Risk free interest rate	0.89% - 1.81% based upon expected time of vesting

The total grant date fair value of this market based share award, all of which is unrecognized compensation cost at June 30, 2017, was $1,305, which is expected to be recognized over the weighted-average remaining derived service period of 1.3 years.

Performance Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain operating results of the Company are obtained.  Any such shares, if earned, willbe issued under the 2016 Stock Plan or another shareholder approved plan.  For each of the Company’s fiscal years 2017 through 2021, if the Company achieves between 85% and 101% of budgeted Funds from Operations (“FFO”) as approved by the Board of Directors, the executive shall earn and be issued between 11,741 and 19,569 shares of common stock, determined on a straight-line basis based on the percentage of budgeted FFO achieved.  In addition, for any fiscal year in which the Company achieves in excess of 101% of budgeted FFO, an additional 391shares of common stock will be earned for each percentage actual FFO exceeds 101% of budgeted FFO, up to a total of 3,910 additional shares of common stock per year.

The fair value of the performance based share awards is based on the closing price of the Company’s common stock on the grant date, discounted for estimated common stock dividends to bedeclared prior to the shares being issued.  The grant date occurs on an annual basis when budgeted FFO is approved by the Board of Directors.  The total grant date fair value of the 2017 portion of this performance based share award, assuming that 100% of budgeted FFO is achieved, all of which is unrecognized compensation cost at June 30, 2017, was $191, which, after adjustment for the reassessment of the performance condition at each reporting date, is expected to be recognized over theremaining service period of 0.5 years.

Warrants

On March 2, 2015, the Company granted a warrant to an executive officer of the Company outside of the 2006 Stock Plan as an inducement material to the executive’s acceptance of employment.  The Black-Scholes model was utilized at issuance for the determination of the fair value of the award.  The warrant entitled the executive to purchase a total of 101,213 authorized but previously unissued shares of the Company’s common stock at a price of (i) $9.88per share (the adjusted closing bid price of the common stock on Nasdaq on March 2, 2015) if at least one-third but not more than one-half of the shares were purchased on or prior to March 17, 2015, and (ii) $12.48 per share for shares purchased after that date. The warrant has a three-year term. The executive officer exercised the warrant in part to purchase 35,060 shares on March 11, 2015 at the price of $9.88 per share. The warrant remains exercisable for 66,153 shares at an exercise price of $12.48 per share.  As of June 30, 2017, the total unrecognized compensation cost related to these warrants was $66, which is expected to be recognized over the remaining service period of0.7years.

Long-Term Incentive Plan Awards

On March 2, 2015, the Company granted an equity award of 5,263,152 LTIP units, representing profit interests in CHLP, to an executive officer of the Company.  A Monte Carlo simulation was utilized at issuance for the determination of the fair value of the award.  The LTIP units were to be earned in one-third increments upon the Company’s common stock achieving price per share milestones of $22.75,  $29.25,  and $35.75, respectively.  Earned LTIP units were to vest in March 2018, or earlier upon a change in control of the Company, and upon vesting could be converted into CHLP partnership units which can be redeemed at the rate of one share of common stock for each 52 earned LTIP units for up to 101,213 common shares.  These LTIP units were cancelled on June 28, 2017 pursuant to an amendment of the employment agreement with the executive officer.

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Investment Committee Share Compensation

Independent directors serving as members of the Investment Committee of the Board of Directors receive their monthly Investment Committee fees in the form of shares of the Company’s common stock if issuance is available under a shareholder approved stock plan, priced as the average of the closing price of the stock for the first 20 trading days of the calendar year. A total of 409 and 1,123 shares, respectively, were issued to the independent directors of the Investment Committee during the three and six months ended June 30,  2017 under the 2016 Stock Plan.  On July 15, 2016, the Company issued 1,837 shares of common stock under the 2016 Stock Plan to the independent directors of the Investment Committee for their service during the six months ended June 30, 2016.

Stock-Based Compensation Expense

The expense recognized in the consolidated financial statements for stock-based compensation, including LTIP units, related to employees and directors for the three months ended June 30, 2017 and 2016 was $80 and $70, respectively, and for the six months ended June 30, 2017 and 2016 was $157 and $139, respectively, all of which is included in general and administrative expense.

NOTE 13.  INCOME TAXES

We have provided a full valuation allowance against our net deferred tax asset during all periods presented due to the uncertainty of realization resulting from past operating losses which results in no tax expense or benefit for the three and sixmonths ended June 30, 2017 and 2016 with the exception of an alternative minimum tax estimate of $35 recorded in the TRS in 2017 as a result of the application of limits on the use of net operating losses under that system of taxation. After consideration of limitations related to a change in control as defined under Internal Revenue Code Section 382 (“Section 382”) following the Company’s 2012 transactions with RES (see Note 10), the TRS’s net operating loss carryforward at June 30, 2017 as determined for federal income tax purposes was $2,020.The availability of the loss carryforwards will expire from 2022 through 2035.  The Company is currently in the process of evaluating whether the Company’s 2016 and 2017 equity transactions (see Notes 9 and 10) will require further limitation of the usage of net operating losses underSection 382.

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

NOTE 14.  EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities.  Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company.  Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses.  The following is a reconciliation of basic and diluted EPS:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Numerator: Basic (1)
Net earnings (loss) attributable to common shareholders:
Continuing operations	$	4,654	$	7,108	$	(9,299)	$	(3,988)
Discontinued operations		-		-		-		654
Total Net earnings (loss) attributable to common shareholders		4,654		7,108		(9,299)		(3,334)
Less: Allocation to participating securities		(20)		-		(20)		-
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	4,634	$	7,108	$	(9,319)	$	(3,334)
Numerator: Diluted (1)
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	$	4,634	$	7,108	$	(9,319)	$	(3,988)
Dividends on Series D Preferred Stock		-		978		-		-
Dividends and fair value adjustment on Series E Preferred Stock		(95)		-		-		-
Interest and fair value adjustment on Convertible Debt		(9)		(192)		-		-
Continuing operations - Diluted		4,530		7,894		(9,319)		(3,988)
Discontinued operations - Diluted		-		-		-		654
Total Diluted	$	4,530	$	7,894	$	(9,319)	$	(3,334)
Denominator
Weighted average number of common shares - Basic		11,541,085		760,129		7,263,158		760,129
Unvested restricted stock		-		111		-		-
Series D Preferred Stock		-		6,004,957		-		-
Series E Preferred Stock		668,111		-		-		-
Warrants - RES		23,146		20,294		-		-
Convertible Debt		97,269		97,269		-		-
Weighted average number of common shares - Diluted		12,329,611		6,882,760		7,263,158		760,129
Earnings per Share
Continuing operations - Basic	$	0.40	$	9.36	$	(1.28)	$	(5.25)
Discontinued operations - Basic		-		-		-		0.86
Total - Basic Earnings per Share	$	0.40	$	9.36	$	(1.28)	$	(4.39)
Continuing operations - Diluted	$	0.37	$	1.17	$	(1.28)	$	(5.25)
Discontinued operations - Diluted		-		-		-		0.86
Total - Diluted Earnings per Share	$	0.37	$	1.17	$	(1.28)	$	(4.39)

(1) The earnings or loss attributable to noncontrolling interest is allocated between continuing and discontinued operations for the purpose of the EPS calculation

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2017	2016	2017	2016
Outstanding stock options	481	865	481	865
Unvested restricted stock	15,269	-	7,677	161
Warrants - RES	-	-	96,587	576,923
Warrants - Employees	66,153	66,153	66,153	66,153
Series C Preferred Stock	-	-	-	1,204,564
Series D Preferred Stock	-	-	1,957,300	57,185
Series E Preferred Stock	-	-	450,239	-
Convertible debt	-	-	97,269	-
LTIP partnership units (1)	98,989	101,213	100,095	101,213
CHLP partnership units (1)	65,920	46,074	58,539	46,074
Total potentially dilutive securities excluded from the denominator	246,812	214,305	2,834,340	2,053,138

(1) LTIP and partnership units of CHLP have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS. All LTIP units were cancelled effective June 28, 2017 (see Note 12).

NOTE 15.  COMMITMENTS AND CONTINGENCIES

Management Agreements

Our TRS engages eligible independent contractors as property managers for each of our hotels in accordance with the requirements for qualification as a REIT.  The hotel management agreements provide that the management companies have control of all operational aspects of the hotels, including employee-related matters. The management companies must generally maintain each hotel under their management in good repair and condition and perform routine maintenance, repairs, and minor alterations. Additionally, the management companies must operate the hotels in accordance with the national franchise agreements that cover the hotels, which includes, as applicable, using franchisor sales and reservation systems and abiding by the franchisors’ marketing standards.  The management agreements generally require the TRS to fund debt service, working capital needs, and capital expenditures and to fund the management companies’third-party operating expenses, except those expenses not related to the operation of the hotels. The TRS also is responsible for obtaining and maintaining certain insurance policies with respect to the hotels.

Each of the management companies employed by the TRS at June 30, 2017 receive a base monthly management fee of 3.0% to 3.5% of gross hotel revenue, with incentives for performance which increase such fee to a maximum of 5.0%.  Base management fees totaled  $440and $452, respectively, for the three months ended June 30, 2017 and 2016, and $764 and $851, respectively, for the six months ended June 30, 2017 and 2016, all of which was included in continuing operations as hotel and property operations expense.  Incentive management fees, included in continuing operations in their entirety, totaled $8 and $0, respectively, for the three months ended June 30, 2017 and 2016, and $33 and $21, respectively, for the six months ended June 30, 2017 and 2016.

The management agreements generally have initial terms of one to three years and renew for additional terms of one year unless either party to the agreement gives the other party written notice of termination at least 90 days before the end of a term. The Company may terminate a management agreement, subject to cure rights, if certain performance metrics tied to both individual hotel and total managed portfolio performance are not met. The Company may also terminate a management agreement with respect to a hotel at any time without reason upon payment of a termination fee. The management agreements terminate with respect to a hotel upon sale of the hotel, subject to certain notice requirements.

32

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Franchise Agreements

As of June 30, 2017, 17 of our 18 wholly owned properties operate under franchise licenses from national hotel companies.  Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue. The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements.  Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term.  Franchise fee expense totaled $947 and $884,  for the three months ended June 30, 2017 and 2016, respectively,  and $1,615 and $1,643, for the six months ended June 30, 2017 and 2016, respectively, all of which was included in continuing operations as hotel and property operations expense.

Leases

The Company has no land lease agreements in place related to properties owned at June 30, 2017. Land lease expense related to properties previously owned totaled $0 and $30, respectively, for the three months ended June 30, 2017 and 2016,  and $9 and $53, respectively, for the six months ended June 30, 2017 and 2016, all of which was included in continuing operations as hotel and property operations expense.

The Company entered into three new office lease agreements in 2016, replacing all existing office lease agreements which expired in 2016. These leases expire in 2019 through 2021 and have combined rent expense of approximately $157 annually.  Office lease expense totaled $39 and $48 in the three months ended June 30, 2017 and 2016, respectively, and $77 and $94 in the six months ended June 30, 2017 and 2016, respectively, and is included in general and administrative expense.

Litigation

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties.  We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us.  The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

NOTE 16.  SUBSEQUENT EVENTS

On July 17, 2017, the Company entered into hotel purchase agreements to purchasethreeTexas properties, the Fairfield Inn & Suites El PasoAirport for $16,100, the TownePlace Suites AustinNorth Tech Ridge for $21,750, and the Residence Inn Austin Airport for $21,750.  The closing of these acquisitions is subject to customary closing conditions including accuracy of representations and warranties and compliance with covenants and obligations.  The closings of the El Paso and Austin Airport properties are expected to occur in the late third quarter of 2017 while the closing of the Austin North Tech Ridge property is expected to occur in the first quarter of 2018.  However, there can be no guarantee that these transactions will close.  Should the Company close on these acquisitions, the Company may accelerate the disposition of up to five more of the legacy assets.

The Company’s common stock began trading on the NYSE MKT under its current symbol “CDOR” beginning at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our audited consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2016 and our unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q.

References to “we,” “our,” “us,” and the “Company” refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

Forward-Looking Statements

Certain information both included and incorporated by reference in this Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on assumptions that management has made in light of experience in the business in which we operate, as well as management’s perceptions of historical trends, current conditions, expected future developments, and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control), and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions.

Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies, and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative thereof or other variations thereon or comparable terminology. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in: economic conditions generally and in the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of capital, risks associated with debt financing, interest rates, competition, supply and demand for hotel rooms in our current and proposed market areas, policies and guidelines applicable to real estate investment trusts, and other risks and uncertainties described herein, and in our filings with the Securities and Exchange Commission (“SEC”) from time to time.  These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein.  We caution readers not to place undue reliance on any forward-looking statements included in this report which speak only as of the date of this report.

Background

Condor Hospitality Trust, Inc. (“CDOR,” “Condor,” or the “Company”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014.  CDOR is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high quality select service, limited service, extended stay, and compact full service hotels.  As of June 30, 2017, the Company owned 19 hotels, representing 2,260 rooms, in 11 states, including one hotel owned through an 80% interest in an unconsolidated joint venture (“Atlanta JV”).

We conduct our business through a traditional umbrella partnership REIT, or UPREIT, in which our hotel properties are owned by our operating partnership, Condor Hospitality Limited Partnership and its subsidiaries (“CHLP”), for which we serve as general partner. As of June 30, 2017, we owned an approximate 99.4% ownership interest in CHLP.  In the future, CHLP may issue limited partnership interests to third parties from time to time in connection with our acquisition of hotel properties or the raising of capital.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, CHLP and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned

34

subsidiaries (“the TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels.  CHLP,  the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. 

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.  The results of the hotels acquired in and since 2015, because of their locations and chain scale, are expected to be less seasonal in nature than our legacy portfolio of assets.

Overview

The Company continues to execute its stated strategy with multiple noteworthy accomplishments in the second quarter of 2017.  In the second quarter of 2017, the Company successfully closed an increase to its secured credit facility to $150.0 million, closed on the sale of three legacy assets, and declared and paid its fifth consecutive common dividend.  Subsequent to the close of the quarter, the Company executed an agreement to acquire three Marriott-branded Hotels in Texas and transferred its common stock to the NYSE MKT.  Management believes all of these achievements have positioned the company extremely well to continue to deliver shareholder value.

The key second quarter 2017 accomplishments are further detailed below:

Revenue:Condor’s second quarter 2017 revenue from continuing operations was $14.3 million compared to $14.2 million in the same 2016 period.

Net Earnings:Second quarter net earnings attributable to common shareholders was $4.7 million, or $0.40 per basic and $0.37 per diluted share, compared to $7.1 million, or $9.36 per basic and $1.17 per diluted share for the same 2016 period.

4.4% New Investment Platform RevPAR Growth:For the second quarter, Revenue per Available Room (“RevPAR”) for the 11 hotels considered the new investment platform hotels (includes the Hampton Inn & Suites Lake Mary acquired in 2017, the four Home2 Suites acquired in 2017, the two Alofts acquired in 2016, the three hotels acquired in 2015, and the Hilton Garden Inn acquired in 2012) increased by 4.4% to $102.09 from $97.74 for the same period in 2016 (comparable operating results given for these hotels include results prior to the Company’s ownership based on information obtained from the prior owners).  The increase is attributable to a 1.3% increase in Average Daily Rate (“ADR”) over the same period 2016 and a 3.1% increase in occupancy.

Increased Secured Revolving Credit Facility to $150 Million:  On May 12, 2017, the Company announced that it had successfully closed on an increase to its senior secured revolving credit facility from $90.0 million to $150.0 million.  The revolving credit facility now provides for up to $150.0 million of committed borrowing capacity and continues to include an accordion feature that would allow the Company to increase the size of the facility up to $400.0 million with additional lender commitments.

Closed Two Hotel Acquisitions, the Home2 Suites Memphis/Southaven and the Hampton Inn & Suites Lake Mary:  On April 17, 2017, the Company announced that it had closed on the acquisition of the Home2 Suites Memphis/Southaven (Mississippi) for $19.0 million.  This purchase completed the Company’s acquisition of the four Home2 Suites hotels announced in January of 2017.  On June 20, 2017, the Company announced that it had closed on the acquisition of the 130-room Hampton Inn and Suites in Lake Mary, Florida for $19.3 million just 51 days after the signing of the purchase contract.  The closing of the Hampton Inn and Suites Lake Mary represented the tenth high-quality premium-branded select-service hotel acquired in the past six quarters.  The Company now owns 11 high-quality, premium-branded select service hotels with an average age of 4 years.

Sold Three Legacy Assets:  In the second quarter of 2017, the Company continued to successfully dispose of legacy assets at what the Company considers to be attractive valuations.  The Company sold three assets in the second quarter resulting in $13.3 million of gross proceeds.  Year-to-date the Company has sold five legacy assets totaling $20.1 million in gross proceeds.  Currently, the Company has placed under contract two additional legacy hotels; however, there can be no guarantee these transactions will close.  The Company has announced that due to the

35

signing of the contact to acquire three hotels in Texas, with one of these assets expected to close in 2018, the Company may accelerate the disposition of up to five more of the legacy assets.  Should the Company close on the new acquisitions and decide to accelerate additional legacy hotel dispositions, the Company would anticipate to have sold or have under contract to be sold these additional assets by year-end 2017. 

Declared and Paid Second Quarter Common Dividend:  On June 13, 2017, the Board of Directors declared a common stock dividend of $0.195 per share related to the second quarter of 2017.  This represents $0.78 per share on an annualized basis and a yield of 7.5% based on Condor’s closing stock price prior to the announcement.  The second quarter dividend was paid on July 7, 2017 to shareholders of record on June 30, 2017.

Subsequent to the close of the first quarter, the Company achieved the following significant accomplishments:

Executed Agreement to Acquire Three Marriott-Branded Hotels in Texas:On July 18, 2017, the Company announced that it had executed agreements to purchase a portfolio of three Marriott-branded hotels for $59.6 million.  The portfolio hotels are: the Fairfield Inn & Suites El Paso Airport, the TownePlace Suites Austin North Tech Ridge, and the Residence Inn Austin Airport.  The Company expects that the hotels will continue to be managed by Aimbridge Hospitality.  This acquisition presents a unique opportunity to acquire three high-quality hotels that fit squarely within our investment strategy of investing in newer, premium-branded select-service assets in secondary markets.  The hotels have an average age of less than two years, have a design aesthetic that we believe appeals to the modern traveler, and are located in growing, attractive secondary markets.  We expect to close the acquisition of the Fairfield Inn & Suites and Residence Inn in the third quarter of 2017 and the TownePlace Suites in early 2018. 

Transferred Common Stock to the NYSE MKT and Rang the Opening Bell of the New York Stock Exchange:On July 21, 2017, President and Chief Executive Officer Bill Blackham accompanied by the Executive team rang the opening bell of the New York Stock Exchange to celebrate the Company’s transfer of trading of its common stock from the NASDAQ Stock Market to the NYSE MKT.  Mr. Blackham was joined by Senior Vice President and Chief Financial Officer Jonathan Gantt, Senior Vice President and Chief Operating Officer Jeff Dougan, Chief Accounting Officer Arinn Cavey, and General Counsel Lauren Green, together with other key Condor team members and alliance partners.  The Company's common stock trades under the trading symbol "CDOR", its previous trading symbol, on the NYSE MKT and began trading at the opening bell on Friday, July 21, 2017.

Outlook and Performance

The hotel sector headlines continue to focus on the continued deceleration of Revenue per Available Room (“RevPAR”) growth and this headline is reinforced by RevPAR outlooks for the remainder of 2017 detailed by many of our public peers.  We believe that our unique investment strategy of focusing on the secondary markets will deliver outperformance in the near-term.  More specifically, we expect that the secondary markets we target, defined as the top 100 Metropolitan Statistical Areas (“MSAs”) with a particular focus on the top 20-60 MSAs, will deliver higher than national average RevPAR growth.  The combination of slower supply growth combined with increasing demand due to continued economic expansion in these markets should lead to RevPAR outperformance, as evidenced by our RevPAR performance for the first and second quarters of 2017.  Factors that might affect our performance include those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 and other documents that we may file with the SEC in the future. We will continue to monitor lodging demand and rates in our markets, our third-party hotel managers, and our performance overall.  The Company currently expects to continue the positive momentum of the first half of 2017 through the end of the year.

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Hotel Property Portfolio and Activity

Hotel Property Portfolio

The following table sets forth certain information with respect to the hotels owned by us as of June 30, 2017:

Brand	City	State	Rooms
New Investment Platform
Hilton Garden Inn	Dowell	Maryland	100
Hotel Indigo	Atlanta (Airport)	Georgia	142
SpringHill Suites	San Antonio (Downtown)	Texas	116
Courtyard by Marriott	Jacksonville	Florida	120
Aloft	Leawood-Overland Park	Kansas	156
Aloft	Atlanta (Downtown) (1)	Georgia	254
Home 2 Suites	Lexington (2)	Kentucky	103
Home 2 Suites	Round Rock (2)	Texas	91
Home 2 Suites	Tallahassee (2)	Florida	132
Home 2 Suites	Southaven (2)	Mississippi	105
Hampton Inn and Suites	Lake Mary (2)	Florida	130
			1,449
Legacy Hotels Held for Use
Comfort Suites	South Bend	Indiana	135
Comfort Suites	Fort Wayne	Indiana	127
Comfort Inn & Suites	Warsaw	Indiana	71
Quality Inn	Solomons	Maryland	59
Super 8	Creston	Iowa	121
Supertel Inn	Creston	Iowa	41
			554
Legacy Hotels Held for Sale
Quality Inn	Morgantown	West Virginia	81
Days Inn	Bossier City	Louisiana	176
			257
		Total Rooms	2,260

(1) This property is owned through an 80% interest in our unconsolidated Atlanta JV

(2) This property was newly acquired in 2017

All of our propertiesare encumbered by either our credit facility or by mortgage debt at June 30, 2017.

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Acquisitions

In the six months ended June 30, 2017, the Company acquired five wholly owned properties, including, on March 24, 2017, the Home2 Suites Lexington University / Medical Center (Kentucky), the Home2 Suites Austin / Round Rock, and the Home 2 Suites Tallahassee State Capitol; on April 14, 2017, the Home2 Suites Memphis / Southaven; and on June 19, 2017, the Hampton Inn & Suites Orlando / Lake Mary.  The allocations of purchase price based on fair value was as included in the table below (in thousands). 

	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt originated at acquisition		Issuance of CHLP partnership units		Net cash
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Total		$	6,022	$	80,002	$	7,033	$	98	$	(155)	$	93,000	$	82,863	$	285	$	9,852

(1) The Lake Mary purchase price is subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieves a stipulated hotel net operating income level in 2017.  This contingent consideration is included in the purchase price allocation at its estimated fair value on the date of the acquisition.

The total purchase price of $93.0 million for these hotels was funded with the assumption of one loan with an aggregate outstanding principal balance of $9.1 million, draws on the credit facility totaling $73.8 million, the issuance of 1,211,648 partnership units from CHLP with a total value at issuance of $0.3 million, and cash of $9.8 million. The assumed loan bears interest at a fixed rate of 4.54%, requires monthly principal and interest payments of approximately $0.05 million, and matures on August 1, 2024.

The Company had no acquisitions of wholly owned properties during the six months ended June 30, 2016.

Additionally, on July 17, 2017, the Company entered into hotel purchase agreements to purchase three Texas properties, the Fairfield Inn & Suites El Paso Airport for $16.1 million, the TownePlace Suites Austin North Tech Ridge for $21.8 million, and the Residence Inn Austin Airport for $21.8 million.  The closing of these acquisitions is subject to customary closing conditions including accuracy of representations and warranties and compliance with covenants and obligations.  The closings of the El Paso and Austin Airport properties are expected to occur in the late third quarter of 2017 while the closing of the Austin North Tech Ridge property is expected to occur in the first quarter of 2018.  However, there can be no guarantee that these transactions will close. 

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Dispositions

Consistent with our strategic repositioning, the following hotel sales were executed in the six months ended June 30, 2017:

			Condor	Number of	Gross proceeds
Date of sale	Location	Brand	lender	rooms	(in thousands)
03/27/2017	New Castle, PA	Comfort Inn	Credit facility	79		2,500
03/28/2017	Billings, MT	Super 8	Credit facility	106		4,250
04/03/2017	Harlan, KY	Comfort Inn	Unencumbered	61		1,850
04/18/2017	Lafayette, IN	Comfort Suites	Credit facility	62		3,885
05/17/2017	Key Largo, FL	Key West Inn	Credit facility	40		7,600
			Total	348	$	20,085

All net proceeds from the hotel dispositions in 2017 to date were used to repay borrowings under the Company’s $150.0 million credit facility with the exception of the net proceeds from the sale of Harlan, which was unencumbered at the time of its sale.  In the three months ended June 30, 2016, seven hotels with a total of 447 rooms were sold for gross proceeds of $16.6 million, and net proceeds, after expenses and debt repayment, of $4.6 million.  In the six months ended June 30, 2016, 11 hotels with a total of 872 rooms were sold for gross proceeds of $26.0 million, and net proceeds, after expenses and debt repayment, of $8.4 million. 

Based on the criteria discussed in the footnotes to the consolidated financial statements, as of June 30, 2017, the Company had two hotels classified as held for sale.  At the beginning of 2017, the Company had seven hotels held for sale and during the three and six months ended June 30, 2017 sold two and five properties, respectively.  None of the hotels reclassified as held for sale since the Company’s adoption of ASU 2014-08 on October 1, 2014 represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.  As a result, only hotels classified as held for sale prior to October 1, 2014 (excluding those subsequently reclassified as held for use), the last of which was sold in January 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations.

As previously discussed, the Company currently has three properties under contract for purchase.  Should the Company close on these acquisitions, the Company may accelerate the disposition of up to five additional legacy assets.  Should these assets be reclassified as held for sale in future periods, the Company may recognize impairment expense at the time of reclassification.

Operating Performance Metrics

The following tables present our same property occupancy,  Average Daily Rate (“ADR”), and RevPAR for all our hotels owned at June 30, 2017.  Same property occupancy, ADR, and RevPAR reflect the performance of hotels during the entire period, regardless of our ownership during the period presented.  Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us.  The performance metrics for the hotel acquired through our Atlanta JV, also presented below, reflect 100% of the operating results of the property, including our interest and the interest of our partner.

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	Three months ended June 30,
	2017					2016
	Occupancy	ADR		RevPAR		Occupancy	ADR		RevPAR
Wholly owned new investment platform properties	82.90%	$	121.02	$	100.33	81.11%	$	118.23	$	95.90
Atlanta Aloft JV	84.16%	$	131.12	$	110.35	78.31%	$	135.88	$	106.41
Total New investment platform	83.13%	$	122.81	$	102.09	80.62%	$	121.24	$	97.74
Legacy hotels held for sale	50.83%	$	50.71	$	25.78	52.09%	$	47.33	$	24.65
Legacy hotels held for use	71.94%	$	80.13	$	57.65	65.44%	$	79.20	$	51.83
Total Legacy	65.32%	$	72.95	$	47.65	61.21%	$	70.60	$	43.21
Total portfolio as of June 30, 2017	76.75%	$	107.61	$	82.59	73.64%	$	106.11	$	78.15

	Six months ended June 30,
	2017					2016
	Occupancy	ADR		RevPAR		Occupancy	ADR		RevPAR
Wholly owned new investment platform properties	80.99%	$	121.69	$	98.56	78.39%	$	117.11	$	91.81
Atlanta Aloft JV	83.34%	$	133.09	$	110.92	73.92%	$	139.52	$	103.13
Total New investment platform	81.40%	$	123.73	$	100.72	77.61%	$	120.85	$	93.79
Legacy hotels held for sale	43.67%	$	49.23	$	21.50	47.28%	$	46.06	$	21.78
Legacy hotels held for use	69.09%	$	75.67	$	52.28	59.55%	$	76.97	$	45.84
Total Legacy	61.10%	$	69.73	$	42.60	55.70%	$	68.73	$	38.28
Total portfolio as of June 30, 2017	74.13%	$	107.78	$	79.89	69.70%	$	105.82	$	73.76

In the new investment platform hotels, total RevPAR increased by 4.4% in the second quarter of 2017, driven by increases in both ADR of 1.3% and occupancy of 3.1%.  Within this same portfolio, total RevPAR increased 7.4% in 2017 year-to-date through the second quarter, also driven by both increases in ADR of 2.4% and occupancy of 4.9%.  The largest increases in RevPAR for these hotels in both periods related to the San Antonio SpringHill Suites, the Lexington Home2 Suites, the Tallahassee Home2 Suites, and the Lake Mary Hampton Inn and Suites.  At the SpringHill Suites, the increase was driven both by increased convention business following the completion in the third quarter of 2016 of a significant expansion and renovation of the convention center as well as increased government business following a focused sales effort to increase this sector.  At the Lexington Home2 Suites, the increase was driven by an increased relationship with the University of Kentucky as well as a soft 2016 during a period of absorption of the opening of a new hotel nearby.  At the Tallahassee Home2 Suites, the increase in RevPAR was primarily the result of a changed meeting schedule used by the state legislature combined with increased awareness of the property by both area colleges and government travelers.  At the Lake Mary Hampton Inn and Suites, 2016 results were impacted by ongoing renovations.

In the legacy held for use portfolio of hotels, total RevPAR increased by 11.2% in the second quarter of 2017, driven by increases in both ADR of 1.2% and occupancy of 9.9%.  Within this same portfolio, total RevPAR increased 14.0% in 2017 year-to-date through the second quarter, driven by an increase in occupancy of 16.0% slightly offset by a decrease in ADR of 1.7%.  These increases in RevPAR were driven both by the completion of renovations that were ongoing in 2016 in three hotels in Indiana and an increase in construction business in one hotel.

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Results of Operations

Comparison of the three months ended June 30, 2017 to the three months ended June 30, 2016 (in thousands)

	Three months ended June 30,
	2017		2016		Variance
Revenue	$	14,252	$	14,155	$	97
Hotel and property operations expense		(9,224)		(9,889)		665
Depreciation and amortization expense		(1,769)		(1,289)		(480)
General and administrative expense		(1,511)		(1,277)		(234)
Acquisition and terminated transactions expense		(215)		(53)		(162)
Net gain on disposition of assets		4,852		8,856		(4,004)
Equity in earnings of joint venture		25		-		25
Net gain on derivatives and convertible debt		227		162		65
Other income (expense), net		(39)		23		(62)
Interest expense		(1,092)		(1,248)		156
Loss on extinguishment of debt		-		(976)		976
Impairment loss, net		(479)		(121)		(358)
Income tax expense		(35)		-		(35)
Net earnings	$	4,992	$	8,343	$	(3,351)

Revenue

Revenue between the periods remained relatively stable in total, increasing by $97, or 0.7%.  Revenue from properties acquired after the second quarter of 2016 totaled $6,027 during the three months ended June 30, 2017 while revenue decreased by $7,037 as a result of decreased revenue from held for sale and sold properties.  Revenue related to held for use properties increased in total by $1,107 as a result of the changes in RevPAR on the new investment platform hotels and legacy held for use hotels discussed above.

Expenses

Hotel and property operations expense decreased by $665, which was driven by decreased expenses from held for sale or sold properties of $4,908, partially offset by expenses from newly acquired properties of $3,499 in the three months ended June 30, 2017.  In totality, hotel and operations expenses decreased as a percentage of total revenue to 64.7% and 69.9% for the three months ended June 30, 2017 and 2016, respectively.  This decrease was both a result of increased ADR in our hotel portfolio and because the legacy hotels that remain in our portfolio and new investment platform hotels have higher operating margins than the hotels that were sold during and between the periods.

Depreciation expense increased by $480 between the periods as a result of an increase in the value of the Company’s held for use hotel property portfolio between the periods (from $111,361 gross investment at June 30, 2016 to $206,790 gross investment at June 30, 2017), largely due to the five acquisitions made during 2017 to date with values totaling $93,000.

Despite an increase in debt balances between the periods (from $70,263 at June 30, 2016 to 94,063 at June 30, 2017), interest expense decreased by $156.  Interest expense was favorably impacted by a decrease in the weighted average interest rate on total debt outstanding between the periods, from 5.16% at June 30, 2016 to 4.02% at June 30, 2017, largely as a result of the lower than historical interest rate obtained on the credit facility refinancing in the first quarter of 2017.

General and administrative expense increased by $234 between the periods largely as a result of increased payroll costs as well as professional fees primarily related to control evaluation procedures undertaken relative to the new management companies engaged by the Company, partially offset by period over period savings on the Company’s Directors and Officers insurance coverage.

Acquisition and terminated transaction costs will fluctuate period to period based on our acquisition activities.  Acquisition costs typically consist of transfer taxes, legal fees, and other costs associated with acquiring a hotel

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property as well as transactions that were terminated during the year and expense incurred pursuing potential acquisitions.  The increase in these expenses between the periods of $162 was a result of increased acquisition activity in 2017, including the consummation of two acquisitions during the second quarter.

Net Gain on Disposition of Assets

In the three months ended June 30, 2017, three hotels were sold with gains totaling $5,031. In the three months ended June 30, 2016, seven hotels were sold with gains totaling $8,886.

Loss on Extinguishment of Debt

The loss on the extinguishment of debt that was incurred in the second quarter of 2016 was a result of prepayment penalties upon the disposal of a properties encumbered by the Company’s Morgan Stanley debt.  There were no prepayment penalties incurred in the second quarter of 2017.

Impairment Loss, net

In the three months ended June 30, 2017, we incurred $479 of impairment losses. In the three months ended June 30, 2016, we recognized impairment losses totaling $121.  All impairments recognized in both periods related either to hotels held for sale or sold at some point during the periods.

Income Tax Expense

As of June 30, 2017 and 2016 and throughout the three months then ended, a full valuation allowance was recorded against the Company’s net deferred tax asset due to the uncertainty of realization because of historical operating losses. As such, no income tax expense or benefit was recorded in the three months ended June 30, 2017 or 2016 with the exception of $35 recorded in the second quarter of 2017 for alternative minimum tax related to the use of net operating losses during the period.  Management believes the combined federal and state income tax rate for the TRS will be approximately 38% and income tax benefit or expense will vary based on the taxable earnings or loss of the TRS.

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Comparison of the six months ended June 30, 2017 to the six months ended June 30, 2016 (in thousands)

	Six months ended June 30,
	2017		2016
	Continuing operations and Total		Continuing operations		Discontinued operations		Total		Continuing operations variance
Revenue	$	24,613	$	26,658	$	6	$	26,664	$	(2,045)
Hotel and property operations expense		(16,837)		(19,600)		(4)		(19,604)		2,763
Depreciation and amortization expense		(2,820)		(2,698)		-		(2,698)		(122)
General and administrative expense		(3,003)		(2,725)		-		(2,725)		(278)
Acquisition and terminated transactions expense		(717)		(147)		-		(147)		(570)
Equity transactions expense		(343)		-		-		-		(343)
Net gain on disposition of assets		4,849		12,223		681		12,904		(7,374)
Equity in earnings of joint venture		136		-		-		-		136
Net gain on derivatives and convertible debt		402		6,279		-		6,279		(5,877)
Other income (expense), net		(40)		2		-		2		(42)
Interest expense		(2,063)		(2,577)		(5)		(2,582)		514
Loss on extinguishment of debt		(800)		(1,149)		-		(1,149)		349
Impairment loss, net		(750)		(914)		-		(914)		164
Income tax expense		(35)		-		-		-		(35)
Net earnings	$	2,592	$	15,352	$	678	$	16,030	$	(12,760)

Revenue

Revenue from continuing operations between the periods decreased by $2,045, or 7.7%.  Revenue from properties acquired after the second quarter of 2016 totaled $7,735 during the six months ended June 30, 2017 while revenue decreased by $12,128 as a result of decreased revenue from held for sale and sold properties included in continuing operations.  Revenue related to held for use properties increased in total by $2,348 as a result of the changes in RevPAR on the new investment platform hotels discussed above.

Expenses

Hotel and property operations expense from continuing operations decreased by $2,763, which was driven by decreased expenses from held for sale or sold properties included in continuing operations of $9,056, partially offset by expenses from newly acquired properties of $4,617 in the six months ended June 30, 2017.  In totality, hotel and operations expenses from continuing operations decreased as a percentage of total revenue to 68.4% and 73.5% for the six months ended June 30, 2017 and 2016, respectively.  This decrease was both a result of increased ADR in our hotel portfolio and because the legacy hotels that remain in our portfolio and new investment platform hotels have higher operating margins than the hotels that were sold during and between the periods.

Depreciation expense increased by $122 between the periods as a result of an increase in the value of the Company’s held for use hotel property portfolio between the periods as discussed above, largely due to the five acquisitions made during 2017 to date with values totaling $93,000.

Despite an increase in debt balances between the periods as discussed above, interest expense decreased by $514.  Interest expense was favorably impacted by a decrease in the weighted average interest rate on total debt outstanding between the periods, from 5.16% at June 30, 2016 to 4.02% at June 30, 2017, largely as a result of the lower than historical interest rate obtained on the credit facility refinancing in the first quarter of 2017.

General and administrative expense increased by $278 between the periods largely as a result of increased payroll costs as well as professional fees primarily related to control evaluation procedures undertaken relative to the new management companies engaged by the Company, partially offset by period over period savings on the Company’s Directors and Officers insurance coverage.

Acquisition and terminated transaction costs will fluctuate period to period based on our acquisition activities.  Acquisition costs typically consist of transfer taxes, legal fees, and other costs associated with acquiring a hotel property as well as transactions that were terminated during the year and expense incurred pursuing potential

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acquisitions.  The increase in these expenses between the periods of $570 was a result of increased acquisition activity in 2017, including the consummation of five acquisitions during the first two quarters of the year.

Equity transaction costs totaled $343, all of which was incurred in the first quarter of 2017 as a result of the one-time non-cash expense of $289 associated with the exchange of warrants as well as expenses associated with this transaction.

Net Gain/(Loss) on Disposition of Assets

In the six months ended June 30, 2017, five hotels were sold with gains totaling $5,031. In the six months ended June 30, 2016, five hotels were sold with gains totaling $12,945.

Net Gain on Derivatives and Convertible Debt

In the six months ended June 30, 2017, the Company recognized a net gain on derivatives and convertible debt of $402, including both a gain on convertible debt of $265 and a gain on derivatives of $137.  In the six months ended June 30, 2016, the Company recognized a net gain totaling $6,279 primarily as a result of a decrease in the Company’s stock price, which in turn decreased the value assigned to the conversion feature of the Series C Preferred Stock and the outstanding common stock warrants, partially offset by a loss of $179 on the fair value of the convertible debt entered into on March 16, 2016 due to an increase in stock price from the date that note was entered into through June 30, 2016.

Loss on Extinguishment of Debt

The Company incurred a loss on the extinguishment of debt of $800 in the first quarter of 2017 as a result of the refinancing of a significant portion of the Company’s existing debt with the credit facility during the period.  The loss on the extinguishment of debt that was incurred in the first two quarters of 2016 was a result of prepayment penalties upon the disposal of a properties encumbered by the Company’s Morgan Stanley debt.

Impairment Loss, net

In the six months ended June 30, 2017, we incurred $750 of impairment losses.  In the six months ended June 30, 2016, we recognized impairment losses totaling $914.  All impairments recognized in both periods related either to hotels held for sale or sold at some point during the periods.

Income Tax Expense

As of June 30, 2017 and 2016 and throughout the six months then ended, a full valuation allowance was recorded against the Company’s net deferred tax asset due to the uncertainty of realization because of historical operating losses. As such, no income tax expense or benefit was recorded in the six months ended June 30, 2017 or 2016 with the exception of $35 recorded in the second quarter of 2017 for alternative minimum tax related to the use of net operating losses during the period.  Management believes the combined federal and state income tax rate for the TRS will be approximately 38% and income tax benefit or expense will vary based on the taxable earnings or loss of the TRS.

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Non-GAAP Financial Measures

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

Funds from Operations (“FFO”) & Adjusted FFO (“AFFO”)

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

We consider FFO and AFFO to be useful additional measures of performance for an equity REIT because they facilitate an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, we believe that FFO and AFFOprovide a meaningful indication of our performance.

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The following table reconciles net earnings to FFO and AFFO for the three and sixmonths ended June 30, 2017 and 2016 (in thousands). All amounts presented include both continuing and discontinued operations as well as our portion of the results of our unconsolidated Atlanta JV.

	Three months ended				Six months ended
	June 30,				June 30,
Reconciliation of Net earnings to FFO and AFFO	2017		2016		2017		2016
Net earnings	$	4,992	$	8,343	$	2,592	$	16,030
Depreciation and amortization expense		1,769		1,289		2,820		2,698
Depreciation and amortization expense from JV		247		-		658		-
Net gain on disposition of assets		(4,852)		(8,856)		(4,849)		(12,904)
Net loss on disposition of assets from JV		2		-		3		-
Impairment loss, net		479		121		750		914
FFO		2,637		897		1,974		6,738
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(271)		(1,057)		(11,874)		(18,797)
FFO attributable to common shares and partnership units		2,366		(160)		(9,900)		(12,059)
Net gain on derivatives and convertible debt		(227)		(162)		(402)		(6,279)
Net loss on derivative from JV		2		-		2		-
Acquisition and terminated transactions expense		215		53		717		147
Equity transactions expense		-		-		343		-
Loss on debt extinguishment		-		976		800		1,149
Stock-based compensation and LTIP expense		80		70		157		139
Amortization of deferred financing fees		280		174		416		349
Non-recurring dividends above stated rates declared and undeclared and in kind dividends deemed on preferred stock		127		12		11,030		16,739
AFFO attributable to common shares and partnership units	$	2,843	$	963	$	3,163	$	185

Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), Adjusted EBITDA, and Hotel EBITDA

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

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

The Company further excludes general and administrative expenses, other non-operating income or expense, and certain hotel and property operations expenses that are not allocated to individual properties in assessing hotel performance (primarily certain general liability and other insurance costs, land lease costs, and office and banking fees) from Adjusted EBITDA to calculate Hotel EBITDA.  Hotel EBITDA is similar to the non-GAAP measure of Property Operating Income (“POI”) presented in filings prior to the September 30, 2016 Form 10-Qexcept that Hotel EBITDA also excludes the unallocated hotel and property operations expenses previously included in POI.  Hotel EBITDA, as presented, may not be comparable to similarly titled measures of other companies. 

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

The following table reconciles net earnings to EBITDA, Adjusted EBITDA, and Hotel EBITDA for the three and six months ended June 30, 2017 and 2016 (in thousands). All amounts presented include both continuing and discontinued operationsas well as our portion of the results of our unconsolidated Atlanta JV.

	Three months ended				Six months ended
	June 30,				June 30,
Reconciliation of Net earnings to EBITDA, Adjusted EBITDA, and Hotel EBITDA	2017		2016		2017		2016
Net earnings	$	4,992	$	8,343	$	2,592	$	16,030
Interest expense		1,092		1,248		2,063		2,582
Interest expense from JV		297		-		902		-
Loss on debt extinguishment		-		976		800		1,149
Income tax expense		35		-		35		-
Depreciation and amortization expense		1,769		1,289		2,820		2,698
Depreciation and amortization expense from JV		247		-		658		-
EBITDA		8,432		11,856		9,870		22,459
Net gain on disposition of assets		(4,852)		(8,856)		(4,849)		(12,904)
Net loss on disposition of assets from JV		2		-		3		-
Impairment loss, net		479		121		750		914
Net gain on derivatives and convertible debt		(227)		(162)		(402)		(6,279)
Net loss on derivative from JV		2		-		2		-
Stock-based compensation and LTIP expense		80		70		157		139
Acquisition and terminated transactions expense		215		53		717		147
Equity transactions expense		-		-		343		-
Adjusted EBITDA		4,131		3,082		6,591		4,476
General and administrative expense, excluding stock comp and LTIP expense		1,431		1,207		2,846		2,586
Other expense (income), net		39		(23)		40		(2)
Unallocated hotel and property operations expense		65		162		197		278
Hotel EBITDA	$	5,666	$	4,428	$	9,674	$	7,338
Revenue	$	14,252	$	14,155	$	24,613	$	26,664
JV revenue		1,851		-		4,840		-
Condor and JV revenue	$	16,103	$	14,155	$	29,453	$	26,664
Hotel EBITDA as a percentage of revenue		35.2%		31.3%		32.8%		27.5%

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Liquidity, Capital Resources, and Equity Transactions

Liquidity Requirements

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our credit facility, and the release of restricted cash upon the satisfaction of usage requirements.  At June 30, 2017, the Company had $5.9 million of cash and cash equivalents on hand and $19.0 million of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to June 30, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1.3 million through September 30, 2018.  We also presently expect to invest approximately $4.0 million to $5.0 million in capital expenditures related to hotel properties we currently own through September 30, 2018.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.

Sources and Uses of Cash

Cash provided by Operating Activities.  Our cash provided by operations was $4.0 million and $2.2 million for the six months ended June 30, 2017 and 2016, respectively.  The increase in operating cash flows was the result of an increase in net income, after adjustments for non-cash items, of $0.3 million as well as differences in the changes in operating assets and liabilities between the periods, none of which were individually significant.

Cash provided by (used in) Investing Activities.  Our cash flows from investing activities were ($64.4) million and $24.0 million for the six months ended June 30, 2017 and 2016, respectively.  The decrease in these cash flows in 2017 was primarily the result of increased cash expenditures related to hotel acquisitions totaling $83.6 million and decreased net proceeds from the sale of properties of $5.7 million between the periods.

Cash provided by (used in) Financing Activities.  Our cash flows from financing activities were $58.1 million and ($12.1) million for the six months ended June 30, 2017 and 2016, respectively.  This increase was the result of increased cash flows from equity issuances, which included the issuance of common stock of $45.9 million in the first quarter of 2017 and the net cash flows from preferred stock issuances and redemptions in the first quarter of 2016 of $8.8 million.  Additionally, the Company had increased net cash inflows related to debt activity in the first two quarters of 2017 of $35.8 million resulting from increased debt issuances related to the properties acquired and credit facility during the period, including consideration of the payment of related deferred financing costs and early extinguishment penalties.

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Significant Equity Transactions

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock. The terms of the Series D Preferred Stock provided for automatic conversion following certain future common stock offerings, and also provided for potential additional payments to the holders depending on the sales price of common stock in the offerings. As a result of the voluntary conversion, the holders are no longer entitled to the potential payments. To induce the holders of the Series D Preferred Stock to voluntarily convert their shares, the Company issued the holders $9,250 in face value of a new series of preferred stock, the Series E Preferred Stock.

The terms of the Series E Preferred Stock are discussed in Note 10, Preferred Stock, to our consolidated interim financial statements.

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5. No fractional shares of common stock were issued as fractional shares were settled in cash.

On March 29, 2017, the Company closed an underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50.  Net proceeds, after the payment of related expenses, from this offering totaled  $45.9 million.

Subsequent to the end of the quarter, the Company’s common stock began trading on the NYSE MKT under its current symbol “CDOR” beginning at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market.

Outstanding Indebtedness

Significant Debt Transactions

On March 1, 2017, a significant portion of the Company’s debt (including all debt outstanding at December 31, 2016 with the exception of the two variable rate Western Alliance Bank loans and the two fixed rate Great Western Bank loans) was refinanced with the credit facility that matures on March 1, 2020.  The credit agreement was entered into with KeyBank National Association, as administrative agent and lender, KeyBanc Capital Markets Inc. and The Huntington National Bank, as joint leader arrangers, and other lenders and agents party thereto.

The original credit agreement provided for a $90.0 million senior secured credit facility and includes an accordion feature that would allow the credit facility to be increased to $400.0 million with additional lender commitments. On May 11, 2017, the Company closed on an increase in the credit facility from $90.0 million to $150.0 million with the credit facility continuing to retain its $400.0 million accordion feature.  Available borrowing capacity under the credit facility is based on a borrowing base formula for the pool of hotel properties securing the facility. As of the closing date, the collateral pool consisted of 14 hotel properties and total available borrowing capacity under the credit facility was$41.05 million.  At June 30, 2017, following the subsequent purchases and sales of hotels subsequent to March 1, 2017 and the common stock equity raise, the collateral pool consisted of 14 hotel properties andtotal available borrowing capacity under the credit facility totaled $73.7 million.

The credit facility is guaranteed by the Company and its material subsidiaries that do not have stand-alone financing. Borrowings under the credit facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage). The credit facility matures in March 2020 and has twoone-year extension options, subject to certain conditions, including the completion of specific capital achievements. The credit facility contains customary representations and warranties, covenants and events of default.

Upon the closing of the credit facility, $34.25 million was immediately drawn down to repay existing debt and related expenses.  Prior to June 30, 2017, net proceeds from the Company’s hotel sales were used to pay down a total of $17.2 on the credit facility, proceeds from the credit facility totaling $74.8 were used to fund the Company’s

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acquisitions plus related expenses, and a portion of the proceeds from the Company’s common stock offering totaling $37.0 million was used to pay down the credit facility.

In connection with the acquisition of the Home2 Suites Memphis / Southaven, on April 14, 2017 the Company assumed an existing securitized loan on the property with outstanding principal totaling approximately $9.1 million.  The loan bears interest at a fixed rate of 4.54%, required monthly principal and interest payments of $0.05 million, and matures on August 1, 2024.

Outstanding Debt

At June 30, 2017, we had long-term debt of $93.6 million associated with assets held for use with a weighted average term to maturity of 3.5 years and a weighted average interest rate of 4.02%.  Of this total, at June 30, 2017, $24.7 million was fixed rate debt with a weighted average term to maturity of 5.4 years and a weighted average interest rate of 4.41% and $68.9 million was variable rate debt with a weighted average term to maturity of 2.8 years and a weighted average interest rate of 3.88%. At December 31, 2016, we had long-term debt of $57.4 million associated with assets held for use with a weighted average term to maturity of 2.9 years and a weighted average interest rate of 4.89%. Of this total, at December 31, 2016, $26.1 million was fixed rate debt with a weighted average term to maturity of 2.8 years and a weighted average interest rate of 4.78% and $31.3 million was variable rate debt with a weighted average term to maturity of 2.9 years and a weighted average interest rate of 4.98%.

Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below based on its contractual maturity although the balances are expected to be repaid within one year upon the sale of the related hotel properties. Aggregate annual principal payments on debt for the remainder of 2017 and thereafter are as follows:

	Held for sale		Held for use		Total
Remainder of 2017	$	-	$	509	$	509
2018		-		1,057		1,057
2019		-		1,105		1,105
2020		445		68,822		69,267
2021		-		13,867		13,867
Thereafter		-		8,258		8,258
Total	$	445	$	93,618	$	94,063

Financial Covenants

The Company’s debt agreements contain requirements as to the maintenance of minimum levels of debt service and fixed charge coverage, required loan-to-value and leverage ratios, required levels of tangible net worth, and place certain restrictions on dividends.  As of June 30, 2017, we were in compliance with our financial covenants.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. As of June 30, 2017, we are not in default of any of our loans.

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Contractual Obligations

Below is a summary of certain obligations that will require capital as of June 30, 2017 (in thousands):

			Payments due by period
Contractual obligations	Total		Remainder of  2017		2018-2019		2020-2021		After 2022
Long-term debt including interest (1)	$	106,806	$	2,399	$	9,594	$	85,574	$	9,239
Office leases		484		79		297		108		-
Total contractual obligations	$	107,290	$	2,478	$	9,891	$	85,682	$	9,239

(1) Interest rate payments on our variable rate debt have been estimated using interest rates in effect at March 31, 2017

Long-term debt and office lease payments above include only amounts related to properties classified as held for use.  Future debt payments, including interest, related to the two held for sale properties that are expected to be sold within the next 12 months of $0.5 million are not included in the table above.

We have various standing or renewable contracts with vendors. These contracts are all cancelable with immaterial or no cancellation penalties. Contract terms are generally one year or less.  We also have management agreements in place for the management and operation of our hotel properties.

Off Balance Sheet Financing Transactions

We have not entered into any off balance sheet financing transactions.

Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that effect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies, are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

Recent Accounting Standards

See Note 1, Organization and Summary of Significant Accounting Policies, to our consolidated interim financial statements for additional information relating to recently adopted and recently issued accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that effect market-sensitive instruments.  At June 30, 2017, our market risk arises primarily from interest rate risk relating to variable rate borrowings and the market risk related to our convertible debt and the embedded redemption right in the Series E Preferred Stock that fair value will fluctuate following changes in the Company’s common stock price or changes in interest rates.

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Interest Rate Sensitivity

The table below provides information about financial instruments that are sensitive to changes in interest rates.  The table presents scheduled maturities, including the amortization of principal and related weighted-average interest rates for the debt maturing in each specified period, excluding $0.4 million of debt related to hotel properties held for sale (dollars in thousands):

	2017			2018			2019			2020			2021			Thereafter			Total
Fixed rate debt	$	344		$	715		$	747		$	778		$	13,867		$	8,258		$	24,709
Average fixed interest rate		4.38	%		4.38	%		4.38	%		4.38	%		4.33	%		4.54	%		4.41	%
Variable rate debt	$	165		$	342		$	358		$	68,044		$	-		$	-		$	68,909
Average variable interest rate		4.46	%		4.46	%		4.46	%		3.87	%		-	%		-	%		3.88	%
Total debt	$	509		$	1,057		$	1,105		$	68,822		$	13,867		$	8,258		$	93,618
Total average interest rate		4.41	%		4.41	%		4.41	%		3.87	%		4.33	%		4.54	%		4.02	%

At June 30, 2017, we have an interest rate cap in place which caps the 30-day LIBOR interest rate on our credit facility (June 30, 2017 balance on the credit facility of $54.8 million) at 2.5%. We do not intend to enter into derivative or interest rate transactions for speculative purposes.

At June 30, 2017, approximately 26.4% of our outstanding debt, excluding debt related to hotel properties held for sale, is subject to fixed interest rates, while 73.6% of our debt is subject to floating rates.  Assuming no increase in the level of our variable debt outstanding at June 30, 2017, if interest rates increased by 1.0% our cash flow related to hotel properties held for use would decrease by approximately $0.7 million per year.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation was performed under the supervision of management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the rules promulgated under the Securities and Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2017, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 was (a) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosures and (b) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control Over Financial Reporting

There have been no changes to our internal control over financial reporting during our most recent fiscal quarter that have materially effected, or are reasonably likely to materially effect, our internal controls over financial reporting.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties.  We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us.  The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

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ITEM 1A.  RISK FACTORS

There have been no material changes from the risk factors disclosed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2016.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

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ITEM 6.  EXHIBITS

3.1	Amended and Restated Articles of Incorporation of the Company, as amended (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 24, 2017)
3.2	Articles of Amendment (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 24, 2017)
3.3	Bylaws of the Company, as amended (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 28, 2017)
10.1	Hotel Management Agreement dated as of April 14, 2017 between TRS MEM Southcrest, LLC and Vista Host Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A (Commission file number 001-34087) dated March 24, 2017).
10.2	Purchase and Sale Agreement dated as of April 29, 2017 between Condor Hospitality Limited Partnership and SI Lake Mary, LP. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated April 29, 2017)
10.3	First Amendment to Credit Agreement dated as of May 11, 2017 among Condor Hospitality Limited Partnership, as Borrower, the Company and the other subsidiary guarantors party thereto, as Guarantors, Keybank National Association and the other lenders party thereto, as Lenders, and Keybank National Association, as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 11, 2017)
10.4	Hotel Management Agreement dated as of June 19, 2017 between TRS MCO Village, LLC and Peachtree Hospitality Management, LLC. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 19, 2017)
10.5	Form of Director Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 19, 2017)
10.6	Amendment of Employment Agreement dated June 28, 2017 between J. William Blackham and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 28, 2017)
31.1*	Section 302 Certificate of Chief Executive Office
31.2*	Section 302 Certificate of Chief Financial Officer
32.1*	Section 906 Certifications of Chief Executive Officer and Chief Financial Officer
101.1*	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements.

*  Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Condor Hospitality Trust, Inc.
August 7, 2017
	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer
	/s/ Jonathan Gantt
	Jonathan Gantt
	Senior Vice President and Chief Financial Officer

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, J. William Blackham, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2017 of Condor Hospitality Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 7, 2017	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jonathan Gantt, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2017 of Condor Hospitality Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 7, 2017	/s/ Jonathan Gantt
	Jonathan Gantt
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Condor Hospitality Trust, Inc. on Form 10-Q for the period ended June 30, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, J. William Blackham, Chief Executive Officer of Condor Hospitality Trust Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Condor Hospitality Trust, Inc. at the dates and for the periods indicated.

August 7, 2017	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Condor Hospitality Trust, Inc., on Form 10-Q for the period ended June 30, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Jonathan Gantt, Chief Financial Officer of Condor Hospitality Trust, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Condor Hospitality Trust, Inc. at the dates and for the periods indicated.

August 7, 2017	/s/ Jonathan Gantt
	Jonathan Gantt
	Chief Financial Officer

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Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Period Focus	Q2
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Entity Registrant Name	CONDOR HOSPITALITY TRUST, INC.
Entity Central Index Key	0000929545
Current Fiscal Year End Date	--12-31
Trading Symbol	cdor
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,630,357

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Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets
Investment in hotel properties, net	$ 187,737	$ 96,158
Investment in unconsolidated joint venture	8,772	9,036
Cash and cash equivalents	5,930	8,326
Restricted cash, property escrows	4,542	5,350
Accounts receivable, net of allowance for doubtful accounts of $25 and $21	1,727	1,416
Prepaid expenses and other assets	1,614	1,666
Derivative assets, at fair value	339
Investment in hotel properties held for sale, net	3,800	18,713
Total Assets	214,461	140,665
Liabilities
Accounts payable, accrued expenses, and other liabilities	6,882	4,698
Dividends payable	2,267	1,125
Derivative liabilities, at fair value		8
Convertible debt, at fair value	1,050	1,315
Long-term debt, net of deferred financing costs	90,176	56,775
Long-term debt related to hotel properties held for sale, net of deferred financing costs	421	5,945
Total Liabilities	100,796	69,866
Shareholders' Equity
Common stock, $.01 par value, 200,000,000 shares authorized; 11,628,139 and 762,590 shares outstanding	116	8
Additional paid-in capital	228,069	118,655
Accumulated deficit	(125,843)	(112,024)
Total Shareholders' Equity	112,392	67,972
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $786 and $2,008	1,273	2,827
Total Equity	113,665	70,799
Total Liabilities and Equity	214,461	140,665
Series D Preferred Stock [Member]
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:		$ 61,333
Series E Preferred Stock [Member]
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:	$ 10,050

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Accounts receivable, allowance for doubtful accounts	$ 25	$ 21
Preferred stock, shares authorized	40,000,000	40,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares outstanding	11,628,139	762,590
Noncontrolling interest in consolidated partnership, redemption value	$ 786	$ 2,008
Series D Preferred Stock [Member]
Preferred stock, annual dividend rate		6.25%
Preferred stock, shares authorized		6,700,000
Preferred stock, par value		$ 0.01
Preferred stock, shares outstanding		6,245,156
Preferred stock, liquidation preference		$ 63,427
Series E Preferred Stock [Member]
Preferred stock, annual dividend rate	6.25%
Preferred stock, shares authorized	925,000
Preferred stock, par value	$ 0.01
Preferred stock, shares outstanding	925,000
Preferred stock, liquidation preference	$ 9,250

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Consolidated Statements Of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue
Room rentals and other hotel services	$ 14,252	$ 14,155	$ 24,613	$ 26,658
Operating Expenses
Hotel and property operations	9,224	9,889	16,837	19,600
Depreciation and amortization	1,769	1,289	2,820	2,698
General and administrative	1,511	1,277	3,003	2,725
Acquisition and terminated transactions	215	53	717	147
Equity transactions			343
Total operating expenses	12,719	12,508	23,720	25,170
Operating income	1,533	1,647	893	1,488
Net gain on disposition of assets	4,852	8,856	4,849	12,223
Equity in earnings of joint venture	25		136
Net gain on derivatives and convertible debt	227	162	402	6,279
Other income (expense), net	(39)	23	(40)	2
Interest expense	(1,092)	(1,248)	(2,063)	(2,577)
Loss on debt extinguishment		(976)	(800)	(1,149)
Impairment loss, net	(479)	(121)	(750)	(914)
Earnings from continuing operations before income taxes	5,027	8,343	2,627	15,352
Income tax expense	35		35
Earnings from continuing operations	4,992	8,343	2,592	15,352
Gain from discontinued operations, net of tax				678
Net earnings	4,992	8,343	2,592	16,030
Earnings attributable to noncontrolling interest	(67)	(178)	(17)	(567)
Net earnings attributable to controlling interests	4,925	8,165	2,575	15,463
Dividends declared and undeclared and in kind dividends deemed on preferred stock	(271)	(1,057)	(11,874)	(18,797)
Net earnings (loss) attributable to common shareholders	$ 4,654	$ 7,108	$ (9,299)	$ (3,334)
Earnings per Share
Continuing operations - Basic	$ 0.40	$ 9.36	$ (1.28)	$ (5.25)
Discontinued operations - Basic				0.86
Total - Basic Earnings per Share	0.40	9.36	(1.28)	(4.39)
Continuing operations - Diluted	0.37	1.17	(1.28)	(5.25)
Discontinued operations - Diluted				0.86
Total - Diluted Earnings per Share	$ 0.37	$ 1.17	$ (1.28)	$ (4.39)

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Consolidated Statements Of Equity - USD ($) shares in Thousands, $ in Thousands	Series D Preferred Stock [Member] Accumulated Deficit [Member]	Series D Preferred Stock [Member] Parent [Member]	Series D Preferred Stock [Member]	Series E Preferred Stock [Member] Accumulated Deficit [Member]	Series E Preferred Stock [Member] Parent [Member]	Series E Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2015							$ 38	$ 8	$ 138,428	$ (105,858)	$ 32,616	$ 1,879	$ 34,495
Balance, shares at Dec. 31, 2015							3,803	760
Stock-based compensation									54		54		54
Preferred dividends declared	$ (1,139)	$ (1,139)	$ (1,139)
Long-term incentive plan												85	85
Redemption of Series A and Series B Preferred Stock							$ (8)		(7,390)	(5,107)	(12,505)		(12,505)
Redemption of Series A and Series B Preferred Stock, shares							(803)
Exchange of Series C Preferred and issuance of Series D							$ 61,351		(12,517)	(20,417)	28,417		28,417
Exchange of Series C Preferred and issuance of Series D Preferred Stock, shares							3,245
Net earnings										15,463	15,463	567	16,030
Balance at Jun. 30, 2016							$ 61,381	$ 8	118,575	(117,058)	62,906	2,531	65,437
Balance, shares at Jun. 30, 2016							6,245	760
Balance at Dec. 31, 2016							$ 61,333	$ 8	118,655	(112,024)	67,972	2,827	70,799
Balance, shares at Dec. 31, 2016							6,245	763
Stock-based compensation								$ 1	71		72		72
Stock-based compensation, shares								88
Preferred dividends declared	$ (650)	$ (650)	$ (650)	$ (194)	$ (194)	$ (194)
Long-term incentive plan												85	85
Conversion of Series D Preferred to common stock and issuance of Series E Preferred							$ (51,283)	$ 60	61,273	(11,030)	(980)		(980)
Conversion of Series D Preferred to common stock and issuance of Series E Preferred, shares							(5,320)	6,005
Issuance of common stock								$ 47	45,841		45,888		45,888
Issuance of common stock, shares								4,772
Fractional common shares settled in reverse stock split									$ (1)		$ (1)		(1)
Issuance of common units												$ 285	285
Cancellation of LTIP units									1,941		1,941	(1,941)
Common stock dividends declared ($0.39 dividends per share)										(4,520)	$ (4,520)		(4,520)
Warrant exchange									$ 289		289		289
Net earnings										2,575	2,575	$ 17	2,592
Balance at Jun. 30, 2017							$ 10,050	$ 116	$ 228,069	$ (125,843)	$ 112,392	$ 1,273	$ 113,665
Balance, shares at Jun. 30, 2017							925	11,628

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Consolidated Statements Of Equity (Parenthetical)	6 Months Ended
	Jun. 30, 2017 $ / shares
Consolidated Statements Of Equity [Abstract]
Common stock dividends declared, per share	$ 0.39

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net earnings	$ 2,592	$ 16,030
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization expense	2,820	2,698
Net gain on disposition of assets	(4,849)	(12,904)
Net gain on derivatives and convertible debt	(402)	(6,279)
Equity in earnings of joint venture	(136)
Amortization of deferred financing costs	416	349
Loss on extinguishment of debt	800	1,149
Impairment loss	750	914
Stock-based compensation and long term incentive plan expense	157	139
Warrant issuance costs	289	12
Changes in operating assets and liabilities:
Increase in assets	(341)	(1,150)
Increase in liabilities	1,895	1,283
Net cash provided by operating activities	3,991	2,241
Cash flows from investing activities:
Additions to hotel properties	(1,554)	(1,890)
Distribution in excess of cumulative earnings from joint venture	400
Hotel acquisitions	(83,619)
Proceeds from sale of hotel assets	19,300	24,957
Net change in capital expenditure escrows	1,033	920
Net cash provided by (used in) investing activities	(64,440)	23,987
Cash flows from financing activities:
Deferred financing costs	(3,550)	(21)
Proceeds from long-term debt	109,000	10,040
Principal payments on long-term debt	(87,422)	(27,313)
Debt early extinguishment penalties	(454)	(939)
Proceeds from common stock issuance	45,888
Series A and B Preferred Stock redemption, including accumulated dividends		(20,167)
Series D Preferred Stock issuance		28,930
Series E Preferred Stock issuance costs	(1,130)
Cash dividends paid to common shareholders	(2,402)
Cash dividends paid to preferred shareholders	(1,820)	(2,623)
Other items	(57)	(6)
Net cash provided by (used in) financing activities	58,053	(12,099)
Increase (decrease) in cash and cash equivalents	(2,396)	14,129
Cash and cash equivalents, beginning of period	8,326	4,870
Cash and cash equivalents, end of period	5,930	18,999
Supplemental cash flow information:
Interest paid	1,651	2,279
Income taxes paid	88
Schedule of noncash investing and financing activities:
Fair value of CHLP common units issued in acquisitions	285
In kind dividends deemed on preferred stock	9,900	$ 20,218
Debt assumed in acquisitions	$ 9,096

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Organization And Summary Of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Organization And Summary Of Significant Accounting Policies [Abstract]

Organization And Summary Of Significant Accounting Policies

NOTE 1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Condor Hospitality Trust, Inc. (“CDOR,” “Condor,” or the “Company”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. CDOR is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high quality select service, limited service, extended stay, and compact full service hotels.  As of June 30,  2017, the Company owned 19 hotels in 11 states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).

Condor, through its wholly owned subsidiary Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (“CHLP”), for which we serve as general partner.  CHLP, including its various subsidiaries, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of 16 properties held by TRS Leasing, Inc.) and conducts all of its operations. At June 30, 2017, the Company owned 99.4% of the partnership operating units (“partnership units”) of CHLP with the remaining partnership units owned by other limited partners. The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, CHLP and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. CHLP, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. References to “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.  The results of the hotels acquired in and since 2015, because of their locations and chain scale, are expected to be less seasonal in nature than our legacy portfolio of assets.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of CHLP and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented. Certain amounts in the notes to the financial statements may be slightly different than previously reported due to rounding of fractional shares as a result of the reverse stock split.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.  These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the financial statements for the periods presented. Interim results are not necessarily indicative of full-year performance for the year ending December 31, 2017 or any future period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period.  Actual results could differ from those estimates.  Because the state of the economy and the real estate market can significantly impact hotel operating performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties and franchise fees are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment. 

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method. Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the consolidated statements of cash flows using the cumulative distributions approach. Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture. Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold prior to that balance sheet date, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

Historically, we have presented the results of operations of hotel properties that have been sold or are considered held for sale as discontinued operations in all periods presented.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 changed the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted this pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Impairment Losses

On a quarterly basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s fair value.

At the end of each reporting period, if the fair value of a held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the decision not to sell.

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code provisions, a trust which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS using the asset and liability method.  Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of available evidence, including tax planning strategies and projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain liabilities and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3: Unobservable inputs for which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions or valuation techniques may have a material effect on estimated fair value measurements.  We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings.  This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 (see Note 7).

Recently Adopted Accounting Standards

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies certain of the criteria for determining whether derivative features in a hybrid financial instrument should be separately recognized.  ASU 2014-16 is effective for fiscal years beginning after December 15, 2015 and permits either a retrospective or cumulative effect transition method.  ASU 2014-16 was adopted by the Company on January 1, 2016 and was utilized in determining the accounting for the 6.25%Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) issued in March 2016 and the 6.25% Series E Cumulative Convertible Preferred Stock (“Series E Preferred Stock”) issued in March 2017 (see Note 10).

In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance effecting both the VIE and VOE consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Company adopted this standard on January 1, 2016 and concluded that CHLP now meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company continues to consolidate CHLP. The Company’s sole significant asset is its investment in CHLP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of CHLP. All of the Company’s debt is an obligation of CHLP.  This ASU was also used in the determination of the accounting for the Atlanta JV entered into in August 2016 (see Note 4).

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the consolidated balance sheet as a direct deduction from the associated debt liability.  The Company adopted this standard on January 1, 2016 and presents all debt issuance costs as a direct deduction from the carrying value of the debt liability. Adoption of this standard was applied retrospectively for all periods presented, effecting only the presentation of the consolidated balance sheet. The adoption of this standard did not have a material impact on the Company's financial position and had no impact on the results of operations or cash flows.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard will be effective for the Company on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has begun to evaluate each of its revenue streams under the new model. Based on preliminary assessments, the Company does not expect the adoption of this guidance to materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of or accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU-2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted cash equivalents in the statement of cash flows. This guidance is effective for the Company for years beginning after December 15, 2017, including interim periods within those years and should be applied retroactively. Early adoption is permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis and we do not expect the determination to materially change the recognition of the assets and liabilities acquired. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.

Reclassifications

Certain amounts in prior year financial statements have been reclassified to conform to current year presentation.

Liquidity

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our$150,000 secured revolvingcredit facility (the “credit facility”), and the release of restricted cash upon the satisfaction of usage requirements.  At June 30, 2017, the Company had $5,930 of cash and cash equivalents on hand and $18,961 of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to June 30, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1,296 through September 30, 2018.  We alsopresently expect to invest approximately $4,000 to $5,000in capital expenditures related to hotel properties we currently own through September 30, 2018.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.

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Investment In Hotel Properties

6 Months Ended

Jun. 30, 2017

Investment In Hotel Properties [Abstract]

Investment In Hotel Properties

NOTE 2.  INVESTMENT IN HOTEL PROPERTIES

Investments in hotel properties consisted of the following at June 30, 2017 and December 31, 2016:

	As of
	June 30, 2017						December 31, 2016
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	526	$	20,043	$	20,569	$	2,392	$	14,020	$	16,412
Buildings, improvements, vehicle		4,896		165,627		170,523		23,118		85,565		108,683
Furniture and equipment		1,879		19,399		21,278		5,233		12,108		17,341
Initial franchise fees		31		1,444		1,475		194		668		862
Construction-in-progress		-		277		277		23		63		86
Investment in hotel properties		7,332		206,790		214,122		30,960		112,424		143,384
Less accumulated depreciation		(3,532)		(19,053)		(22,585)		(12,247)		(16,266)		(28,513)
Investment in hotel properties, net	$	3,800	$	187,737	$	191,537	$	18,713	$	96,158	$	114,871

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Acquisition Of Hotel Properties

6 Months Ended

Jun. 30, 2017

Acquisition Of Hotel Properties [Abstract]

Acquisition Of Hotel Properties

NOTE 3.  ACQUISITION OF HOTEL PROPERTIES

During the six months ended June 30, 2017, the Company acquired five wholly owned hotel properties.  The allocation of the purchase price based on fair value, which was determined using Level 3 fair value inputs, was as included in the table below. 

	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt originated at acquisition		Issuance of CHLP partnership units		Net cash
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Total		$	6,022	$	80,002	$	7,033	$	98	$	(155)	$	93,000	$	82,863	$	285	$	9,852

(1) The Lake Mary purchase price is subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieves a stipulated hotel net operating income level in 2017.  This contingent consideration is included in the purchase price allocation at its estimated fair value on the date of the acquisition.

The total purchase price of $93,000 for these hotels was funded with the assumption of one loan with an aggregate outstanding principal balance of $9,096, draws on the credit facility totaling $73,767, the issuance of 1,211,648 partnership units from CHLP with a total value at issuance of $285, and cash of $9,852. The assumed loan bears interest at a fixed rate of 4.54%, requires monthly principal and interest payments of $48, and matures on August 1, 2024.

During the three and six months ended June 30, 2017, included in the consolidated statement of operations from the hotels we acquired during the six months ended June 30, 2017 is revenue totaling $4,325 and $4,630, respectively, and net earnings, excluding the consideration of acquisition costs, totaling $831 and $968, respectively.

The Company had no acquisitions of wholly owned properties during the six months ended June 30, 2016.

Pro Forma Results

In addition to the five properties discussed above, the Company also entered into the Atlanta JV which then acquired one hotel in August of 2016 (see Note 4) and the Company acquired one wholly owned property, the Aloft Leawood / Overland Park (Kansas City), for a purchase price of $22,500 on December 14, 2016.  The following condensed pro forma financial data is presented as if all acquisitions completed in 2016 and 2017, including that completed by the Atlanta JV, had been completed on January 1, 2016.  Supplemental pro forma earnings were adjusted to exclude all acquisition expense recognized in the periods presented as if these acquisition costs had been incurred in prior periods but were not adjusted to remove the results of hotels sold during and between the periods.  Results for periods prior to the Company’s ownership are based on information provided by the prior owners, adjusted for differences in interest expense, depreciation expense, and management fees following the Company’s ownership.  The condensed pro forma financial data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the acquisitions had been consummated on January 1, 2016, nor do they purport to represent the results of operations for future periods.

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total revenue	$	15,442	$	20,949	$	30,594	$	39,443
Operating income	$	2,229	$	3,477	$	3,272	$	4,520
Net earnings (loss) attributable to common shareholders	$	5,127	$	7,883	$	(8,066)	$	(2,764)
Net earnings (loss) per share attributable to common shareholders - Basic	$	0.44	$	10.37	$	(1.11)	$	(3.64)
Net earnings (loss) per share attributable to common shareholders - Diluted	$	0.41	$	1.26	$	(1.11)	$	(3.64)

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Investment In Unconsolidated Joint Venture

6 Months Ended

Jun. 30, 2017

Investment In Unconsolidated Joint Venture [Abstract]

Investment In Unconsolidated Joint Venture

NOTE 4.  INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

On August 1, 2016, the Company entered into a joint venture with Three Wall Capital LLC and certain of its affiliates (“TWC”) to acquire an Aloft hotel in downtown Atlanta, Georgia for $44,550 on August 22, 2016.  The Company accounts for the Atlanta JV under the equity method.  Condor owns 80% of the Atlanta JV with TWC owning the remaining 20%.  The Atlanta JV is comprised of two companies: Spring Street Hotel Property II LLC, of which CHLP indirectly owns an 80% equity interest, and Spring Street Hotel OpCo II LLC, of which our TRS indirectly owns an 80% equity interest.  TWC owns the remaining 20% equity interest in these two companies.

The purchase price for the Atlanta Aloft was partially paid with $33,750 of proceeds from a term loan secured by the property. The term loan, obtained from LoanCore Capital Credit REIT LLC, has an initial term of 24 months with three12-month extension periods, which may be exercised at the Atlanta JV’s option subject to certain conditions and fees.  The interest rate is a floating rate calculated on the one-month LIBOR plus 5.0%, and as a condition to closing, the Atlanta JV purchased a LIBOR cap of 3.0%.  The current interest rate on the loan is 6.19%. The loan is non-recourse to the Atlanta JV, subject to specified exceptions.  The loan is also non-recourse to Condor, except for certain customary carve-outs which are guaranteed by the Company.

Under the Atlanta JV agreement, the Atlanta JV is managed by TWC in accordance with business plans and budgets approved by both partners.  Major decisions as detailed in the agreement also require joint approval.  Condor may remove TWC as manager of the Atlanta JV and appoint a new manager only upon the occurrence of certain events.  The Atlanta Aloft hotel is managed by Boast Hotel Management Company LLC (“Boast”), an affiliate of TWC.  The Atlanta JV paid to Boast total management fees of $93 and $182 for the three and six months ended June 30, 2017.

Net cash flow from the Atlanta JV will be distributed each fiscal year first with a 10% preferred return on capital contributions to Condor, second with a 10% preferred return on capital contributions to TWC, and third with any remainder distributed to the partners based on their pro-rata equity ownership. Profits are allocated in the same proportion as net cash flow. Losses are allocated based on pro-rata equity ownership. The Atlanta JV agreement also includes buy-sell rights for both members (generally after three years of hotel ownership for Condor and after five years for TWC) and Condor has a purchase option for TWC’s Atlanta JV ownership interest exercisable between the third and fifth anniversary of the hotel closing.

The following tables represent the total assets, liabilities, equity, and components of net earnings, including the Company’s share, of the Atlanta JV as of and for the three and six months ended June 30, 2017:

	As of June 30, 2017
Investment in hotel properties, net	$	48,659
Cash and cash equivalents		1,860
Restricted cash, property escrows		910
Accounts receivable, prepaid expenses, and other assets		485
Total Assets	$	51,914
Accounts payable, accrued expenses, and other liabilities	$	1,491
Land option liability		6,190
Long-term debt, net of deferred financing costs		33,268
Total Liabilities		40,949
Condor equity		8,772
TWC equity		2,193
Total Equity		10,965
Total Liabilities and Equity	$	51,914

	Three months ended June 30, 2017		Six months ended June 30, 2017
Revenue
Room rentals and other hotel services	$	3,061	$	6,050
Operating Expenses
Hotel and property operations		2,062		3,923
Depreciation and amortization		412		823
Total operating expenses		2,474		4,746
Operating income		587		1,304
Net loss on disposition of assets		(3)		(4)
Net loss on derivative		(2)		(2)
Interest expense		(523)		(1,128)
Net earnings	$	59	$	170
Condor allocated earnings	$	25	$	136
TWC allocated earnings		34		34
Net earnings	$	59	$	170

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Disposition Of Hotel Properties And Discontinued Operations

6 Months Ended

Jun. 30, 2017

Disposition Of Hotel Properties And Discontinued Operations [Abstract]

Disposition Of Hotel Properties And Discontinued Operations

NOTE 5.DISPOSITIONS OF HOTEL PROPERTIES AND DISCONTINUED OPERATIONS

As of June 30, 2017, the Company had two hotels classified as held for sale. At the beginning of 2017, the Company had seven hotels held for sale and during the three and six months ended June 30, 2017sold three and five properties, respectively.  None of the hotels reclassified as held for sale since the Company’s adoption of ASU 2014-08 on October 1, 2014 represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.  As a result, only hotels classified as held for sale prior to October 1, 2014 (excluding those subsequently reclassified as held for use),  the last of which was sold in January 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations.

In the three months ended June 30, 2017 and 2016, the Company sold three and seven hotels, respectively, resulting in total gains of $5,031 and $8,886,  respectively, all of which was included in continuing operations.  In the six months ended June 30, 2017 and 2016, the Company sold five and 11 hotels, respectively, resulting in total gains of $5,031 and $12,945,  respectively, of which $5,031 and $12,264, respectively, was included in continuing operations.  The hotels sold during the three months ended March 31, 2017 had been previously impaired and recoveries of impairment totaling $80 were recognized upon their sale.

The Company allocates interest expense to discontinued operations for debt that is to be assumed or that is required to be repaid as a result of disposal transactions. The following table sets forth the components of discontinued operations for the six months ended June 30, 2016, all of which was recognized in the first quarter of 2016:  

	Six months ended June 30, 2016
Revenue	$	6
Hotel and property operations expense		(4)
Net gain (loss) on disposition of assets		681
Interest expense		(5)
Gain from discontinued operations, net of tax	$	678
Capital expenditures	$	-

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Long-Term Debt

6 Months Ended

Jun. 30, 2017

Long-Term Debt [Abstract]

Long-Term Debt

NOTE 6.  LONG-TERM DEBT

On March 1, 2017, a significant portion of the Company’s debt (including all debt outstanding at December 31, 2016 with the exception of the two variable rate Western Alliance Bank loans and the two fixed rate Great Western Bank loans) was refinanced with the credit facility that matures on March 1, 2020.  The credit agreement was entered into with KeyBank National Association, as administrative agent and lender, KeyBanc Capital Markets Inc. and The Huntington National Bank, as joint leader arrangers, and other lenders and agents party thereto.

The original credit agreement provided for a $90,000 senior secured credit facility and includes an accordion feature that would allow the credit facility to be increased to $400,000 with additional lender commitments. On May 11, 2017, the Company closed on an increase in the credit facility from $90,000 to $150,000 with the credit facility continuing to retain its $400,000 accordion feature.  Available borrowing capacity under the credit facility is based on a borrowing base formula for the pool of hotel properties securing the facility. As of the closing date, the collateral pool consisted of 14 hotel properties and total available borrowing capacity under the credit facility was$41,050.  At June 30, 2017, following the subsequent purchases and sales of hotels subsequent to March 1, 2017(see Notes 3 and 5) and the common stock equity raise (see Note 9), the collateral pool consisted of 14 hotel properties andtotal available borrowing capacity under the credit facility totaled $73,743.

The credit facility is guaranteed by the Company and its material subsidiaries that do not have stand-alone financing. Borrowings under the credit facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage). The credit facility matures in March 2020 and has twoone-year extension options, subject to certain conditions, including the completion of specific capital achievements. The credit facility contains customary representations and warranties, covenants and events of default.

Upon the closing of the credit facility, $34,250 was immediately drawn down to repay existing debt and related expenses.  Prior to June 30, 2017, net proceeds from the Company’s hotel sales (see Note 5) were used to pay down a total of $17,218 on the credit facility, proceeds from the credit facility totaling $74,750 were used to fund the Company’s acquisitions plus related expenses (see Note 3), and a portion of the proceeds from the Company’s common stock offering totaling $37,000 (see Note 9) was used to pay down the credit facility.

Long-term debt related to wholly owned properties, including debt related to hotel properties held for sale, consisted of the following loans payable at June 30, 2017 and December 31, 2016:

Lender		Balance at June 30, 2017	Interest rate at June 30, 2017	Maturity	Amortization provision	Properties encumbered at June 30, 2017		Balance at December 31, 2016
Fixed rate debt
Great Western Bank (1)	$	14,143	4.33%	12/2021	25 years	1	$	14,326
Great Western Bank (1)		1,498	4.33%	12/2021	7 years	-		1,599
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18		9,069	4.54%	08/2024	25 years	1		-
Western Alliance Bank		-	-	-	-	-		4,806
Western Alliance Bank		-	-	-	-	-		2,803
Cantor Commercial Real Estate Lending		-	-	-	-	-		5,713
Morgan Stanley Mortgage Capital Holdings, LLC		-	-	-	-	-		912
Total fixed rate debt		24,710						30,159
Variable rate debt
Western Alliance Bank		4,824	4.46% (2)	11/2020	25 years	1		4,882
Western Alliance Bank		9,747	4.46% (2)	11/2020	25 years	1		9,863
KeyBank credit facility (3)		54,782	3.72% (4)	03/2020	Interest only	14		-
The Huntington National Bank		-	-	-	-	-		7,361
LMREC 2015 - CREI, Inc. (Latitude)		-	-	-	-	-		11,124
Total variable rate debt		69,353				18		33,230
Total long-term debt	$	94,063					$	63,389
Less: Deferred financing costs		(3,466)						(669)
Total long-term debt, net of deferred financing costs		90,597						62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $24 and $55		(421)						(5,945)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,442 and $614	$	90,176					$	56,775

(1) Both loans are collateralized by Aloft Leawood

(2)  90-day LIBORplus3.25%

(3) Total unused availability under this credit facility was $18,961at June 30, 2017; commitment fee on unused facility is 0.20%

(4) Borrowings under the facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage);  30-day LIBOR for $50,000 notional capped at 2.5% after giving effect to market rate cap (see Note 8)

Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below based on its contractual maturity although the balances are expected to be repaid within one year upon the sale of the related hotel properties. Aggregate annual principal payments on debt for the remainder of 2017 and thereafter are as follows:

	Held for sale		Held for use		Total
Remainder of 2017	$	-	$	509	$	509
2018		-		1,057		1,057
2019		-		1,105		1,105
2020		445		68,822		69,267
2021		-		13,867		13,867
Thereafter		-		8,258		8,258
Total	$	445	$	93,618	$	94,063

Financial Covenants

The Company’s debt agreements contain requirements as to the maintenance of minimum levels of debt service and fixed charge coverage, required loan-to-value and leverage ratios, required levels of tangible net worth, and place certain restrictions on dividends.  As of June 30, 2017, we were in compliance with our financial covenants.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. As of June 30, 2017, we are not in default of any of our loans.

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Convertible Debt At Fair Value

6 Months Ended

Jun. 30, 2017

Convertible Debt At Fair Value [Abstract]

Convertible Debt At Fair Value

NOTE 7.  CONVERTIBLE DEBT AT FAIR VALUE

As part of an agreement entered into on March 16, 2016 (the “Exchange Agreement”) with Real Estate Strategies, L.P. (“RES”) (see Note 10), the Company issued to RES a Convertible Promissory Note (the “Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012 initially convertible into shares of Series D Preferred Stock, which could be subsequently converted into 97,269 shares of common stock.  Following the conversion of all of the outstanding Series D Preferred Stock into common stock and the issuance of the Series E Preferred Stock on March 1, 2017, the Note was amended to be convertible directly into 97,269 shares of common stock at any time at the option of RES or automatically when the Series E Preferred Stock is required to be converted or is redeemed in whole (see Note 10).  The Note is not convertible to the extent at the time the conversion would cause RES, together with its affiliates, to beneficially own more than 49% of the voting stock of the Company.  Any conversion reduces the principal amount of the Note proportionally. 

The Company has made an irrevocable election to record this Convertible Debt in its entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of this Note. As such, gains and losses on the Note are included in net gain on derivatives and convertible debt within net earnings each reporting period. Gains (losses) related to this Note were recognized totaling $25 and $208 during the three months ended June 30, 2017 and 2016, respectively, and $265 and ($179) during the six months ended June 30, 2017 and 2016, respectively.  The fair value of the Note was determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options. The fair value of the Note on the date of issuance was determined to be equal to its principal amount. Interest expense related to this Note is recorded separately from other changes in its fair value within interest expense each period.

The following table represents the difference between the fair value and the unpaid principal balance of the Note as of June 30, 2017:

	Fair value as of June 30, 2017		Unpaid principal balance as of June 30, 2017		Fair value carrying amount over/(under) unpaid principal
6.25% Convertible Debt	$	1,050	$	1,012	$	38

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Fair Value Measurements And Derivative Instruments

6 Months Ended

Jun. 30, 2017

Fair Value Measurements And Derivative Instruments [Abstract]

Fair Value Measurements And Derivative Instruments

NOTE 8. FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Our determination of fair value measurements is based on the assumptions that market participants would use in pricing the asset or liability. At June 30, 2017, the Company’s convertible debt (see Note 7) and certain derivative instruments were the only financial instruments measured in the financial statements at fair value on a recurring basis.  Nonrecurring fair value measurements were utilized in the determination of the fair value of acquired properties in 2017 (see Note 3), in the accounting for the Company’sequity transactions that occurred in March 2016 and 2017 (see Note 10),  and in the valuation of the stock-based compensation grants (see Note 12) and impaired hotels during the three and sixmonths ended June 30, 2017 and 2016.

Derivative Instruments

Currently, the Company uses derivatives, such as interest rate swaps and caps, to manage its interest rate risk.  The fair value of interest rate positions is determined using the standard market methodology of netting discounted expected future cash receipts and payments. Variable interest rates used in the calculation of projected receipts and payments on the positions are based on expectations of future interest rates derived from observable market interest rate curves and volatilities.  Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements.  The Company believes it minimizes this credit risk by transacting with major creditworthy financial institutions.  These interest rate positions at June 30, 2017 and December 31, 2016 are as follows:

Associated debt	Type	Terms	Effective date	Maturity date		Notional amount at June 30, 2017		Notional amount at December 31, 2016
Credit facility	Cap	Caps 30-day LIBOR at 2.50%	03/2017	03/2019	$	50,000	$	-
Huntington	Swap	Swaps 30-day LIBOR + 2.25% for fixed rate of 4.13% cancellable at Company's option anytime after 11/01/2018 without penalty	11/2015	11/2020	$	-	$	7,361
Latitude	Cap	Caps 30-day LIBOR at 1.0%	03/016	06/2017	$	-	$	11,124

Additionally, prior to the execution of the Exchange Agreement (see Note 10) on March 16, 2016, which extinguished the instrument, the Company was required to bifurcate and include on the consolidated balance sheet at fair value the embedded conversion option in the 6.25%Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”) due to the presence of an antidilution provision that required an adjustment in the common stock conversion ratio should subsequent issuances of the Company’s common stock be issued below the instrument’s original conversion price of $52.00 per share.

Similarly, at December 31, 2015, prior to the execution of the Exchange Agreement, the terms of the common stock warrants issued to the holders of the Series C Preferred Stock (see Note 10) also included an antidilution provision that required a reduction in the warrant’s exercise price of $62.40 should the conversion ratio of the Series C Preferred Stock be adjusted due to its antidilution provisions. Accordingly, the warrants did not qualify for equity classification, and, as a result, the fair value of the warrants was shown as a derivative liability on the consolidated balance sheet.  With the execution of the Exchange Agreement, this provision of these warrants was effectively eliminated and the conversion price was locked permanently at its current amount on the date of the extinguishment of the Series C Preferred Stock ($12.48).  Following this modification of terms, the warrants qualified for equity classification and were reclassified to additional paid-in capital at their fair value of $611on the date of the modification.

The fair value of the derivative liabilities recognized in connection with the Series C Preferred Stock was determined using the Monte Carlo simulation method. The Monte Carlo simulation method is a generally accepted statistical method used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and its peer group and minimize standard error.

Included in the Series E Preferred Stock issued on March 1, 2017 is a redemption right that allows the Company, upon the occurrence of a Qualified Offering (defined as a single offering of common stock of at least $50,000 or up to three offerings in the aggregate of at least $75,000, all with certain minimum prices per share and a potential make whole payment required in certain scenarios), to redeem up to a total of 490,250 shares of Series E Preferred Stock for specific percentages of its liquidation preference (see Note 10).  Because this redemption right is contingent upon the occurrence of a Qualified Offering, the Company was required to bifurcate and include on the consolidated balance sheet at fair value the embedded redemption right.This option was determined to be an asset with a fair value on the date of issuance of $150 using a trinomial lattice-based model, considered a Level 3 fair value measurement.  A Qualified Offering was completed on March 29, 2017 (see Note 9).

All derivatives recognized by the Company are reported as either derivative assets or liabilities on the consolidated balance sheets and are adjusted to their fair value at each reporting date. All gains and losses on derivative instruments are included in net gain on derivatives and convertible debt and with the exception of realized gains and losses related to the interest rate instruments, which are included in interest expense on the consolidated statements of operations. Net gains (losses) of $202 and ($46) for the three months ended June 30, 2017 and 2016, respectively, and $137 and $6,458 for the six months ended June 30, 2017 and 2016, respectively, were recognized related to derivative instruments.

Recurring Fair Value Measurements

The following tables provide the fair value of the Company’s financial assets and (liabilities) carried at fair value and measured on a recurring basis:

	Fair value at
	June 30, 2017		Level 1		Level 2		Level 3
Interest rate derivatives	$	6	$	-	$	6	$	-
Series E Preferred embedded redemption option		333		-		-		333
Convertible debt		(1,050)		-		-		(1,050)
Total	$	(711)	$	-	$	6	$	(717)

	Fair value at
	December 31, 2016		Level 1		Level 2		Level 3
Interest rate derivatives	$	(8)	$	-	$	(8)	$	-
Convertible debt		(1,315)		-		-		(1,315)
Total	$	(1,323)	$	-	$	(8)	$	(1,315)

There were no transfers between levels during the three or six months ended June 30, 2017 or 2016.

The following tables present a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related gains and losses recorded in the consolidated statements of operations during the periods:

	Three months ended June 30,
	2017						2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Convertible debt
Fair value, beginning of period	$	93	$	(1,075)	$	(982)	$	(1,399)
Net gains recognized in earnings		240		25		265		208
Purchase and issuances		-		-		-		-
Sales and settlements		-		-		-		-
Gross transfers into Level 3		-		-		-		-
Gross transfers out of Level 3		-		-		-		-
Fair value, end of period	$	333	$	(1,050)	$	(717)	$	(1,191)
						-
Total unrealized gains during the period included in earnings related to instruments held at end of period	$	240	$	25	$	265	$	208

	Six months ended June 30,
		2017						2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Series C Preferred embedded derivative		RES warrant derivative		Convertible debt		Total
Fair value, beginning of period	$	-	$	(1,315)	$	(1,315)	$	(6,271)	$	(2,411)	$	-	$	(8,682)
Net gains (losses) recognized in earnings		183		265		448		4,848		1,800		(179)		6,469
Purchase and issuances		150		-		150		-		-		(1,012)		(1,012)
Sales and settlements		-		-		-		1,423		-		-		1,423
Gross transfers into Level 3		-		-		-		-		-		-		-
Gross transfers out of Level 3		-		-		-		-		611 (1)		-		611
Fair value, end of period	$	333	$	(1,050)	$	(717)	$	-	$	-	$	(1,191)	$	(1,191)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	183	$	265	$	448	$	-	$	-	$	(179)	$	(179)

(1) RES warrants were permanently reclassified to additional paid-in capital as discussed above

Fair Value of Long-Term Debt

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of debt obligations with similar credit risks. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. Both the carrying valueand estimated fair value of the Company’s long-term debt are presented net of deferred financing costs in the table below:

	Carrying value as of				Estimated fair value as of
	June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Held for use	$	90,176	$	56,775	$	90,175	$	56,842
Held for sale		421		5,945		421		6,378
Total	$	90,597	$	62,720	$	90,596	$	63,220

Impaired Hotel Properties

In the performance of impairment analysis for both held for sale and held for use properties, fair value is determined with the assistance of independent real estate brokers and through the use of operating results and revenue multiples based on the Company’s experience with hotel sales as well as available industry information.  For held for sale properties, estimated selling costs are based on our experience with similar asset sales.  These are considered Level 3 inputs.The amount of impairment and recovery of previously recorded impairment recognized in the three and six months ended June 30, 2017 and 2016 is shown in the tables below:

	Three months ended June 30,
	2017			2016
	Number of hotels		Impairment (loss) recovery	Number of hotels		Impairment (loss) recovery
Held for sale hotels:
Impairment loss	2	$	(479)	1	$	(5)
Impairment recovery	-		-	-		-
Sold hotels:
Impairment loss	-		-	1		(116)
Impairment recovery	-		-	-		-
Total net impairment loss:	2	$	(479)	2	$	(121)

	Six months ended June 30,
	2017			2016
	Number of hotels		Impairment (loss) recovery	Number of hotels		Impairment (loss) recovery
Held for sale hotels:
Impairment loss	2	$	(830)	1	$	(512)
Impairment recovery	-		-	-		-
Sold hotels:
Impairment loss	-		-	2		(402)
Impairment recovery	2		80	-		-
Total net impairment loss:	4	$	(750)	3	$	(914)

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Common Stock

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Common Stock

NOTE 9.COMMON STOCK

The Company’s common stock is duly authorized, fully paid, and non-assessable. 

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock (adjusted for the reverse stock split discussed below) at $10.40 per share pursuant to the terms of the preferred stock (see Note 10).

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash.  A total of 73 shares   were settled for $1. Unless otherwise noted, impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented.

On March 29, 2017, the Company closed an underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50. Net proceeds, after the payment of related expenses, from this offering totaled $45,888.

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Preferred Stock

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Preferred Stock

NOTE 10.PREFERRED STOCK

On March 16, 2016, the Company entered into a series of agreements providing for:

· the issuance and sale of Condor’s Series D Preferred Stock under a private transaction to SREP III Flight-Investco, L.P. (“SREP”), an affiliate of StepStone Group LP;

· the exchange of all of Condor’s outstanding Series C Preferred Stock for Series D Preferred Stock; and

· the cash redemption of all of Condor’s outstanding 8% Series A Cumulative Preferred Stock (“Series A Preferred Stock”) and 10% Series B Cumulative Preferred Stock (“Series B Preferred Stock”).

In connection with these transactions, the Company and SREP entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) dated March 16, 2016 pursuant to which Condor issued and sold 3,000,000 shares of Series D Preferred Stock to SREP on the March 16, 2016 for an aggregate purchase price of $30,000. The Stock Purchase Agreement required that $20,147 of the purchase price be deposited into an escrow account for the purpose of effecting the redemption of the Series A and Series B Preferred Stock and that the remaining amount of the purchase price be delivered to Condor. 

Simultaneously, the Company entered into the Exchange Agreement with RES pursuant to which all 3,000,000 outstanding shares of Series C Preferred Stock were exchanged for 3,000,000 shares of Series D Preferred Stock. Under the Exchange Agreement, in lieu of payment of accrued and unpaid dividends in the amount of $4,947 on the Series C Preferred Stock, Condor (a) paid to RES an amount of cash equal to $1,484, (b) issued to RES 245,156 shares of Series D Preferred Stock (such that RES, IRSA and their affiliates do not beneficially own in excess of 49% of the voting stock of Condor) and (c) issued to RES a convertible promissory note, bearing interest at 6.25% per annum, in the principal amount of $1,012 (see Note 7).

Pursuant to the Stock Purchase Agreement, on April 15, 2016, Condor redeemed all of the outstanding Series A and Series B Preferred Stock,in accordance with redemption notices issued on March16, 2016, as follows:

· all 803,270 outstanding shares of the Series A Preferred Stock at the redemption price of $10.00 per share plus $2.084940 per share in accrued and unpaid dividends (plus compounded interest) through the redemption date for a total redemption price of $9,707; and

· all 332,500 outstanding shares of the Series B Preferred Stock at the redemption price of $25.00 per share plus $6.354167 per share in accrued and unpaid dividends through the redemption date for a total redemption price of $10,425.

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock. The terms of the Series D Preferred Stock provided for automatic conversion following certain future common stock offerings, and also provided for potential additional payments to the holders depending on the sales price of common stock in the offerings. As a result of the voluntary conversion, the holders are no longer entitled to the potential payments. To induce the holders of the Series D Preferred Stock to voluntarily convert their shares, the Company issued the holders 925,000 shares of a new series of preferred stock, the Series E Preferred Stock.

The effect of these transactions on the Company’s preferred stock and the key terms of the remaining series of the Company’s preferred stock are discussed individually below.

Series A Preferred Stock

On April 15, 2016, the remaining 803,270 outstanding shares of Series A Preferred Stock were redeemed.

The difference between the recorded value of the Series A Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series A Preferred Stock plus related expenses, a total of $2,326, was recorded as a reduction of accumulated deficit during the six months ended June 30, 2016 as the amount is considered a deemed dividend on the Series A Preferred Stock. $2,288 of this amount was recorded during the three months ended March 31, 2016 upon the Series A Preferred Stock becoming mandatorily redeemable and liability classified prior to its redemption.  Of these amounts, $38 and $874 for the three and six months ended June 30, 2016, respectively, was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividends that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

Series B Redeemable Preferred Stock

On April 15, 2016, the remaining 332,500 shares of Series B Preferred Stock were redeemed.

The difference between the recorded value of the Series B Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series B Preferred Stock, a total $2,781, was recorded as a reduction of accumulated deficit during the six months ended June 30, 2016 as the amount is considered a deemed dividend on the Series B Preferred Stock.  $2,740 of this amount was recorded during the three months ended March 31, 2016 upon the Series B Preferred Stock becoming mandatorily redeemable and liability classified prior to its redemption.  Of these amounts, $41 and $911 for the three and six months ended June 30, 2016, respectively, was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earningsattributable to common shareholders in previous periods.

Series C Convertible Preferred Stock and Warrants

On March 16, 2016, the Series C Preferred Stock was extinguished under the Exchange Agreement discussed above.  Upon this extinguishment, the difference between the recorded value of the Series C Preferred Stock prior to the exchange and the fair value of the consideration received in the exchange, a total of $20,366, was recorded as a reduction of accumulated deficit as the amount is considered a deemed dividend on the Series C Preferred Stock.  Of this amount, $15,874 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

On January 24, 2017, the Company exchanged 23,160 new warrants (the “New Warrants”) to purchase common stock of the Company for 576,923 warrants (the “Old Warrants”) held by RES. The number of New Warrants issued in exchange for the Old Warrants equals the number of shares of common stock issuable upon exercise of the Old Warrants pursuant to a cashless exercise provisions of the Old Warrants. The New Warrants are exercisable for 23,160 shares of common stock, have an exercise price of $0.0065 for each common share, and expire on January 24, 2019.On the date of the exchange, the New Warrants had a fair value in excess of the Old Warrants of $289, which is reflected as other expense and an increase in additional paid-in capital as the exchange is assumed to be equivalent to the modification of an equity classified instrument.  The New Warrants remain outstanding in their entirety at June 30, 2017.

Series D Convertible Preferred Stock

Following the execution of the Stock Purchase Agreement and Exchange Agreement on March 16, 2016, there were 6,245,156 shares of Series D Preferred Stock outstanding. 

The Series D Preferred stockholders ranked senior to the Company’s common stock and any other preferred stock issuances and received preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly in arrears on each March 31,June 30, September 30, and December 31, or, if not a business day, the next succeeding business day, of the $10.00 face value per share.  Dividends on the Series D Preferred Stock accrued whether or not the Company had earnings, whether or not there were funds legally available for the payment of such dividends, whether or not such dividends were declared, and whether or not such dividends were prohibited by agreement. If the dividends on the Series D Preferred Stock had been in arrears for four consecutive quarters, then upon notice by holders of in the aggregate not less than 40% of the outstanding Series D Preferred Stock, the Company would (a) take all appropriate action reasonably within its means to maximize the assets legally available for paying such dividends and to monetize such assets (for example, but without limiting the generality of the foregoing, by selling or liquidating all of some of the Company’s assets or by selling the Company as a going concern), (b) pay out of all such assets legally available (including any proceeds from any sale or liquidation of such assets) the maximum possible amount of such unpaid dividends, and (c) thereafter, at any time and from time to time when additional assets of the Company (including any proceeds from any sale or liquidation of such assets) became legally available to pay such unpaid dividends, pay such remaining unpaid dividends until all dividends accumulated on the Series D Preferred Stock had been fully paid.  Dividends were paid when due throughout the life of the instrument.

Each share of Series D Preferred Stock was convertible, at the option of the holder, at any time into a number of shares of common stock determined by dividing the conversion price of $10.40 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. The conversion price was subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends.  Each outstanding share of Series D Preferred Stock would be converted into a number of shares of common stock determined by dividing the conversion price of $10.40 into the $10.00 face value per share, which was equal to a rate of 0.9615385 shares of common stock for each share of Series D Preferred Stock, automatically upon closing of a Qualified Offering without any further action by the holders of such shares or the Company.

The Series D Preferred Stock was redeemable by the Company at any time subject to certain restrictions, in whole or in a partial redemption of up to $30,000, at $12.00 per share on or before March 16, 2019, $13.00 per share from March 16, 2019 to March 16, 2020, and $14.00 per share on or after March 16, 2020, plus all accrued and unpaid dividends.  If a Qualified Offering had not occurred on or before September 30, 2021, holders that hold in the aggregate not less than 40% of the outstanding shares of the Series D Preferred Stock had the right to elect to have the Company fully liquidate in a commercially reasonable manner as determined by the Board of Directors of the Company to provide for liquidation distributions to the holders of the Series D Preferred Stock in an amount per share equal to $14.00 in cash plus accrued and unpaid dividends.  Once this right had been exercised and the Company had been notified, the dividend rate on the Series D Preferred Stock after September 30, 2021 would increase from 6.25% per annum to 12.5% per annum. The holders of Series D Preferred Stock voted their Series D Preferred Stock as a single class with the holders of the common stock on all matters submitted to such holders for vote or consent. For each such vote or consent, each share of Series D Preferred Stock entitled the holder to cast one vote for each whole vote (rounded to the nearest whole number) that such holder would be entitled to cast had such holder converted its Series D Preferred Stock into shares of common stock as of the date immediately prior to the record date for determining the shareholders of the Company eligible to vote on any such matter.

The fair value of the Series D Preferred Stock was determined to be equal to its face value on the date of issuance.

As discussed above, on February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock.  At the time of conversion, the Series D Preferred Stock holders were issued 925,000 shares of newly created Series E Preferred Stock.

Series ERedeemable Convertible Preferred Stock

Following the voluntary conversion of the Series D Preferred Stock on February 28, 2017, the only shares of preferred stock outstanding are925,000 shares of Series E Preferred Stock. 

The Series E Preferred Stock ranks senior to the Company’s common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly of the $10.00 face value per share. If the Company fails to pay a dividend then during the period that dividends are not paid, the dividend rate increases to 9.50% per annum. Dividends on the Series E Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement.

Each share of Series E Preferred Stock is convertible, at the option of the holder, at any time on or after February 28, 2019, into a number of shares of common stock determined by dividing the conversion price of $13.845 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. Upon liquidation, each share of Series E Preferred Stock is entitled to $10.00 per share and accrued and unpaid dividends. The conversion price is subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends. Following a specific equity offering or offerings, from time to time a number of shares of Series E Preferred Stock automatically converts into common stock if the common stock trades at 120% of the conversion price for 60 trading days, and the number of shares converted will be determined by certain trading volumes measures.

The Company has rights to redeem up to 490,250 shares of the Series E Preferred Stock at prices from 110% to 130% of its liquidation value.  The holders have put rights commencing March 16, 2021 to put the Series E Preferred Stock to the Company at 130% of its liquidation preference, which the Company can satisfy with cash or common stock. The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of Condor, related party transactions exceeding $120, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from Condor’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock or commitment or agreement to do any of the foregoing.

RES and SREP are the only shareholders of the Series E Preferred Stock.  RES and SREP are also parties to director designation agreements pursuant to which each of RES and SREP have rights to designate directors for election, the number of which is determined by the percentage voting power they have in the election of directors.  All of the directors designated by RES and SREP have been determined by the Company’s Board of Directors to be independent under applicable stock exchange rules.  However, notwithstanding that all of the directors designed by RES and SREP are independent directors under exchange rules and neither RES or SREP may alone designate a majority of the Company’s Board of Directors, because RES and SREP hold all of the Series E Preferred Stock and the directors designated by them collectively constitute a majority of the Board of Directors, as of March 31, 2017, they were deemed to have potential influence on the put and call options discussed above, and therefore the Series E Preferred Stock was at that time classified as temporary equity.  During the three months ended June 30, 2017, the Board of Directors established a special committee, which excludes the directors designated by RES and SREP, with the sole power to govern the put and call options, and as such, the Series E Preferred Stock was reclassified into permanent equity during that period.

The Series E Preferred Stock was determined to have a fair value of $9,900 on the date of issuance as measured using a trinomial lattice-based model.  From this value, the embedded redemption option (see Note 8), which was determined to be an asset with a fair value on the date of issuance of $150 using the same model, was bifurcated and will be accounted for at fair value at each period end.  These are considered Level 3 fair value measurements.  The issuance of the Series E Preferred Stock is considered an inducement to convert the Series D Preferred Stock to common stock and as such, its fair value at issuance, plus related expenses totaling $127 and $1,130 in the three and six months ended June 30, 2017, respectively, are reflected as a reduction of retained earnings and an increase in dividends declared and undeclared and in kind dividends deemed on preferred stock.

Impact of Preferred Stock on Net Earnings (Loss) Attributable to Common Shareholders

The components of dividends declared and undeclared and in kind dividends deemed on preferred stock are as follows:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Preferred A dividends accrued at stated rate	$	-	$	32	$	-	$	222
Preferred A additional deemed dividends upon redemption		-		6		-		652
Preferred B dividends accrued at stated rate		-		35		-		243
Preferred B additional deemed dividends upon redemption		-		6		-		668
Preferred C dividends accrued at stated rate		-		-		-		455
Preferred C additional deemed dividends at exchange		-		-		-		15,419
Preferred D dividends accrued at stated rate		-		978		650		1,138
Preferred D inducement to convert		127		-		11,030		-
Preferred E dividends accrued at stated rate		144		-		194		-
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$	271	$	1,057	$	11,874	$	18,797

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Noncontrolling Interest Of Common Units In CHLP

6 Months Ended

Jun. 30, 2017

Noncontrolling Interest Of Common Units CHLP [Abstract]

Noncontrolling Interest Of Common Units In CHLP

NOTE 11.  NONCONTROLLING INTEREST OF PARTNERSHIP UNITS IN CHLP

Noncontrolling interest in CHLP represents the limited partners’ proportionate share of the equity in the operating partnership and long-term incentive plan (“LTIP”) units (see Note 12).  Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of CHLP during the period. 

Our ownership interest in CHLP as of June 30, 2017 was99.4% and as of December 31, 2016 was 97.8%, which includes consideration of the partnership units of the limited partners as well as the LTIP units. At June 30, 2017 and December 31, 2016, 3,821,439 and 7,872,943 CHLP partnership units owned by minority interest holders were outstanding, respectively, which includes3,821,439 and2,609,791 partnership units held by limited partners, respectively, and 5,263,152 LTIP units outstanding at December 31, 2016 that were subsequently cancelled on June 28, 2017 (see Note 12). The combined redemption value for the partnership units and LTIP units was $786and $2,008 at June 30, 2017 and December 31, 2016, respectively.

Each limited partner of CHLP may, subject to certain limitations, require that CHLP redeem all or a portion of his or her partnership units at any time after a specified period following the date the units were acquired, by delivering a redemption notice to CHLP. When a limited partner tenders partnership units for redemption, the Company can, at its sole discretion, choose to purchase the units for either (1) a number of shares of Company common stock at a rate of one share of common stock for each 52 partnership units redeemed or (2) cash in an amount equal to the market value of the number of shares of Company common stock the limited partner would have received if the Company chose to purchase the units for common stock. No partnership units were redeemed during the three or six months endedJune 30, 2017 or 2016.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 12.  STOCK-BASED COMPENSATION

The Company previously had in place a 2006 Stock Plan which had been approved by the Company’s shareholders. The 2006 StockPlan authorized the grant of stock options, stock appreciation rights, restricted stock, and stock bonuses of up to 9,615 shares of common stock. The 2006 Stock Plan expired on December 31, 2015.  As a replacement for the 2006 Stock Plan, the Board of Directors adopted the Condor 2016 Stock Plan, which was approved by the Company’s shareholders at the annual shareholders meeting on June 15, 2016.  The 2016 Stock Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units, and other forms of stock-based compensation.  The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 461,538.  As of June 30, 2017, there were 371,012 common shares available for issuance under the 2016 Stock Plan.

Equity-based compensation is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the requisite service period. Stock-based compensation awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement. Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock and as noncontrolling interest for LTIP awards of CHLP partnership units.  The Company has elected to account for forfeitures of stock-based compensation as they occur.

Service Condition Share Awards

On March 31, 2017, the Company granted awards of13,656 restrictedshares of common stock to two executive officers for incentive performance pursuant to their annual incentive objectives.  On June 28, 2017, the Company granted an award of 73,385restricted shares of common stock awards to one executive officer.  All of the shares of restricted stock just described were issued under the 2016 Stock Plan and have five year ratable vesting periods based on continued employment.  Dividends paid on these restricted shares during the vesting period are not forfeited in the event that the shares fail to vest. The following table presents a summary of the service condition unvested share activity for the six months ended June 30, 2017:

	Shares	Weighted-average grant date fair value
Unvested at December 31, 2016	-	$	-
Granted	87,041	$	10.60
Vested	-	$	-
Forfeited	-	$	-
Unvested at June 30, 2017	87,041	$	10.60

The fair value of the service condition unvested share awards was determined based on the closing price of the Company’s common stock on the grant date.The total unrecognized compensation cost related to service condition unvested share awards at June 30, 2017 was $960, which is expected to be recognized over weighted-average remaining service period of 4.9 years.

Market Based Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain market share prices of common stock are attained.  Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan.  The executive officer will earn and be issued 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days. 

The compensation cost related to awards that are contingent upon achieving a market based criteria is measured at the fair value of the award on the date of grant using the Monte Carlo simulation, including consideration of the market criteria, and amortized on a straight line basis over the derived performance period which is also estimated using this model.  The grant date fair value of this award was determined using the following assumptions:

Volatility	25.0	%
Stock price	$                                                                 10.60
Dividend yield	7.4	%
Risk free interest rate	0.89% - 1.81% based upon expected time of vesting

The total grant date fair value of this market based share award, all of which is unrecognized compensation cost at June 30, 2017, was $1,305, which is expected to be recognized over the weighted-average remaining derived service period of 1.3 years.

Performance Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain operating results of the Company are obtained.  Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan.  For each of the Company’s fiscal years 2017 through 2021, if the Company achieves between 85% and 101% of budgeted Funds from Operations (“FFO”) as approved by the Board of Directors, the executive shall earn and be issued between 11,741 and 19,569 shares of common stock, determined on a straight-line basis based on the percentage of budgeted FFO achieved.  In addition, for any fiscal year in which the Company achieves in excess of 101% of budgeted FFO, an additional 391 shares of common stock will be earned for each percentage actual FFO exceeds 101% of budgeted FFO, up to a total of 3,910 additional shares of common stock per year.

The fair value of the performance based share awards is based on the closing price of the Company’s common stock on the grant date, discounted for estimated common stock dividends to be declared prior to the shares being issued.  The grant date occurs on an annual basis when budgeted FFO is approved by the Board of Directors.  The total grant date fair value of the 2017 portion of this performance based share award, assuming that 100% of budgeted FFO is achieved, all of which is unrecognized compensation cost at June 30, 2017, was $191, which, after adjustment for the reassessment of the performance condition at each reporting date, is expected to be recognized over theremaining service period of 0.5 years.

Warrants

On March 2, 2015, the Company granted a warrant to an executive officer of the Company outside of the 2006 Stock Plan as an inducement material to the executive’s acceptance of employment.  The Black-Scholes model was utilized at issuance for the determination of the fair value of the award.  The warrant entitled the executive to purchase a total of 101,213 authorized but previously unissued shares of the Company’s common stock at a price of (i) $9.88per share (the adjusted closing bid price of the common stock on Nasdaq on March 2, 2015) if at least one-third but not more than one-half of the shares were purchased on or prior to March 17, 2015, and (ii) $12.48 per share for shares purchased after that date. The warrant has a three-year term. The executive officer exercised the warrant in part to purchase 35,060 shares on March 11, 2015 at the price of $9.88 per share. The warrant remains exercisable for 66,153 shares at an exercise price of $12.48 per share.  As of June 30, 2017, the total unrecognized compensation cost related to these warrants was $66, which is expected to be recognized over the remaining service period of0.7years.

Long-Term Incentive Plan Awards

On March 2, 2015, the Company granted an equity award of 5,263,152 LTIP units, representing profit interests in CHLP, to an executive officer of the Company.  A Monte Carlo simulation was utilized at issuance for the determination of the fair value of the award.  The LTIP units were to be earned in one-third increments upon the Company’s common stock achieving price per share milestones of $22.75,  $29.25,  and $35.75, respectively.  Earned LTIP units were to vest in March 2018, or earlier upon a change in control of the Company, and upon vesting could be converted into CHLP partnership units which can be redeemed at the rate of one share of common stock for each 52 earned LTIP units for up to 101,213 common shares.  These LTIP units were cancelled on June 28, 2017 pursuant to an amendment of the employment agreement with the executive officer.

Investment Committee Share Compensation

Independent directors serving as members of the Investment Committee of the Board of Directors receive their monthly Investment Committee fees in the form of shares of the Company’s common stock if issuance is available under a shareholder approved stock plan, priced as the average of the closing price of the stock for the first 20 trading days of the calendar year. A total of 409 and 1,123 shares, respectively, were issued to the independent directors of the Investment Committee during the three and six months ended June 30, 2017 under the 2016 Stock Plan.  On July 15, 2016, the Company issued 1,837 shares of common stock under the 2016 Stock Plan to the independent directors of the Investment Committee for their service during the six months ended June 30, 2016.

Stock-Based Compensation Expense

The expense recognized in the consolidated financial statements for stock-based compensation, including LTIP units, related to employees and directors for the three months ended June 30, 2017 and 2016 was $80 and $70, respectively, and for the six months ended June 30, 2017 and 2016 was $157 and $139, respectively, all of which is included in general and administrative expense.

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Income Taxes

6 Months Ended

Jun. 30, 2017

Income Taxes [Abstract]

Income Taxes

NOTE 13.  INCOME TAXES

We have provided a full valuation allowance against our net deferred tax asset during all periods presented due to the uncertainty of realization resulting from past operating losses which results in no tax expense or benefit for the three and sixmonths ended June 30, 2017 and 2016 with the exception of an alternative minimum tax estimate of $35 recorded in the TRS in 2017 as a result of the application of limits on the use of net operating losses under that system of taxation. After consideration of limitations related to a change in control as defined under Internal Revenue Code Section 382 (“Section 382”) following the Company’s 2012 transactions with RES (see Note 10), the TRS’s net operating loss carryforward at June 30, 2017 as determined for federal income tax purposes was $2,020.The availability of the loss carryforwards will expire from 2022 through 2035.  The Company is currently in the process of evaluating whether the Company’s 2016 and 2017 equity transactions (see Notes 9 and 10) will require further limitation of the usage of net operating losses underSection 382.

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Earnings Per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 14.  EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities.  Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company.  Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses.  The following is a reconciliation of basic and diluted EPS:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Numerator: Basic (1)
Net earnings (loss) attributable to common shareholders:
Continuing operations	$	4,654	$	7,108	$	(9,299)	$	(3,988)
Discontinued operations		-		-		-		654
Total Net earnings (loss) attributable to common shareholders		4,654		7,108		(9,299)		(3,334)
Less: Allocation to participating securities		(20)		-		(20)		-
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	4,634	$	7,108	$	(9,319)	$	(3,334)
Numerator: Diluted (1)
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	$	4,634	$	7,108	$	(9,319)	$	(3,988)
Dividends on Series D Preferred Stock		-		978		-		-
Dividends and fair value adjustment on Series E Preferred Stock		(95)		-		-		-
Interest and fair value adjustment on Convertible Debt		(9)		(192)		-		-
Continuing operations - Diluted		4,530		7,894		(9,319)		(3,988)
Discontinued operations - Diluted		-		-		-		654
Total Diluted	$	4,530	$	7,894	$	(9,319)	$	(3,334)
Denominator
Weighted average number of common shares - Basic		11,541,085		760,129		7,263,158		760,129
Unvested restricted stock		-		111		-		-
Series D Preferred Stock		-		6,004,957		-		-
Series E Preferred Stock		668,111		-		-		-
Warrants - RES		23,146		20,294		-		-
Convertible Debt		97,269		97,269		-		-
Weighted average number of common shares - Diluted		12,329,611		6,882,760		7,263,158		760,129
Earnings per Share
Continuing operations - Basic	$	0.40	$	9.36	$	(1.28)	$	(5.25)
Discontinued operations - Basic		-		-		-		0.86
Total - Basic Earnings per Share	$	0.40	$	9.36	$	(1.28)	$	(4.39)
Continuing operations - Diluted	$	0.37	$	1.17	$	(1.28)	$	(5.25)
Discontinued operations - Diluted		-		-		-		0.86
Total - Diluted Earnings per Share	$	0.37	$	1.17	$	(1.28)	$	(4.39)

(1) The earnings or loss attributable to noncontrolling interest is allocated between continuing and discontinued operations for the purpose of the EPS calculation

The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2017	2016	2017	2016
Outstanding stock options	481	865	481	865
Unvested restricted stock	15,269	-	7,677	161
Warrants - RES	-	-	96,587	576,923
Warrants - Employees	66,153	66,153	66,153	66,153
Series C Preferred Stock	-	-	-	1,204,564
Series D Preferred Stock	-	-	1,957,300	57,185
Series E Preferred Stock	-	-	450,239	-
Convertible debt	-	-	97,269	-
LTIP partnership units (1)	98,989	101,213	100,095	101,213
CHLP partnership units (1)	65,920	46,074	58,539	46,074
Total potentially dilutive securities excluded from the denominator	246,812	214,305	2,834,340	2,053,138

(1) LTIP and partnership units of CHLP have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS. All LTIP units were cancelled effective June 28, 2017 (see Note 12).

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2017

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 15.  COMMITMENTS AND CONTINGENCIES

Management Agreements

Our TRS engages eligible independent contractors as property managers for each of our hotels in accordance with the requirements for qualification as a REIT.  The hotel management agreements provide that the management companies have control of all operational aspects of the hotels, including employee-related matters. The management companies must generally maintain each hotel under their management in good repair and condition and perform routine maintenance, repairs, and minor alterations. Additionally, the management companies must operate the hotels in accordance with the national franchise agreements that cover the hotels, which includes, as applicable, using franchisor sales and reservation systems and abiding by the franchisors’ marketing standards.  The management agreements generally require the TRS to fund debt service, working capital needs, and capital expenditures and to fund the management companies’third-party operating expenses, except those expenses not related to the operation of the hotels. The TRS also is responsible for obtaining and maintaining certain insurance policies with respect to the hotels.

Each of the management companies employed by the TRS at June 30, 2017 receive a base monthly management fee of 3.0% to 3.5% of gross hotel revenue, with incentives for performance which increase such fee to a maximum of 5.0%.  Base management fees totaled  $440and $452, respectively, for the three months ended June 30, 2017 and 2016, and $764 and $851, respectively, for the six months ended June 30, 2017 and 2016, all of which was included in continuing operations as hotel and property operations expense.  Incentive management fees, included in continuing operations in their entirety, totaled $8 and $0, respectively, for the three months ended June 30, 2017 and 2016, and $33 and $21, respectively, for the six months ended June 30, 2017 and 2016.

The management agreements generally have initial terms of one to three years and renew for additional terms of one year unless either party to the agreement gives the other party written notice of termination at least 90 days before the end of a term. The Company may terminate a management agreement, subject to cure rights, if certain performance metrics tied to both individual hotel and total managed portfolio performance are not met. The Company may also terminate a management agreement with respect to a hotel at any time without reason upon payment of a termination fee. The management agreements terminate with respect to a hotel upon sale of the hotel, subject to certain notice requirements.

Franchise Agreements

As of June 30, 2017, 17 of our 18 wholly owned properties operate under franchise licenses from national hotel companies.  Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue. The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements.  Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term.  Franchise fee expense totaled $947 and $884,  for the three months ended June 30, 2017 and 2016, respectively,  and $1,615 and $1,643, for the six months ended June 30, 2017 and 2016, respectively, all of which was included in continuing operations as hotel and property operations expense.

Leases

The Company has no land lease agreements in place related to properties owned at June 30, 2017. Land lease expense related to properties previously owned totaled $0 and $30, respectively, for the three months ended June 30, 2017 and 2016,  and $9 and $53, respectively, for the six months ended June 30, 2017 and 2016, all of which was included in continuing operations as hotel and property operations expense.

The Company entered into three new office lease agreements in 2016, replacing all existing office lease agreements which expired in 2016. These leases expire in 2019 through 2021 and have combined rent expense of approximately $157 annually.  Office lease expense totaled $39 and $48 in the three months ended June 30, 2017 and 2016, respectively, and $77 and $94 in the six months ended June 30, 2017 and 2016, respectively, and is included in general and administrative expense.

Litigation

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties.  We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us.  The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

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Subsequent Events

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

NOTE 16.  SUBSEQUENT EVENTS

On July 17, 2017, the Company entered into hotel purchase agreements to purchase three Texas properties, the Fairfield Inn & Suites El Paso Airport for $16,100, the TownePlace Suites Austin North Tech Ridge for $21,750, and the Residence Inn Austin Airport for $21,750.  The closing of these acquisitions is subject to customary closing conditions including accuracy of representations and warranties and compliance with covenants and obligations.  The closings of the El Paso and Austin Airport properties are expected to occur in the late third quarter of 2017 while the closing of the Austin North Tech Ridge property is expected to occur in the first quarter of 2018.  However, there can be no guarantee that these transactions will close.  Should the Company close on these acquisitions, the Company may accelerate the disposition of up to five more of the legacy assets.

The Company’s common stock began trading on the NYSE MKT under its current symbol “CDOR” beginning at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market.

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Organization And Summary Of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2017

Organization And Summary Of Significant Accounting Policies [Abstract]

Description Of Business

Description of Business

Condor Hospitality Trust, Inc. (“CDOR,” “Condor,” or the “Company”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. CDOR is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high quality select service, limited service, extended stay, and compact full service hotels.  As of June 30,  2017, the Company owned 19 hotels in 11 states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).

Condor, through its wholly owned subsidiary Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (“CHLP”), for which we serve as general partner.  CHLP, including its various subsidiaries, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of 16 properties held by TRS Leasing, Inc.) and conducts all of its operations. At June 30, 2017, the Company owned 99.4% of the partnership operating units (“partnership units”) of CHLP with the remaining partnership units owned by other limited partners. The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, CHLP and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. CHLP, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. References to “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters annually.  The results of the hotels acquired in and since 2015, because of their locations and chain scale, are expected to be less seasonal in nature than our legacy portfolio of assets.

Basis Of Presentation

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of CHLP and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented. Certain amounts in the notes to the financial statements may be slightly different than previously reported due to rounding of fractional shares as a result of the reverse stock split.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.  These unaudited consolidated financial statements include all adjustments considered necessary for a fair presentation of the financial statements for the periods presented. Interim results are not necessarily indicative of full-year performance for the year ending December 31, 2017 or any future period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Estimates, Risks And Uncertainties

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period.  Actual results could differ from those estimates.  Because the state of the economy and the real estate market can significantly impact hotel operating performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

Investment In Hotel Properties

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties and franchise fees are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment. 

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method. Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

Investment In Joint Venture

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the consolidated statements of cash flows using the cumulative distributions approach. Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture. Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held For Sale And Discontinued Operations

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold prior to that balance sheet date, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

Historically, we have presented the results of operations of hotel properties that have been sold or are considered held for sale as discontinued operations in all periods presented.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 changed the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted this pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Impariment Losses

Impairment Losses

On a quarterly basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s fair value.

At the end of each reporting period, if the fair value of a held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the decision not to sell.

Income Taxes

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code provisions, a trust which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS using the asset and liability method.  Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS and their respective tax bases and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled.  However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on the consideration of available evidence, including tax planning strategies and projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain liabilities and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3: Unobservable inputs for which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions or valuation techniques may have a material effect on estimated fair value measurements.  We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings.  This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 (see Note 7).

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies certain of the criteria for determining whether derivative features in a hybrid financial instrument should be separately recognized.  ASU 2014-16 is effective for fiscal years beginning after December 15, 2015 and permits either a retrospective or cumulative effect transition method.  ASU 2014-16 was adopted by the Company on January 1, 2016 and was utilized in determining the accounting for the 6.25%Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) issued in March 2016 and the 6.25% Series E Cumulative Convertible Preferred Stock (“Series E Preferred Stock”) issued in March 2017 (see Note 10).

In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance effecting both the VIE and VOE consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Company adopted this standard on January 1, 2016 and concluded that CHLP now meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company continues to consolidate CHLP. The Company’s sole significant asset is its investment in CHLP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of CHLP. All of the Company’s debt is an obligation of CHLP.  This ASU was also used in the determination of the accounting for the Atlanta JV entered into in August 2016 (see Note 4).

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the consolidated balance sheet as a direct deduction from the associated debt liability.  The Company adopted this standard on January 1, 2016 and presents all debt issuance costs as a direct deduction from the carrying value of the debt liability. Adoption of this standard was applied retrospectively for all periods presented, effecting only the presentation of the consolidated balance sheet. The adoption of this standard did not have a material impact on the Company's financial position and had no impact on the results of operations or cash flows.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard will be effective for the Company on January 1, 2018. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has begun to evaluate each of its revenue streams under the new model. Based on preliminary assessments, the Company does not expect the adoption of this guidance to materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales. Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of or accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU-2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted cash equivalents in the statement of cash flows. This guidance is effective for the Company for years beginning after December 15, 2017, including interim periods within those years and should be applied retroactively. Early adoption is permitted. The Company does not anticipate that this guidance will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis and we do not expect the determination to materially change the recognition of the assets and liabilities acquired. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.

Reclassifications

Reclassifications

Certain amounts in prior year financial statements have been reclassified to conform to current year presentation.

Liquidity

Liquidity

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our$150,000 secured revolvingcredit facility (the “credit facility”), and the release of restricted cash upon the satisfaction of usage requirements.  At June 30, 2017, the Company had $5,930 of cash and cash equivalents on hand and $18,961 of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to June 30, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1,296 through September 30, 2018.  We alsopresently expect to invest approximately $4,000 to $5,000in capital expenditures related to hotel properties we currently own through September 30, 2018.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.

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Investment In Hotel Properties (Tables)

6 Months Ended

Jun. 30, 2017

Investment In Hotel Properties [Abstract]

Schedule Of Investments In Hotel Properties

	As of
	June 30, 2017						December 31, 2016
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	526	$	20,043	$	20,569	$	2,392	$	14,020	$	16,412
Buildings, improvements, vehicle		4,896		165,627		170,523		23,118		85,565		108,683
Furniture and equipment		1,879		19,399		21,278		5,233		12,108		17,341
Initial franchise fees		31		1,444		1,475		194		668		862
Construction-in-progress		-		277		277		23		63		86
Investment in hotel properties		7,332		206,790		214,122		30,960		112,424		143,384
Less accumulated depreciation		(3,532)		(19,053)		(22,585)		(12,247)		(16,266)		(28,513)
Investment in hotel properties, net	$	3,800	$	187,737	$	191,537	$	18,713	$	96,158	$	114,871

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Acquisition Of Hotel Properties (Tables)

6 Months Ended

Jun. 30, 2017

Acquisition Of Hotel Properties [Abstract]

Schedule Of Purchase Price Allocation

	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt originated at acquisition		Issuance of CHLP partnership units		Net cash
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Total		$	6,022	$	80,002	$	7,033	$	98	$	(155)	$	93,000	$	82,863	$	285	$	9,852

(1) The Lake Mary purchase price is subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieves a stipulated hotel net operating income level in 2017.  This contingent consideration is included in the purchase price allocation at its estimated fair value on the date of the acquisition.

Schedule Of Pro Forma Results

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total revenue	$	15,442	$	20,949	$	30,594	$	39,443
Operating income	$	2,229	$	3,477	$	3,272	$	4,520
Net earnings (loss) attributable to common shareholders	$	5,127	$	7,883	$	(8,066)	$	(2,764)
Net earnings (loss) per share attributable to common shareholders - Basic	$	0.44	$	10.37	$	(1.11)	$	(3.64)
Net earnings (loss) per share attributable to common shareholders - Diluted	$	0.41	$	1.26	$	(1.11)	$	(3.64)

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Investment In Unconsolidated Joint Venture (Tables)

6 Months Ended

Jun. 30, 2017

Investment In Unconsolidated Joint Venture [Abstract]

Schedule Of Financial Position of Unconsolidated Joint Ventures

	As of June 30, 2017
Investment in hotel properties, net	$	48,659
Cash and cash equivalents		1,860
Restricted cash, property escrows		910
Accounts receivable, prepaid expenses, and other assets		485
Total Assets	$	51,914
Accounts payable, accrued expenses, and other liabilities	$	1,491
Land option liability		6,190
Long-term debt, net of deferred financing costs		33,268
Total Liabilities		40,949
Condor equity		8,772
TWC equity		2,193
Total Equity		10,965
Total Liabilities and Equity	$	51,914

Summary Of Results Of Operations Of Unconsolidated Joint Ventures

	Three months ended June 30, 2017		Six months ended June 30, 2017
Revenue
Room rentals and other hotel services	$	3,061	$	6,050
Operating Expenses
Hotel and property operations		2,062		3,923
Depreciation and amortization		412		823
Total operating expenses		2,474		4,746
Operating income		587		1,304
Net loss on disposition of assets		(3)		(4)
Net loss on derivative		(2)		(2)
Interest expense		(523)		(1,128)
Net earnings	$	59	$	170
Condor allocated earnings	$	25	$	136
TWC allocated earnings		34		34
Net earnings	$	59	$	170

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Disposition Of Hotel Properties And Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2017

Disposition Of Hotel Properties And Discontinued Operations [Abstract]

Components Of Discontinued Operations

	Six months ended June 30, 2016
Revenue	$	6
Hotel and property operations expense		(4)
Net gain (loss) on disposition of assets		681
Interest expense		(5)
Gain from discontinued operations, net of tax	$	678
Capital expenditures	$	-

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2017

Long-Term Debt [Abstract]

Summary Of Long Term Debt

Lender		Balance at June 30, 2017	Interest rate at June 30, 2017	Maturity	Amortization provision	Properties encumbered at June 30, 2017		Balance at December 31, 2016
Fixed rate debt
Great Western Bank (1)	$	14,143	4.33%	12/2021	25 years	1	$	14,326
Great Western Bank (1)		1,498	4.33%	12/2021	7 years	-		1,599
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18		9,069	4.54%	08/2024	25 years	1		-
Western Alliance Bank		-	-	-	-	-		4,806
Western Alliance Bank		-	-	-	-	-		2,803
Cantor Commercial Real Estate Lending		-	-	-	-	-		5,713
Morgan Stanley Mortgage Capital Holdings, LLC		-	-	-	-	-		912
Total fixed rate debt		24,710						30,159
Variable rate debt
Western Alliance Bank		4,824	4.46% (2)	11/2020	25 years	1		4,882
Western Alliance Bank		9,747	4.46% (2)	11/2020	25 years	1		9,863
KeyBank credit facility (3)		54,782	3.72% (4)	03/2020	Interest only	14		-
The Huntington National Bank		-	-	-	-	-		7,361
LMREC 2015 - CREI, Inc. (Latitude)		-	-	-	-	-		11,124
Total variable rate debt		69,353				18		33,230
Total long-term debt	$	94,063					$	63,389
Less: Deferred financing costs		(3,466)						(669)
Total long-term debt, net of deferred financing costs		90,597						62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $24 and $55		(421)						(5,945)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,442 and $614	$	90,176					$	56,775

(1) Both loans are collateralized by Aloft Leawood

(2)  90-day LIBORplus3.25%

(3) Total unused availability under this credit facility was $18,961at June 30, 2017; commitment fee on unused facility is 0.20%

(4) Borrowings under the facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage);  30-day LIBOR for $50,000 notional capped at 2.5% after giving effect to market rate cap (see Note 8)

Aggregate Annual Principal Payments On Debt Associated With Assets Held For Use And Held For Sale

	Held for sale		Held for use		Total
Remainder of 2017	$	-	$	509	$	509
2018		-		1,057		1,057
2019		-		1,105		1,105
2020		445		68,822		69,267
2021		-		13,867		13,867
Thereafter		-		8,258		8,258
Total	$	445	$	93,618	$	94,063

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Convertible Debt At Fair Value (Tables)

6 Months Ended

Jun. 30, 2017

Convertible Debt At Fair Value [Abstract]

Difference Between Fair Value And Unpaid Principal Balance Of Note

	Fair value as of June 30, 2017		Unpaid principal balance as of June 30, 2017		Fair value carrying amount over/(under) unpaid principal
6.25% Convertible Debt	$	1,050	$	1,012	$	38

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Fair Value Measurements And Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Measurements And Derivative Instruments [Abstract]

Schedule Of Interest Rate Swaps And Caps

Associated debt	Type	Terms	Effective date	Maturity date		Notional amount at June 30, 2017		Notional amount at December 31, 2016
Credit facility	Cap	Caps 30-day LIBOR at 2.50%	03/2017	03/2019	$	50,000	$	-
Huntington	Swap	Swaps 30-day LIBOR + 2.25% for fixed rate of 4.13% cancellable at Company's option anytime after 11/01/2018 without penalty	11/2015	11/2020	$	-	$	7,361
Latitude	Cap	Caps 30-day LIBOR at 1.0%	03/016	06/2017	$	-	$	11,124

Schedule Of Fair Value Assets And (Liabilities) Carried At Fair Value And Measured On Recurring Basis

	Fair value at
	June 30, 2017		Level 1		Level 2		Level 3
Interest rate derivatives	$	6	$	-	$	6	$	-
Series E Preferred embedded redemption option		333		-		-		333
Convertible debt		(1,050)		-		-		(1,050)
Total	$	(711)	$	-	$	6	$	(717)

	Fair value at
	December 31, 2016		Level 1		Level 2		Level 3
Interest rate derivatives	$	(8)	$	-	$	(8)	$	-
Convertible debt		(1,315)		-		-		(1,315)
Total	$	(1,323)	$	-	$	(8)	$	(1,315)

Reconciliation Of Fair Value Liabilities Measured On Recurring Basis

	Three months ended June 30,
	2017						2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Convertible debt
Fair value, beginning of period	$	93	$	(1,075)	$	(982)	$	(1,399)
Net gains recognized in earnings		240		25		265		208
Purchase and issuances		-		-		-		-
Sales and settlements		-		-		-		-
Gross transfers into Level 3		-		-		-		-
Gross transfers out of Level 3		-		-		-		-
Fair value, end of period	$	333	$	(1,050)	$	(717)	$	(1,191)
						-
Total unrealized gains during the period included in earnings related to instruments held at end of period	$	240	$	25	$	265	$	208

	Six months ended June 30,
		2017						2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Series C Preferred embedded derivative		RES warrant derivative		Convertible debt		Total
Fair value, beginning of period	$	-	$	(1,315)	$	(1,315)	$	(6,271)	$	(2,411)	$	-	$	(8,682)
Net gains (losses) recognized in earnings		183		265		448		4,848		1,800		(179)		6,469
Purchase and issuances		150		-		150		-		-		(1,012)		(1,012)
Sales and settlements		-		-		-		1,423		-		-		1,423
Gross transfers into Level 3		-		-		-		-		-		-		-
Gross transfers out of Level 3		-		-		-		-		611 (1)		-		611
Fair value, end of period	$	333	$	(1,050)	$	(717)	$	-	$	-	$	(1,191)	$	(1,191)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	183	$	265	$	448	$	-	$	-	$	(179)	$	(179)

(1) RES warrants were permanently reclassified to additional paid-in capital as discussed above

Schedule Of Carrying Value And Estimated Fair Value Of Long-Term Debt

	Carrying value as of				Estimated fair value as of
	June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Held for use	$	90,176	$	56,775	$	90,175	$	56,842
Held for sale		421		5,945		421		6,378
Total	$	90,597	$	62,720	$	90,596	$	63,220

Schedule Of Impairment And Recovery Of Previously Recorded Impairment

	Three months ended June 30,
	2017			2016
	Number of hotels		Impairment (loss) recovery	Number of hotels		Impairment (loss) recovery
Held for sale hotels:
Impairment loss	2	$	(479)	1	$	(5)
Impairment recovery	-		-	-		-
Sold hotels:
Impairment loss	-		-	1		(116)
Impairment recovery	-		-	-		-
Total net impairment loss:	2	$	(479)	2	$	(121)

	Six months ended June 30,
	2017			2016
	Number of hotels		Impairment (loss) recovery	Number of hotels		Impairment (loss) recovery
Held for sale hotels:
Impairment loss	2	$	(830)	1	$	(512)
Impairment recovery	-		-	-		-
Sold hotels:
Impairment loss	-		-	2		(402)
Impairment recovery	2		80	-		-
Total net impairment loss:	4	$	(750)	3	$	(914)

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Preferred Stock (Tables)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Components Of Dividends Declared And Undeclared And In Kind Dividends Deemed On Preferred Stock

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Preferred A dividends accrued at stated rate	$	-	$	32	$	-	$	222
Preferred A additional deemed dividends upon redemption		-		6		-		652
Preferred B dividends accrued at stated rate		-		35		-		243
Preferred B additional deemed dividends upon redemption		-		6		-		668
Preferred C dividends accrued at stated rate		-		-		-		455
Preferred C additional deemed dividends at exchange		-		-		-		15,419
Preferred D dividends accrued at stated rate		-		978		650		1,138
Preferred D inducement to convert		127		-		11,030		-
Preferred E dividends accrued at stated rate		144		-		194		-
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$	271	$	1,057	$	11,874	$	18,797

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Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2017

Stock-Based Compensation [Abstract]

Summary Of Service Condition Unvested Share Activity

	Shares	Weighted-average grant date fair value
Unvested at December 31, 2016	-	$	-
Granted	87,041	$	10.60
Vested	-	$	-
Forfeited	-	$	-
Unvested at June 30, 2017	87,041	$	10.60

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Reconciliation Of Basic And Diluted Earnings Per Common Share

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Numerator: Basic (1)
Net earnings (loss) attributable to common shareholders:
Continuing operations	$	4,654	$	7,108	$	(9,299)	$	(3,988)
Discontinued operations		-		-		-		654
Total Net earnings (loss) attributable to common shareholders		4,654		7,108		(9,299)		(3,334)
Less: Allocation to participating securities		(20)		-		(20)		-
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	4,634	$	7,108	$	(9,319)	$	(3,334)
Numerator: Diluted (1)
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	$	4,634	$	7,108	$	(9,319)	$	(3,988)
Dividends on Series D Preferred Stock		-		978		-		-
Dividends and fair value adjustment on Series E Preferred Stock		(95)		-		-		-
Interest and fair value adjustment on Convertible Debt		(9)		(192)		-		-
Continuing operations - Diluted		4,530		7,894		(9,319)		(3,988)
Discontinued operations - Diluted		-		-		-		654
Total Diluted	$	4,530	$	7,894	$	(9,319)	$	(3,334)
Denominator
Weighted average number of common shares - Basic		11,541,085		760,129		7,263,158		760,129
Unvested restricted stock		-		111		-		-
Series D Preferred Stock		-		6,004,957		-		-
Series E Preferred Stock		668,111		-		-		-
Warrants - RES		23,146		20,294		-		-
Convertible Debt		97,269		97,269		-		-
Weighted average number of common shares - Diluted		12,329,611		6,882,760		7,263,158		760,129
Earnings per Share
Continuing operations - Basic	$	0.40	$	9.36	$	(1.28)	$	(5.25)
Discontinued operations - Basic		-		-		-		0.86
Total - Basic Earnings per Share	$	0.40	$	9.36	$	(1.28)	$	(4.39)
Continuing operations - Diluted	$	0.37	$	1.17	$	(1.28)	$	(5.25)
Discontinued operations - Diluted		-		-		-		0.86
Total - Diluted Earnings per Share	$	0.37	$	1.17	$	(1.28)	$	(4.39)

(1) The earnings or loss attributable to noncontrolling interest is allocated between continuing and discontinued operations for the purpose of the EPS calculation

Schedule Of Potentially Dilutive Securities Excluded From Computation Of Earnings Per Share

	Three months ended June 30,		Six months ended June 30,
	2017	2016	2017	2016
Outstanding stock options	481	865	481	865
Unvested restricted stock	15,269	-	7,677	161
Warrants - RES	-	-	96,587	576,923
Warrants - Employees	66,153	66,153	66,153	66,153
Series C Preferred Stock	-	-	-	1,204,564
Series D Preferred Stock	-	-	1,957,300	57,185
Series E Preferred Stock	-	-	450,239	-
Convertible debt	-	-	97,269	-
LTIP partnership units (1)	98,989	101,213	100,095	101,213
CHLP partnership units (1)	65,920	46,074	58,539	46,074
Total potentially dilutive securities excluded from the denominator	246,812	214,305	2,834,340	2,053,138

(1) LTIP and partnership units of CHLP have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS. All LTIP units were cancelled effective June 28, 2017 (see Note 12).

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Organization And Summary Of Significant Accounting Policies (Details)					6 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($)	Mar. 15, 2017 shares	Feb. 28, 2017	Mar. 16, 2016	Jun. 30, 2017 USD ($) property state	Dec. 31, 2016 USD ($)	May 11, 2017 USD ($)	Mar. 01, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Number of hotels | property					19
Number of states the entity owns hotels | state					11
Reverse stock split, conversion ratio		0.1538
Reverse stock split, fractional shares issued | shares		0
Cash and cash equivalents on hand					$ 5,930,000	$ 8,326,000			$ 18,999,000	$ 4,870,000
Long-term debt					$ 94,063,000	$ 63,389,000
Forecast [Member]
Long-term debt	$ 1,296,000
Minimum [Member] | Forecast [Member]
Capital expenditures	4,000,000
Maximum [Member] | Forecast [Member]
Capital expenditures	$ 5,000,000
Building And Improvements [Member] | Minimum [Member]
Estimated useful life					15 years
Building And Improvements [Member] | Maximum [Member]
Estimated useful life					40 years
Furniture And Equipment [Member] | Minimum [Member]
Estimated useful life					3 years
Furniture And Equipment [Member] | Maximum [Member]
Estimated useful life					12 years
KeyBank Credit Facility [Member]
Line of credit facility, maximum borrowing capacity					$ 150,000,000		$ 150,000,000	$ 90,000,000
Available borrowing capacity					$ 18,961,000
Atlanta Joint Venture [Member]
Number of hotels | property					1
Ownership percentage					80.00%
Condor Hospitality Limited Partnership [Member]
Ownership percentage of minority interest					99.40%	97.80%
E&P Financing Limited Partnership [Member]
Ownership percentage of minority interest					100.00%
TRS Leasing, Inc [Member]
Number of properties held by related parties | property					16
Series D Preferred Stock [Member]
Preferred stock, annual dividend rate				6.25%		6.25%
Series E Preferred Stock [Member]
Preferred stock, annual dividend rate			6.25%		6.25%

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Investment In Hotel Properties (Schedule Of Investments In Hotel Properties) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Real Estate [Line Items]
Investment in hotel properties, Held for sale	$ 7,332	$ 30,960
Less accumulated depreciation, Held For Sale	(3,532)	(12,247)
Investment in hotel properties, net, Held For Sale	3,800	18,713
Investment in hotel properties, Held For Use	206,790	112,424
Less accumulated depreciation, Held For Use	(19,053)	(16,266)
Investments in hotel properties, net, Held For Use	187,737	96,158
Investments in hotel properties	214,122	143,384
Less accumulated depreciation	(22,585)	(28,513)
Investments in hotel properties, net, Total	191,537	114,871
Land [Member]
Real Estate [Line Items]
Investment in hotel properties, Held for sale	526	2,392
Investment in hotel properties, Held For Use	20,043	14,020
Investments in hotel properties	20,569	16,412
Building, Improvements, Vehicle [Member]
Real Estate [Line Items]
Investment in hotel properties, Held for sale	4,896	23,118
Investment in hotel properties, Held For Use	165,627	85,565
Investments in hotel properties	170,523	108,683
Furniture And Equipment [Member]
Real Estate [Line Items]
Investment in hotel properties, Held for sale	1,879	5,233
Investment in hotel properties, Held For Use	19,399	12,108
Investments in hotel properties	21,278	17,341
Initial Franchise Fees [Member]
Real Estate [Line Items]
Investment in hotel properties, Held for sale	31	194
Investment in hotel properties, Held For Use	1,444	668
Investments in hotel properties	1,475	862
Construction-In-Progress [Member]
Real Estate [Line Items]
Investment in hotel properties, Held for sale		23
Investment in hotel properties, Held For Use	277	63
Investments in hotel properties	$ 277	$ 86

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Acquisition Of Hotel Properties (Narrative) (Details) $ in Thousands			3 Months Ended		6 Months Ended
	Dec. 14, 2016 USD ($) property	Aug. 22, 2016 USD ($) property	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) property loan shares	Jun. 30, 2016 USD ($) property
Business Acquisition [Line Items]
Number of wholly owned properties acquired | property					5	0
Revenues			$ 14,252	$ 14,155	$ 24,613	$ 26,658
Net income (loss)			4,925	$ 8,165	2,575	$ 15,463
Aloft Hotel, Leawood, Kansas [Member]
Business Acquisition [Line Items]
Number of wholly owned properties acquired | property	1
Purchase price	$ 22,500
Wholly Owned Properties Acquired [Member]
Business Acquisition [Line Items]
Revenues			4,325		4,630
Net income (loss)			$ 831		968
Level 3 [Member]
Business Acquisition [Line Items]
Purchase price					$ 93,000
Number of loans assumed | loan					1
Assumption of debt					$ 9,096
Debt originated at acquisition					73,767
Cash paid for acquisition					$ 9,852
Interest rate			4.54%		4.54%
Monthly payment					$ 48
Maturity date of debt					Aug. 01, 2024
Level 3 [Member] | Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member]
Business Acquisition [Line Items]
Common units issued | shares					1,211,648
Value of common units issued			$ 285		$ 285
Level 3 [Member] | Atlanta Joint Venture [Member] | Aloft Hotel, Atlanta, Georgia [Member]
Business Acquisition [Line Items]
Number of wholly owned properties acquired | property		1
Purchase price		$ 44,550
Debt originated at acquisition		$ 33,750

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Acquisition Of Hotel Properties (Schedule Of Purchase Price Allocation) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Hampton Inn And Suites [Member] | Lake Mary, Florida [Member]
Business Acquisition [Line Items]
Contingent consideration liability	$ 250
Level 3 [Member]
Business Acquisition [Line Items]
Land	6,022
Building, improvements, and vehicles	80,002
Furniture and equipment	7,033
Intangible asset	98
Estimated earn out	(155)
Total purchase price	93,000
Assumption of debt	9,096
Debt originated at acquisition	82,863
Net cash	$ 9,852
Level 3 [Member] | Home2 Suites [Member] | Lexington, Kentucky [Member]
Business Acquisition [Line Items]
Acquisition date	Mar. 24, 2017
Land	$ 905
Building, improvements, and vehicles	14,204
Furniture and equipment	1,351
Intangible asset	40
Total purchase price	16,500
Debt originated at acquisition	16,455
Net cash
Level 3 [Member] | Home2 Suites [Member] | Round Rock, Texas [Member]
Business Acquisition [Line Items]
Acquisition date	Mar. 24, 2017
Land	$ 1,087
Building, improvements, and vehicles	14,345
Furniture and equipment	1,285
Intangible asset	33
Total purchase price	16,750
Debt originated at acquisition	16,705
Net cash
Level 3 [Member] | Home2 Suites [Member] | Tallahassee, Florida [Member]
Business Acquisition [Line Items]
Acquisition date	Mar. 24, 2017
Land	$ 1,519
Building, improvements, and vehicles	18,229
Furniture and equipment	1,727
Intangible asset	25
Total purchase price	21,500
Debt originated at acquisition	21,442
Net cash
Level 3 [Member] | Home2 Suites [Member] | Southaven, Mississippi [Member]
Business Acquisition [Line Items]
Acquisition date	Apr. 14, 2017
Land	$ 1,311
Building, improvements, and vehicles	16,792
Furniture and equipment	897
Total purchase price	19,000
Debt originated at acquisition	9,096
Net cash	$ 9,852
Level 3 [Member] | Hampton Inn And Suites [Member] | Lake Mary, Florida [Member]
Business Acquisition [Line Items]
Acquisition date	Jun. 19, 2017
Land	$ 1,200
Building, improvements, and vehicles	16,432
Furniture and equipment	1,773
Estimated earn out	(155)
Total purchase price	19,250
Debt originated at acquisition	19,165
Net cash
Condor Hospitality Limited Partnership [Member] | Level 3 [Member] | Noncontrolling Interest [Member]
Business Acquisition [Line Items]
Issuance of common units	285
Condor Hospitality Limited Partnership [Member] | Level 3 [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Lexington, Kentucky [Member]
Business Acquisition [Line Items]
Issuance of common units	45
Condor Hospitality Limited Partnership [Member] | Level 3 [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Round Rock, Texas [Member]
Business Acquisition [Line Items]
Issuance of common units	45
Condor Hospitality Limited Partnership [Member] | Level 3 [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Tallahassee, Florida [Member]
Business Acquisition [Line Items]
Issuance of common units	58
Condor Hospitality Limited Partnership [Member] | Level 3 [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Southaven, Mississippi [Member]
Business Acquisition [Line Items]
Issuance of common units	52
Condor Hospitality Limited Partnership [Member] | Level 3 [Member] | Noncontrolling Interest [Member] | Hampton Inn And Suites [Member] | Lake Mary, Florida [Member]
Business Acquisition [Line Items]
Issuance of common units	$ 85

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Acquisition Of Hotel Properties (Schedule Of Pro Forma Results) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Acquisition Of Hotel Properties [Abstract]
Total revenue	$ 15,442	$ 20,949	$ 30,594	$ 39,443
Operating income	2,229	3,477	3,272	4,520
Net earnings (loss) attributable to common shareholders	$ 5,127	$ 7,883	$ (8,066)	$ (2,764)
Net earnings (loss) per share attributable to common shareholders - Basic	$ 0.44	$ 10.37	$ (1.11)	$ (3.64)
Net earnings (loss) per share attributable to common shareholders - Diluted	$ 0.41	$ 1.26	$ (1.11)	$ (3.64)

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Investment In Unconsolidated Joint Venture (Narrative) (Details) $ in Thousands		3 Months Ended		6 Months Ended
	Aug. 22, 2016 USD ($)	Jun. 30, 2017 USD ($) entity	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) entity item	Jun. 30, 2016 USD ($)
Schedule of Equity Method Investments [Line Items]
Management fees incurred		$ 440	$ 452	$ 764	$ 851
Spring Street Hotel Property II LLC [Member] | Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		20.00%		20.00%
Spring Street Hotel OpCo II LLC [Member] | Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		20.00%		20.00%
Atlanta Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		80.00%		80.00%
Number of companies comprised in joint venture | entity		2		2
Management fees incurred		$ 93		$ 182
Atlanta Joint Venture [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Preferred return on capital contributions				10.00%
Buy-sell rights				3 years
Atlanta Joint Venture [Member] | Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		20.00%		20.00%
Preferred return on capital contributions				10.00%
Buy-sell rights				5 years
Atlanta Joint Venture [Member] | Minimum [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Purchase option period				3 years
Atlanta Joint Venture [Member] | Maximum [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Purchase option period				5 years
Condor Hospitality Limited Partnership [Member] | Spring Street Hotel Property II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		80.00%		80.00%
TRS Leasing, Inc [Member] | Spring Street Hotel OpCo II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		80.00%		80.00%
Aloft Hotel, Atlanta, Georgia [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Loan term				24 months
Number of loan extensions | item				3
Extension period				12 months
Variable rate, interest rate				6.19%
Aloft Hotel, Atlanta, Georgia [Member] | LIBOR [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Reference rate				one-month LIBOR
Basis spread				5.00%
Interest Rate Cap [Member] | Aloft Hotel, Atlanta, Georgia [Member] | LIBOR [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread				3.00%
Level 3 [Member]
Schedule of Equity Method Investments [Line Items]
Purchase price				$ 93,000
Debt originated at acquisition				$ 73,767
Level 3 [Member] | Aloft Hotel, Atlanta, Georgia [Member] | Atlanta Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Purchase price	$ 44,550
Debt originated at acquisition	$ 33,750

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Investment In Unconsolidated Joint Venture (Schedule Of Financial Position of Unconsolidated Joint Ventures) (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Investment In Unconsolidated Joint Venture [Abstract]
Investment in hotel properties, net	$ 48,659
Cash and cash equivalents	1,860
Restricted cash, property escrows	910
Accounts receivable, prepaid expenses, and other assets	485
Total Assets	51,914
Accounts payable, accrued expenses, and other liabilities	1,491
Land option liability	6,190
Long-term debt, net of deferred financing costs	33,268
Total Liabilities	40,949
Condor equity	8,772
TWC equity	2,193
Total Equity	10,965
Total Liabilities and Equity	$ 51,914

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Investment In Unconsolidated Joint Venture (Summary Of Results Of Operations Of Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Schedule of Equity Method Investments [Line Items]
Room rentals and other hotel services	$ 3,061	$ 6,050
Hotel and property operations	2,062	3,923
Depreciation and amortization	412	823
Total operating expenses	2,474	4,746
Operating income	587	1,304
Net loss on disposition of assets	(3)	(4)
Net loss on derivative	(2)	(2)
Interest expense	(523)	(1,128)
Net earnings	59	170
Allocated earnings	59	170
Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Allocated earnings	25	136
Three Wall Capital LLC [Member]
Schedule of Equity Method Investments [Line Items]
Allocated earnings	$ 34	$ 34

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Disposition Of Hotel Properties And Discontinued Operations (Narrative) (Details) $ in Thousands	3 Months Ended			6 Months Ended		28 Months Ended
	Jun. 30, 2017 USD ($) property	Mar. 31, 2017 USD ($)	Jun. 30, 2016 USD ($) property	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($) property	Jan. 31, 2017 property	Jan. 01, 2017 property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels | property	19			19
Number of properties sold | property	3		7	5	11
Number of hotels reclassified as held for sale that represent a strategic shift | property						0
Net gain on sale of properties				$ 5,031	$ 12,945
Continuing Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net gain on sale of properties	$ 5,031		$ 8,886	$ 5,031	12,264
Held For Sale [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels | property	2			2			7
Impairment Loss [Member] | Sold [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment (loss) recovery, Continuing operations, Sold hotels			$ (116)		$ (402)
Impairment Recovery [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment (loss) recovery, Continuing operations, Sold hotels		$ 80
Impairment Recovery [Member] | Sold [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment (loss) recovery, Continuing operations, Sold hotels				$ 80

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Disposition Of Hotel Properties And Discontinued Operations (Components Of Discontinued Operations) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Disposition Of Hotel Properties And Discontinued Operations [Abstract]
Revenue	$ 6
Hotel and property operations expense	(4)
Net gain (loss) on disposition of assets	681
Interest expense	(5)
Gain from discontinued operations, net of tax	678
Capital expenditures

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Long-Term Debt (Narrative) (Details)					6 Months Ended
	Mar. 30, 2017 USD ($)	Mar. 29, 2017 USD ($)	Mar. 24, 2017 USD ($)	Mar. 01, 2017 USD ($) loan item	Jun. 30, 2017 USD ($) property	May 11, 2017 USD ($) property
Debt Instrument [Line Items]
Debt to be repaid upon sale of related properties, term					1 year
KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Maturity date of debt					Mar. 01, 2020
Line of credit facility, maximum borrowing capacity				$ 90,000,000	$ 150,000,000	$ 150,000,000
Available borrowing capacity, gross					$ 73,743,000	41,050,000
Line of credit facility, accordion feature				$ 400,000,000		$ 400,000,000
Number of properties in collateral pool | property					14	14
Number of loan extensions | item				2
Extension period				1 year
Amount borrowed						$ 34,250,000
Payments on line of credit	$ 17,218,000	$ 37,000,000
Proceeds from line of credit			$ 74,750,000
Variable Rate Debt [Member] | Multiple Loans Western Alliance Bank [Member]
Debt Instrument [Line Items]
Number of loans not refinanced during period | loan				2
Fixed Rate Debt [Member] | Multiple Loans Great Western Bank [Member]
Debt Instrument [Line Items]
Number of loans not refinanced during period | loan				2
Minimum [Member] | LIBOR [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Basis spread				2.25%	2.25%
Minimum [Member] | Base Rate [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Basis spread				1.25%	2.00%
Maximum [Member] | LIBOR [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Basis spread				3.00%	3.00%
Maximum [Member] | Base Rate [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Basis spread				2.00%	1.25%

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Long-Term Debt (Summary Of Long Term Debt) (Details) $ in Thousands		6 Months Ended
	Mar. 01, 2017	Jun. 30, 2017 USD ($) property	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Total fixed rate debt		$ 24,710	$ 30,159
Total variable rate debt		69,353	33,230
Total Long-term debt		94,063	63,389
Less: Deferred financing costs		(3,466)	(669)
Total long-term debt, net of deferred financing costs		90,597	62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $24 and $55		(421)	(5,945)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,442 and $614		$ 90,176	56,775
Number of hotels | property		19
Deferred financing costs		$ 3,442	614
Deferred finance costs, assets held-for-sale		$ 24	55
Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		18
Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		18
Great Western Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 14,143	14,326
Fixed rate, interest rate		4.33%
Maturity		Dec. 31, 2021
Amortization provision		25 years
Great Western Bank [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		1
Great Western Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 1,498	1,599
Fixed rate, interest rate		4.33%
Maturity		Dec. 31, 2021
Amortization provision		7 years
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 [Member]
Debt Instrument [Line Items]
Total fixed rate debt		$ 9,069
Fixed rate, interest rate		4.54%
Maturity		Aug. 01, 2024
Amortization provision		25 years
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		1
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt			4,806
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt			2,803
Cantor Commercial Real Estate Lending [Member]
Debt Instrument [Line Items]
Total fixed rate debt			5,713
Morgan Stanley Mortgage Capital Holdings, LLC [Member]
Debt Instrument [Line Items]
Total fixed rate debt			912
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total variable rate debt		$ 4,824	4,882
Variable rate, interest rate		4.46%
Maturity		Nov. 30, 2020
Amortization provision		25 years
Western Alliance Bank [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		1
Western Alliance Bank [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Reference rate		90-day LIBOR
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total variable rate debt		$ 9,747	9,863
Variable rate, interest rate		4.46%
Maturity		Nov. 20, 2020
Amortization provision		25 years
Western Alliance Bank [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		1
Western Alliance Bank [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread		3.25%
KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Total variable rate debt		$ 54,782
Variable rate, interest rate		3.72%
Maturity		Mar. 01, 2020
Available borrowing capacity		$ 18,961
Commitment fee		0.20%
KeyBank Credit Facility [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property		14
KeyBank Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread	2.25%	2.25%
KeyBank Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread	3.00%	3.00%
KeyBank Credit Facility [Member] | Base Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread	1.25%	2.00%
KeyBank Credit Facility [Member] | Base Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread	2.00%	1.25%
The Huntington National Bank [Member]
Debt Instrument [Line Items]
Total variable rate debt			7,361
LMREC 2015 - CREI, Inc. (Latitude) [Member]
Debt Instrument [Line Items]
Total variable rate debt			11,124
Interest Rate Cap [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Notional amount		$ 50,000
Cap interest rate		2.50%
Interest Rate Cap [Member] | KeyBank Credit Facility [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread		2.50%
Reference rate		30-day LIBOR
Interest Rate Cap [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member]
Debt Instrument [Line Items]
Notional amount			$ 11,124
Interest Rate Cap [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread		1.00%

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Long-Term Debt (Aggregate Annual Principal Payments On Debt Associated With Assets Held For Use And Held For Sale) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Remainder of 2017	$ 509
2018	1,057
2019	1,105
2020	69,267
2021	13,867
Thereafter	8,258
Total Long-term debt	94,063	$ 63,389
Held For Sale [Member]
Debt Instrument [Line Items]
2020	445
Total Long-term debt	445
Held For Use [Member]
Debt Instrument [Line Items]
Remainder of 2017	509
2018	1,057
2019	1,105
2020	68,822
2021	13,867
Thereafter	8,258
Total Long-term debt	$ 93,618

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Convertible Debt At Fair Value (Narrative) (Details) - USD ($)			3 Months Ended		6 Months Ended
	Mar. 01, 2017	Mar. 16, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Debt Instrument [Line Items]
Gain (loss) on derivatives and convertible debt			$ 227,000	$ 162,000	$ 402,000	$ 6,279,000
6.25% Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Interest rate		6.25%	6.25%		6.25%
Principal amount		$ 1,012,000
Number of shares of common stock debt can convert into	97,269	97,269
Maximum ownership percentage of voting stock upon debt conversion		49.00%
Gain (loss) on derivatives and convertible debt			$ 25,000	$ 208,000	$ 265,000	$ (179,000)

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Convertible Debt At Fair Value (Difference Between Fair Value And Unpaid Principal Balance Of Note) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Mar. 16, 2016
Debt Instrument [Line Items]
Fair value	$ 1,050	$ 1,315
Unpaid principal balance	1,012
Fair value carrying amount over/(under) unpaid principal	$ 38
6.25% Convertible Promissory Note [Member]
Debt Instrument [Line Items]
Interest rate	6.25%		6.25%

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Fair Value Measurements And Derivative Instruments (Narrative) (Details) - USD ($)				3 Months Ended		6 Months Ended
	Mar. 01, 2017	Feb. 28, 2017	Mar. 16, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Feb. 29, 2012
Fair Value Measurements And Derivative Instruments [Line Items]
Transfers between levels				$ 0	$ 0	$ 0	$ 0
Interest Rate Instruments [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Net gain (loss) on interest rate instruments				$ 202,000	$ (46,000)	$ 137,000	$ 6,458,000
Series C Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Preferred stock, annual dividend rate			6.25%
Debt instrument original conversion price, per share								$ 52.00
Warrants [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Common stock warrants, exercise price								$ 62.40
Common stock warrants, adjusted exercise price			$ 12.48
Adjustment to additional paid in capital, warrant			$ 611,000
Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Preferred stock, annual dividend rate		6.25%				6.25%
Redemption Rights [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Number of shares called by redemption	490,250
Level 3 [Member] | Redemption Rights [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Assets fair value	$ 150,000	$ 150,000
Minimum [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Debt instrument conversion amount upon closing of qualified offering	50,000,000
Maximum [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Debt instrument conversion amount upon closing of qualified offering	$ 75,000,000

XML

Fair Value Measurements And Derivative Instruments (Schedule Of Interest Rate Swaps And Caps) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
KeyBank Credit Facility [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Effective date	Mar. 01, 2017
Maturity date	Mar. 01, 2019
Notional amount	$ 50,000
The Huntington National Bank [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Effective date	Nov. 01, 2015
Maturity date	Nov. 01, 2020
Notional amount		$ 7,361
Cancellation date, without penalty	Nov. 01, 2018
LMREC 2015 - CREI, Inc. (Latitude) [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Effective date	Mar. 01, 16
Maturity date	Jun. 01, 2017
Notional amount		$ 11,124
LIBOR [Member] | KeyBank Credit Facility [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.50%
LIBOR [Member] | The Huntington National Bank [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Basis spread	2.25%
LIBOR [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Basis spread	1.00%
Federal Funds Effective Swap Rate [Member] | The Huntington National Bank [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Basis spread	4.13%

XML

Fair Value Measurements And Derivative Instruments (Schedule Of Fair Value Assets And (Liabilities) Carried At Fair Value And Measured On Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	$ 339
Derivative liability		$ (8)
Convertible debt	(1,050)	(1,315)
Total	(711)	(1,323)
Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total	6	(8)
Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Convertible debt	(1,050)	(1,315)
Total	(717)	(1,315)
Interest Rate Instruments [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	6
Derivative liability		(8)
Interest Rate Instruments [Member] | Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	6
Derivative liability		$ (8)
Series E Preferred Embedded Redemption Option [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	333
Series E Preferred Embedded Redemption Option [Member] | Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	$ 333

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Fair Value Measurements And Derivative Instruments (Reconciliation Of Fair Value Liabilities Measured On Recurring Basis) (Details) - Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	$ (982)		$ (1,315)	$ (8,682)
Net gains (losses) recognized in earnings	265		448	6,469
Purchases and issuances			150	(1,012)
Sales and settlements				1,423
Gross transfers into Level 3
Gross transfers out of Level 3				611
Fair value, end of period	(717)	$ (1,191)	(717)	(1,191)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	265		448	(179)
Series E Preferred Embedded Redemption Option [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	93
Net gains (losses) recognized in earnings	240		183
Purchases and issuances			150
Sales and settlements
Gross transfers into Level 3
Gross transfers out of Level 3
Fair value, end of period	333		333
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	240		183
Series C Preferred Embedded Derivative [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period				(6,271)
Net gains (losses) recognized in earnings				4,848
Sales and settlements				1,423
Convertible Debt [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period		(1,399)
Net gains (losses) recognized in earnings		208
Purchases and issuances
Sales and settlements
Gross transfers into Level 3
Gross transfers out of Level 3
Fair value, end of period		(1,191)		(1,191)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period		208
Convertible Debt [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	(1,075)		(1,315)
Net gains (losses) recognized in earnings	25		265	(179)
Purchases and issuances				(1,012)
Sales and settlements
Gross transfers into Level 3
Gross transfers out of Level 3
Fair value, end of period	(1,050)	$ (1,191)	(1,050)	(1,191)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$ 25		$ 265	(179)
Real Estate Strategies, L.P. [Member] | Warrant Derivative [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period				(2,411)
Net gains (losses) recognized in earnings				1,800
Gross transfers out of Level 3				$ 611

XML

Fair Value Measurements And Derivative Instruments (Schedule Of Carrying Value And Estimated Fair Value Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 90,597	$ 62,720
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	90,596	63,220
Held For Use [Member] | Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	90,176	56,775
Held For Use [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	90,175	56,842
Held For Sale [Member] | Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	421	5,945
Held For Sale [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 421	$ 6,378

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Fair Value Measurements And Derivative Instruments (Schedule Of Impairment And Recovery Of Previously Recorded Impairment) (Details) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2017 USD ($) property	Mar. 31, 2017 USD ($)	Jun. 30, 2016 USD ($) property	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($) property
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | property	2		2	4	3
Net impairment loss reported in continuing operations	$ (479)		$ (121)	$ (750)	$ (914)
Impairment (loss) recovery, Total net impairments				$ (750)	$ (914)
Impairment Recovery [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Impairment (loss) recovery, Continuing operations, Sold hotels		$ 80
Held For Sale [Member] | Impairment Loss [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | property	2		1	2	1
Impairment (loss) recovery, Continuing operations, Held for sale hotels	$ (479)		$ (5)	$ (830)	$ (512)
Sold [Member] | Impairment Loss [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | property			1		2
Impairment (loss) recovery, Continuing operations, Sold hotels			$ (116)		$ (402)
Sold [Member] | Impairment Recovery [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | property				2
Impairment (loss) recovery, Continuing operations, Sold hotels				$ 80

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Common Stock (Narrative) (Details) $ / shares in Units, $ in Thousands				6 Months Ended
	Mar. 29, 2017 USD ($) $ / shares shares	Mar. 15, 2017 USD ($) shares	Feb. 28, 2017 $ / shares shares	Jun. 30, 2017 USD ($) shares	Feb. 29, 2012 $ / shares
Class of Stock [Line Items]
Shares issued, price per share | $ / shares	$ 10.50
Reverse stock split, conversion ratio		0.1538
Reverse stock split, fractional shares issued		0
Reverse stock split, shares settled in cash		73
Reverse stock split, shares settled in cash, amount | $		$ 1		$ 1
Issuance of common stock, shares	4,772,500
Proceeds from common stock issued | $	$ 45,888			45,888
Rights offering issuance costs | $				$ 1,130
Pursuant To Full Exercise Of An Option To Purchase Additional Shares Of Common Stock Granted To Underwriters [Member]
Class of Stock [Line Items]
Issuance of common stock, shares	622,500
Warrants [Member]
Class of Stock [Line Items]
Common stock purchase price using warrants | $ / shares					$ 62.40
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion			6,004,957
Shares issued, price per share | $ / shares			$ 10.40
Issuance of common stock, shares				4,772,000

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Preferred Stock (Narrative) (Details) - USD ($)				6 Months Ended		12 Months Ended
	Feb. 28, 2017	Apr. 15, 2016	Mar. 16, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Mar. 29, 2017
Class of Stock [Line Items]
Shares issued, price per share							$ 10.50
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion	6,004,957
Shares issued, price per share	$ 10.40
Real Estate Strategies, L.P. [Member] | Promissory Note [Member]
Class of Stock [Line Items]
Interest rate			6.25%
Principal amount			$ 1,012,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate			8.00%
Preferred stock, shares outstanding		803,270
Preferred stock, redemption price		$ 10.00
Dividends unpaid and accrued per share		$ 2.084940
Redemption liability		$ 9,707,000
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate			10.00%
Preferred stock, shares outstanding		332,500
Dividends unpaid and accrued per share		$ 6.354167
Preferred stock, temporary equity, redemption price		$ 25.00
Redemption liability		$ 10,425,000
Series A and B Preferred Stock [Member] | SREP III Flight Investco L.P. [Member]
Class of Stock [Line Items]
Escrow deposit for effecting redemtion			$ 20,147,000
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate			6.25%
Series C Preferred Stock [Member] | Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Shares converted			3,000,000
Dividends unpaid and accrued			$ 4,947,000
Preferred dividends, cash			$ 1,484,000
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate			6.25%			6.25%
Preferred stock, value						$ 61,333,000
Preferred dividends, cash				$ 650,000	$ 1,139,000
Percentage of voting stock			40.00%
Preferred stock, shares outstanding			6,245,156			6,245,156
Series D Preferred Stock [Member] | SREP III Flight Investco L.P. [Member]
Class of Stock [Line Items]
Preferred stock, shares issued			3,000,000
Preferred stock, value			$ 30,000,000
Series D Preferred Stock [Member] | Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Shares issued upon conversion			3,000,000
Preferred dividends, stock			$ 245,156
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate	6.25%			6.25%
Preferred stock, value	$ 9,900,000			$ 10,050,000
Preferred dividends, cash				$ 194,000
Preferred stock, shares outstanding	925,000			925,000
Redeemable preferred stock, shares issued	925,000
Maximum [Member] | Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Percentage of voting stock			49.00%

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Preferred Stock (Series A Preferred Stock) (Narrative) (Details) - Series A Preferred Stock [Member] - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Apr. 15, 2016	Jun. 30, 2016	Jun. 30, 2016
Class of Stock [Line Items]
Preferred stock, shares redeemed	803,270
Preferred stock, deemed dividend		$ 2,288	$ 2,326
Preferred stock dividends, adjustment to net earnings attributable to common shareholders		$ 38	$ 874

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Preferred Stock (Series B Redeemable Preferred Stock) (Narrative) (Details) - Series B Preferred Stock [Member] - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Apr. 15, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2016
Class of Stock [Line Items]
Preferred stock, shares redeemed	332,500
Preferred stock, deemed dividend			$ 2,740	$ 2,781
Preferred stock dividends, adjustment to net earnings attributable to common shareholders		$ 41		$ 911

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Preferred Stock (Series C Convertible Preferred Stock And Warrants) (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands				6 Months Ended
	Feb. 28, 2017	Jan. 24, 2017	Mar. 16, 2016	Jun. 30, 2017	Jun. 30, 2016	Feb. 29, 2012
Class of Stock [Line Items]
Warrant issuance costs				$ 289	$ 12
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, deemed dividend			$ 20,366
Preferred stock dividends, adjustment to net earnings attributable to common shareholders			$ 15,874
New Warrants [Member]
Class of Stock [Line Items]
Shares issued upon conversion		23,160
Common stock warrants, exercise price		$ 0.0065
Warrant expiration		Jan. 24, 2019
Warrants [Member]
Class of Stock [Line Items]
Common stock warrants, exercise price						$ 62.40
Warrant issuance costs		$ 289
Real Estate Strategies, L.P. [Member] | Series C Preferred Stock [Member]
Class of Stock [Line Items]
Shares converted			3,000,000
Real Estate Strategies, L.P. [Member] | Warrants [Member]
Class of Stock [Line Items]
Shares converted		576,923
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion	6,004,957
Number of shares called by warrant		23,160

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Preferred Stock (Series D Convertible Preferred Stock) (Narrative) (Details) $ / shares in Units, $ in Thousands			6 Months Ended	12 Months Ended
	Feb. 28, 2017 $ / shares shares	Mar. 16, 2016 $ / shares shares	Jun. 30, 2017 USD ($) $ / shares shares	Dec. 31, 2016 shares	Mar. 29, 2017 $ / shares
Class of Stock [Line Items]
Preferred stock, partial redemption value | $			$ 30,000
Shares issued, price per share					$ 10.50
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding | shares		6,245,156		6,245,156
Preferred stock, annual dividend rate		6.25%		6.25%
Preferred stock, face value		$ 10.00
Percentage of voting stock		40.00%
Conversion price per share		$ 10.40
Preferred stock, conversion ratio		0.9615385
Series D Preferred Stock [Member] | On Or Before March 16, 2019 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price			$ 12.00
Series D Preferred Stock [Member] | March 16, 2019 to March 16, 2020 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price			13.00
Series D Preferred Stock [Member] | On Or After March 16, 2020 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price			14.00
Series D Preferred Stock [Member] | On Or Before September 30,2021 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price			$ 14.00
Aggregate outstanding shares required for liquidation election			40.00%
Series D Preferred Stock [Member] | After September 30, 2021 [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate			12.50%
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding | shares	925,000		925,000
Preferred stock, annual dividend rate	6.25%		6.25%
Preferred stock, face value	$ 10.00
Redeemable preferred stock, shares issued | shares	925,000
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion | shares	6,004,957
Shares issued, price per share	$ 10.40

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Preferred Stock (Series E Convertible Preferred Stock) (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended	6 Months Ended
	Feb. 28, 2017	Jun. 30, 2017	Jun. 30, 2017	Mar. 01, 2017
Class of Stock [Line Items]
Rights offering issuance costs			$ 1,130
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding	925,000	925,000	925,000
Preferred stock, annual dividend rate	6.25%		6.25%
Preferred stock, face value	$ 10.00
Preferred stock, dividend rate increase resulting from failure to pay dividend, with equity offerings	9.50%
Redeemable preferred stock, liquidation preference per share	$ 10.00
Preferred stock, percentage of conversion price at which preferred stock automatically converts to common stock	120.00%
Preferred stock, trading days for preferred stock automatically converting to common stock	60 days
Number of shares redeemable by company when market price is within defined range	490,250
Preferred stock, percentage of liquidation value at which holders can sell	130.00%
Threshold of originally issued preferred stock shares outstanding required for approval of certain transactions by preferred shareholders	434,750
Threshold of originally issued preferred stock shares outstanding required for approval of certain transactions by preferred shareholders, percent	47.00%
Percentage of approval required for certain transactions by preferred shareholders	75.00%
Threshold of amount of related party transactions for aprroval by preferred shareholders	$ 120
Threshold of maximum percentage of shares grantable before shareholder approval required	9.90%
Preferred stock, value	$ 9,900	$ 10,050	$ 10,050
Rights offering issuance costs		$ 127	$ 1,130
Series E Preferred Stock [Member] | On Or After February 28,2019 [Member]
Class of Stock [Line Items]
Conversion price per share	$ 13.845
Minimum [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, percentage of liquidation value at which company can redeem preferred stock	110.00%
Maximum [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, percentage of liquidation value at which company can redeem preferred stock	130.00%
Level 3 [Member] | Redemption Rights [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Assets fair value	$ 150			$ 150

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Preferred Stock (Components Of Dividends Declared And Undeclared And In Kind Dividends Deemed On Preferred Stock) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$ 271	$ 1,057	$ 11,874	$ 18,797
Accrued At Stated Rate [Member] | Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		32		222
Accrued At Stated Rate [Member] | Series B Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		35		243
Accrued At Stated Rate [Member] | Series C Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock				455
Accrued At Stated Rate [Member] | Series D Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		978	650	1,138
Accrued At Stated Rate [Member] | Series E Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	144		194
Deemed Upon Redemption [Member] | Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		6		652
Deemed Upon Redemption [Member] | Series B Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		$ 6		668
Deemed At Exchange [Member] | Series C Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock				$ 15,419
Inducement To Convert [Member] | Series D Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$ 127		$ 11,030

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Noncontrolling Interest Of Common Units In CHLP (Details) - USD ($) $ in Thousands		6 Months Ended
	Mar. 02, 2015	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016
Redeemable Noncontrolling Interest [Line Items]
Redemption value		$ 786	$ 2,008
Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage of minority interest		99.40%	97.80%
Common units redemption to common stock		1.923%
Common units redeemed		0		0
Condor Hospitality Limited Partnership [Member] | Limited Partner [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding		3,821,439	2,609,791
Common Units and LTIP [Member] | Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Redemption value		$ 786	$ 2,008
LTIP Awards [Member] | Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding			5,263,152
Common units redemption to common stock	1.923%
Noncontrolling Interest [Member] | Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding		3,821,439	7,872,943

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Stock-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands							3 Months Ended		6 Months Ended
	Jun. 28, 2017 $ / shares item shares	Mar. 31, 2017 item shares	Jul. 15, 2016 shares	Mar. 17, 2015 $ / shares	Mar. 11, 2015 $ / shares shares	Mar. 02, 2015 $ / shares item shares	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted									87,041
Stock-based compensation | $							$ 80	$ 70	$ 157	$ 139
2006 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized							9,615		9,615
Expiration date									Dec. 31, 2015
2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized							461,538		461,538
Shares available for issuance							371,012		371,012
Investment Committee of the Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Trading period used to determine award price									20 days
Investment Committee of the Board of Directors [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued to independent directors			1,837
Independent Directors of the Investment Committee of the Board of Directors [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued to independent directors							409		1,123
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $							$ 960		$ 960
Unrecognized compensation cost recognition period									4 years 10 months 24 days
Restricted Stock [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted	73,385	13,656
Vesting period									5 years
Restricted Stock [Member] | Executive Officer [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of officers granted share awards | item	1	2
Performance Based Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $							191		$ 191
Unrecognized compensation cost recognition period									6 months
Performance Based Share Awards [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration date	Dec. 31, 2021
Additional shares earned per percentage if actual FFO exceeds budgeted FFO	391
Grant date fair value, assumed percentage of budgeted FFO									100.00%
Performance Based Share Awards [Member] | Minimum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required percentage of budgeted FFO to achieve performance award	85.00%
Potential shares earned and issued if operating results are obtained	11,741
Performance Based Share Awards [Member] | Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required percentage of budgeted FFO to achieve performance award	101.00%
Potential shares earned and issued if operating results are obtained	19,569
Additional shares earned per percentage if actual FFO exceeds budgeted FFO	3,910
Market Based Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $							1,305		$ 1,305
Unrecognized compensation cost recognition period									1 year 3 months 18 days
Market Based Awards [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration date	Mar. 31, 2022
Market based award, potential shares earned and issued	36,692
Market price target increments | $ / shares	$ 1
Trading period used to determine award price	60 days
Market Based Awards [Member] | Minimum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price target | $ / shares	$ 11.00
Market Based Awards [Member] | Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price target | $ / shares	$ 18.00
Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $							$ 66		$ 66
Unrecognized compensation cost recognition period									8 months 12 days
Number of shares called by warrant						101,213
Common stock warrants, exercise price | $ / shares				$ 12.48	$ 9.88	$ 9.88	$ 12.48		$ 12.48
Expiration period									3 years
Shares purchased with warrants					35,060
Number of shares outstanding under warrant							66,153		66,153
Warrants [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units earned, increments				33.33%
Warrants [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units earned, increments				50.00%
Warrants [Member] | Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of officers granted share awards | item						1
LTIP Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted						5,263,152
Units earned, increments						33.33%
LTIP Awards [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share milestone | $ / shares						$ 22.75
LTIP Awards [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share milestone | $ / shares						29.25
LTIP Awards [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share milestone | $ / shares						$ 35.75
LTIP Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting date						2018-03
LTIP Awards [Member] | Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of officers granted share awards | item						1
Condor Hospitality Limited Partnership [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common units redemption to common stock									1.923%
Condor Hospitality Limited Partnership [Member] | LTIP Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common units redemption to common stock						1.923%
Condor Hospitality Limited Partnership [Member] | LTIP Awards [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Redemption, number of shares						101,213

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Stock-Based Compensation (Summary Of Service Condition Unvested Share Activity) (Details)	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Stock-Based Compensation [Abstract]
Shares: Unvested at December 31, 2016 | shares
Shares: Granted | shares	87,041
Shares: Vested | shares
Shares: Forfeited | shares
Shares: Unvested at June 30, 2017 | shares	87,041
Weighted-average grant date fair value: Unvested at December 31, 2016 | $ / shares
Weighted-average grant date fair value: Granted | $ / shares	10.60
Weighted-average grant date fair value: Vested | $ / shares
Weighted-average grant date fair value: Forfeited | $ / shares
Weighted-average grant date fair value: Unvested at June 30, 2017 | $ / shares	$ 10.60

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Stock-Based Compensation (Schedule Of Estimated Fair Value Of Options) (Details) - Market Based Awards [Member] - Monte Carlo Option-Pricing Model [Member]	6 Months Ended
	Jun. 30, 2017 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	25.00%
Stock price	$ 10.60
Dividend yield	7.40%
Risk free interest rate, minimum	0.89%
Risk free interest rate, maximum	1.81%

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Income Taxes (Narrative) (Details) - TRS Leasing, Inc [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Income Tax Disclosure [Line Items]
Alternative minimum tax expense	$ 35
Net operating loss carryforward for federal income tax purposes	$ 2,020
Minimum [Member]
Income Tax Disclosure [Line Items]
Loss carryforwards expiration period	Dec. 31, 2022
Maximum [Member]
Income Tax Disclosure [Line Items]
Loss carryforwards expiration period	Dec. 31, 2035

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Earnings Per Share (Reconciliation Of Basic And Diluted Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator: Basic
Net loss attributable to common shareholders: Continuing operations	$ 4,654	$ 7,108	$ (9,299)	$ (3,988)
Net loss attributable to common shareholders: Discontinued operations				654
Net earnings (loss) attributable to common shareholders	4,654	7,108	(9,299)	(3,334)
Less: Allocation to participating securities	(20)		(20)
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	4,634	7,108	(9,319)	(3,334)
Numerator: Diluted
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	4,634	7,108	(9,319)	(3,988)
Dividends on Series D Preferred Stock		978
Dividends and fair value adjustment on Series E Preferred Stock	(95)
Interest and fair value adjustment on Convertible Debt	(9)	(192)
Continuing operations - Diluted	4,530	7,894	(9,319)	(3,988)
Discontinued operations - Diluted				654
Total Diluted	$ 4,530	$ 7,894	$ (9,319)	$ (3,334)
Denominator
Weighted average number of common shares - Basic	11,541,085	760,129	7,263,158	760,129
Unvested stock		111
Warrants - RES	23,146	20,294
Convertible Debt	97,269	97,269
Weighted average number of common shares - Diluted	12,329,611	6,882,760	7,263,158	760,129
Earnings per Share:
Continuing operations - Basic	$ 0.40	$ 9.36	$ (1.28)	$ (5.25)
Discontinued operations - Basic				0.86
Total - Basic Earnings per Share	0.40	9.36	(1.28)	(4.39)
Continuing operations - Diluted	0.37	1.17	(1.28)	(5.25)
Discontinued operations - Diluted				0.86
Total - Diluted Earnings per Share	$ 0.37	$ 1.17	$ (1.28)	$ (4.39)
Series D Preferred Stock [Member]
Denominator
Preferred Stock		6,004,957
Series E Preferred Stock [Member]
Denominator
Preferred Stock	668,111

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Earnings Per Share (Schedule Of Potentially Dilutive Securities Excluded From Computation Of Earnings Per Share) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	246,812	214,305	2,834,340	2,053,138
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	481	865	481	865
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	15,269		7,677	161
Warrants - Employees [Member}
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	66,153	66,153	66,153	66,153
Series C Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator				1,204,564
Series D Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator			1,957,300	57,185
Series E Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator			450,239
Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator			97,269
LTIP Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	98,989	101,213	100,095	101,213
Real Estate Strategies, L.P. [Member] | Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator			96,587	576,923
Condor Hospitality Limited Partnership [Member] | Partnership Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	65,920	46,074	58,539	46,074

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Commitments And Contingencies (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) agreement
Loss Contingencies [Line Items]
Management fees incurred	$ 440	$ 452	$ 764	$ 851
Incentive management fee	$ 8	0	$ 33	21
Management agreement renewal additional term			1 year
Management agreement written notice of termination period			90 days
Number of hotels | property	19		19
Franchise costs	$ 947	884	$ 1,615	1,643
Lease expense	0	30	9	53	$ 157
Number of new leases entered into during period | agreement					3
Office Building [Member]
Loss Contingencies [Line Items]
Lease expense	$ 39	$ 48	$ 77	$ 94
Minimum [Member]
Loss Contingencies [Line Items]
Management fee percent			3.00%
Management agreement term			1 year
Franchise fee percent			3.30%
Other franchiser programs and service fee percent			2.50%
Franchise agreement term			10 years
Lease expiration					Dec. 31, 2019
Maximum [Member]
Loss Contingencies [Line Items]
Management fee percent			3.50%
Incentive fee percent			5.00%
Management agreement term			3 years
Franchise fee percent			5.50%
Other franchiser programs and service fee percent			6.00%
Franchise agreement term			25 years
Lease expiration					Dec. 31, 2021
Wholly Owned Properties [Member]
Loss Contingencies [Line Items]
Number of hotels | property	18		18
Wholly Owned Properties [Member] | Franchise Rights [Member]
Loss Contingencies [Line Items]
Number of hotels | property	17		17

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Subsequent Events (Narrative) (Details) $ in Thousands		6 Months Ended
	Jul. 17, 2017 USD ($) property	Jun. 30, 2017 property	Jun. 30, 2016 property
Subsequent Event [Line Items]
Number of wholly owned properties acquired | property		5	0
Subsequent Event [Member]
Subsequent Event [Line Items]
Number of wholly owned properties acquired | property	3
Number of assets with potential accelerated disposition upon closing of acquisitions | property	5
Fairfield Inn and Suites El Paso Airport [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Purchase price of hotel acquisition | $	$ 16,100
Towne Place Suites Austin North Tech Ridge [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Purchase price of hotel acquisition | $	21,750
Residence Inn Austin Airport [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Purchase price of hotel acquisition | $	$ 21,750