Notes Receivable, net and Other

9 Months Ended

Sep. 30, 2021

Notes receivable, net are summarized in the table below (dollars in thousands):


	Interest Rate		September 30, 2021		December 31, 2020
Construction Financing Note (1) (5)
Face amount	7.0	%	$	4,000	$	4,000
Discount (2)			—		(143)
			4,000		3,857
Certificate of Occupancy Note (3) (5)
Face amount	7.0	%	$	5,250	$	5,250
Discount (4)			(608)		(844)
			4,642		4,406
Notes receivable, net			$	8,642	$	8,263

____________________________________

(1) The outstanding principal balance and all accrued and unpaid interest shall be due and payable on or before the earlier of (i) the buyer closing on third-party institutional financing for the construction of improvements on the property, (ii) three years after the development commencement date, or (iii) July 9, 2024.

(2) The discount represents the imputed interest during the interest-free period. Interest began accruing on July 9, 2021.

(3) The outstanding principal balance and all accrued and unpaid interest shall be due and payable on or before July 9, 2025.

(4) The discount represents the imputed interest during the interest-free period. Interest begins accruing on July 9, 2023.

(5) The notes receivable are secured by the 1.65-acre land parcel adjacent to the Hilton St. Petersburg Bayfront.

Cash interest income of $63,000 was recorded for the three and nine months ended September 30, 2021. No cash interest income was recorded for the three and nine months ended September 30, 2020.

We recognized discount amortization income as presented in the table below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Line Item	2021		2020		2021		2020
Other income (expense)	$	87	$	140	$	379	$	412

On January 1, 2020, we adopted the provisions of ASC Topic 326, Financial Instruments - Credit Losses. Upon adoption, we evaluated the notes and other receivables under the criteria in ASC Topic 326. Upon adoption, we determined that the expected credit loss associated with the notes and other receivables was immaterial. As of September 30, 2021 and December 31, 2020, the expected credit loss associated with the notes and other receivables continues to be immaterial.

Other consideration received from the sale of the 1.65-acre parking lot adjacent to the Hilton St. Petersburg Bayfront is summarized in the table below (dollars in thousands):


	Imputed Interest Rate		December 31, 2020
Future ownership rights of parking parcel	7.0	%	$	4,100
Imputed interest			372
			$	4,472	(1)

____________________________________

(1) Included in “other assets” in the consolidated balance sheet.

On August 31, 2021, we obtained access to the parking parcel and capitalized $4.7 million to “investment in hotel properties, net” in the consolidated balance sheet. For the three months ended September 30, 2021 and 2020, we received reimbursement of $80,000 and $120,000 of parking fees and recognized income of $80,000 and $4,000, which is included in “other income (expense)” in the consolidated statements of operations while the parking parcel is in development. For the nine months ended September 30, 2021 and 2020, we received reimbursement of $320,000 and $120,000 of parking fees and recognized income of $89,000 and $4,000, which is included in “other income (expense)” in the consolidated statements of operations while the parking parcel is in development. On August 31, 2021, the parking parcel was completed and we obtained access to utilize the parking parcel.

For the three and nine months ended September 30, 2021 and 2020, respectively, we recognized imputed interest income as presented in the table below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Line Item	2021		2020		2021		2020
Other income (expense)	$	54	$	76	$	211	$	223

We recognized amortization expense related to the free use of parking easement as presented in the table below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Line Item	2021		2020		2021		2020
Other income (expense)	$	—	$	—	$	—	$	(117)