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Indebtedness, net (Tables) | 9 Months Ended
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Sep. 30, 2023
Debt Disclosure [Abstract] |
Summary of Indebtedness | Indebtedness consisted of the following (in thousands):
|  |  |  |  |  |  |  |  |  |  |  | September 30, 2023 |  | December 31, 2022
Indebtedness |  | Collateral |  | Maturity |  | Interest Rate (1) |  | Default Rate (2) |  | Debt Balance |  |  |  | Debt Balance |  |
Mortgage loan (5) |  | 1 | hotel |  | June 2023 |  | LIBOR(3) + | 2.45 | % |  | n/a |  | $ | — |  |  |  |  | $ | 73,450 |  |  |
Mortgage loan (6) |  | 7 | hotels |  | June 2023 |  | SOFR(4) + | 3.70 | % |  | 4.00% |  | 180,720 |  |  |  |  | 180,720 |  |  |
Mortgage loan (7) |  | 7 | hotels |  | June 2023 |  | SOFR(4) + | 3.44 | % |  | 4.00% |  | 174,400 |  |  |  |  | 174,400 |  |  |
Mortgage loan (8) |  | 5 | hotels |  | June 2023 |  | SOFR(4) + | 3.73 | % |  | 4.00% |  | 215,120 |  |  |  |  | 215,120 |  |  |
Mortgage loan (5) |  | 1 | hotel |  | November 2023 |  | SOFR(4) + | 2.80 | % |  | n/a |  | — |  |  |  |  | 25,000 |  |  |
Mortgage loan (9) (10) |  | 17 | hotels |  | November 2023 |  | SOFR(4) + | 3.26 | % |  | n/a |  | 409,750 |  |  |  |  | 415,000 |  |  |
Mortgage loan (11) |  | 1 | hotel |  | December 2023 |  | SOFR(4) + | 2.85 | % |  | n/a |  | 15,175 |  |  |  |  | 15,290 |  |  |
Mortgage loan |  | 1 | hotel |  | January 2024 |  |  | 5.49 | % |  | n/a |  | 6,231 |  |  |  |  | 6,345 |  |  |
Mortgage loan |  | 1 | hotel |  | January 2024 |  |  | 5.49 | % |  | n/a |  | 9,093 |  |  |  |  | 9,261 |  |  |
Term loan (12) |  |  | Equity |  | January 2024 |  |  | 14.00 | % |  | n/a |  | 183,082 |  |  |  |  | 195,959 |  |  |
Mortgage loan (13) |  | 8 | hotels |  | February 2024 |  | SOFR(4) + | 3.28 | % |  | n/a |  | 345,000 |  |  |  |  | 395,000 |  |  |
Mortgage loan (14) |  | 2 | hotels |  | March 2024 |  | SOFR(4) + | 2.80 | % |  | n/a |  | 240,000 |  |  |  |  | 240,000 |  |  |
Mortgage loan (15) |  | 19 | hotels |  | April 2024 |  | SOFR(4) + | 3.51 | % |  | n/a |  | 862,027 |  |  |  |  | 907,030 |  |  |
Mortgage loan |  | 1 | hotel |  | May 2024 |  |  | 4.99 | % |  | n/a |  | 5,652 |  |  |  |  | 5,819 |  |  |
Mortgage loan (16) |  | 1 | hotel |  | June 2024 |  | SOFR(4) + | 2.00 | % |  | n/a |  | 8,881 |  |  |  |  | 8,881 |  |  |
Mortgage loan (17) |  | 5 | hotels |  | June 2024 |  | SOFR(4) + | 3.90 | % |  | n/a |  | 158,689 |  |  |  |  | 221,040 |  |  |
Mortgage loan (18) |  | 5 | hotels |  | June 2024 |  | SOFR(4) + | 4.17 | % |  | n/a |  | 237,061 |  |  |  |  | 262,640 |  |  |
Mortgage loan (19) |  | 5 | hotels |  | June 2024 |  | SOFR(4) + | 2.90 | % |  | n/a |  | 119,003 |  |  |  |  | 160,000 |  |  |
Mortgage loan |  | 2 | hotels |  | August 2024 |  |  | 4.85 | % |  | n/a |  | 10,986 |  |  |  |  | 11,172 |  |  |
Mortgage loan |  | 3 | hotels |  | August 2024 |  |  | 4.90 | % |  | n/a |  | 22,024 |  |  |  |  | 22,349 |  |  |
Mortgage loan (20) |  | 1 | hotel |  | November 2024 |  | LIBOR(3) + | 4.65 | % |  | n/a |  | — |  |  |  |  | 85,552 |  |  |
Mortgage loan (20) |  | 1 | hotel |  | November 2024 |  | SOFR(4) + | 4.76 | % |  | n/a |  | 86,000 |  |  |  |  | — |  |  |
Mortgage loan (21) |  | 1 | hotel |  | December 2024 |  | SOFR(4) + | 4.00 | % |  | n/a |  | 37,000 |  |  |  |  | 37,000 |  |  |
Mortgage loan |  | 3 | hotels |  | February 2025 |  |  | 4.45 | % |  | n/a |  | 45,999 |  |  |  |  | 46,918 |  |  |
Mortgage loan |  | 1 | hotel |  | March 2025 |  |  | 4.66 | % |  | n/a |  | 22,892 |  |  |  |  | 23,326 |  |  |
Mortgage loan (22) |  | 1 | hotel |  | August 2025 |  | SOFR(4) + | 3.91 | % |  | n/a |  | 98,000 |  |  |  |  | 98,000 |  |  |
Mortgage loan (5) |  | 2 | hotels |  | May 2026 |  | SOFR(4) + | 4.00 | % |  | n/a |  | 98,450 |  |  |  |  | — |  |  |
|  |  |  |  |  |  |  |  |  |  |  | 3,591,235 |  |  |  |  | 3,835,272 |  |  |
Bridge loan (23) (26) |  | 1 | hotel |  | November 2023 |  |  | 5.00% |  | n/a |  | 19,889 |  |  |  |  | — |  |  |
Environmental loan (26) |  | 1 | hotel |  | April 2024 |  |  | 10.00% |  | n/a |  | 571 |  |  |  |  | — |  |  |
TIF loan (24) (26) |  | 1 | hotel |  | August 2025 |  |  | 8.25% |  | n/a |  | 5,609 |  |  |  |  | — |  |  |
Construction loan (25) (26) |  | 1 | hotel |  | May 2033 |  | SOFR(4) + | 8.50% |  | n/a |  | 12,622 |  |  |  |  | — |  |  |
|  |  |  |  |  |  |  |  |  |  |  | 38,691 |  |  |  |  | — |  |  |
Total indebtedness |  |  |  |  |  |  |  |  |  |  |  | 3,629,926 |  |  |  |  | 3,835,272 |  |  |
Premiums (discounts), net |  |  |  |  |  |  |  |  |  |  |  | (5,667) |  |  |  |  | (20,249) |  |  |
Capitalized default interest and late charges |  |  |  |  |  |  |  |  |  |  |  | 1,757 |  |  |  |  | 8,363 |  |  |
Deferred loan costs, net |  |  |  |  |  |  |  |  |  |  |  | (8,146) |  |  |  |  | (8,530) |  |  |
Embedded debt derivative |  |  |  |  |  |  |  |  |  |  |  | 23,096 |  |  |  |  | 23,687 |  |  |
Indebtedness, net |  |  |  |  |  |  |  |  |  |  |  | $ | 3,640,966 |  |  |  |  | $ | 3,838,543 |  |  |
Indebtedness related to assets held for sale, net (10) |  | 1 | hotel |  | June 2024 |  | SOFR(4) + | 3.90% |  | n/a |  | 9,247 |  |  |  |  | — |  |  |
|  |  |  |  |  |  |  |  |  |  |  | $ | 3,631,719 |  |  |  |  | $ | 3,838,543 |  |  |
_____________________________ (1) Interest rates do not include default or late payment rates in effect on some mortgage loans. (2) Default rates are presented for mortgage loans which were in default, in accordance with the terms and conditions of the applicable mortgage agreement, as of September 30, 2023. The default rate is accrued in addition to the stated interest rate. (3) LIBOR rate was 4.392% December 31, 2022. (4) SOFR rates were 5.320% and 4.358% at September 30, 2023 and December 31, 2022, respectively. (5) On May 19, 2023, we refinanced this mortgage loan with a new $98.5 million mortgage loan with a three-year initial term and two one-year extension options, subject to satisfaction of certain conditions. The new mortgage loan is interest only and bears interest at a rate of SOFR + 4.00% and has a SOFR floor of 0.50%. (6) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period ended in June 2022. The paydown that was required in order to exercise the fourth one-year extension option was not made. As a result, effective June 9, 2023, this mortgage loan was in default under the terms and conditions of the mortgage loan agreement. Default interest has been accrued, in accordance with the terms of the mortgage loan agreement, and is reflected in the Company’s consolidated balance sheet and statement of operations. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.65% to SOFR + 3.70%. (7) This loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in June 2022. The paydown that was required in order to exercise the fourth one-year extension option was not made. As a result, effective June 9, 2023, this mortgage loan was in default under the terms and conditions of the mortgage loan agreement. Default interest has been accrued, in accordance with the terms of the mortgage loan agreement, and is reflected in the Company’s consolidated balance sheet and statement of operations. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.39% to SOFR + 3.44%. (8) This loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in June 2022. The paydown that was required in order to exercise the fourth one-year extension option was not made. As a result, effective June 9, 2023, this mortgage loan was in default under the terms and conditions of the mortgage loan agreement. Default interest has been accrued, in accordance with the terms of the mortgage loan agreement, and is reflected in the Company’s consolidated balance sheet and statement of operations. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.68% to SOFR + 3.73%. (9) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began in November 2022. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.13% to SOFR + 3.26%. On July 14, 2023, we repaid $5.3 million of principal on this mortgage loan. (10) A portion of this mortgage loan at September 30, 2023 relates to the Bucks County Sheraton. See note 5. (11) This loan has two one-year extension options, subject to satisfaction of certain conditions. The first one-year extension period began in December 2022. (12) This term loan has two one-year extension options, subject to satisfaction of certain conditions. Effective January 15, 2023, the interest rate decreased from 16% to 14% in accordance with the terms and conditions of the loan agreement. On August 1, 2023, we repaid $12.9 million of principal on this term loan. (13) On February 9, 2023, we amended this mortgage loan. Terms of the amendment included a principal paydown of $50.0 million, and the variable interest rate changed from LIBOR + 3.07% to LIBOR + 3.17%. This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began in February 2023. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.17% to SOFR + 3.28%. (14) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The third one-year extension period began in March 2023. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 2.75% to SOFR + 2.80%. (15) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began in April 2023. In accordance with exercising the fourth one-year extension option, we repaid $45.0 million of principal and the variable interest rate changed from LIBOR + 3.20% to LIBOR + 3.47%. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.47% to SOFR + 3.51%. (16) This mortgage loan has a SOFR floor of 2.00%. (17) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began effective June 2023. In accordance with exercising the extension option, we repaid $62.4 million of principal and the variable interest rate changed from LIBOR + 3.73% to LIBOR + 3.86%. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 3.86% to SOFR + 3.90%. (18) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began in June 2023. In accordance with exercising the extension option, the interest rate changed from LIBOR + 4.02% to LIBOR + 4.15%. On July 5, 2023, we repaid $25.6 million of principal, reducing the outstanding principal balance to $237.1 million, in accordance with exercising the fourth extension option. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 4.15% to SOFR + 4.17%. (19) This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions. The fourth one-year extension period began effective June 2023. In accordance with exercising the extension option, the interest rate changed from LIBOR + 2.73% to LIBOR + 2.85%. On July 7, 2023, we repaid $41.0 million of principal, reducing the outstanding principal balance to $119.0 million, in accordance with exercising the fourth extension option. This loan transitioned from LIBOR to SOFR in July 2023 and the variable interest rate changed from LIBOR + 2.85% to SOFR + 2.90%. (20) On January 27, 2023, we drew the remaining $449,000 of the $2.0 million additional funding available to replenish restricted cash balances in accordance with the terms of the mortgage loan. Effective June 30, 2023, we replaced the variable interest rate of LIBOR + 4.65% with SOFR + 4.76% in accordance with the terms and conditions of the loan agreement. This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions. (21) This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. This mortgage loan has a SOFR floor of 0.50%. (22) This mortgage loan has one one-year extension option, subject to satisfaction of certain conditions. (23) This loan has one six-month extension option, subject to satisfaction of certain conditions. (24) On July 26, 2023, we amended this loan. Terms of the amendment included increasing the fixed rate of 4.75% to a fixed rate of 8.25%, and extending the maturity date from July 2024 to August 2025. (25) Effective August 1, 2023, we amended this construction loan. Terms of the amendment included replacing the variable interest rate of LIBOR + 8.39% with SOFR + 8.50% and extending the term loan effective date from August 2023 to January 2024. Additionally, the term loan rate of a fixed rate of 6.81% plus the higher of the a) five-year swap rate and b) 0.94% was replaced with a fixed rate of 7.75% plus SOFR, less 1.85%. The final maturity date is May 2033. (26) This loan is associated with 815 Commerce Managing Member, LLC. See discussion in notes 2, 4 and 8.
Schedule of Net Premium (Discount) Amortization Recognized | We recognized net premium (discount) amortization as presented in the table below (in thousands):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Line Item |  | 2023 |  | 2022 |  | 2023 |  | 2022 |  |
Interest expense and amortization of discounts and loan costs |  | $ | (5,031) |  |  | $ | (3,108) |  |  | $ | (13,862) |  |  | $ | (8,719) |  |  |

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