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Indebtedness, net (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Summary of Indebtedness
Indebtedness consisted of the following (in thousands):
September 30, 2023December 31, 2022
IndebtednessCollateralMaturity
Interest Rate (1)
Default Rate (2)
Debt BalanceDebt Balance
Mortgage loan (5)
1hotelJune 2023
LIBOR(3) +
2.45 %n/a$— $73,450 
Mortgage loan (6)
7hotelsJune 2023
SOFR(4) +
3.70 %4.00%180,720 180,720 
Mortgage loan (7)
7hotelsJune 2023
SOFR(4) +
3.44 %4.00%174,400 174,400 
Mortgage loan (8)
5hotelsJune 2023
SOFR(4) +
3.73 %4.00%215,120 215,120 
Mortgage loan (5)
1hotelNovember 2023
SOFR(4) +
2.80 %n/a— 25,000 
Mortgage loan (9) (10)
17hotelsNovember 2023
SOFR(4) +
3.26 %n/a409,750 415,000 
Mortgage loan (11)
1hotelDecember 2023
SOFR(4) +
2.85 %n/a15,175 15,290 
Mortgage loan 1hotelJanuary 20245.49 %n/a6,231 6,345 
Mortgage loan 1hotelJanuary 20245.49 %n/a9,093 9,261 
Term loan (12)
EquityJanuary 202414.00 %n/a183,082 195,959 
Mortgage loan (13)
8hotelsFebruary 2024
SOFR(4) +
3.28 %n/a345,000 395,000 
Mortgage loan (14)
2hotelsMarch 2024
SOFR(4) +
2.80 %n/a240,000 240,000 
Mortgage loan (15)
19hotelsApril 2024
SOFR(4) +
3.51 %n/a862,027 907,030 
Mortgage loan1hotelMay 20244.99 %n/a5,652 5,819 
Mortgage loan (16)
1hotelJune 2024
SOFR(4) +
2.00 %n/a8,881 8,881 
Mortgage loan (17)
5hotelsJune 2024
SOFR(4) +
3.90 %n/a158,689 221,040 
Mortgage loan (18)
5hotelsJune 2024
SOFR(4) +
4.17 %n/a237,061 262,640 
Mortgage loan (19)
5hotelsJune 2024
SOFR(4) +
2.90 %n/a119,003 160,000 
Mortgage loan2hotelsAugust 20244.85 %n/a10,986 11,172 
Mortgage loan3hotelsAugust 20244.90 %n/a22,024 22,349 
Mortgage loan (20)
1hotelNovember 2024
LIBOR(3) +
4.65 %n/a— 85,552 
Mortgage loan (20)
1hotelNovember 2024
SOFR(4) +
4.76 %n/a86,000 — 
Mortgage loan (21)
1hotelDecember 2024
SOFR(4) +
4.00 %n/a37,000 37,000 
Mortgage loan3hotelsFebruary 20254.45 %n/a45,999 46,918 
Mortgage loan1hotelMarch 20254.66 %n/a22,892 23,326 
Mortgage loan (22)
1hotelAugust 2025
SOFR(4) +
3.91 %n/a98,000 98,000 
Mortgage loan (5)
2hotelsMay 2026
SOFR(4) +
4.00 %n/a98,450 — 
3,591,235 3,835,272 
Bridge loan (23) (26)
1hotelNovember 20235.00%n/a19,889 — 
Environmental loan (26)
1hotelApril 202410.00%n/a571 — 
TIF loan (24) (26)
1hotelAugust 20258.25%n/a5,609 — 
Construction loan (25) (26)
1hotelMay 2033
SOFR(4) +
8.50%n/a12,622 — 
38,691 — 
Total indebtedness3,629,926 3,835,272 
Premiums (discounts), net(5,667)(20,249)
Capitalized default interest and late charges1,757 8,363 
Deferred loan costs, net(8,146)(8,530)
Embedded debt derivative23,096 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 $2.0 million additional funding available to replenish restricted cash balances in accordance with the terms of the mortgage loan. Effective June 30, 2023, we replaced the variable interest rate of LIBOR + 4.65% with SOFR + 4.76% in accordance with the terms and conditions of the loan agreement. This mortgage loan has two one-year extension options, subject to satisfaction of certain conditions.
(21)    This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. This mortgage loan has a SOFR floor of 0.50%.
(22)    This mortgage loan has one one-year extension option, subject to satisfaction of certain conditions.
(23)     This loan has one six-month extension option, subject to satisfaction of certain conditions.
(24)    On July 26, 2023, we amended this loan. Terms of the amendment included increasing the fixed rate of 4.75% to a fixed rate of 8.25%, and extending the maturity date from July 2024 to August 2025.
(25)    Effective August 1, 2023, we amended this construction loan. Terms of the amendment included replacing the variable interest rate of LIBOR + 8.39% with SOFR + 8.50% and extending the term loan effective date from August 2023 to January 2024. Additionally, the term loan rate of a fixed rate of 6.81% plus the higher of the a) five-year swap rate and b) 0.94% was replaced with a fixed rate of 7.75% plus SOFR, less 1.85%. The final maturity date is May 2033.
(26)    This loan is associated with 815 Commerce Managing Member, LLC. See discussion in notes 2, 4 and 8.
Schedule of Net Premium (Discount) Amortization Recognized
We recognized net premium (discount) amortization as presented in the table below (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
Line Item2023202220232022
Interest expense and amortization of discounts and loan costs$(5,031)$(3,108)$(13,862)$(8,719)