XML 29 R15.htm IDEA: XBRL DOCUMENT
v3.20.4

Debt | 12 Months Ended
--- | ---
Dec. 31, 2020
Debt Disclosure [Abstract] |
Debt | Debt The Company's mortgage loans are collateralized by first-mortgage liens on certain of the Company's properties. The mortgages are non-recourse except for instances of fraud or misapplication of funds. The Company's credit facility is secured by pledges of its equity interests in certain properties. Debt consisted of the following (in thousands):
Loan/Collateral | Interest Rate |  | Maturity Date |  | 12/31/20 Property Carrying Value |  | Balance Outstanding as of
December 31, 2020 |  | December 31, 2019
Revolving Credit Facility (1) | 3.07 | % |  | March 8, 2022 |  | $ | 608,319 |  |  | $ | 135,300 |  |  | $ | 90,000 |
Construction loan (2) | 7.75 | % |  | August 4, 2024 |  | 43,651 |  |  | 13,325 |  |  | — |
Residence Inn by Marriott New Rochelle, NY | 5.75 | % |  | September 1, 2021 |  | 21,883 |  |  | 12,602 |  |  | 12,936 |
Residence Inn by Marriott San Diego, CA | 4.66 | % |  | February 6, 2023 |  | — |  |  | — |  |  | 27,272 |
Homewood Suites by Hilton San Antonio, TX | 4.59 | % |  | February 6, 2023 |  | 28,622 |  |  | 15,195 |  |  | 15,563 |
Residence Inn by Marriott Vienna, VA | 4.49 | % |  | February 6, 2023 |  | 30,996 |  |  | 20,780 |  |  | 21,291 |
Courtyard by Marriott Houston, TX | 4.19 | % |  | May 6, 2023 |  | 30,152 |  |  | 17,126 |  |  | 17,559 |
Hyatt Place Pittsburgh, PA | 4.65 | % |  | July 6, 2023 |  | 33,760 |  |  | 21,031 |  |  | 21,520 |
Residence Inn by Marriott Bellevue, WA | 4.97 | % |  | December 6, 2023 |  | 62,419 |  |  | 42,998 |  |  | 43,857 |
Residence Inn by Marriott Garden Grove, CA | 4.79 | % |  | April 6, 2024 |  | 41,246 |  |  | 31,463 |  |  | 32,053 |
Residence Inn by Marriott Silicon Valley I, CA | 4.64 | % |  | July 1, 2024 |  | 75,680 |  |  | 63,418 |  |  | 64,406 |
Residence Inn by Marriott Silicon Valley II, CA | 4.64 | % |  | July 1, 2024 |  | 83,931 |  |  | 69,192 |  |  | 70,270 |
Residence Inn by Marriott San Mateo, CA | 4.64 | % |  | July 1, 2024 |  | 62,652 |  |  | 47,564 |  |  | 48,305 |
Residence Inn by Marriott Mountain View, CA | 4.64 | % |  | July 1, 2024 |  | 48,563 |  |  | 37,092 |  |  | 37,670 |
SpringHill Suites by Marriott Savannah, GA | 4.62 | % |  | July 6, 2024 |  | 33,349 |  |  | 29,358 |  |  | 29,817 |
Hilton Garden Inn Marina del Rey, CA | 4.68 | % |  | July 6, 2024 |  | 38,044 |  |  | 20,490 |  |  | 20,931 |
Homewood Suites by Hilton Billerica, MA | 4.32 | % |  | December 6, 2024 |  | 13,014 |  |  | 15,411 |  |  | 15,693 |
Hampton Inn & Suites Houston Medical Cntr., TX | 4.25 | % |  | January 6, 2025 |  | 15,769 |  |  | 17,396 |  |  | 17,717 |
Total debt before unamortized debt issue costs |  |  |  |  | $ | 1,272,050 |  |  | $ | 609,741 |  |  | $ | 586,860 |
Unamortized mortgage debt issue costs |  |  |  |  |  |  | (971) |  |  | (1,395) |
Total debt outstanding |  |  |  |  |  |  | 608,770 |  |  | 585,465 |
1.The interest rate for the revolving credit facility is variable and based on LIBOR (subject to a 0.5% floor) plus a spread of 2.50% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. At December 31, 2020 and 2019, the Company had $135.3 million and $90.0 million, respectively, of outstanding borrowings under its $250.0 million revolving credit facility. The credit facility provides two six-month extension options that would extend the final maturity to March 8, 2023 if exercised. The Company can exercise the extension options as long as there is no default. 2.On August 4, 2020, a subsidiary of the Company entered into an agreement with affiliates of Mack Real Estate Credit Strategies to obtain a loan with a total commitment of up to $40 million to fund the remaining construction costs of the Warner Center hotel development. The loan has an initial term of 4 years and there are two six-month extension options. The rate on the loan is LIBOR, subject to a 0.25% floor, plus a spread of 7.5%. At December 31, 2020 and 2019, the Company had $135.3 million and $90.0 million, respectively, of outstanding borrowings under its revolving credit facility. At December 31, 2020, the maximum borrowing availability under the revolving credit facility was $250.0 million. The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. All of the Company's mortgage loans are fixed-rate. Rates take into consideration general market conditions, quality and estimated value of collateral and maturity of debt with similar credit terms and are classified within level 3 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt as of December 31, 2020 and 2019 was $462.6 million and $501.5 million, respectively. The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with a similar maturity and that is classified within level 3 of the fair value hierarchy. As of December 31, 2020, the Company’s variable rate debt consists of its revolving credit facility and its construction loan. The estimated fair value of the Company’s variable rate debt as of December 31, 2020 and 2019 was $148.6 million and $90.0 million, respectively. On December 16, 2020, the Company, entered into a Third Amendment to the Company’s Amended and Restated Credit Agreement, dated as of March 8, 2018 (as amended by the Credit Agreement Amendment, and as previously amended by that certain First Amendment to the Amended and Restated Credit Agreement, dated as of May 6, 2020, and as further amended by that certain Second Amendment to Amended and Restated Credit Agreement, dated as of July 23, 2020), with certain lenders for whom Barclays Bank PLC is acting as the administrative agent. The amendment provides for the waiver of certain financial covenants through December 31, 2021 and allows the Company to borrow up to the entire $250 million facility size during this period. During this covenant waiver period, the Company will be required to maintain a minimum liquidity of $25 million which will include both unrestricted cash and credit facility availability. In connection with the amendment, the Company added six hotels to the credit facility’s borrowing base which now has a total of 24 properties. The amendment provided the Company’s credit facility lenders with pledges of the equity in the 24 borrowing base hotels. The amendment places additional limits on the Company’s ability to incur debt, pay dividends, and make capital expenditures during the covenant waiver period. During the covenant waiver period interest will be calculated as LIBOR (subject to a 0.5% floor) plus a spread of 2.50% if borrowings remain at or below $200 million and a spread of 3.0% if borrowings exceed $200 million. As of December 31, 2020, the Company was in compliance with all of its modified financial covenants. Our mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel’s operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of our lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of December 31, 2020, the debt service coverage ratios or debt yields for all of our mortgage loans were below the minimum thresholds such that the cash trap provision of each respective loan could be enforced. As of December 31, 2020, none of our mortgage debt lenders has enforced cash trap provisions. We do not expect that such cash traps will affect our ability to satisfy our short-term liquidity requirements. Future scheduled principal payments of debt obligations as of December 31, 2020, for each of the next five calendar years and thereafter are as follows (in thousands):
| Amount
2021 | $ | 21,441 |
2022 | 144,549 |
2023 | 117,875 |
2024 | 309,941 |
2025 | 15,935 |
Thereafter | — |
Total debt before unamortized debt issue costs | $ | 609,741 |
Unamortized mortgage debt issue costs | (971) |
Total debt outstanding | $ | 608,770 |
Accounting for Derivative Instruments The Company has entered into interest rate cap agreements to hedge against interest rate fluctuations related to the construction loan for the Warner Center hotel. The Company records its derivative instruments on the balance sheet at their estimated fair values. Changes in the fair value of the derivatives are recorded each period in current earnings or in other comprehensive income, depending on whether a derivative is designated as part of a hedging relationship and, if it is, depending on the type of hedging relationship. The Company's interest rate caps are not designated as a hedge but to eliminate the incremental cost to the Company if the one-month LIBOR were to exceed 3.5%. Accordingly, the interest rate caps are recorded on the balance sheet under prepaid expenses and other assets at the estimated fair value and realized and unrealized changes in the fair value are reported in the consolidated statements of operations. As of December 31, 2020, the fair value of the interest rate caps were $9.1 thousand.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration