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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 Date12/31/20 Property
Carrying
Value		Balance Outstanding as of
December 31, 2020December 31,
2019
Revolving Credit Facility (1)3.07 %March 8, 2022$608,319 $135,300 $90,000 
Construction loan (2)7.75 %August 4, 202443,651 13,325 — 
Residence Inn by Marriott New Rochelle, NY5.75 %September 1, 202121,883 12,602 12,936 
Residence Inn by Marriott San Diego, CA4.66 %February 6, 2023— — 27,272 
Homewood Suites by Hilton San Antonio, TX 4.59 %February 6, 202328,622 15,195 15,563 
Residence Inn by Marriott Vienna, VA4.49 %February 6, 202330,996 20,780 21,291 
Courtyard by Marriott Houston, TX4.19 %May 6, 202330,152 17,126 17,559 
Hyatt Place Pittsburgh, PA4.65 %July 6, 202333,760 21,031 21,520 
Residence Inn by Marriott Bellevue, WA4.97 %December 6, 202362,419 42,998 43,857 
Residence Inn by Marriott Garden Grove, CA 4.79 %April 6, 202441,246 31,463 32,053 
Residence Inn by Marriott Silicon Valley I, CA 4.64 %July 1, 202475,680 63,418 64,406 
Residence Inn by Marriott Silicon Valley II, CA 4.64 %July 1, 202483,931 69,192 70,270 
Residence Inn by Marriott San Mateo, CA 4.64 %July 1, 202462,652 47,564 48,305 
Residence Inn by Marriott Mountain View, CA4.64 %July 1, 202448,563 37,092 37,670 
SpringHill Suites by Marriott Savannah, GA 4.62 %July 6, 202433,349 29,358 29,817 
Hilton Garden Inn Marina del Rey, CA4.68 %July 6, 202438,044 20,490 20,931 
Homewood Suites by Hilton Billerica, MA4.32 %December 6, 202413,014 15,411 15,693 
Hampton Inn & Suites Houston Medical Cntr., TX 4.25 %January 6, 202515,769 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 outstanding608,770 585,465 
 
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 
2022144,549 
2023117,875 
2024309,941 
202515,935 
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.