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Debt | 9 Months Ended
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Sep. 30, 2022
Debt Disclosure [Abstract] |
Debt | Debt The Company’s mortgage loans are collateralized by first-mortgage liens on certain of the Company’s properties. The mortgage loans are non-recourse except for instances of fraud or misapplication of funds. Mortgage and revolving credit facility debt consisted of the following (dollars in thousands):
Collateral | Interest Rate |  | Maturity Date |  | September 30, 2022 Property Carrying Value |  | Balance Outstanding on Loan as of
| September 30, 2022 |  | December 31, 2021
Revolving Credit Facility (1) | 3.43 | % |  | March 8, 2023 |  | $ | — |  |  | $ | — |  |  | $ | 70,000 |
Construction loan (2) | 8.65 | % |  | August 4, 2024 |  | 67,483 |  |  | 39,331 |  |  | 35,007 |
Homewood Suites by Hilton San Antonio, TX | 4.59 | % |  | February 6, 2023 |  | 27,769 |  |  | 14,505 |  |  | 14,808 |
Residence Inn by Marriott Vienna, VA | 4.49 | % |  | February 6, 2023 |  | 29,078 |  |  | 19,824 |  |  | 20,243 |
Courtyard by Marriott Houston, TX | 4.19 | % |  | May 6, 2023 |  | 28,700 |  |  | 16,320 |  |  | 16,673 |
Hyatt Place Pittsburgh, PA | 4.65 | % |  | July 6, 2023 |  | 32,026 |  |  | 20,113 |  |  | 20,515 |
Residence Inn by Marriott Bellevue, WA | 4.97 | % |  | December 6, 2023 |  | 60,009 |  |  | 41,378 |  |  | 42,089 |
Residence Inn by Marriott Garden Grove, CA | 4.79 | % |  | April 6, 2024 |  | 38,306 |  |  | 30,352 |  |  | 30,839 |
Residence Inn by Marriott Silicon Valley I, CA | 4.64 | % |  | July 1, 2024 |  | 68,835 |  |  | 61,561 |  |  | 62,374 |
Residence Inn by Marriott Silicon Valley II, CA | 4.64 | % |  | July 1, 2024 |  | 76,575 |  |  | 67,166 |  |  | 68,054 |
Residence Inn by Marriott San Mateo, CA | 4.64 | % |  | July 1, 2024 |  | 57,672 |  |  | 46,170 |  |  | 46,781 |
Residence Inn by Marriott Mountain View, CA | 4.64 | % |  | July 6, 2024 |  | 43,019 |  |  | 36,005 |  |  | 36,481 |
SpringHill Suites by Marriott Savannah, GA | 4.62 | % |  | July 6, 2024 |  | 31,746 |  |  | 28,495 |  |  | 28,873 |
Hilton Garden Inn Marina del Rey, CA | 4.68 | % |  | July 6, 2024 |  | 36,419 |  |  | 19,660 |  |  | 20,024 |
Homewood Suites by Hilton Billerica, MA | 4.32 | % |  | December 6, 2024 |  | 11,619 |  |  | 14,884 |  |  | 15,114 |
Hampton Inn & Suites Houston Medical Center, TX | 4.25 | % |  | January 6, 2025 |  | 14,697 |  |  | 16,796 |  |  | 17,058 |
Total debt before unamortized debt issue costs |  |  |  |  | $ | 623,953 |  |  | $ | 472,560 |  |  | $ | 544,933 |
Unamortized mortgage debt issue costs |  |  |  |  |  |  | (442) |  |  | (644) |
Total debt outstanding |  |  |  |  |  |  | $ | 472,118 |  |  | $ | 544,289 |
1.The interest rate for the $250.0 million revolving credit facility is variable and based on LIBOR plus a spread of 1.5% to 2.25% based on leverage based pricing grid. At September 30, 2022 and December 31, 2021, the Company had $0 and $70.0 million, respectively, of outstanding borrowings under the revolving credit facility. Credit facility lenders representing $227.5 million of commitments have provided two six-month extension options that would extend the final maturity to March 8, 2024, if exercised. 2.On August 4, 2020, a subsidiary of Chatham entered into an agreement with affiliates of Mack Real Estate Credit Strategies to obtain a $40.0 million loan to fund the remaining construction costs of the Home2 Woodland Hills hotel development. The loan has an initial term of 4 years and there are two six-month extension options. The interest rate on the loan is LIBOR, subject to a 0.25% floor, plus a spread of 7.5%. 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 September 30, 2022 and December 31, 2021 was $414.2 million and $443.4 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 similar maturity and is classified within level 3 of the fair value hierarchy. As of September 30, 2022, the Company’s variable rate debt consisted of its revolving credit facility and construction loan. The estimated fair value of the Company’s variable rate debt as of September 30, 2022 and December 31, 2021 was $39.3 million and $105.0 million, respectively. Our credit facility contains financial covenants that require us to maintain secured leverage and total leverage below certain levels and maintain fixed charge coverage above certain levels. On October 26, 2021, the Company executed an amendment to its credit facility which extended a waiver of financial covenants until June 30, 2022. The Company exited its credit facility covenant waiver period as of the end of the second quarter of 2022 and is in compliance with the covenants in the credit facility agreement. 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 September 30, 2022, the debt service coverage ratios or debt yields for four of our mortgage loans were below the minimum thresholds such that the cash trap provision of each respective loan could be enforced. As of September 30, 2022, three of our mortgage debt lenders have 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 September 30, 2022, for the current year and each of the next five calendar years and thereafter are as follows (in thousands):
| Amount
2022 (remaining three months) | $ | 2,552 |
2023 | 117,919 |
2024 | 336,142 |
2025 | 15,947 |
2026 | — |
Thereafter | — |
Total debt before unamortized debt issue costs | $ | 472,560 |
Unamortized mortgage debt issue costs | (442) |
Total debt outstanding | $ | 472,118 |
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 Home2 Woodland Hills 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 statement of operations. As of September 30, 2022, the fair value of the interest rate caps were $0.7 million.

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