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Note 6 - Debt
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Debt Disclosure [Text Block]

6.

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, revolving credit facility, and unsecured term loan debt consisted of the following (dollars in thousands):

 

         

September 30, 2025

         
  

Interest

  

Maturity

  

Property

  

Balance Outstanding on Loan as of

 

Collateral

 

Rate

  

Date

  

Carrying Value

  

September 30, 2025

  

December 31, 2024

 

Revolving Credit Facility (1)

  5.66% 

September 25, 2029

  $—  $—  $110,000 

Unsecured Term Loan (2)

  5.61% 

September 25, 2029

   —   200,000   140,000 

Hampton Inn & Suites Houston Medical Center, TX

  4.25% 

January 6, 2025

   —   —   15,957 

Courtyard by Marriott Dallas, TX

  7.61% 

September 11, 2028

   38,680   24,500   24,500 

Hyatt Place Pittsburgh, PA (3)

  7.29% 

June 11, 2029

   29,089   23,300   23,300 

Residence Inn by Marriott Austin, TX

  7.42% 

September 6, 2033

   34,545   20,850   20,850 

TownePlace Suites by Marriott Austin, TX

  7.42% 

September 6, 2033

   29,172   19,075   19,075 

Courtyard by Marriott Summerville, SC

  7.33% 

September 11, 2033

   17,706   9,000   9,000 

Residence Inn by Marriott Summerville, SC

  7.33% 

September 11, 2033

   16,626   9,500   9,500 

SpringHill Suites by Marriott Savannah, GA (4)

  6.70% 

June 6, 2034

   32,057   22,000   22,000 

Hampton Inn & Suites Exeter, NH (4)

  6.70% 

June 11, 2034

   12,054   15,000   15,000 

Total debt before unamortized debt issue costs

        $209,929  $343,225  $409,182 

Unamortized term loan and mortgage debt issue costs

             (4,379)  (2,332)

Total debt outstanding

            $338,846  $406,850 

 

 

1.

The interest rate for the revolving credit facility is variable and based on one-month term secured overnight financing rate ("SOFR") plus a spread of 1.50% to 2.25% based on the Company's leverage.

 

 

2.

The interest rate for the unsecured term loan is variable and based on one-month term SOFR plus a spread of 1.45% to 2.20% based on the Company's leverage.

 

 

3.

On May 31, 2024, a subsidiary of Chatham entered into an agreement with Wells Fargo Bank to obtain a $23.3 million loan secured by the Hyatt Place Pittsburgh. The loan has a term of five years, carries a fixed interest rate of 7.29%, and is interest-only for its duration.

 

 

4.

On June 6, 2024, two subsidiaries of Chatham entered into two agreements with Barclays Capital Real Estate and Wells Fargo Bank to obtain a $22.0 million loan secured by the SpringHill Suites Savannah and a $15.0 million loan secured by the Hampton Inn & Suites Exeter. Each loan has a term of ten years, carries a fixed interest rate of 6.70%, and is interest-only for its duration.

 

On September 25, 2025, the Company entered into a new credit agreement for a credit facility (the "Credit Facility") consisting of a $300.0 million unsecured revolving credit facility and a $200.0 million unsecured term loan facility which replaced the existing $260.0 million revolving credit facility and the existing $140.0 unsecured term loan facility. Proceeds from the new $200.0 million funded term loan were used to repay the $60.0 million of outstanding borrowings under the prior $260.0 million revolving credit facility and the $140.0 million of outstanding borrowings under the prior term loan. The new Credit Facility has an initial maturity date of September 25, 2029 and provides options to extend for one year. Total commitments of $500.0 million under the new Credit Facility can be increased up to $650.0 million through an accordion feature.

 

At September 30, 2025 and December 31, 2024, the Company had $200.0 million and $250.0 million, respectively, of outstanding borrowings under its revolving credit facility and unsecured term loan. At September 30, 2025, the aggregate maximum remaining borrowing availability under the Credit Facility was $300.0 million.

 

During the nine months ended September 30, 2025, the Company repaid the maturing mortgage loan of $16.0 million on the Hampton Inn Houston hotel property. During the year ended December 31, 2024, the Company repaid the maturing mortgage loans of $29.3 million on the Residence Inn Garden Grove hotel property, $34.9 million on the Residence Inn Mountain View hotel property, $27.6 million on the SpringHill Suites Savannah hotel property, $59.5 million on the Residence Inn Silicon Valley I hotel property, $65.0 million on the Residence Inn Silicon Valley II hotel property, $44.7 million on the Residence Inn San Mateo hotel property, $18.8 million on the Hilton Garden Inn Marina del Rey hotel property, and $14.2 million on the Homewood Suites Billerica hotel property. The Company utilized cash, borrowings under its unsecured credit facility and unsecured term loan, and proceeds from its eight new mortgage loans to repay these loans.

 

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, 2025 and  December 31, 2024 was $153.0 million and $164.8 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, 2025, the Company’s variable rate debt consisted of borrowings under its revolving credit facility and its unsecured term loan. The estimated fair value of the Company’s variable rate debt as of  September 30, 2025 and  December 31, 2024 was $200.0 million and $250.0 million, respectively.

 

Future scheduled principal payments of debt obligations as of September 30, 2025, for the current year and each of the next five calendar years and thereafter are as follows (in thousands):

 

  

Amount

 

2025 (remaining three months)

 $— 

2026

  — 

2027

  — 

2028

  24,590 

2029

  223,681 

Thereafter

  94,954 

Total debt before unamortized debt issue costs

 $343,225 

Unamortized term loan and mortgage debt issue costs

  (4,379)

Total debt outstanding

 $338,846