XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.23.2

Indebtedness, net | 6 Months Ended
--- | ---
Jun. 30, 2023
Debt Disclosure [Abstract] |
Indebtedness, net | Indebtedness, net Indebtedness, net consisted of the following (dollars in thousands):
Indebtedness |  | Collateral |  | Current Maturity |  | Final Maturity (11) |  | Interest Rate |  | June 30, 2023 |  | December 31, 2022
Mortgage loan (3) |  | The Ritz-Carlton Sarasota |  | April 2023 |  | April 2023 |  | LIBOR (1) + 2.65% |  | $ | — |  |  |  |  | $ | 98,500 |  |  |
Mortgage loan (4) |  | Hotel Yountville |  | May 2023 |  | May 2023 |  | LIBOR (1) + 2.55% |  | — |  |  |  |  | 51,000 |  |  |
Mortgage loan |  | Bardessono Hotel and Spa |  | August 2023 |  | August 2023 |  | SOFR (2) + 2.65% |  | 40,000 |  |  |  |  | 40,000 |  |  |
Mortgage loan (5) |  | The Ritz-Carlton St. Thomas |  | August 2023 |  | August 2024 |  | LIBOR (1) + 3.95% |  | 42,500 |  |  |  |  | 42,500 |  |  |
Mortgage loan (3) |  | The Ritz-Carlton Sarasota |  | October 2023 |  | April 2024 |  | SOFR (2) + 3.60% |  | 98,000 |  |  |  |  | — |  |  |
Mortgage loan (4) |  | Hotel Yountville |  | November 2023 |  | May 2024 |  | SOFR (2) + 2.65% |  | 51,000 |  |  |  |  | — |  |  |
Mortgage loan |  | The Ritz-Carlton Lake Tahoe |  | January 2024 |  | January 2024 |  | SOFR (2) + 2.20% |  | 54,000 |  |  |  |  | 54,000 |  |  |
Mortgage loan |  | Capital Hilton |  | February 2024 |  | February 2024 |  | LIBOR (1) + 1.70% |  | 195,000 |  |  |  |  | 195,000 |  |  |
|  | Hilton La Jolla Torrey Pines |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loan (6) |  | Park Hyatt Beaver Creek Resort & Spa |  | February 2024 |  | February 2027 |  | SOFR (2) + 2.86% |  | 70,500 |  |  |  |  | 70,500 |  |  |
Mortgage loan (7) |  | The Ritz-Carlton Reserve Dorado Beach |  | March 2024 |  | March 2026 |  | LIBOR (1) + 6.00% |  | — |  |  |  |  | 54,000 |  |  |
Mortgage loan (8) |  | The Notary Hotel |  | June 2024 |  | June 2025 |  | LIBOR (1) + 2.61% |  | 293,180 |  |  |  |  | 435,000 |  |  |
|  | The Clancy |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Sofitel Chicago Magnificent Mile |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Marriott Seattle Waterfront |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loan (9) |  | Mr. C Beverly Hills Hotel |  | August 2024 |  | August 2024 |  | LIBOR (1) + 3.60% |  | 30,000 |  |  |  |  | 30,000 |  |  |
Mortgage loan |  | Pier House Resort & Spa |  | September 2024 |  | September 2024 |  | SOFR (2) + 1.95% |  | 80,000 |  |  |  |  | 80,000 |  |  |
Mortgage loan (10) |  | Four Seasons Resort Scottsdale |  | December 2025 |  | December 2027 |  | SOFR (2) + 3.75% |  | 100,000 |  |  |  |  | 100,000 |  |  |
Convertible Senior Notes |  | Equity |  | June 2026 |  | June 2026 |  | 4.50% |  | 86,250 |  |  |  |  | 86,250 |  |  |
|  |  |  |  |  |  |  |  |  | 1,140,430 |  |  |  |  | 1,336,750 |  |  |
Capitalized default interest and late charges, net |  |  |  |  |  |  |  |  |  | 1,046 |  |  |  |  | 1,934 |  |  |
Deferred loan costs, net |  |  |  |  |  |  |  |  |  | (3,616) |  |  |  |  | (5,054) |  |  |
Premiums/(discounts), net |  |  |  |  |  |  |  |  |  | (1,902) |  |  |  |  | 500 |  |  |
Indebtedness, net |  |  |  |  |  |  |  |  |  | $ | 1,135,958 |  |  |  |  | $ | 1,334,130 |  |  |
__________________ (1)LIBOR rates were 5.22% and 4.39% at June 30, 2023 and December 31, 2022, respectively. (2)SOFR rates were 5.14% and 4.36% at June 30, 2023 and December 31, 2022, respectively. (3)On April 4, 2023, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 2.65% with SOFR + 2.75%, extended the current maturity date to October 2023, and added one six-month extension option, subject to satisfaction of certain conditions. Effective June 1, 2023, the variable interest rate increased from SOFR + 2.75% to SOFR + 3.60% in accordance with the loan agreement. (4)On April 18, 2023, we amended this mortgage loan. Terms of the amendment replaced the variable interest rate of LIBOR + 2.55% with SOFR + 2.65%, extended the current maturity date to November 2023, and added one six-month extension option, subject to satisfaction of certain conditions. (5)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the second was exercised in August 2022. This mortgage loan has a LIBOR floor of 1.00%. (6)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions. (7)On January 18, 2023, we repaid this mortgage loan. (8)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the fourth was exercised in June 2023. In accordance with exercising the fourth one-year extension option, we repaid $142.0 million of principal and the variable interest rate increased from LIBOR + 2.16% to LIBOR + 2.61%. (9)This mortgage loan has a LIBOR floor of 1.50%. (10)This mortgage loan has a SOFR floor of 1.00%. (11)The final maturity date assumes all available extension options will be exercised. During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by certain of our hotels. The Company determined that all of the forbearance and other agreements evaluated were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. As a result of the troubled debt restructurings, all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loans using the effective interest method. The amount of principal that was amortized was approximately $420,000 and $888,000, respectively, for the three and six months ended June 30, 2023. For the three and six months ended June 30, 2022, the amount of principal amortization was $500,000 and $1.0 million, respectively. On January 18, 2023, the Company repaid its $54.0 million mortgage loan secured by The Ritz-Carlton Reserve Dorado Beach, which resulted in a gain on extinguishment of debt of $2.3 million for the six months ended June 30, 2023. The gain was primarily attributable to the premium that was recorded upon the assumption of the mortgage loan when the hotel was acquired. Convertible Senior Notes In May 2021, the Company issued $86.25 million aggregate principal amount of 4.50% Convertible Senior Notes due June 2026 (the “Convertible Senior Notes”). The net proceeds from this offering of the Convertible Senior Notes were approximately $82.8 million after deducting the underwriting fees and other expenses paid by the Company. The Convertible Senior Notes are governed by an indenture between the Company and U.S. Bank National Association, as trustee. The Convertible Senior Notes bear interest at a rate of 4.50% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2021. The Convertible Senior Notes will mature on June 1, 2026. For the three and six months ended June 30, 2023, the Company recorded coupon interest expense of $970,000 and $1.9 million, respectively. For the three and six months ended June 30, 2022, the Company recorded coupon interest expense of $970,000 and $1.9 million, respectively. For the three and six months ended June 30, 2023, the Company recorded discount amortization of $146,000 and $290,000, respectively, related to the initial purchase discount, with the remaining discount balance to be amortized through June 2026. For the three and six months ended June 30, 2022, the discount amortization was $139,000 and $271,000, respectively. The Convertible Senior Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the election of the Company, based on an initial conversion rate of 157.7909 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to a conversion price of approximately $6.34 per share of common stock), subject to adjustment of the conversion rate under certain circumstances. In addition, following the occurrence of certain corporate events, if the Company provides notice of redemption or if it exercises its option to convert the Convertible Senior Notes, the Company will, in certain circumstances, increase the conversion rate for a holder that converts its Convertible Senior Notes in connection with such corporate event, such notice of redemption, or such issuer conversion option, as the case may be. The Company may redeem the Convertible Senior Notes at the Company’s option, in whole or in part, on any business day on or after the date of issuance if the last reported sale price per share of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Senior Notes to be redeemed subject to certain adjustments, plus accrued and unpaid interest to, but excluding, the redemption date. Effective June 30, 2023, LIBOR is no longer published. Accordingly all variable interest rate mortgage loans held by the Company that used the LIBOR index transitioned to SOFR beginning on July 1, 2023. Not all lenders will execute loan amendment documents and instead will defer to original loan documents that dictate changes in index rates. If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group. As of June 30, 2023, we were in compliance with all covenants.

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 -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//470/tableOfContent + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration