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Debt
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Debt

4. Debt

Mortgage Loans, Net. As of June 30, 2025 and December 31, 2024, we had approximately $313.9 million and approximately $316.5 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels.

 

 

Balance Outstanding as of

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

Prepayment

 

Maturity

 

Amortization

 

Interest

 

Property

2025

 

 

2024

 

 

Penalties

 

Date

 

Provisions

 

Rate

 

The DeSoto (1)

$

28,696,534

 

 

$

29,236,795

 

 

Yes

 

7/1/2026

 

25 years

 

4.25%

 

The DeSoto (2)

 

4,965,264

 

 

 

4,982,794

 

 

Yes

 

7/1/2026

 

25 years

 

7.50%

 

DoubleTree by Hilton Jacksonville
   Riverfront (3)

 

25,824,300

 

 

 

26,056,500

 

 

None

 

7/8/2029

 

25 years

 

SOFR plus 3.00%

 

DoubleTree by Hilton Laurel (4)

 

10,000,000

 

 

 

10,000,000

 

 

(4)

 

5/6/2028

 

(4)

 

7.35%

 

DoubleTree by Hilton Philadelphia Airport (5)

 

35,915,488

 

 

 

35,915,488

 

 

None

 

4/29/2026

 

(5)

 

SOFR plus 3.50%

 

DoubleTree Resort by Hilton Hollywood
   Beach (6)

 

49,646,982

 

 

 

50,211,533

 

 

(6)

 

10/1/2025

 

30 years

 

4.913%

 

Georgian Terrace (7)

 

37,994,787

 

 

 

38,375,095

 

 

None

 

(7)

 

30 years

 

4.42%

 

Hotel Alba Tampa, Tapestry Collection by Hilton (8)

 

35,000,000

 

 

 

35,000,000

 

 

(8)

 

3/6/2029

 

(8)

 

8.49%

 

Hotel Ballast Wilmington, Tapestry Collection by
   Hilton (9)

 

29,261,481

 

 

 

29,770,045

 

 

Yes

 

1/1/2027

 

25 years

 

4.25%

 

Hyatt Centric Arlington (10)

 

44,725,680

 

 

 

45,317,273

 

 

Yes

 

10/1/2028

 

30 years

 

5.25%

 

The Whitehall (11)

 

13,635,598

 

 

 

13,777,078

 

 

None

 

2/26/2028

 

25 years

 

PRIME plus 1.25%

 

Total Mortgage Principal Balance

$

315,666,114

 

 

$

318,642,601

 

 

 

 

 

 

 

 

 

 

Deferred financing costs, net

 

(1,727,146

)

 

 

(2,144,656

)

 

 

 

 

 

 

 

 

 

Unamortized premium on loan

 

5,862

 

 

 

18,203

 

 

 

 

 

 

 

 

 

 

Total Mortgage Loans, Net

$

313,944,830

 

 

$

316,516,148

 

 

 

 

 

 

 

 

 

 

(1)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date.

(2)

The note is a second mortgage that amortizes on a 25-year schedule. The note can be prepaid with penalty.

(3)

The note provides for an initial tranche in the amount of $26.25 million and a renovation tranche in the amount of $9.49 million.

(4)

The note requires payments of interest only and cannot be prepaid until the last 4 months of the loan term.

(5)

The note requires payments of interest only. On May 3, 2024, we entered into an interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026.

(6)

With limited exception, the note could not be prepaid prior to June 2025.

(7)

The note matured on June 1, 2025 and is in default. The Company is in discussion with the special servicer and has proposed terms for a 1-year extension which are under consideration. The Company intends to continue making interest payments, as well as real estate tax escrows and required reserve payments in the interim.

(8)

The note requires payments of interest only and cannot be prepaid until the last four months of the term.

(9)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date.

(10)

The note can be prepaid with penalty in years 6-10 and without penalty during the final 4 months of the term.

(11)

The note bears a floating interest rate of New York Prime Rate plus 1.25%, with a floor of 7.50%.

 

As of June 30, 2025, the Company was in compliance with all debt covenants, current on all loan payments and not otherwise in default under any of our mortgage loans, with the exception of a payment at maturity default on the mortgage on the Georgian Terrace and a covenant default on the DoubleTree by Hilton Jacksonville Riverfront. We have requested a 1-year extension on the mortgage on the Georgian Terrace, but may be required to obtain alternate financing at unfavorable terms. We have requested a waiver from the lender of the mortgage on the DoubleTree by Hilton Jacksonville Riverfront. If we are unable to obtain a waiver, we may be required to provide cash collateral or reduce the outstanding indebtedness by approximately $4.0 million. The mortgages on the DoubleTree Resort by Hilton Hollywood Beach, the DoubleTree by Hilton Philadelphia Airport and The DeSoto mature in October 2025, April 2026 and July 2026, respectively. We intend to obtain an extension from the existing lenders of the DoubleTree Resort by Hilton Hollywood Beach and the DoubleTree by Hilton Philadelphia Airport, but may be required to refinance these mortgages. Based on current and anticipated financial performance of the properties and anticipated market conditions, we may be required to reduce the level of indebtedness by an amount of (i) up to $4.0 million on the refinance of the Georgian Terrace, (ii) up to $12.3 million for the mortgage on the DoubleTree Resort by Hilton Hollywood Beach, and (ii) up to $12.7 million on the DoubleTree by Hilton Philadelphia Airport. We intend to refinance the indebtedness on The DeSoto at an amount at least equivalent to the expiring indebtedness.

 

Total future mortgage debt maturities for the remaining six and twelve-month periods, without respect to any extension of loan maturity or loan modification after June 30, 2025, were as follows:

 

For the remaining six months ending December 31, 2025

$

89,714,887

 

December 31, 2026

 

72,118,271

 

December 31, 2027

 

29,804,854

 

December 31, 2028

 

64,829,201

 

December 31, 2029

 

59,198,901

 

Total future maturities

$

315,666,114

 

PPP Loans. The Operating Partnership and certain of its subsidiaries have received PPP Loans administered by the U.S. Small Business Administration pursuant to the CARES Act. Each PPP Loan had an initial term of two years, with the ability to extend the loan to five years, if not forgiven, and carries an interest rate of 1.00%. Equal payments of principal and interest begin no later than 10 months following origination of the loan and are amortized over the remaining term of the loan. Pursuant to the terms of the CARES Act, the proceeds of each PPP Loan may be used for payroll costs, mortgage interest, rent or utility costs. The promissory note for each PPP Loan contains customary events of default relating to, among other things, payment defaults and breach of representations and warranties or of provisions of the relevant promissory note.

Under the terms of the CARES Act, each borrower can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds in accordance with the terms of the CARES Act. No assurance is provided that any borrower will obtain forgiveness under any relevant PPP Loan in whole or in part.

On April 16, 2020, we entered into a promissory note with Village Bank in connection with a PPP Loan and received proceeds of $333,500. We are required to make monthly payments of $18,000 through December 25, 2025.

On April 28, 2020, we entered into a promissory note and received proceeds of approximately $9.4 million under a PPP Loan from Fifth Third Bank, National Association. On December 9, 2022, we were notified we had received principal forgiveness in the amount of approximately $4.6 million and are required to make monthly payments of $56,809 through July 1, 2025 to extinguish the loan.

On May 6, 2020, we entered into a second promissory note with Fifth Third Bank, National Association and received proceeds of $952,700 under a PPP Loan. On February 3, 2023, we were notified we had received principal forgiveness in the amount of approximately $268,309 and were required to make monthly payments of $13,402 through May 6, 2025 to extinguish the loan.

At June 30, 2025 and December 31, 2024, the PPP loans had a cumulative balance of approximately $0.2 million and approximately $0.7 million, respectively.