Cover page
Cover page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 06, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-14765 | |
Entity Registrant Name | HERSHA HOSPITALITY TRUST | |
Entity Incorporation, State | MD | |
Entity Tax Identification Number | 25-1811499 | |
Entity Address, Street | 44 Hersha Drive | |
Entity Address, City | Harrisburg | |
Entity Address, State | PA | |
Entity Address, Postal Zip Code | 17102 | |
City Area Code | 717 | |
Local Phone Number | 236-4400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001063344 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Shares | ||
Entity Information [Line Items] | ||
Title of each class | Class A Common Shares of Beneficial Interest, par value $.01 per share | |
Trading Symbol(s) | HT | |
Name of each exchange on which registered | NYSE | |
Entity Common Stock, Shares Outstanding (in shares) | 38,789,371 | |
Series C Preferred Shares | ||
Entity Information [Line Items] | ||
Title of each class | 6.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per share | |
Trading Symbol(s) | HT-PC | |
Name of each exchange on which registered | NYSE | |
Series D Preferred Shares | ||
Entity Information [Line Items] | ||
Title of each class | 6.500% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per share | |
Trading Symbol(s) | HT-PD | |
Name of each exchange on which registered | NYSE | |
Series E Preferred Shares | ||
Entity Information [Line Items] | ||
Title of each class | 6.500% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per share | |
Trading Symbol(s) | HT-PE | |
Name of each exchange on which registered | NYSE | |
Class B Common Shares | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Investment in Hotel Properties, Net of Accumulated Depreciation | $ 1,902,464 | $ 1,975,973 |
Investment in Unconsolidated Joint Ventures | 7,527 | 8,446 |
Cash and Cash Equivalents | 23,228 | 27,012 |
Escrow Deposits | 7,374 | 9,973 |
Hotel Accounts Receivable | 3,801 | 9,213 |
Due from Related Parties | 2,363 | 6,113 |
Intangible Assets, Net of Accumulated Amortization of $6,705 and $6,545 | 1,876 | 2,137 |
Right of Use Assets | 44,761 | 45,384 |
Other Assets | 20,996 | 38,177 |
Hotel Assets Held for Sale | 40,170 | 0 |
Total Assets | 2,054,560 | 2,122,428 |
Liabilities and Equity: | ||
Line of Credit | 95,000 | 48,000 |
Term Loans, Net of Unamortized Deferred Financing Costs (Note 5) | 697,597 | 697,183 |
Unsecured Notes Payable, Net of Unamortized Deferred Financing Costs (Note 5) | 50,763 | 50,736 |
Mortgages Payable, Net of Unamortized Premium and Unamortized Deferred Financing Costs | 331,771 | 332,280 |
Lease Liabilities | 54,217 | 54,548 |
Accounts Payable, Accrued Expenses and Other Liabilities | 74,161 | 47,626 |
Dividends and Distributions Payable | 0 | 17,058 |
Total Liabilities | 1,303,509 | 1,247,431 |
Redeemable Noncontrolling Interests - Consolidated Joint Venture (Note 1) | 0 | 3,196 |
Shareholders' Equity: | ||
Preferred Shares: $.01 Par Value, 29,000,000 Shares Authorized, 3,000,000 Series C, 7,701,700 Series D and 4,001,514 Series E Shares Issued and Outstanding at June 30, 2020 and December 31, 2019, with Liquidation Preferences of $25.00 Per Share (Note 1) | 147 | 147 |
Accumulated Other Comprehensive Loss | (27,097) | 1,010 |
Additional Paid-in Capital | 1,149,291 | 1,144,808 |
Distributions in Excess of Net Income | (427,393) | (338,695) |
Total Shareholders' Equity | 695,336 | 807,657 |
Noncontrolling Interests (Note 1) | 55,715 | 64,144 |
Equity in noncontrolling interest | 751,051 | 871,801 |
Total Liabilities and Equity | 2,054,560 | 2,122,428 |
Class A Common Shares | ||
Shareholders' Equity: | ||
Common Shares | 388 | 387 |
Class B Common Shares | ||
Shareholders' Equity: | ||
Common Shares | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Intangible assets, accumulated amortization | $ 6,705 | $ 6,545 |
Shareholders' Equity: | ||
Preferred shares - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares - authorized (in shares) | 29,000,000 | 29,000,000 |
Preferred shares - outstanding (in shares) | 14,703,214 | 14,703,214 |
Series C, D and E Preferred Shares | ||
Shareholders' Equity: | ||
Preferred shares - liquidation preference value (in dollars per share) | $ 25 | $ 25 |
Series C Preferred Shares | ||
Shareholders' Equity: | ||
Preferred shares - issued (in shares) | 3,000,000 | 3,000,000 |
Preferred shares - outstanding (in shares) | 3,000,000 | 3,000,000 |
Series D Preferred Shares | ||
Shareholders' Equity: | ||
Preferred shares - issued (in shares) | 7,701,700 | 7,701,700 |
Preferred shares - outstanding (in shares) | 7,701,700 | 7,701,700 |
Series E Preferred Shares | ||
Shareholders' Equity: | ||
Preferred shares - issued (in shares) | 4,001,514 | 4,001,514 |
Preferred shares - outstanding (in shares) | 4,001,514 | 4,001,514 |
Class A Common Shares | ||
Shareholders' Equity: | ||
Preferred shares - outstanding (in shares) | 38,789,371 | 38,652,650 |
Common shares - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares - authorized (in shares) | 104,000,000 | 104,000,000 |
Common shares - issued (in shares) | 38,789,371 | 38,652,650 |
Class B Common Shares | ||
Shareholders' Equity: | ||
Common shares - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares - authorized (in shares) | 1,000,000 | 1,000,000 |
Common shares - issued (in shares) | 0 | 0 |
Common shares - outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Revenue: | |||||
Other Revenues | $ 29 | $ (12) | $ 228 | $ 138 | |
Total Revenues | 17,441 | 147,501 | 107,578 | 262,294 | |
Operating Expenses: | |||||
Hotel Ground Rent | 1,058 | 1,114 | 2,121 | 2,224 | |
Real Estate and Personal Property Taxes and Property Insurance | 9,969 | 8,997 | 19,911 | 18,394 | |
General and Administrative (including Share Based Payments of $1,799 and $3,474, and $4,255 and $5,432 for the three and six months ended June 30, 2020 and 2019, respectively) | 4,187 | 8,100 | 10,021 | 13,700 | |
Loss on Impairment of Assets | 1,069 | 0 | 1,069 | 0 | |
Depreciation and Amortization | 24,322 | 23,964 | 48,510 | 48,092 | |
Total Operating Expenses | 58,983 | 124,785 | 165,529 | 240,131 | |
Operating (Loss) Income | (41,542) | 22,716 | (57,951) | 22,163 | |
Interest Income | 2 | 58 | 38 | 141 | |
Interest Expense | (13,481) | (13,325) | (26,488) | (26,223) | |
Other Expense | (385) | (124) | (457) | (83) | |
Loss on Debt Extinguishment | 0 | (34) | 0 | (34) | |
(Loss) Income Before Results from Unconsolidated Joint Venture Investments and Income Taxes | (55,406) | 9,291 | (84,858) | (4,036) | |
(Loss) Income from Unconsolidated Joint Ventures | (502) | 299 | (1,520) | 480 | |
(Loss) Income Before Income Taxes | (55,908) | 9,590 | (86,378) | (3,556) | |
Income Tax (Expense) Benefit | (15,872) | (4,031) | (11,374) | 1,233 | |
Net (Loss) Income | (71,780) | 5,559 | (97,752) | (2,323) | |
Preferred Distributions | (6,044) | (6,043) | (12,088) | (12,087) | |
Net Loss Applicable to Common Shareholders | $ (67,464) | $ (443) | $ (96,583) | $ (13,146) | |
BASIC | |||||
Loss from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (1.75) | $ (0.02) | $ (2.50) | $ (0.35) | |
DILUTED | |||||
Loss from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (1.75) | $ (0.02) | $ (2.50) | $ (0.35) | |
Weighted Average Common Shares Outstanding: | |||||
Basic (in shares) | 38,609,922 | 39,127,385 | 38,587,011 | 39,121,421 | |
Diluted (in shares) | [1] | 38,609,922 | 39,127,385 | 38,587,011 | 39,121,421 |
Noncontrolling Interests Common Units And LTIP Units | |||||
Operating Expenses: | |||||
Net (Loss) Income | $ (7,164) | $ (49) | $ (10,061) | $ (1,112) | |
(Income) Loss Allocated to Noncontrolling Interests | 7,164 | 49 | 10,061 | 1,112 | |
Consolidated Joint Ventures | |||||
Operating Expenses: | |||||
Net (Loss) Income | (300) | ||||
(Income) Loss Allocated to Noncontrolling Interests | 3,196 | (8) | 3,196 | 152 | |
Room | |||||
Revenue: | |||||
Hotel Operating Revenues: | 15,139 | 118,980 | 86,222 | 210,465 | |
Operating Expenses: | |||||
Hotel Operating Expenses | 3,622 | 24,013 | 22,714 | 46,103 | |
Food and Beverage | |||||
Revenue: | |||||
Hotel Operating Revenues: | 136 | 18,253 | 10,211 | 32,481 | |
Operating Expenses: | |||||
Hotel Operating Expenses | 721 | 13,990 | 11,342 | 26,822 | |
Other Operating | |||||
Revenue: | |||||
Hotel Operating Revenues: | 2,137 | 10,280 | 10,917 | 19,210 | |
Operating Expenses: | |||||
Hotel Operating Expenses | $ 14,035 | $ 44,607 | $ 49,841 | $ 84,796 | |
[1] | Income (Loss) allocated to noncontrolling interest in Hersha Hospitality Limited Partnership (the “Operating Partnership” or “HHLP”) has been excluded from the numerator and the Class A common shares issuable upon any redemption of the Operating Partnership’s common units of limited partnership interest (“Common Units”) and the Operating Partnership’s vested LTIP units (“Vested LTIP Units”) have been omitted from the denominator for the purpose of computing diluted earnings per share because the effect of including these shares and units in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share based payments | $ 1,799 | $ 3,474 | $ 4,255 | $ 5,432 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,676,388 | 4,316,531 | 4,839,454 | 4,274,583 |
Common Units and Vested LTIP Units | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,943,319 | 3,379,354 | 3,891,032 | 3,344,178 |
Unvested Stock Awards and LTIP Units Outstanding | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 547,315 | 616,937 | 267,443 | 423,399 |
Contingently Issuable Share Awards | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 185,754 | 320,240 | 680,979 | 507,006 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net (Loss) Income | $ (71,780) | $ 5,559 | $ (97,752) | $ (2,323) |
Other Comprehensive Loss | ||||
Change in Fair Value of Derivative Instruments | (2,020) | (4,122) | (33,146) | (5,902) |
Less: Reclassification Adjustment for Change in Fair Value of Derivative Instruments Included in Net Income | 1,228 | (1,112) | 2,205 | (2,253) |
Total Other Comprehensive Loss | (792) | (5,234) | (30,941) | (8,155) |
Comprehensive (Loss) Income | (72,572) | 325 | (128,693) | (10,478) |
Preferred Distributions | (6,044) | (6,043) | (12,088) | (12,087) |
Comprehensive Loss Attributable to Common Shareholders | (68,150) | (5,261) | (124,690) | (20,658) |
Noncontrolling Interests Common Units And LTIP Units | ||||
Net (Loss) Income | (7,164) | (49) | (10,061) | (1,112) |
Other Comprehensive Loss | ||||
Less: Comprehensive Loss (Income) Attributable to Noncontrolling Interests | 7,270 | 465 | 12,895 | 1,755 |
Consolidated Joint Ventures | ||||
Net (Loss) Income | (300) | |||
Other Comprehensive Loss | ||||
Less: Comprehensive Loss (Income) Attributable to Noncontrolling Interests | $ 3,196 | $ (8) | $ 3,196 | $ 152 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Shares | Common SharesClass A Common Shares | Common SharesClass B Common Shares | Preferred Shares | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Distributions in Excess of Net Income | Total Shareholders' Equity | Noncontrolling Interests Common Units And LTIP Units | Total Equity | Consolidated Joint Ventures |
Balance at Dec. 31, 2018 | $ 395 | $ 0 | $ 147 | $ 1,155,776 | $ 4,227 | $ (267,740) | $ 892,805 | $ 62,010 | $ 954,815 | $ 2,708 | ||
Balance (in shares) at Dec. 31, 2018 | 39,458,626 | 14,703,214 | 3,749,665 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Repurchase of Common Shares | (3) | (4,693) | (4,696) | (4,696) | ||||||||
Repurchase of Common Shares (in shares) | (273,538) | |||||||||||
Issuance Costs | 21 | 21 | 21 | |||||||||
Dividends and Distributions declared: | ||||||||||||
Common Shares | (21,967) | (21,967) | (21,967) | |||||||||
Preferred Stock | (12,087) | (12,087) | (12,087) | |||||||||
Common Units | $ (1,158) | (1,158) | ||||||||||
LTIP Units | $ (1,362) | (1,362) | ||||||||||
Dividend Reinvestment Plan | $ 42 | 42 | 42 | 42 | ||||||||
Dividend Reinvestment Plan (in shares) | 2,496 | |||||||||||
Share Based Compensation: | ||||||||||||
Grants | 1 | 400 | 401 | 401 | ||||||||
Grants (in shares) | 53,340 | 530,281 | ||||||||||
Amortization | 1,583 | 1,583 | $ 6,839 | 8,422 | ||||||||
Equity Contribution to Consolidated Joint Venture | 300 | |||||||||||
Change in Fair Value of Derivative Instruments | (8,155) | (7,512) | (7,512) | (643) | (8,155) | |||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | (148) | (148) | (148) | 148 | ||||||||
Net Loss | (2,323) | (911) | (911) | (1,112) | (2,023) | (300) | ||||||
Balance at Jun. 30, 2019 | 393 | 0 | $ 147 | 1,152,939 | (3,285) | (302,705) | 847,489 | $ 64,574 | 912,063 | 2,856 | ||
Balance (in shares) at Jun. 30, 2019 | 39,240,924 | 14,703,214 | 4,279,946 | |||||||||
Balance at Mar. 31, 2019 | 392 | 0 | $ 147 | 1,151,654 | 1,534 | (291,282) | 862,445 | $ 64,808 | 927,253 | 2,848 | ||
Balance (in shares) at Mar. 31, 2019 | 39,213,269 | 14,703,214 | 4,279,946 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Issuance Costs | (21) | (21) | (21) | |||||||||
Dividends and Distributions declared: | ||||||||||||
Common Shares | (10,987) | (10,987) | (10,987) | |||||||||
Preferred Stock | (6,044) | (6,044) | (6,044) | |||||||||
Common Units | $ (580) | (580) | ||||||||||
LTIP Units | (620) | (620) | ||||||||||
Dividend Reinvestment Plan | 21 | 21 | 21 | |||||||||
Dividend Reinvestment Plan (in shares) | 1,231 | |||||||||||
Share Based Compensation: | ||||||||||||
Grants | 1 | 400 | 401 | 401 | ||||||||
Grants (in shares) | 26,424 | |||||||||||
Amortization | 893 | 893 | 1,430 | 2,323 | ||||||||
Change in Fair Value of Derivative Instruments | (5,234) | (4,819) | (4,819) | (415) | (5,234) | |||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | (8) | (8) | (8) | 8 | ||||||||
Net Loss | 5,559 | 5,608 | 5,608 | (49) | 5,559 | |||||||
Balance at Jun. 30, 2019 | 393 | 0 | $ 147 | 1,152,939 | (3,285) | (302,705) | 847,489 | $ 64,574 | 912,063 | 2,856 | ||
Balance (in shares) at Jun. 30, 2019 | 39,240,924 | 14,703,214 | 4,279,946 | |||||||||
Balance at Dec. 31, 2019 | 871,801 | 387 | 0 | $ 147 | 1,144,808 | 1,010 | (338,695) | 807,657 | $ 64,144 | 871,801 | 3,196 | |
Balance (in shares) at Dec. 31, 2019 | 38,652,650 | 14,703,214 | 4,279,946 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Issuance Costs | (30) | (30) | (30) | |||||||||
Dividends and Distributions declared: | ||||||||||||
Preferred Stock | (1,007) | (1,007) | (1,007) | |||||||||
Dividend Reinvestment Plan | 14 | 14 | 14 | 14 | ||||||||
Dividend Reinvestment Plan (in shares) | 1,094 | |||||||||||
Share Based Compensation: | ||||||||||||
Grants | 1 | 1 | 1 | |||||||||
Grants (in shares) | 135,627 | 1,101,924 | ||||||||||
Amortization | 1,303 | 1,303 | $ 4,466 | 5,769 | ||||||||
Change in Fair Value of Derivative Instruments | (30,941) | (28,107) | (28,107) | (2,834) | (30,941) | |||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | (3,196) | 3,196 | 3,196 | 3,196 | ||||||||
Net Loss | (97,752) | (87,691) | (87,691) | (10,061) | (97,752) | |||||||
Balance at Jun. 30, 2020 | 751,051 | 388 | 0 | $ 147 | 1,149,291 | (27,097) | (427,393) | 695,336 | $ 55,715 | 751,051 | 0 | |
Balance (in shares) at Jun. 30, 2020 | 38,789,371 | 14,703,214 | 5,381,870 | |||||||||
Balance at Mar. 31, 2020 | 387 | 0 | $ 147 | 1,145,450 | (26,411) | (362,777) | 756,796 | $ 59,162 | 815,958 | 3,196 | ||
Balance (in shares) at Mar. 31, 2020 | 38,673,242 | 14,703,214 | 4,279,946 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Issuance Costs | (10) | (10) | (10) | |||||||||
Share Based Compensation: | ||||||||||||
Grants | 1 | 1 | 1 | |||||||||
Grants (in shares) | 116,129 | 1,101,924 | ||||||||||
Amortization | 655 | 655 | $ 3,823 | 4,478 | ||||||||
Change in Fair Value of Derivative Instruments | (792) | (686) | (686) | (106) | (792) | |||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | 3,196 | 3,196 | 3,196 | (3,196) | ||||||||
Net Loss | (71,780) | (64,616) | (64,616) | (7,164) | (71,780) | |||||||
Balance at Jun. 30, 2020 | $ 751,051 | $ 388 | $ 0 | $ 147 | $ 1,149,291 | $ (27,097) | $ (427,393) | $ 695,336 | $ 55,715 | $ 751,051 | $ 0 | |
Balance (in shares) at Jun. 30, 2020 | 38,789,371 | 14,703,214 | 5,381,870 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Dividends [Abstract] | ||
Common Shares, Dividends declared (in dollars per share) | $ 0.28 | $ 0.56 |
Common Units, Distributions declared (in dollars per share) | 0.28 | 0.56 |
LTIP Units, Distribution Per Unit (in dollars per share) | $ 0.28 | $ 0.56 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities: | ||
Net (Loss) Income | $ (97,752) | $ (2,323) |
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities: | ||
Loss on Impairment of Assets | 1,069 | 0 |
Deferred Taxes | 11,390 | (1,348) |
Depreciation | 48,273 | 47,791 |
Amortization | 1,116 | 1,107 |
Loss on Debt Extinguishment | 0 | 17 |
Equity in Loss (Income) of Unconsolidated Joint Ventures | 1,520 | (480) |
Distributions from Unconsolidated Joint Ventures | 0 | 478 |
Loss Recognized on Change in Fair Value of Derivative Instrument | 2,205 | 163 |
Share Based Compensation Expense | 4,255 | 5,432 |
(Increase) Decrease in: | ||
Hotel Accounts Receivable | 5,412 | (325) |
Other Assets | 4,884 | (1,317) |
Due from Related Parties | 3,750 | (2,453) |
(Decrease) Increase in: | ||
Accounts Payable, Accrued Expenses and Other Liabilities | (2,479) | 129 |
Net Cash Provided by (Used in) Operating Activities | (16,357) | 46,871 |
Investing Activities: | ||
Capital Expenditures | (15,612) | (21,230) |
Cash Paid for Hotel Development Projects | 21 | |
Cash Paid for Hotel Development Projects | (467) | |
Contributions to Unconsolidated Joint Ventures | (600) | (4,000) |
Distributions from Unconsolidated Joint Ventures | 0 | 1,022 |
Net Cash Used in Investing Activities | (16,191) | (24,675) |
Financing Activities: | ||
Borrowings Under Line of Credit, Net | 47,000 | 27,000 |
Principal Repayment of Mortgages and Notes Payable | (650) | (56,636) |
Proceeds of Paycheck Protection Program ("PPP") Loans | 18,936 | 0 |
Repayment of PPP Loans | (18,936) | 0 |
Cash Paid for Deferred Financing Costs | (2,104) | (643) |
Repurchase of Common Shares | 0 | (4,624) |
Dividends Paid on Common Shares | (10,809) | (21,980) |
Dividends Paid on Preferred Shares | (6,044) | (12,087) |
Distributions Paid on Common Units and LTIP Units | (1,198) | (2,371) |
Other Financing Activities | (30) | (91) |
Net Cash Provided by (Used in) Financing Activities | 26,165 | (15,432) |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | (6,383) | 6,764 |
Cash, Cash Equivalents, and Restricted Cash - Beginning of Period | 36,985 | 40,783 |
Cash, Cash Equivalents, and Restricted Cash - End of Period | $ 30,602 | $ 47,547 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | he accompanying unaudited consolidated financial statements of Hersha Hospitality Trust (“we,” “us,” “our” or the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or any future period. Accordingly, readers of these consolidated interim financial statements should refer to the Company’s audited financial statements prepared in accordance with US GAAP, and the related notes thereto, for the year ended December 31, 2019, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as certain footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from this report pursuant to the rules of the Securities and Exchange Commission. We are a self-administered Maryland real estate investment trust that was organized in May 1998 and completed our initial public offering in January 1999. Our common shares are traded on the New York Stock Exchange (the “NYSE”) under the symbol “HT.” We own our hotels and our investments in joint ventures through our operating partnership, Hersha Hospitality Limited Partnership (“HHLP” or “the Partnership”), for which we serve as the sole general partner. As of June 30, 2020, we owned an approximate 87.8% partnership interest in HHLP, including a 1.0% general partnership interest. Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with US GAAP and include all of our accounts as well as accounts of the Partnership, subsidiary partnerships and our wholly owned Taxable REIT Subsidiary Lessee (“TRS Lessee”), 44 New England Management Company. All significant inter-company amounts have been eliminated. Consolidated properties are either wholly owned or owned less than 100% by the Partnership and are controlled by the Company as general partner of the Partnership. Properties owned in joint ventures are also consolidated if the determination is made that we are the primary beneficiary in a variable interest entity (“VIE”) or we maintain control of the asset through our voting interest in the entity. Variable Interest Entities We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. To determine if we are the primary beneficiary of a VIE, we evaluate whether we have a controlling financial interest in that VIE. An enterprise is deemed to have a controlling financial interest if it has i) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the rights to receive benefits from the VIE that could be significant to the VIE. Control can also be demonstrated by the ability of a member to manage day-to-day operations, refinance debt and sell the assets of the partnerships without the consent of the other member and the inability of the members to replace the managing member. Based on our examination, there have been no changes to the operating structure of our legal entities during the six months ended June 30, 2020 and, therefore, there are no changes to our evaluation of VIE's as presented within our annual report presented on Form 10-K for the year ended December 31, 2019. HERSHA HOSPITALITY TRUST AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 [UNAUDITED] [IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS] NOTE 1 - BASIS OF PRESENTATION (CONTINUED) Noncontrolling Interest We classify the noncontrolling interests of our common units of limited partnership interest in HHLP (“Common Units”), and Long Term Incentive Plan Units (“LTIP Units”) as equity. LTIP Units are a separate class of limited partnership interest in the Operating Partnership that are convertible into Common Units under certain circumstances. The noncontrolling interest of Common Units and LTIP Units totaled $55,715 as of June 30, 2020 and $64,144 as of December 31, 2019. As of June 30, 2020, there were 5,381,870 Common Units and LTIP Units outstanding with a fair market value of $31,000, based on the price per share of our common shares on the NYSE on such date. In accordance with the partnership agreement of HHLP, holders of these Common Units may redeem them for cash unless we, in our sole and absolute discretion, elect to issue common shares on a one-for-one basis in lieu of paying cash. Net income or loss attributed to Common Units and LTIP Units is included in net income or loss but excluded from net income or loss applicable to common shareholders in the consolidated statements of operations. We entered into a joint venture that owns the Ritz-Carlton Coconut Grove, FL, in which our joint venture partner has a noncontrolling equity interest of 15% in the property. Hersha Holding RC Owner, LLC, the owner entity of the Ritz-Carlton Coconut Grove joint venture ("Ritz Coconut Grove"), will distribute income based on cash available for distribution which will be distributed as follows: (1) to us until we receive a cumulative return on our contributed senior common equity interest, currently at 8%, and (2) then to the owner of the noncontrolling interest until they receive a cumulative return on their contributed junior common equity interest, currently at 8%, and (3) then 75% to us and 25% to the owner of the noncontrolling interest until we both receive a cumulative return on our contributed senior common equity interest, currently at 12%, and (4) finally, any remaining operating profit shall be distributed 70% to us and 30% to the owner of the noncontrolling interest. Additionally, the noncontrolling interest in the Ritz Coconut Grove has the right to put their ownership interest to us for cash consideration at any time during the life of the venture. The balance sheets and financial results of the Ritz Coconut Grove are included in our consolidated financial statements and book value of the noncontrolling interest in the Ritz Coconut Grove is classified as temporary equity within our Consolidated Balance Sheets. The noncontrolling interest in the Ritz Coconut Grove was initially measured at fair value upon formation of the joint venture and will be subsequently measured at the greater of historical cost or the put option redemption value. For the three and six months ended June 30, 2020, based on the income allocation methodology described above, the noncontrolling interest in this joint venture was allocated losses of $0. For the three and six months ended June 30, 2019, the noncontrolling interest in the joint venture was allocated losses of $0 and $300, respectively. This is recorded as part of the Loss Allocated to Noncontrolling Interests line item within the Consolidated Statements of Operations. On June 30, 2020 we reclassified $3,196 from Noncontrolling Joint Venture Interest to Additional Paid in Capital to recognize the noncontrolling interest at the put option redemption value of $0. Shareholders’ Equity Terms of the Series C, Series D, and Series E Preferred Shares outstanding at June 30, 2020 and December 31, 2019 are summarized as follows: HERSHA HOSPITALITY TRUST AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 [UNAUDITED] [IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS] NOTE 1 - BASIS OF PRESENTATION (CONTINUED) Dividend Per Share Shares Outstanding Six Months Ended June 30, Series June 30, 2020 December 31, 2019 Aggregate Liquidation Preference Distribution Rate 2020 2019 Series C 3,000,000 3,000,000 $ 75,000 6.875 % — $ 0.8594 Series D 7,701,700 7,701,700 $ 192,500 6.500 % — $ 0.8126 Series E 4,001,514 4,001,514 $ 100,000 6.500 % — $ 0.8126 Total 14,703,214 14,703,214 Liquidity and Management's Plan Due to the COVID-19 pandemic and the effects of travel restrictions both globally and in the United States, the hospitality industry has experienced drastic drops in demand. The global impact of the pandemic has been rapidly evolving and, in the United States, certain states and cities, including most where we own properties, have reacted by instituting various restrictive measures such as quarantines, restrictions on travel, school closings, "stay at home" rules and restrictions on types of business that may continue to operate. During the first quarter of 2020 as a result of the impact of the COVID-19 pandemic, we had temporarily closed 21 of our 48 hotels while our remaining hotels operated in a significantly reduced capacity. During the second quarter of 2020 we reopened 5 hotels, resulting in 16 hotels remaining closed as of June 30, 2020. We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have a material negative impact on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because the lodging industry has not previously experienced such an abrupt and drastic reduction in hotel demand, and as a consequence, our ability to be predictive is uncertain. In addition, the magnitude, duration, and speed of the pandemic is uncertain and we cannot estimate when travel demand will recover. As a consequence, we cannot estimate the impact on our business, financial condition, or operating results with reasonable certainty, but we expect a net loss on a U.S. GAAP basis for the year ending December 31, 2020. On April 2, 2020, we amended our existing Credit Agreement (as defined below) and received $100,000 in available funds on our Line of Credit (as defined below), of which we drew $25,000 during April 2020 and $10,000 during July 2020. Additionally, the amendment provided a waiver of covenants under our Credit Facility (as defined below) through March 31, 2021 and changed the Credit Facility from an unsecured borrowing facility to a secured borrowing facility. Based on this amendment along with cost savings measures throughout our operations, we believe that we will be able to generate sufficient liquidity to satisfy our obligations for the next twelve months, absent a breach of Credit Facility covenants described below. At June 30, 2020, we were in compliance with all debt covenants related to our mortgage borrowings with the exception of one mortgage where we failed a debt service coverage ratio requirement, which is not considered an event of default but triggers a cash escrow requirement related to future debt service. We have one mortgage borrowing in the amount of $25,000 that will mature within the next twelve months, which we expect to be able to extend the maturity based on the provisions within the existing mortgage or refinance the mortgage. After considering the effect of the COVID-19 pandemic on our consolidated operations, it is probable that we will fail certain financial covenants within certain property-level mortgage borrowings or under our Credit Facility within the next twelve months. We have received financial covenant waivers from certain of our mortgage lenders, which provided us relief from financial covenants for a period of time that does not extend beyond the first quarter of 2021. For mortgages with financial covenants, the lenders' remedy of a covenant failure would be a requirement to escrow funds for the purpose of meeting our future debt payment obligations, with the exception of one mortgage borrowing. In this instance, the lender could require prepayment of the mortgage in full, however, we believe we would have sufficient available funds on our Credit Facility to accommodate this remedy of covenant default. As noted above, the covenant waivers on our Credit Facility extend through March 31, 2021; however, we believe that it is probable we will breach certain of our Credit Facility covenants when measured for the period ended June 30, 2021. This potential event of default could lead to potential acceleration of amounts due under the Credit Facility. Notwithstanding our belief that we HERSHA HOSPITALITY TRUST AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 [UNAUDITED] [IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS] NOTE 1 - BASIS OF PRESENTATION (CONTINUED) probably will be successful in renegotiating the terms of our Credit Facility prior to an event of default, we believe that we will continue to have access to the capital markets. Also, we could choose to raise cash by selling hotel properties, although there can be no assurances we would be successful on terms favorable to us. Management’s primary mitigation plan to avoid a default under its Credit Agreement is to obtain a further waiver from its creditors or amend the Credit Facility in a manner to avoid an event of default. There can be no assurance that we will be able to obtain a waiver or amendment in a timely manner, or on acceptable terms, if at all. The failure to obtain a waiver or amendment, or otherwise repay the debt, could lead to an event of default, which would have a material adverse effect on our financial condition, which gives rise to substantial doubt about our ability to continue as a going concern. As a result, management determined that the future valuation and ability to realize the benefits of our deferred tax assets is not probable and we have recorded a full valuation allowance against our net deferred tax assets as of June 30, 2020. Investment in Hotel Properties Investments in hotel properties are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of up to 40 years for buildings and improvements, two Identifiable assets, liabilities, and noncontrolling interests related to hotel properties acquired in a business combination are recorded at full fair value. Estimating techniques and assumptions used in determining fair values involve significant estimates and judgments. These estimates and judgments have a direct impact on the carrying value of our assets and liabilities which can directly impact the amount of depreciation expense recorded on an annual basis and could have an impact on our assessment of potential impairment of our investment in hotel properties. Properties intended to be sold are designated as “held for sale” on the balance sheet. In accordance with ASU Update No. 2014-08 concerning the classification and reporting of discontinued operations, we evaluate each disposition to determine whether we need to classify the disposition as discontinued operations. This amendment defines discontinued operations as a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. We anticipate that most of our hotel dispositions will not be classified as discontinued operations as most will not fit this definition. Based on the occurrence of certain events or changes in circumstances, we review the recoverability of the property’s carrying value. Such events or changes in circumstances include the following: • a significant decrease in the market price of a long-lived asset; • a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; • a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; • an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; • a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and • a current expectation that, it is more likely than not that, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. HERSHA HOSPITALITY TRUST AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 [UNAUDITED] [IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS] NOTE 1 - BASIS OF PRESENTATION (CONTINUED) We review our portfolio on an on-going basis to evaluate the existence of any of the aforementioned events or changes in circumstances that would require us to test for recoverability. In general, our review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value expected, as well as the effects of hotel demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are required to make subjective assessments as to whether there are impairments in the values of our investments in hotel properties. As of June 30, 2020, based on our analysis and given consideration to the impairment charge taken on one of our hotels held for sale, we have determined that the estimated future cash flow of each of the properties in our portfolio is sufficient to recover its carrying value. New Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. As a result of identified structural risks of interbank offered rates, in particular, the London Interbank Offered Rate (LIBOR), reference rate reform is underway to identify alternative reference rates that are more observable or transaction based. The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The optional expedients and exceptions contained within this update, in general, only apply to contract amendments and modifications entered into prior to January 1, 2023. The provisions of this update that will most likely affect our financial reporting process relate to modifications of contracts with lenders and the related hedging contracts associated with each respective modified borrowing contract. In general, the provisions of the update would benefit the Company by allowing, among other things, the following: • Allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 470 to be accounted for as a non-substantial modification and not be considered a debt extinguishment. • Allowing a change to contractual terms of a hedging instrument in conjunction with reference rate reform to not require a dedesignation of the hedging relationship. • Allowing a change to the interest rate used for margining, discounting, or contract price alignment for a derivative that is a cash flow hedge to not be considered a change to the critical terms of the hedge and will not require a dedesignation of the hedging relationship. We have not entered into any contract modifications yet, as it directly relates to reference rate reform but we anticipate having to undertake such modifications in the future as a majority of our contracts with lenders and hedging counterparties are indexed to LIBOR. While we anticipate the impact of this update to be to the benefit of the Company, we are still evaluating the overall impact to the Company. |
INVESTMENT IN HOTEL PROPERTIES
INVESTMENT IN HOTEL PROPERTIES | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
INVESTMENT IN HOTEL PROPERTIES | INVESTMENT IN HOTEL PROPERTIES Investment in hotel properties consists of the following at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Land $ 505,156 $ 518,243 Buildings and Improvements 1,686,057 1,710,621 Furniture, Fixtures and Equipment 297,465 294,527 Construction in Progress 4,706 10,202 2,493,384 2,533,593 Less Accumulated Depreciation (590,920) (557,620) Total Investment in Hotel Properties * $ 1,902,464 $ 1,975,973 * The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $44,139 and $44,854 at June 30, 2020 and December 31, 2019, respectively. Acquisitions For the six months ended June 30, 2020 and 2019, we acquired no hotel properties. Hotel Dispositions For the six months ended June 30, 2020 and 2019, we disposed of no hotel properties. Assets Held For Sale We have classified two assets as held for sale as of June 30, 2020. The sales of Duane Street Hotel and Blue Moon Hotel are expected to close in 2020 and are included as held for sale assets as of June 30, 2020. During the second quarter of 2020, the Company amended the purchase and sale agreement with the buyer of the hotel to reduce the purchase price by $2,000. As a result of the reduced sales price and after consideration of selling costs to the Company, management determined that the carrying value of the hotel exceeded the anticipated net proceeds from sale, resulting in a $1,069 impairment charge recorded during the three months ended June 30, 2020. The table below shows the balances for the properties that were classified as assets held for sales as of June 30, 2020. June 30, 2020 Land $ 13,087 Buildings and Improvements 35,482 Furniture, Fixtures and Equipment 6,418 54,987 Less Accumulated Depreciation (14,817) Assets Held for Sale $ 40,170 |
INVESTMENT IN UNCONSOLIDATED JO
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of June 30, 2020 and December 31, 2019, our investment in unconsolidated joint ventures consisted of the following: Percent Joint Venture Hotel Properties Owned June 30, 2020 December 31, 2019 Cindat Hersha Owner JV, LLC Hilton and IHG branded hotels in NYC 31 % $ — $ — Hiren Boston, LLC Courtyard by Marriott, South Boston, MA 50 % 555 1,434 SB Partners, LLC Holiday Inn Express, South Boston, MA 50 % — — SB Partners Three, LLC Home2 Suites, South Boston, MA 50 % 6,972 7,012 $ 7,527 $ 8,446 On January 3, 2020, we entered into an agreement with our joint venture partner for our partner to purchase our membership interests in Hiren Boston, LLC and SB Partners, LLC. Net proceeds from the sale of our interests are anticipated to be approximately $26,000 and this transaction is expected to close during the fourth quarter of 2020. Income/Loss Allocation Cindat Hersha Owner JV, LLC cash available for distribution will be distributed to (1) Cindat until they receive a return on their contributed $143,650 senior common equity interest, currently at 8%, and (2) then to us until we receive an 8% return on our contributed $64,357 junior common equity interest. Any cash available for distribution remaining will be split 31% to us and 69% to Cindat. Cindat’s senior common equity return is reduced by 0.5% annually for 4 years following the closing until it is set at a rate of 8% for the remainder of the life of the joint venture. As of June 30, 2020, based on the income allocation methodology described above, the Company has absorbed cumulative losses equal to our accounting basis in the joint venture resulting in a $0 investment balance in the table above, however, we currently maintain a positive equity balance within the venture. This difference is due to difference in our basis inside the venture versus our basis outside of the venture, which is explained later in this note. For SB Partners, LLC, Hiren Boston, LLC, and SB Partners Three, LLC, income or loss is allocated to us and our joint venture partners consistent with the allocation of cash distributions in accordance with the joint venture agreements. This results in an income allocation consistent with our percentage of ownership interests. Any difference between the carrying amount of any of our investments noted above and the underlying equity in net assets is amortized over the expected useful lives of the properties and other intangible assets. Income (loss) recognized during the three and six months ended June 30, 2020 and 2019, for our investments in unconsolidated joint ventures is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cindat Hersha Owner JV, LLC $ — $ — $ — $ — Hiren Boston, LLC (477) 315 (880) 138 SB Partners, LLC — — (600) 375 SB Partners Three, LLC (25) (16) (40) (33) (Loss) Income from Unconsolidated Joint Venture Investments $ (502) $ 299 $ (1,520) $ 480 The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019. Balance Sheets June 30, 2020 December 31, 2019 Assets Investment in Hotel Properties, Net $ 584,038 $ 579,287 Other Assets 28,359 33,891 Total Assets $ 612,397 $ 613,178 Liabilities and Equity Mortgages and Notes Payable $ 445,533 $ 430,282 Other Liabilities 22,452 19,185 Equity: Hersha Hospitality Trust 7,996 9,588 Joint Venture Partner(s) 136,977 154,998 Accumulated Other Comprehensive Loss (561) (875) Total Equity 144,412 163,711 Total Liabilities and Equity $ 612,397 $ 613,178 Statements of Operations Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Room Revenue $ 5,588 $ 26,995 $ 16,932 $ 43,346 Other Revenue — 622 787 1,243 Operating Expenses (3,265) (11,890) (11,613) (21,921) Lease Expense (170) (164) (354) (365) Property Taxes and Insurance (3,154) (3,051) (6,438) (6,103) General and Administrative (553) (1,505) (1,516) (2,711) Depreciation and Amortization (3,925) (3,694) (7,840) (7,354) Interest Expense (5,582) (7,196) (11,869) (14,343) Net (Loss) Income $ (11,061) $ 117 $ (21,911) $ (8,208) The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of June 30, 2020 and December 31, 2019. June 30, 2020 December 31, 2019 Our share of equity recorded on the joint ventures' financial statements $ 7,996 $ 9,588 Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures (1) (469) (1,142) Investment in Unconsolidated Joint Ventures $ 7,527 $ 8,446 (1) Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following: • the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements; • accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Income (Loss) from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and |
OTHER ASSETS
OTHER ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other Assets Other Assets consisted of the following at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Derivative Asset $ — $ 2,514 Deferred Financing Costs 3,019 1,330 Prepaid Expenses 6,189 11,279 Investment in Statutory Trusts 1,548 1,548 Investment in Non-Hotel Property and Inventories 2,714 2,987 Deposits with Unaffiliated Third Parties 2,575 2,577 Deferred Tax Asset, Net of Valuation Allowance of $20,363 and $497, respectively — 11,390 Property Insurance Receivable 1,788 1,788 Other 3,163 2,764 $ 20,996 $ 38,177 Derivative Asset – This category represents the Company’s gross asset fair value of interest rate swaps and interest rate caps. Any swaps and caps resulting in a liability to the Company are accounted for separately within Other Liabilities on the Balance Sheets. Deferred Financing Costs – This category represents financing costs paid by the Company to establish our Line of Credit. These costs have been capitalized and will amortize to interest expense over the life of the Line of Credit. Prepaid Expenses – Prepaid expenses include amounts paid for property tax, insurance and other expenditures that will be expensed in the next twelve months. Investment in Statutory Trusts – We have an investment in the common stock of Hersha Statutory Trust I and Hersha Statutory Trust II. Investment in Non-Hotel Property and Inventories – This category represents the costs paid and capitalized by the Company for items such as office leasehold improvements, furniture and equipment, and property inventories. Deposits with Unaffiliated Third Parties – These deposits represent deposits made by the Company with unaffiliated third parties for items such as lease security deposits, utility deposits, and deposits with unaffiliated third party management companies. Deferred Tax Asset – We have recorded a valuations allowance resulting in net deferred tax assets of $0 as of June 30, 2020. We have considered various factors, including future reversals of existing taxable temporary differences, future taxable income and tax planning strategies in determining the ability to realize the benefits of our deferred tax assets. In Note 1, we also disclosed factors that have given rise to substantial doubt in our ability to continue as a going concern, which is a primary factor in our determination that a full valuation allowance against our net deferred tax assets was appropriate to record during the three months ended June 30, 2020. Property Insurance Receivable – This category represents the amount that we expect to receive from our insurance companies for reimbursement of costs incurred as a result of water damage at The Boxer. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Mortgages Mortgages payable at June 30, 2020 and December 31, 2019 consisted of the following: June 30, 2020 December 31, 2019 Mortgage Indebtedness $ 333,298 $ 333,948 Net Unamortized Premium 585 821 Net Unamortized Deferred Financing Costs (2,112) (2,489) Mortgages Payable $ 331,771 $ 332,280 Net Unamortized Deferred Financing Costs associated with entering into mortgage indebtedness are deferred and amortized over the life of the mortgages. Net Unamortized Premiums are also amortized over the remaining life of the loans. Mortgage indebtedness balances are subject to fixed and variable interest rates, which ranged from 2.16% to 6.30% as of June 30, 2020. Aggregate interest expense incurred under the mortgage loans payable totaled $3,031 and $4,077, and $6,516 and $8,067, during the three and six months ended June 30, 2020 and 2019, respectively. The impact on interest expense related to the interest rate swap contracts on mortgages resulted in expense of $552 and $585 for the three and six months ended June 30, 2020 and a decrease to interest expense of $99 and $196 for the three and six months ended June 30, 2019. Our mortgage indebtedness contains various financial and non-financial covenants customarily found in secured, non-recourse financing arrangements. Our mortgage loans payable typically require that specified debt service coverage ratios be maintained with respect to the financed properties before we can exercise certain rights under the loan agreements relating to such properties. If the specified criteria are not satisfied, the lender may be able to escrow cash flow generated by the property securing the applicable mortgage loan. We have determined that all debt covenants contained in the loan agreements securing our consolidated hotel properties with the exception of one mortgage were met as of June 30, 2020. The failure of meeting a minimum debt service coverage ratio requirement in this one mortgage is not considered an event of default under the loan agreement but rather, triggers a cash escrow requirement related to future debt service. As of June 30, 2020, the maturity dates for the outstanding mortgage loans ranged from January 2021 to September 2025. Unsecured Notes Payable We have two junior subordinated notes payable in the aggregate amount of $51,548 to the Hersha Statutory Trusts pursuant to indenture agreements which will mature on July 30, 2035, but may be redeemed at our option, in whole or in part, prior to maturity in accordance with the provisions of the indenture agreements. The $25,774 of notes issued to each of Hersha Statutory Trust I and Hersha Statutory Trust II bear interest at a variable rate of LIBOR plus 3% per annum. This rate resets 2 business days prior to each quarterly payment. The face value of the notes payable is offset by $785 and $812 as of June 30, 2020 and December 31, 2019, respectively, in net deferred financing costs incurred as a result of entering into these indentures. The deferred financing costs are amortized over the life of the notes payable. The weighted average interest rate on our two junior subordinated notes payable was 4.08% and 5.64%, and 4.45% and 5.66%, during the three and six months ended June 30, 2020 and 2019, respectively. Interest expense on Unsecured Notes Payable in the amount of $532 and $734, and $1,160 and $1,466, was recorded for the three and six months ended June 30, 2020 and 2019, respectively. Credit Facilities as of June 30, 2020 We maintain three credit agreements which aggregate to $950,900 with Citigroup Global Markets Inc., Wells Fargo Bank, Inc. and various other lenders. Our credit agreement (the "Credit Agreement") provides for a $457,000 senior credit facility (“Credit Facility”). The Credit Facility consists of a $250,000 senior revolving line of credit (“Line of Credit”) and a $207,000 senior term loan ("First Term Loan"). The Credit Facility expires on August 10, 2022, and, provided no event of default has occurred, we may request that the lenders renew the Credit Facility for an additional one-year period. The Credit Facility is also expandable to $857,000 at our request, subject to the satisfaction of certain conditions. We maintain another credit agreement which provides for a $300,000 senior term loan agreement (“Second Term Loan”) and expires on September 10, 2024. A separate credit agreement provides for a $193,900 senior term loan agreement (“Third Term Loan” and collectively with the Credit Agreement and the Second Term Loan, the "Credit Agreements") and expires on August 2, 2021. On April 2, 2020, the Company signed amendments to the Credit Agreements, which, among other things, changed each borrowing facility under the agreements from unsecured to secured. Additionally, the Company received $100,000 in available funds on its Line of Credit, of which $25,000 was drawn during April 2020 and $10,000 during July 2020. The amount that we can borrow at any given time under our Line of Credit, and the individual term loans (each a “Term Loan” and together the “Term Loans”) is governed by certain operating metrics of designated hotel properties known as borrowing base assets. As of June 30, 2020, the following hotel properties secured the amended facilities under the Credit Agreements: - Courtyard, Brookline, MA - Mystic Marriott Hotel & Spa, Groton, CT - Holiday Inn Express, Cambridge, MA - Hampton Inn, Washington, DC - Envoy Hotel, Boston, MA - Ritz Carlton, Washington, DC - The Boxer, Boston, MA - Hilton Garden Inn, M Street, Washington, DC - Hampton Inn, Seaport, NY - Residence Inn, Coconut Grove, FL - The Duane Street Hotel, NY - The Winter Haven, Miami, FL - NU Hotel, Brooklyn, NY - The Blue Moon, Miami, FL - Holiday Inn Express, 29th Street, NY - The Cadillac Hotel and Beach Club, Miami, FL - The Gate JFK Airport, New York, NY - The Parrot Key Hotel & Resort, Key West, FL - Hilton Garden Inn, JFK Airport, New York, NY - TownePlace Suites, Sunnyvale, CA - Hyatt House White Plains, NY - The Ambrose Hotel, Santa Monica, CA - Sheraton, Wilmington South, DE - Courtyard, San Diego, CA - Hampton Inn, Philadelphia, PA - The Pan Pacific Hotel, Seattle, WA - The Rittenhouse, Philadelphia, PA - The Westin, Philadelphia, PA The interest rate for borrowings under the Line of Credit and Term Loans are based on a pricing grid with a range of one month U.S. LIBOR plus a spread. The following table summarizes the balances outstanding and interest rate spread for each borrowing: Outstanding Balance Borrowing Spread June 30, 2020 December 31, 2019 Line of Credit 1.50% to 2.25% $ 95,000 $ 48,000 Term Loan: First Term Loan 1.45% to 2.20% $ 207,000 $ 207,000 Second Term Loan 1.35% to 2.00% 300,000 300,000 Third Term Loan 1.45% to 2.20% 193,900 193,900 Deferred Loan Costs (3,303) (3,717) Total Term Loan $ 697,597 $ 697,183 The Company received a waiver of Credit Facility covenants through March 31, 2021 in connection with the April 2, 2020 amendment to the Credit Agreement. Upon expiration of the covenant waiver in March 2021, the following covenant requirements will again become effective. The Credit Facility and the Term Loans include certain financial covenants and require that we maintain: (1) a minimum tangible net worth (calculated as total assets, plus accumulated depreciation, less total liabilities, intangibles and other defined adjustments) of $1,119,500, plus an amount equal to 75% of the net cash proceeds of all issuances and primary sales of equity interests of the parent guarantor or any of its subsidiaries consummated following the closing date; (2) annual distributions not to exceed 95% of adjusted funds from operations; and (3) certain financial ratios, including the following: - a fixed charge coverage ratio of not less than 1.50 to 1.00; - a maximum leverage ratio of not more than 60%; and - a maximum secured debt leverage ratio of 45%. The Company recorded interest expense of $5,370 and $8,903, and $12,404 and $17,539, related to borrowings drawn on the Credit Facility and Term Loans for the three and six months ended June 30, 2020 and 2019, respectively. The impact on interest expense related to the interest rate swap contracts on the Credit Facility resulted in expense of $3,133 and $4,219 for the three and six months ended June 30, 2020 and a decrease to interest expense of $1,000 and $2,095 for the three and six months ended June 30, 2019. The weighted average interest rate, inclusive of the effect of derivative instruments, on the Credit Facility and Term Loans was 4.23% and 4.17%, and 4.21% and 4.15%, for the three and six months ended June 30, 2020 and 2019, respectively. Paycheck Protection Program Loans During the three months ended June 30, 2020, the Company applied for and received $18,936 in loans pursuant to the Paycheck Protection Program ("the PPP") under the Coronavirus Aid, Relief, and Economic Security Act. All funds borrowed under the PPP were returned without penalty during the three months ended June 30, 2020. Deferred Financing Costs As noted above, costs associated with entering into mortgages, notes payable and our credit facilities are deferred and amortized over the life of the debt instruments. The deferred costs related to mortgages and term loans and unsecured notes payable are presented as reductions in the respective debt balances. Amortization of deferred costs for the three and six months ended June 30, 2020 and 2019 was $702 and $560, and $1,267 and $1,134, respectively. New Debt/Refinance On April 2, 2020, we amended our Credit Agreements, which covered the Credit Facility and borrowing base of assets on the Line of Credit, to access an additional $100,000. With these amendments, we received waivers on all financial covenants through March 31, 2021. The proceeds from the borrowings drawn will be used to fund the operating expenses of the business. See "Liquidity, Capital Resources and Equity Offerings". |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which provides the principles for the recognition, measurement, presentation and disclosure of leases. The Company adopted the provisions of the update effective January 1, 2019. We elected the modified retrospective transition method upon adoption, which resulted in no cumulative-effect adjustment to the balance of opening retained earnings. As part of our adoption, we elected to utilize the package of practical expedients which allowed us to not reassess existing contracts for embedded leases and not reassess the classification of existing leases. As a result of our adoption, the Company recorded a lease liability and corresponding right of use asset of $55,515 at January 1, 2019 for leases where we are the lessee. Our most significant leases are land leases. We own five hotels within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms, with extension options that range from May 2062 to October 2103. Based on the nature of these leases, the Company assumed that all extension options would be fully executed. For land leases that include variable payments, those include payments that are tied to an index such as the consumer price index or include rental payments based partially on the hotel's revenues. Two additional office space leases are also factored into the lease liability and are classified as operating leases with terms ranging from January 2022 to December 2027. For office space leases that include variable payments, those include payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. The Company applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. Since the discount rate implicit in the leases could not be readily determinable, we calculated our incremental borrowing rate as prescribed by ASC Topic 842. We utilized judgments and estimates regarding the Company's market credit rating, comparable market bond yield curve, and adjustments to market yield curves to determine a securitized rate. We are also a lessor in certain office space and retail lease agreements related to our hotels and the adoption of this ASU did not have a material impact on our accounting for leases where we are the lessor. The adoption of this ASU did not impact revenue recognition policies for the Company. The components of lease costs for the three months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 1,050 $ 121 $ 1,171 $ 973 $ 121 $ 1,094 Variable lease costs 8 87 95 141 88 229 Total lease costs $ 1,058 $ 208 $ 1,266 $ 1,114 $ 209 $ 1,323 The components of lease costs for the six months ended June 30, 2020 and 2019 were as follows: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 2,100 $ 242 $ 2,342 $ 1,946 $ 242 $ 2,188 Variable lease costs 21 154 175 278 159 437 Total lease costs $ 2,121 $ 396 $ 2,517 $ 2,224 $ 401 $ 2,625 Other information related to leases as of and for the six months ended June 30, 2020 and 2019 is as follows: June 30, 2020 June 30, 2019 Cash paid from operating cash flow for operating leases $ 1,951 $ 2,188 Weighted average remaining lease term 64.2 64.2 Weighted average discount rate 7.86 % 7.85 % |
LEASES | LEASES In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which provides the principles for the recognition, measurement, presentation and disclosure of leases. The Company adopted the provisions of the update effective January 1, 2019. We elected the modified retrospective transition method upon adoption, which resulted in no cumulative-effect adjustment to the balance of opening retained earnings. As part of our adoption, we elected to utilize the package of practical expedients which allowed us to not reassess existing contracts for embedded leases and not reassess the classification of existing leases. As a result of our adoption, the Company recorded a lease liability and corresponding right of use asset of $55,515 at January 1, 2019 for leases where we are the lessee. Our most significant leases are land leases. We own five hotels within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms, with extension options that range from May 2062 to October 2103. Based on the nature of these leases, the Company assumed that all extension options would be fully executed. For land leases that include variable payments, those include payments that are tied to an index such as the consumer price index or include rental payments based partially on the hotel's revenues. Two additional office space leases are also factored into the lease liability and are classified as operating leases with terms ranging from January 2022 to December 2027. For office space leases that include variable payments, those include payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. The Company applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. Since the discount rate implicit in the leases could not be readily determinable, we calculated our incremental borrowing rate as prescribed by ASC Topic 842. We utilized judgments and estimates regarding the Company's market credit rating, comparable market bond yield curve, and adjustments to market yield curves to determine a securitized rate. We are also a lessor in certain office space and retail lease agreements related to our hotels and the adoption of this ASU did not have a material impact on our accounting for leases where we are the lessor. The adoption of this ASU did not impact revenue recognition policies for the Company. The components of lease costs for the three months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 1,050 $ 121 $ 1,171 $ 973 $ 121 $ 1,094 Variable lease costs 8 87 95 141 88 229 Total lease costs $ 1,058 $ 208 $ 1,266 $ 1,114 $ 209 $ 1,323 The components of lease costs for the six months ended June 30, 2020 and 2019 were as follows: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 2,100 $ 242 $ 2,342 $ 1,946 $ 242 $ 2,188 Variable lease costs 21 154 175 278 159 437 Total lease costs $ 2,121 $ 396 $ 2,517 $ 2,224 $ 401 $ 2,625 Other information related to leases as of and for the six months ended June 30, 2020 and 2019 is as follows: June 30, 2020 June 30, 2019 Cash paid from operating cash flow for operating leases $ 1,951 $ 2,188 Weighted average remaining lease term 64.2 64.2 Weighted average discount rate 7.86 % 7.85 % |
COMMITMENTS AND CONTINGENCIES A
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies And Related Party Transactions [Abstract] | |
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS | COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS Management Agreements Our wholly-owned TRS, 44 New England Management Company, and certain of our joint venture entities engage eligible independent contractors in accordance with the requirements for qualification as a REIT under the Internal Revenue Code of 1986, as amended, including Hersha Hospitality Management Limited Partnership (“HHMLP”), as the property managers for hotels it leases from us pursuant to management agreements. HHMLP is owned, in part, by certain executives and trustees of the Company. Our management agreements with HHMLP provide for a term of five years and are subject to early termination upon the occurrence of defaults and certain other events described therein. As required under the REIT qualification rules, HHMLP must qualify as an “eligible independent contractor” during the term of the management agreements. Under the management agreements, HHMLP generally pays the operating expenses of our hotels. All operating expenses or other expenses incurred by HHMLP in performing its authorized duties are reimbursed or borne by our TRS to the extent the operating expenses or other expenses are incurred within the limits of the applicable approved hotel operating budget. HHMLP is not obligated to advance any of its own funds for operating expenses of a hotel or to incur any liability in connection with operating a hotel. Management agreements with other unaffiliated hotel management companies have similar terms. For its services, HHMLP receives a base management fee and, if a hotel exceeds certain thresholds, an incentive management fee. The base management fee for a hotel is due monthly and is equal to 3% of gross revenues associated with each hotel managed for the related month. The incentive management fee, if any, for a hotel is due annually in arrears on the ninetieth day following the end of each fiscal year and is based upon the financial performance of the hotels. For the three and six months ended June 30, 2020 and 2019, base management fees incurred from HHMLP totaled $564 and $3,949, and $2,933 and $6,942, respectively, and are recorded as Hotel Operating Expenses. For the three and six months ended June 30, 2020 and 2019, we did not incur incentive management fees. Franchise Agreements Our branded hotel properties are operated under franchise agreements assumed by the hotel property lessee. The franchise agreements have 10 to 20 year terms, but may be terminated by either the franchisee or franchisor on certain anniversary dates specified in the agreements. The franchise agreements require annual payments for franchise royalties, reservation, and advertising services, and such payments are based upon percentages of gross room revenue. These payments are paid by the hotels and charged to expense as incurred. Franchise fee expenses for the three and six months ended June 30, 2020 and 2019 were $775 and $6,508, and $4,603 and $11,483, respectively, and are recorded in Hotel Operating Expenses. The initial fees incurred to enter into the franchise agreements are amortized over the life of the franchise agreements. Accounting and Information Technology Fees Each of the wholly-owned hotels and consolidated joint venture hotel properties managed by HHMLP incurs a monthly accounting and information technology fee. Monthly fees for accounting services are between $2 and $3 per property and monthly information technology fees range from $1 to $2 per property. For the three and six months ended June 30, 2020 and 2019, the Company incurred accounting fees of $319 and $315, and $644 and $631, respectively. For the three and six months ended June 30, 2020 and 2019, the Company incurred information technology fees of $103 and $102, and $208 and $203, respectively. Accounting fees and information technology fees are included in Hotel Operating Expenses. Capital Expenditure Fees HHMLP charges a 5% fee on certain capital expenditures and pending renovation projects at the properties as compensation for procurement services related to capital expenditures and for project management of renovation projects. For the three and six months ended June 30, 2020 and 2019, we incurred fees of $56 and $989, and $956 and $1,513, respectively, which were capitalized with the cost of capital expenditures. Acquisitions from Affiliates We have entered into an option agreement with certain of our officers and trustees such that we obtain a right of first refusal to purchase any hotel owned or developed in the future by these individuals or entities controlled by them at fair market value. This right of first refusal would apply to each party until one year after such party ceases to be an officer or trustee of the Company. Our Acquisition Committee of the Board of Trustees is comprised solely of independent trustees, and the purchase prices and all material terms of the purchase of hotels from related parties are approved by the Acquisition Committee. Hotel Supplies For the three and six months ended June 30, 2020 and 2019, we incurred charges for hotel supplies of $11 and $80, and $63 and $214, respectively. For the three and six months ended June 30, 2020 and 2019, we incurred charges for capital expenditure purchases of $176 and $3,882, and $1,056 and $4,417, respectively. These purchases were made from Hersha Purchasing and Design, a hotel supply company owned, in part, by certain executives and trustees of the Company. Hotel supplies are expensed and included in Hotel Operating Expenses on our consolidated statements of operations, and capital expenditure purchases are included in investment in hotel properties on our consolidated balance sheets. Approximately $26 and $9 is included in accounts payable for the purchase of hotel supplies at June 30, 2020 and December 31, 2019, respectively. Insurance Services The Company utilizes the services of the Hersha Group, a risk management business owned, in part, by certain executives and trustees of the Company. The Hersha Group provides consulting and procurement services to the Company related to the placement of property and casualty insurance, placement of general liability insurance, and for claims handling for our hotel properties. The total costs of property insurance that we paid through the Hersha Group were $1,388 and $1,269, and $2,984 and $2,706, for the three and six months ended June 30, 2020 and 2019, respectively. These amounts paid to the Hersha Group include insurance premiums, which are then paid to insurance carriers, and consulting procurement fees and claims handling as compensation for services. Restaurant Lease Agreements with Independent Restaurant Group The Company enters into lease agreements with a number of restaurant management companies for the lease of restaurants located within our hotels. The Company previously entered into lease agreements with Independent Restaurant Group ("IRG") for restaurants at three of its hotel properties. Jay H. Shah and Neil H. Shah, executive officers and/or trustees of the Company, collectively own a 70.0% interest in IRG. The Company’s restaurant lease agreements with IRG generally provided for a term of five years and the payment of base rents and percentage rents, which were based on IRG’s revenue in excess of defined thresholds. Effective April 1, 2020, each of these lease agreements became a management agreement between the Company and IRG, subject to the supervision of HHMLP, as property manager. At the time of the conversion of the lease agreements to management agreements there was rent due of $103, which was forgiven due to the impact of the COVID-19 pandemic on the operations of our hotels and IRG's restaurants. The total amount of revenue recognized from IRG was $0 and $143 for the six months ended June 30, 2020 and 2019, respectively. Due From Related Parties The due from related parties balance as of June 30, 2020 and December 31, 2019 was approximately $2,363 and $6,113, respectively. The balances primarily consisted of working capital deposits made to HHMLP and other entities owned, in part, by certain executives and trustees of the Company. Due to Related Parties The balance due to related parties as of June 30, 2020 and December 31, 2019 was $0. |
FAIR VALUE MEASUREMENTS AND DER
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS Fair Value Measurements Our determination of fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we utilize a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liabilities, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As of June 30, 2020, the Company’s derivative instruments represented the only financial instruments measured at fair value. Currently, the Company uses derivative instruments, such as interest rate swaps and caps, to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and the counter-parties. However, as of June 30, 2020 we have assessed the significance of the effect of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Derivative Instruments The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps designated as cash flow hedges limit the Company’s exposure to increased cash payments due to increases in variable interest rates. The table on the following page presents our derivative instruments as of June 30, 2020 and December 31, 2019. Estimated Fair Value Asset / (Liability) Balance Hedged Debt Type Strike Rate Index Effective Date Derivative Contract Maturity Date Notional Amount June 30, 2020 December 31, 2019 Term Loan Instruments: Credit Facility Swap 1.341 % 1-Month LIBOR + 2.20% October 3, 2019 August 2, 2021 150,000 (1,965) 539 Credit Facility Swap 1.316 % 1-Month LIBOR + 2.20% September 3, 2019 August 2, 2021 43,900 (563) 175 Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 (3,698) (718) Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 (3,698) (718) Credit Facility Swap 1.460 % 1-Month LIBOR + 2.00% September 10, 2019 September 10, 2024 300,000 (15,695) 1,776 Mortgages: Courtyard, LA Westside, Culver City, CA Swap 1.683 % 1-Month LIBOR + 2.75% August 1, 2017 August 1, 2020 35,000 — (8) Annapolis Waterfront Hotel, MD Cap 3.350 % 1-Month LIBOR +2.65% May 1, 2018 May 1, 2021 28,000 — — Hyatt, Union Square, New York, NY Swap 1.870 % 1-Month LIBOR + 2.30% June 7, 2019 June 7, 2023 56,000 (2,827) (556) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 (1,438) (169) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 (1,438) (169) Hilton Garden Inn 52nd Street, New York, NY Swap 1.540 % 1-Month LIBOR + 2.30% December 4, 2019 December 4, 2022 44,325 (1,515) 23 Courtyard, LA Westside, Culver City, CA Swap 0.495 % 1-Month LIBOR + 2.75% June 1, 2020 August 1, 2021 35,000 (134) — $ (32,971) $ 175 On June 1, 2020, we entered into an accelerated termination agreement on the interest rate swap associated with the $35,000 mortgage debt on the Courtyard LA Westside, which had an initial maturity of August 1, 2020. Also on June 1, 2020, we entered into a new interest rate swap associated with the $35,000 mortgage on the Courtyard LA Westside, which will mature on August 1, 2021. The fair value of the old swap at the time of termination was a liability in the amount of $67. Instead of settling this amount with cash consideration at termination, the rate and terms of the new swap were such that, the fair value at termination of the old swap would carry over as the fair value of the new swap at inception. The other comprehensive income related to the old swap will be reclassified to interest expense until the date of the original maturity date of August 1, 2020. The fair value of swaps and our interest rate caps with a positive balance is included in other assets at June 30, 2020 and December 31, 2019. The fair value of our interest rate swaps with a negative balance is included in accounts payable, accrued expenses and other liabilities at June 30, 2020 and December 31, 2019. The net change related to derivative instruments designated as cash flow hedges recognized as unrealized gains and losses reflected on our consolidated balance sheet in accumulated other comprehensive income was a loss of $792 and a loss of $5,234 for the three months ended June 30, 2020 and 2019, respectively, and a loss of $30,941 and a loss of $8,155 for the six months ended June 30, 2020 and 2019, respectively. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate derivatives. The change in net unrealized gains/losses on cash flow hedges reflects a reclassification of $1,228 and $1,112 and $2,205 and $2,253 of net unrealized gains/losses from accumulated other comprehensive income as an increase/decrease to interest expense for the three and six months ended June 30, 2020 and 2019, respectively. For the next twelve months ending June 30, 2021, we estimate that an additional $14,197 will be reclassified as an increase to interest expense. Fair Value of Debt We estimate the fair value of our fixed rate debt and the credit spreads over variable market rates on our variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. As of June 30, 2020, the carrying value and estimated fair value of our debt were $1,175,131 and $1,150,217 respectively. As of December 31, 2019, the carrying value and estimated fair value of our debt were $1,128,199 and $1,098,082, respectively. |
SHARE BASED PAYMENTS
SHARE BASED PAYMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE BASED PAYMENTS | SHARE BASED PAYMENTS Our shareholders approved the Hersha Hospitality Trust 2012 Equity Incentive Plan, as amended, (the “2012 Plan”) for the purpose of attracting and retaining executive officers, employees, trustees and other persons and entities that provide services to the Company. Pursuant to the 2012 Plan, equity may be awarded in the form of stock awards, LTIP Units, or performance share awards issuable. The Short Term Incentive Program ("STIP") and the Long-Term Incentive Program ("LTIP") were incentive compensation programs the Compensation Committee of our Board of Trustees established to align executive compensation with the performance of the Company. Prior to 2019, executives participated in our legacy incentive compensation programs, including the Multi-Year Long Term Equity Incentive Program ("Multi-Year EIP"). On April 10, 2020, based on the achievement of certain metrics established under the 2019 STIP for the performance period ended December 31, 2019, the Compensation Committee awarded 833,539 LTIP Units. The awards issued pursuant to the STIP vest on December 31, 2021, the two three A summary of our share based compensation activity from January 1, 2020 to June 30, 2020 is as follows: LTIP Unit Awards Restricted Share Awards Share Awards Number of Units Weighted Average Grant Date Fair Value Number of Restricted Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested Balance as of December 31, 2019 441,201 $ 17.99 92,102 $ 17.07 — Granted 1,101,924 5.23 135,740 5.21 — N/A Vested (120,459) 5.23 (75,384) 12.74 — N/A Forfeited — N/A (113) 18.00 — N/A Unvested Balance as of June 30, 2020 1,422,666 $ 9.19 152,345 $ 8.65 — The following table summarizes share based compensation expense for the three and six months ended June 30, 2020 and 2019 and unearned compensation as of June 30, 2020 and December 31, 2019: Share Based Unearned For the Three Months Ended For the Six Months Ended As of 6/30/2020 6/30/2019 6/30/2020 6/30/2019 6/30/2020 12/31/2019 Issued Awards LTIP Unit Awards $ 1,142 $ 1,428 $ 2,951 $ 2,791 $ 4,179 $ 2,878 Restricted Share Awards 342 459 674 795 1,080 1,051 Share Awards — 402 — 402 — — Unissued Awards Market Based 315 430 630 689 2,110 2,739 Performance Based — 755 — 755 — — Total $ 1,799 $ 3,474 $ 4,255 $ 5,432 $ 7,369 $ 6,668 The weighted-average period of which the unrecognized compensation expense will be recorded is approximately 1.5 years for LTIP Unit Awards and 0.9 years for Restricted Share Awards. The remaining unvested target units are expected to vest as follows: 2020 2021 2022 2023 LTIP Unit Awards 524,540 898,126 — — Restricted Share Awards 3,784 144,376 3,654 531 528,324 1,042,502 3,654 531 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table is a reconciliation of the income or loss (numerator) and the weighted average shares (denominator) used in the calculation of basic and diluted earnings per common share. The computation of basic and diluted earnings per share is presented below. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 NUMERATOR: Basic and Diluted* Net (Loss) Income $ (71,780) $ 5,559 $ (97,752) $ (2,323) Loss allocated to Noncontrolling Interests 10,360 41 13,257 1,264 Distributions to Preferred Shareholders (6,044) (6,043) (12,088) (12,087) Dividends Paid on Unvested Restricted Shares and LTIP Units — (271) — (553) Net Loss applicable to Common Shareholders $ (67,464) $ (714) $ (96,583) $ (13,699) DENOMINATOR: Weighted average number of common shares - basic 38,609,922 39,127,385 38,587,011 39,121,421 Effect of dilutive securities: Restricted Stock Awards and LTIP Units (unvested) — — — — Contingently Issued Shares and Units — — — — Weighted average number of common shares - diluted 38,609,922 39,127,385 38,587,011 39,121,421 * Income (loss) allocated to noncontrolling interest in HHLP has been excluded from the numerator and Common Units and Vested LTIP Units have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders. |
CASH FLOW DISCLOSURES AND NON C
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES | CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES Interest paid during the six months ended June 30, 2020 and 2019 totaled $21,488 and $27,802 respectively. Net Cash paid on Interest Rate Derivative contracts during the six months ended June 30, 2020 and 2019 totaled $1,505 and $(2,443) respectively. Cash paid for income taxes during the six months ended June 30, 2020 and 2019 totaled $233 and $466, respectively. The following non-cash investing and financing activities occurred during the six months ended June 30, 2020 and 2019: 2020 2019 Common Shares issued as part of the Dividend Reinvestment Plan $ 14 $ 42 Issuance of share based payments 6,404 12,119 Accrued payables for capital expenditures placed into service 1,398 1,268 Adjustment to Record Noncontrolling Interest at Redemption Value (3,196) 148 Adjustment to Record Right of Use Asset & Lease Liability — 55,515 The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019: 2020 2019 Cash and cash equivalents $ 23,228 $ 36,780 Escrowed cash 7,374 10,767 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 30,602 $ 47,547 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles Of Consolidation And Presentation | Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with US GAAP and include all of our accounts as well as accounts of the Partnership, subsidiary partnerships and our wholly owned Taxable REIT Subsidiary Lessee (“TRS Lessee”), 44 New England Management Company. All significant inter-company amounts have been eliminated. |
Variable Interest Entities | Variable Interest Entities We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. To determine if we are the primary beneficiary of a VIE, we evaluate whether we have a controlling financial interest in that VIE. An enterprise is deemed to have a controlling financial interest if it has i) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the rights to receive benefits from the VIE that could be significant to the VIE. Control can also be demonstrated by the ability of a member to manage day-to-day operations, refinance debt and sell the assets of the partnerships without the consent of the other member and the inability of the members to replace the managing member. Based on our examination, there have been no changes to the operating structure of our legal entities during the six months ended June 30, 2020 and, therefore, there are no changes to our evaluation of VIE's as presented within our annual report presented on Form 10-K for the year ended December 31, 2019. |
Noncontrolling Interest | Noncontrolling InterestWe classify the noncontrolling interests of our common units of limited partnership interest in HHLP (“Common Units”), and Long Term Incentive Plan Units (“LTIP Units”) as equity. LTIP Units are a separate class of limited partnership interest in the Operating Partnership that are convertible into Common Units under certain circumstances. |
Revenue Recognition | Investment in Hotel Properties Investments in hotel properties are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of up to 40 years for buildings and improvements, two Identifiable assets, liabilities, and noncontrolling interests related to hotel properties acquired in a business combination are recorded at full fair value. Estimating techniques and assumptions used in determining fair values involve significant estimates and judgments. These estimates and judgments have a direct impact on the carrying value of our assets and liabilities which can directly impact the amount of depreciation expense recorded on an annual basis and could have an impact on our assessment of potential impairment of our investment in hotel properties. Properties intended to be sold are designated as “held for sale” on the balance sheet. In accordance with ASU Update No. 2014-08 concerning the classification and reporting of discontinued operations, we evaluate each disposition to determine whether we need to classify the disposition as discontinued operations. This amendment defines discontinued operations as a component of an entity that represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. We anticipate that most of our hotel dispositions will not be classified as discontinued operations as most will not fit this definition. Based on the occurrence of certain events or changes in circumstances, we review the recoverability of the property’s carrying value. Such events or changes in circumstances include the following: • a significant decrease in the market price of a long-lived asset; • a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; • a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; • an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; • a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and • a current expectation that, it is more likely than not that, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. HERSHA HOSPITALITY TRUST AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 [UNAUDITED] [IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS] NOTE 1 - BASIS OF PRESENTATION (CONTINUED) We review our portfolio on an on-going basis to evaluate the existence of any of the aforementioned events or changes in circumstances that would require us to test for recoverability. In general, our review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value expected, as well as the effects of hotel demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are required to make subjective assessments as to whether there are impairments in the values of our investments in hotel properties. As of June 30, 2020, based on our analysis and given consideration to the impairment charge taken on one of our hotels held for sale, we have determined that the estimated future cash flow of each of the properties in our portfolio is sufficient to recover its carrying value. |
New Accounting Pronouncements | New Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. As a result of identified structural risks of interbank offered rates, in particular, the London Interbank Offered Rate (LIBOR), reference rate reform is underway to identify alternative reference rates that are more observable or transaction based. The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The optional expedients and exceptions contained within this update, in general, only apply to contract amendments and modifications entered into prior to January 1, 2023. The provisions of this update that will most likely affect our financial reporting process relate to modifications of contracts with lenders and the related hedging contracts associated with each respective modified borrowing contract. In general, the provisions of the update would benefit the Company by allowing, among other things, the following: • Allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 470 to be accounted for as a non-substantial modification and not be considered a debt extinguishment. • Allowing a change to contractual terms of a hedging instrument in conjunction with reference rate reform to not require a dedesignation of the hedging relationship. • Allowing a change to the interest rate used for margining, discounting, or contract price alignment for a derivative that is a cash flow hedge to not be considered a change to the critical terms of the hedge and will not require a dedesignation of the hedging relationship. We have not entered into any contract modifications yet, as it directly relates to reference rate reform but we anticipate having to undertake such modifications in the future as a majority of our contracts with lenders and hedging counterparties are indexed to LIBOR. While we anticipate the impact of this update to be to the benefit of the Company, we are still evaluating the overall impact to the Company. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of preferred stock | Terms of the Series C, Series D, and Series E Preferred Shares outstanding at June 30, 2020 and December 31, 2019 are summarized as follows: HERSHA HOSPITALITY TRUST AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019 [UNAUDITED] [IN THOUSANDS, EXCEPT SHARE/UNIT AND PER SHARE AMOUNTS] NOTE 1 - BASIS OF PRESENTATION (CONTINUED) Dividend Per Share Shares Outstanding Six Months Ended June 30, Series June 30, 2020 December 31, 2019 Aggregate Liquidation Preference Distribution Rate 2020 2019 Series C 3,000,000 3,000,000 $ 75,000 6.875 % — $ 0.8594 Series D 7,701,700 7,701,700 $ 192,500 6.500 % — $ 0.8126 Series E 4,001,514 4,001,514 $ 100,000 6.500 % — $ 0.8126 Total 14,703,214 14,703,214 |
INVESTMENT IN HOTEL PROPERTIES
INVESTMENT IN HOTEL PROPERTIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of investment in hotel properties | Investment in hotel properties consists of the following at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Land $ 505,156 $ 518,243 Buildings and Improvements 1,686,057 1,710,621 Furniture, Fixtures and Equipment 297,465 294,527 Construction in Progress 4,706 10,202 2,493,384 2,533,593 Less Accumulated Depreciation (590,920) (557,620) Total Investment in Hotel Properties * $ 1,902,464 $ 1,975,973 * The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $44,139 and $44,854 at June 30, 2020 and December 31, 2019, respectively. |
Schedule of assets held for sale | The table below shows the balances for the properties that were classified as assets held for sales as of June 30, 2020. June 30, 2020 Land $ 13,087 Buildings and Improvements 35,482 Furniture, Fixtures and Equipment 6,418 54,987 Less Accumulated Depreciation (14,817) Assets Held for Sale $ 40,170 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investment in unconsolidated joint ventures | As of June 30, 2020 and December 31, 2019, our investment in unconsolidated joint ventures consisted of the following: Percent Joint Venture Hotel Properties Owned June 30, 2020 December 31, 2019 Cindat Hersha Owner JV, LLC Hilton and IHG branded hotels in NYC 31 % $ — $ — Hiren Boston, LLC Courtyard by Marriott, South Boston, MA 50 % 555 1,434 SB Partners, LLC Holiday Inn Express, South Boston, MA 50 % — — SB Partners Three, LLC Home2 Suites, South Boston, MA 50 % 6,972 7,012 $ 7,527 $ 8,446 |
Schedule of income or loss from unconsolidated joint ventures | Income (loss) recognized during the three and six months ended June 30, 2020 and 2019, for our investments in unconsolidated joint ventures is as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cindat Hersha Owner JV, LLC $ — $ — $ — $ — Hiren Boston, LLC (477) 315 (880) 138 SB Partners, LLC — — (600) 375 SB Partners Three, LLC (25) (16) (40) (33) (Loss) Income from Unconsolidated Joint Venture Investments $ (502) $ 299 $ (1,520) $ 480 |
Summary of financial information related to unconsolidated joint ventures | The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019. Balance Sheets June 30, 2020 December 31, 2019 Assets Investment in Hotel Properties, Net $ 584,038 $ 579,287 Other Assets 28,359 33,891 Total Assets $ 612,397 $ 613,178 Liabilities and Equity Mortgages and Notes Payable $ 445,533 $ 430,282 Other Liabilities 22,452 19,185 Equity: Hersha Hospitality Trust 7,996 9,588 Joint Venture Partner(s) 136,977 154,998 Accumulated Other Comprehensive Loss (561) (875) Total Equity 144,412 163,711 Total Liabilities and Equity $ 612,397 $ 613,178 Statements of Operations Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Room Revenue $ 5,588 $ 26,995 $ 16,932 $ 43,346 Other Revenue — 622 787 1,243 Operating Expenses (3,265) (11,890) (11,613) (21,921) Lease Expense (170) (164) (354) (365) Property Taxes and Insurance (3,154) (3,051) (6,438) (6,103) General and Administrative (553) (1,505) (1,516) (2,711) Depreciation and Amortization (3,925) (3,694) (7,840) (7,354) Interest Expense (5,582) (7,196) (11,869) (14,343) Net (Loss) Income $ (11,061) $ 117 $ (21,911) $ (8,208) |
Reconciliation of share in unconsolidated joint ventures equity in investment In unconsolidated joint ventures | The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of June 30, 2020 and December 31, 2019. June 30, 2020 December 31, 2019 Our share of equity recorded on the joint ventures' financial statements $ 7,996 $ 9,588 Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures (1) (469) (1,142) Investment in Unconsolidated Joint Ventures $ 7,527 $ 8,446 (1) Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following: • the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements; • accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Income (Loss) from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other assets | Other Assets consisted of the following at June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Derivative Asset $ — $ 2,514 Deferred Financing Costs 3,019 1,330 Prepaid Expenses 6,189 11,279 Investment in Statutory Trusts 1,548 1,548 Investment in Non-Hotel Property and Inventories 2,714 2,987 Deposits with Unaffiliated Third Parties 2,575 2,577 Deferred Tax Asset, Net of Valuation Allowance of $20,363 and $497, respectively — 11,390 Property Insurance Receivable 1,788 1,788 Other 3,163 2,764 $ 20,996 $ 38,177 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of mortgages payable | Mortgages payable at June 30, 2020 and December 31, 2019 consisted of the following: June 30, 2020 December 31, 2019 Mortgage Indebtedness $ 333,298 $ 333,948 Net Unamortized Premium 585 821 Net Unamortized Deferred Financing Costs (2,112) (2,489) Mortgages Payable $ 331,771 $ 332,280 |
Summary of borrowing base assets | As of June 30, 2020, the following hotel properties secured the amended facilities under the Credit Agreements: - Courtyard, Brookline, MA - Mystic Marriott Hotel & Spa, Groton, CT - Holiday Inn Express, Cambridge, MA - Hampton Inn, Washington, DC - Envoy Hotel, Boston, MA - Ritz Carlton, Washington, DC - The Boxer, Boston, MA - Hilton Garden Inn, M Street, Washington, DC - Hampton Inn, Seaport, NY - Residence Inn, Coconut Grove, FL - The Duane Street Hotel, NY - The Winter Haven, Miami, FL - NU Hotel, Brooklyn, NY - The Blue Moon, Miami, FL - Holiday Inn Express, 29th Street, NY - The Cadillac Hotel and Beach Club, Miami, FL - The Gate JFK Airport, New York, NY - The Parrot Key Hotel & Resort, Key West, FL - Hilton Garden Inn, JFK Airport, New York, NY - TownePlace Suites, Sunnyvale, CA - Hyatt House White Plains, NY - The Ambrose Hotel, Santa Monica, CA - Sheraton, Wilmington South, DE - Courtyard, San Diego, CA - Hampton Inn, Philadelphia, PA - The Pan Pacific Hotel, Seattle, WA - The Rittenhouse, Philadelphia, PA - The Westin, Philadelphia, PA |
Summary of the balances outstanding and interest rate spread | The following table summarizes the balances outstanding and interest rate spread for each borrowing: Outstanding Balance Borrowing Spread June 30, 2020 December 31, 2019 Line of Credit 1.50% to 2.25% $ 95,000 $ 48,000 Term Loan: First Term Loan 1.45% to 2.20% $ 207,000 $ 207,000 Second Term Loan 1.35% to 2.00% 300,000 300,000 Third Term Loan 1.45% to 2.20% 193,900 193,900 Deferred Loan Costs (3,303) (3,717) Total Term Loan $ 697,597 $ 697,183 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of components of lease costs | The components of lease costs for the three months ended June 30, 2020 and 2019 were as follows: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 1,050 $ 121 $ 1,171 $ 973 $ 121 $ 1,094 Variable lease costs 8 87 95 141 88 229 Total lease costs $ 1,058 $ 208 $ 1,266 $ 1,114 $ 209 $ 1,323 The components of lease costs for the six months ended June 30, 2020 and 2019 were as follows: Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 2,100 $ 242 $ 2,342 $ 1,946 $ 242 $ 2,188 Variable lease costs 21 154 175 278 159 437 Total lease costs $ 2,121 $ 396 $ 2,517 $ 2,224 $ 401 $ 2,625 Other information related to leases as of and for the six months ended June 30, 2020 and 2019 is as follows: June 30, 2020 June 30, 2019 Cash paid from operating cash flow for operating leases $ 1,951 $ 2,188 Weighted average remaining lease term 64.2 64.2 Weighted average discount rate 7.86 % 7.85 % |
FAIR VALUE MEASUREMENTS AND D_2
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of interest rate swaps and caps | The table on the following page presents our derivative instruments as of June 30, 2020 and December 31, 2019. Estimated Fair Value Asset / (Liability) Balance Hedged Debt Type Strike Rate Index Effective Date Derivative Contract Maturity Date Notional Amount June 30, 2020 December 31, 2019 Term Loan Instruments: Credit Facility Swap 1.341 % 1-Month LIBOR + 2.20% October 3, 2019 August 2, 2021 150,000 (1,965) 539 Credit Facility Swap 1.316 % 1-Month LIBOR + 2.20% September 3, 2019 August 2, 2021 43,900 (563) 175 Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 (3,698) (718) Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 (3,698) (718) Credit Facility Swap 1.460 % 1-Month LIBOR + 2.00% September 10, 2019 September 10, 2024 300,000 (15,695) 1,776 Mortgages: Courtyard, LA Westside, Culver City, CA Swap 1.683 % 1-Month LIBOR + 2.75% August 1, 2017 August 1, 2020 35,000 — (8) Annapolis Waterfront Hotel, MD Cap 3.350 % 1-Month LIBOR +2.65% May 1, 2018 May 1, 2021 28,000 — — Hyatt, Union Square, New York, NY Swap 1.870 % 1-Month LIBOR + 2.30% June 7, 2019 June 7, 2023 56,000 (2,827) (556) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 (1,438) (169) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 (1,438) (169) Hilton Garden Inn 52nd Street, New York, NY Swap 1.540 % 1-Month LIBOR + 2.30% December 4, 2019 December 4, 2022 44,325 (1,515) 23 Courtyard, LA Westside, Culver City, CA Swap 0.495 % 1-Month LIBOR + 2.75% June 1, 2020 August 1, 2021 35,000 (134) — $ (32,971) $ 175 |
SHARE BASED PAYMENTS (Tables)
SHARE BASED PAYMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of unvested share awards issued to executives | A summary of our share based compensation activity from January 1, 2020 to June 30, 2020 is as follows: LTIP Unit Awards Restricted Share Awards Share Awards Number of Units Weighted Average Grant Date Fair Value Number of Restricted Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested Balance as of December 31, 2019 441,201 $ 17.99 92,102 $ 17.07 — Granted 1,101,924 5.23 135,740 5.21 — N/A Vested (120,459) 5.23 (75,384) 12.74 — N/A Forfeited — N/A (113) 18.00 — N/A Unvested Balance as of June 30, 2020 1,422,666 $ 9.19 152,345 $ 8.65 — |
Schedule of employee service share-based compensation, allocation of recognized period costs | The following table summarizes share based compensation expense for the three and six months ended June 30, 2020 and 2019 and unearned compensation as of June 30, 2020 and December 31, 2019: Share Based Unearned For the Three Months Ended For the Six Months Ended As of 6/30/2020 6/30/2019 6/30/2020 6/30/2019 6/30/2020 12/31/2019 Issued Awards LTIP Unit Awards $ 1,142 $ 1,428 $ 2,951 $ 2,791 $ 4,179 $ 2,878 Restricted Share Awards 342 459 674 795 1,080 1,051 Share Awards — 402 — 402 — — Unissued Awards Market Based 315 430 630 689 2,110 2,739 Performance Based — 755 — 755 — — Total $ 1,799 $ 3,474 $ 4,255 $ 5,432 $ 7,369 $ 6,668 |
Disclosure of share-based compensation arrangements by share-based payment award | The remaining unvested target units are expected to vest as follows: 2020 2021 2022 2023 LTIP Unit Awards 524,540 898,126 — — Restricted Share Awards 3,784 144,376 3,654 531 528,324 1,042,502 3,654 531 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of earnings per share | The following table is a reconciliation of the income or loss (numerator) and the weighted average shares (denominator) used in the calculation of basic and diluted earnings per common share. The computation of basic and diluted earnings per share is presented below. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 NUMERATOR: Basic and Diluted* Net (Loss) Income $ (71,780) $ 5,559 $ (97,752) $ (2,323) Loss allocated to Noncontrolling Interests 10,360 41 13,257 1,264 Distributions to Preferred Shareholders (6,044) (6,043) (12,088) (12,087) Dividends Paid on Unvested Restricted Shares and LTIP Units — (271) — (553) Net Loss applicable to Common Shareholders $ (67,464) $ (714) $ (96,583) $ (13,699) DENOMINATOR: Weighted average number of common shares - basic 38,609,922 39,127,385 38,587,011 39,121,421 Effect of dilutive securities: Restricted Stock Awards and LTIP Units (unvested) — — — — Contingently Issued Shares and Units — — — — Weighted average number of common shares - diluted 38,609,922 39,127,385 38,587,011 39,121,421 * Income (loss) allocated to noncontrolling interest in HHLP has been excluded from the numerator and Common Units and Vested LTIP Units have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders. |
CASH FLOW DISCLOSURES AND NON_2
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of cash flow | The following non-cash investing and financing activities occurred during the six months ended June 30, 2020 and 2019: 2020 2019 Common Shares issued as part of the Dividend Reinvestment Plan $ 14 $ 42 Issuance of share based payments 6,404 12,119 Accrued payables for capital expenditures placed into service 1,398 1,268 Adjustment to Record Noncontrolling Interest at Redemption Value (3,196) 148 Adjustment to Record Right of Use Asset & Lease Liability — 55,515 |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019: 2020 2019 Cash and cash equivalents $ 23,228 $ 36,780 Escrowed cash 7,374 10,767 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 30,602 $ 47,547 |
Summary of restrictions on cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019: 2020 2019 Cash and cash equivalents $ 23,228 $ 36,780 Escrowed cash 7,374 10,767 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 30,602 $ 47,547 |
BASIS OF PRESENTATION (Narrativ
BASIS OF PRESENTATION (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Jul. 31, 2020 | Apr. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 02, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Noncontrolling Interest [Abstract] | |||||||||||
Loss attributable to noncontrolling interest | $ 0 | $ 0 | $ 0 | $ 300,000 | |||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | (3,196,000) | ||||||||||
Equity in noncontrolling interest | $ 751,051,000 | 751,051,000 | $ 871,801,000 | ||||||||
Proceed from line of credit | $ 47,000,000 | 27,000,000 | |||||||||
Buildings and Improvements | Maximum | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Useful life of buildings and improvements | 40 years | ||||||||||
Furniture, Fixtures and Equipment | Minimum | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Useful life of buildings and improvements | 2 years | ||||||||||
Furniture, Fixtures and Equipment | Maximum | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Useful life of buildings and improvements | 7 years | ||||||||||
Revolving Line Of Credit | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Revolving line of credit, increase (decrease) In borrowing capacity | $ 100,000,000 | ||||||||||
Proceed from line of credit | $ 25,000,000 | ||||||||||
Secured Debt | Debt Instrument Secured By One Mortgage | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Short term debt outstanding | 25,000,000 | $ 25,000,000 | |||||||||
Subsequent Event | Revolving Line Of Credit | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Proceed from line of credit | $ 10,000,000 | ||||||||||
Noncontrolling Interests Common Units And LTIP Units | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Noncontrolling interests in Nonredeemable Common Units | $ 55,715,000 | $ 55,715,000 | 64,144,000 | ||||||||
Nonredeemable common units outstanding (in shares) | 5,381,870 | 5,381,870 | |||||||||
Fair market value of nonredeemable common units | $ 31,000,000 | $ 31,000,000 | |||||||||
Equity in noncontrolling interest | 55,715,000 | 59,162,000 | 64,574,000 | 55,715,000 | 64,574,000 | 64,144,000 | $ 64,808,000 | $ 62,010,000 | |||
Consolidated Joint Ventures | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | (3,196,000) | 8,000 | 148,000 | ||||||||
Equity in noncontrolling interest | 0 | 3,196,000 | 2,856,000 | 0 | 2,856,000 | 3,196,000 | 2,848,000 | 2,708,000 | |||
Additional Paid-In Capital | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | 3,196,000 | (8,000) | 3,196,000 | (148,000) | |||||||
Equity in noncontrolling interest | $ 1,149,291,000 | $ 1,145,450,000 | $ 1,152,939,000 | $ 1,149,291,000 | $ 1,152,939,000 | $ 1,144,808,000 | $ 1,151,654,000 | $ 1,155,776,000 | |||
Senior Common Equity Interest | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Noncontrolling interest, common equity interest, return | 12.00% | ||||||||||
Consolidated Joint Ventures | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Cumulative return on common equity interest (percent) | 30.00% | 30.00% | |||||||||
Consolidated Joint Ventures | Senior Common Equity Interest | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Cumulative return on common equity interest (percent) | 25.00% | 25.00% | |||||||||
Consolidated Joint Ventures | Junior Common Equity Interest | Scenario, Plan | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Noncontrolling interest, common equity interest, return | 8.00% | ||||||||||
Hersha Holding RC Owner, LLC | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Cumulative return on common equity interest (percent) | 70.00% | 70.00% | |||||||||
Hersha Holding RC Owner, LLC | Senior Common Equity Interest | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Noncontrolling interest, common equity interest, return | 8.00% | ||||||||||
Cumulative return on common equity interest (percent) | 75.00% | 75.00% | |||||||||
Ritz-Carlton Coconut Grove, FL | Consolidated Joint Ventures | |||||||||||
Noncontrolling Interest [Abstract] | |||||||||||
Noncontrolling interest, ownership percentage | 15.00% | 15.00% | |||||||||
Hersha Hospitality Limited Partnership | |||||||||||
Class of Stock | |||||||||||
Approximate ownership percentage in the partnership (percent) | 87.80% | 87.80% | |||||||||
General partnership interest (percent) | 1.00% |
BASIS OF PRESENTATION (Schedule
BASIS OF PRESENTATION (Schedule Of Preferred Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Class of Stock | |||
Shares outstanding (in shares) | 14,703,214 | 14,703,214 | |
Series C Preferred Shares | |||
Class of Stock | |||
Shares outstanding (in shares) | 3,000,000 | 3,000,000 | |
Aggregate Liquidation Preference | $ 75,000 | ||
Dividend Rate (percentage) | 6.875% | ||
Dividend per share (in dollars per share) | $ 0 | $ 0.8594 | |
Series D Preferred Shares | |||
Class of Stock | |||
Shares outstanding (in shares) | 7,701,700 | 7,701,700 | |
Aggregate Liquidation Preference | $ 192,500 | ||
Dividend Rate (percentage) | 6.50% | ||
Dividend per share (in dollars per share) | $ 0 | 0.8126 | |
Series E Preferred Shares | |||
Class of Stock | |||
Shares outstanding (in shares) | 4,001,514 | 4,001,514 | |
Aggregate Liquidation Preference | $ 100,000 | ||
Dividend Rate (percentage) | 6.50% | ||
Dividend per share (in dollars per share) | $ 0 | $ 0.8126 |
INVESTMENT IN HOTEL PROPERTIE_2
INVESTMENT IN HOTEL PROPERTIES (Investment In Hotel Properties) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | $ 2,493,384 | $ 2,533,593 |
Less Accumulated Depreciation | (590,920) | (557,620) |
Total Investment in Hotel Properties | 1,902,464 | 1,975,973 |
Assets | 2,054,560 | 2,122,428 |
Variable Interest Entity, Primary Beneficiary | ||
Property, Plant and Equipment | ||
Assets | 44,139 | 44,854 |
Land | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 505,156 | 518,243 |
Buildings and Improvements | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 1,686,057 | 1,710,621 |
Furniture, Fixtures and Equipment | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 297,465 | 294,527 |
Construction in Progress | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | $ 4,706 | $ 10,202 |
INVESTMENT IN HOTEL PROPERTIE_3
INVESTMENT IN HOTEL PROPERTIES (Assets Held For Sale) (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Long Lived Assets Held-for-sale | |
Less Accumulated Depreciation | $ (14,817) |
Assets Held for Sale | 40,170 |
Assets Held-for-sale | |
Long Lived Assets Held-for-sale | |
Assets Held for Sale, gross | 54,987 |
Land | Assets Held-for-sale | |
Long Lived Assets Held-for-sale | |
Assets Held for Sale, gross | 13,087 |
Buildings and Improvements | Assets Held-for-sale | |
Long Lived Assets Held-for-sale | |
Assets Held for Sale, gross | 35,482 |
Furniture, Fixtures and Equipment | Assets Held-for-sale | |
Long Lived Assets Held-for-sale | |
Assets Held for Sale, gross | $ 6,418 |
INVESTMENT IN HOTEL PROPERTIE_4
INVESTMENT IN HOTEL PROPERTIES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment | ||||
Asset impairment charge | $ 1,069 | $ 0 | $ 1,069 | $ 0 |
Duane Street Hotel | ||||
Property, Plant and Equipment | ||||
Reduction in purchase price | $ 2 |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investment In Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Investments in Unconsolidated Joint Ventures | ||
Investment in unconsolidated joint ventures | $ 7,527 | $ 8,446 |
Hilton and IHG branded hotels in NYC | Cindat Hersha Owner JV, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 31.00% | |
Investment in unconsolidated joint ventures | $ 0 | 0 |
Courtyard by Marriott, South Boston, MA | Hiren Boston, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 50.00% | |
Investment in unconsolidated joint ventures | $ 555 | 1,434 |
Holiday Inn Express, South Boston, MA | SB Partners, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 50.00% | |
Investment in unconsolidated joint ventures | $ 0 | 0 |
Home2 Suites, South Boston, MA | SB Partners Three, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 50.00% | |
Investment in unconsolidated joint ventures | $ 6,972 | $ 7,012 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Investments in Unconsolidated Joint Ventures | |||
Investment in Unconsolidated Joint Ventures | $ 7,527 | $ 8,446 | |
Cindat Hersha Owner JV, LLC | Cindat Capital Management Limited | |||
Investments in Unconsolidated Joint Ventures | |||
Preferred joint venture partner, ownership (percentage) | 69.00% | ||
Cindat Hersha Owner JV, LLC | Cindat Capital Management Limited | Senior Common Equity Interest | |||
Investments in Unconsolidated Joint Ventures | |||
Common equity interest | $ 143,650 | ||
Cindat Hersha Owner JV, LLC | Cindat Capital Management Limited | Junior Common Equity Interest | |||
Investments in Unconsolidated Joint Ventures | |||
Common equity interest return (percentage) | 8.00% | ||
Cindat Hersha Owner JV, LLC | Hersha Hospitality Limited Partnership | |||
Investments in Unconsolidated Joint Ventures | |||
Percent owned (percentage) | 31.00% | ||
Cindat Hersha Owner JV, LLC | Hersha Hospitality Limited Partnership | Junior Common Equity Interest | |||
Investments in Unconsolidated Joint Ventures | |||
Common equity interest | $ 64,357 | ||
Hilton and IHG branded hotels in NYC | Cindat Hersha Owner JV, LLC | |||
Investments in Unconsolidated Joint Ventures | |||
Percent owned (percentage) | 31.00% | ||
Investment in Unconsolidated Joint Ventures | $ 0 | $ 0 | |
Scenario, Plan | Cindat Hersha Owner JV, LLC | Cindat Capital Management Limited | |||
Investments in Unconsolidated Joint Ventures | |||
Common equity interest return (percentage) | 8.00% | ||
Common equity interest, return, annual reduction (percentage) | 0.50% | ||
Common equity interest, return, annual reduction, term | 4 years | ||
Subsequent Event | Forecast | |||
Investments in Unconsolidated Joint Ventures | |||
Net proceeds from the sale of our interests | $ 26 |
INVESTMENT IN UNCONSOLIDATED _5
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Income Or Loss From Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investments in Unconsolidated Joint Ventures | ||||
Income (loss) from equity method investments | $ (502) | $ 299 | $ (1,520) | $ 480 |
Cindat Hersha Owner JV, LLC | ||||
Investments in Unconsolidated Joint Ventures | ||||
Income (loss) from equity method investments | 0 | 0 | 0 | 0 |
Hiren Boston, LLC | ||||
Investments in Unconsolidated Joint Ventures | ||||
Income (loss) from equity method investments | (477) | 315 | (880) | 138 |
SB Partners, LLC | ||||
Investments in Unconsolidated Joint Ventures | ||||
Income (loss) from equity method investments | 0 | 0 | (600) | 375 |
SB Partners Three, LLC | ||||
Investments in Unconsolidated Joint Ventures | ||||
Income (loss) from equity method investments | $ (25) | $ (16) | $ (40) | $ (33) |
INVESTMENT IN UNCONSOLIDATED _6
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summary Financial Information Related To Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Assets | |||||
Investment in Hotel Properties, Net | $ 1,902,464 | $ 1,902,464 | $ 1,975,973 | ||
Other Assets | 20,996 | 20,996 | 38,177 | ||
Total Assets | 2,054,560 | 2,054,560 | 2,122,428 | ||
Liabilities and Equity | |||||
Mortgages and Notes Payable | 331,771 | 331,771 | 332,280 | ||
Equity: | |||||
Hersha Hospitality Trust | 695,336 | 695,336 | 807,657 | ||
Joint Venture Partner(s) | 55,715 | 55,715 | 64,144 | ||
Accumulated Other Comprehensive Loss | (27,097) | (27,097) | 1,010 | ||
Liabilities and Equity | 2,054,560 | 2,054,560 | 2,122,428 | ||
Statement of Operations [Abstract] | |||||
Other Revenue | 29 | $ (12) | 228 | $ 138 | |
Lease Expense | (1,266) | (1,323) | (2,517) | (2,625) | |
Property Taxes and Insurance | (9,969) | (8,997) | (19,911) | (18,394) | |
General and Administrative | (4,187) | (8,100) | (10,021) | (13,700) | |
Depreciation and Amortization | (24,322) | (23,964) | (48,510) | (48,092) | |
Interest Expense | (13,481) | (13,325) | (26,488) | (26,223) | |
Net (Loss) Income | (71,780) | 5,559 | (97,752) | (2,323) | |
Room | |||||
Statement of Operations [Abstract] | |||||
Hotel Operating Revenues: | 15,139 | 118,980 | 86,222 | 210,465 | |
Operating Expenses | (3,622) | (24,013) | (22,714) | (46,103) | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||||
Assets | |||||
Investment in Hotel Properties, Net | 584,038 | 584,038 | 579,287 | ||
Other Assets | 28,359 | 28,359 | 33,891 | ||
Total Assets | 612,397 | 612,397 | 613,178 | ||
Liabilities and Equity | |||||
Mortgages and Notes Payable | 445,533 | 445,533 | 430,282 | ||
Other Liabilities | 22,452 | 22,452 | 19,185 | ||
Equity: | |||||
Hersha Hospitality Trust | 7,996 | 7,996 | 9,588 | ||
Joint Venture Partner(s) | 136,977 | 136,977 | 154,998 | ||
Accumulated Other Comprehensive Loss | (561) | (561) | (875) | ||
Total Equity | 144,412 | 144,412 | 163,711 | ||
Liabilities and Equity | 612,397 | 612,397 | $ 613,178 | ||
Statement of Operations [Abstract] | |||||
Other Revenue | 0 | 622 | 787 | 1,243 | |
Operating Expenses | (3,265) | (11,890) | (11,613) | (21,921) | |
Lease Expense | (170) | (164) | (354) | (365) | |
Property Taxes and Insurance | (3,154) | (3,051) | (6,438) | (6,103) | |
General and Administrative | (553) | (1,505) | (1,516) | (2,711) | |
Depreciation and Amortization | (3,925) | (3,694) | (7,840) | (7,354) | |
Interest Expense | (5,582) | (7,196) | (11,869) | (14,343) | |
Net (Loss) Income | (11,061) | 117 | (21,911) | (8,208) | |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Room | |||||
Statement of Operations [Abstract] | |||||
Hotel Operating Revenues: | $ 5,588 | $ 26,995 | $ 16,932 | $ 43,346 |
INVESTMENT IN UNCONSOLIDATED _7
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Reconciliation Of Share In Unconsolidated Joint Ventures' Equity In Investment In Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Our share of equity recorded on the joint ventures' financial statements | $ 7,996 | $ 9,588 |
Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures | (469) | (1,142) |
Investment in Unconsolidated Joint Ventures | $ 7,527 | $ 8,446 |
OTHER ASSETS (Other Assets) (De
OTHER ASSETS (Other Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Derivative Asset | $ 0 | $ 2,514 |
Deferred Financing Costs | 3,019 | 1,330 |
Prepaid Expenses | 6,189 | 11,279 |
Investment in Statutory Trusts | 1,548 | 1,548 |
Investment in Non-Hotel Property and Inventories | 2,714 | 2,987 |
Deposits with Unaffiliated Third Parties | 2,575 | 2,577 |
Deferred Tax Asset, Net of Valuation Allowance of $20,363 and $497, respectively | 0 | 11,390 |
Property Insurance Receivable | 1,788 | 1,788 |
Other | 3,163 | 2,764 |
Total other assets | 20,996 | 38,177 |
Deferred tax assets, valuation allowance | $ 20,363 | $ 497 |
OTHER ASSETS (Narrative) (Detai
OTHER ASSETS (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred tax assets, net | $ 0 | $ 11,390 |
DEBT (Mortgages) (Details)
DEBT (Mortgages) (Details) - Mortgages - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Mortgages and Notes Payable [Abstract] | |||||
Mortgage Indebtedness | $ 333,298 | $ 333,298 | $ 333,948 | ||
Net Unamortized Premium | 585 | 585 | 821 | ||
Net Unamortized Deferred Financing Costs | (2,112) | (2,112) | (2,489) | ||
Total debt | 331,771 | 331,771 | $ 332,280 | ||
Interest expense | 3,031 | $ 4,077 | $ 6,516 | $ 8,067 | |
Debt covenant compliance status | We have determined that all debt covenants contained in the loan agreements securing our consolidated hotel properties with the exception of one mortgage were met as of June 30, 2020. | ||||
Interest Rate Swap | |||||
Mortgages and Notes Payable [Abstract] | |||||
Increase (decrease) interest expense | $ 552 | $ (99) | $ 585 | $ (196) | |
Minimum | |||||
Mortgages and Notes Payable [Abstract] | |||||
Debt instrument, interest rate, effective (percentage) | 2.16% | 2.16% | |||
Maximum | |||||
Mortgages and Notes Payable [Abstract] | |||||
Debt instrument, interest rate, effective (percentage) | 6.30% | 6.30% |
DEBT (Unsecured Notes Payable)
DEBT (Unsecured Notes Payable) (Details) - Junior Subordinated Debt $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)loan | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)loan | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Hersha Statutory Trust I and Hersha Statutory Trust II | |||||
Subordinated Notes Payable | |||||
Number of debt instruments | loan | 2 | 2 | |||
Subordinated notes payable | $ 51,548 | $ 51,548 | |||
Maturity date | Jul. 30, 2035 | ||||
Number of business days prior to quarterly interest payments for resetting rates | 2 days | ||||
Net unamortized deferred financing costs | $ 785 | $ 785 | $ 812 | ||
Debt instrument, interest rate during period (in hundredths) | 4.08% | 5.64% | 4.45% | 5.66% | |
Interest expense | $ 532 | $ 734 | $ 1,160 | $ 1,466 | |
Hersha Statutory Trust I | |||||
Subordinated Notes Payable | |||||
Subordinated notes payable | 25,774 | $ 25,774 | |||
Debt instrument, description of variable rate basis | LIBOR | ||||
Basis spread on variable rate (percentage) | 3.00% | ||||
Hersha Statutory Trust II | |||||
Subordinated Notes Payable | |||||
Subordinated notes payable | $ 25,774 | $ 25,774 | |||
Debt instrument, description of variable rate basis | LIBOR | ||||
Basis spread on variable rate (percentage) | 3.00% |
DEBT (Credit Facilities Narrati
DEBT (Credit Facilities Narrative) (Details) | Apr. 02, 2020USD ($) | Jul. 31, 2020USD ($) | Apr. 30, 2020USD ($) | Jun. 30, 2020USD ($)agreement | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)agreement | Jun. 30, 2019USD ($) |
Short-term Debt | |||||||
Proceed from line of credit | $ 47,000,000 | $ 27,000,000 | |||||
Line of credit facility covenant minimum tangible net worth | $ 1,119,500,000 | ||||||
Line of credit facility covenant percentage of net cash proceeds of issuance and sales of equity interests (percentage) | 75.00% | ||||||
Line of credit facility covenant maximum annual distributions ( (percentage) | 95.00% | ||||||
Line of credit facility covenant maximum leverage ratio (percentage) | 60.00% | ||||||
Line of credit facility covenant maximum secured debt leverage ratio (percentage) | 45.00% | ||||||
Minimum | |||||||
Short-term Debt | |||||||
Line of credit facility covenant fixed charge coverage ratio | 1.50 | ||||||
Term Loan: | |||||||
Short-term Debt | |||||||
Number of unsecured credit agreements (agreements) | agreement | 3 | 3 | |||||
Debt instrument, face amount | $ 950,900,000 | $ 950,900,000 | |||||
Term Loan: | Credit Facility | |||||||
Short-term Debt | |||||||
Revolving line of credit, current borrowing capacity | 457,000,000 | 457,000,000 | |||||
Line of credit, maximum borrowing capacity | 857,000,000 | 857,000,000 | |||||
Revolving line of credit, increase (decrease) In borrowing capacity | $ 100,000,000 | ||||||
Proceed from line of credit | $ 25,000,000 | ||||||
Term Loan: | $250 Million Term Loan (First Term Loan) | |||||||
Short-term Debt | |||||||
Debt instrument, face amount | 207,000,000 | $ 207,000,000 | |||||
Line of credit, expiration date | Aug. 10, 2022 | ||||||
Term Loan: | $300 Million Senior Term Loan Agreement (Second Term Loan) | |||||||
Short-term Debt | |||||||
Debt instrument, face amount | 300,000,000 | $ 300,000,000 | |||||
Maturity date | Sep. 10, 2024 | ||||||
Term Loan: | $200 Million Senior Term Loan Agreement (Third Term Loan) | |||||||
Short-term Debt | |||||||
Debt instrument, face amount | 193,900,000 | $ 193,900,000 | |||||
Maturity date | Aug. 2, 2021 | ||||||
Revolving Line Of Credit | |||||||
Short-term Debt | |||||||
Revolving line of credit, increase (decrease) In borrowing capacity | $ 100,000,000 | ||||||
Proceed from line of credit | $ 25,000,000 | ||||||
Description of variable rate basis | one month U.S. LIBOR | ||||||
Interest expense, on credit facilities | $ 5,370,000 | $ 8,903,000 | $ 12,404,000 | $ 17,539,000 | |||
Line of credit, weighted average interest rate (percentage) | 4.23% | 4.17% | 4.21% | 4.15% | |||
Revolving Line Of Credit | Subsequent Event | |||||||
Short-term Debt | |||||||
Proceed from line of credit | $ 10,000,000 | ||||||
Revolving Line Of Credit | Interest Rate Swap | |||||||
Short-term Debt | |||||||
Increase (decrease) interest expense | $ 3,133,000 | $ (1,000,000) | $ 4,219,000 | $ (2,095,000) | |||
Revolving Line Of Credit | $250 Million Senior Revolving Line Of Credit (Line of Credit) | |||||||
Short-term Debt | |||||||
Revolving line of credit, current borrowing capacity | $ 250,000,000 | $ 250,000,000 |
DEBT (Summary Of The Balances O
DEBT (Summary Of The Balances Outstanding And Interest Rate Spread) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Short-term Debt | ||
Line of Credit | $ 95,000 | $ 48,000 |
Term Loan: | ||
Short-term Debt | ||
Deferred Loan Costs | (3,303) | (3,717) |
Total debt | 697,597 | 697,183 |
$250 Million Senior Revolving Line Of Credit (Line of Credit) | Line of Credit | ||
Short-term Debt | ||
Line of Credit | 95,000 | 48,000 |
$250 Million Term Loan (First Term Loan) | Term Loan: | ||
Short-term Debt | ||
Unsecured Term Loan | 207,000 | 207,000 |
$300 Million Senior Term Loan Agreement (Second Term Loan) | Term Loan: | ||
Short-term Debt | ||
Unsecured Term Loan | 300,000 | 300,000 |
$200 Million Senior Term Loan Agreement (Third Term Loan) | Term Loan: | ||
Short-term Debt | ||
Unsecured Term Loan | $ 193,900 | $ 193,900 |
Minimum | $250 Million Senior Revolving Line Of Credit (Line of Credit) | Line of Credit | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.50% | |
Minimum | $250 Million Term Loan (First Term Loan) | Term Loan: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.45% | |
Minimum | $300 Million Senior Term Loan Agreement (Second Term Loan) | Term Loan: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.35% | |
Minimum | $200 Million Senior Term Loan Agreement (Third Term Loan) | Term Loan: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.45% | |
Maximum | $250 Million Senior Revolving Line Of Credit (Line of Credit) | Line of Credit | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.25% | |
Maximum | $250 Million Term Loan (First Term Loan) | Term Loan: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.20% | |
Maximum | $300 Million Senior Term Loan Agreement (Second Term Loan) | Term Loan: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.00% | |
Maximum | $200 Million Senior Term Loan Agreement (Third Term Loan) | Term Loan: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.20% |
DEBT (Paycheck Protection Progr
DEBT (Paycheck Protection Program Loans) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Disclosure [Abstract] | ||
Proceeds of Paycheck Protection Program ("PPP") Loans | $ 18,936 | $ 0 |
DEBT (Capitalized Interest and
DEBT (Capitalized Interest and Deferred Financing Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Disclosure [Abstract] | ||||
Amortization of deferred costs | $ 702 | $ 560 | $ 1,267 | $ 1,134 |
DEBT (New Debt_Refinance Narrat
DEBT (New Debt/Refinance Narrative) (Details) | Apr. 02, 2020USD ($) |
Revolving Line Of Credit | |
Debt Instrument [Line Items] | |
Revolving line of credit, increase (decrease) In borrowing capacity | $ 100,000,000 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) $ in Thousands | Jun. 30, 2020USD ($)leaseproperty | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) |
Lessee, Lease, Description | |||
Right of use asset | $ 44,761 | $ 45,384 | $ 55,515 |
Lease liability | $ 54,217 | $ 54,548 | $ 55,515 |
Land | |||
Lessee, Lease, Description | |||
Number of real estate properties (property) | property | 5 | ||
Building | |||
Lessee, Lease, Description | |||
Number of lease agreements | lease | 2 |
LEASES (Lease Costs) (Details)
LEASES (Lease Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lessee, Lease, Description | ||||
Operating lease costs | $ 1,171 | $ 1,094 | $ 2,342 | $ 2,188 |
Variable lease costs | 95 | 229 | 175 | 437 |
Total lease costs | 1,266 | 1,323 | 2,517 | 2,625 |
Ground Lease | ||||
Lessee, Lease, Description | ||||
Operating lease costs | 1,050 | 973 | 2,100 | 1,946 |
Variable lease costs | 8 | 141 | 21 | 278 |
Total lease costs | 1,058 | 1,114 | 2,121 | 2,224 |
Office Lease | ||||
Lessee, Lease, Description | ||||
Operating lease costs | 121 | 121 | 242 | 242 |
Variable lease costs | 87 | 88 | 154 | 159 |
Total lease costs | $ 208 | $ 209 | $ 396 | $ 401 |
LEASES (Other Information) (Det
LEASES (Other Information) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Cash paid from operating cash flow for operating leases | $ 1,951 | $ 2,188 |
Weighted average remaining lease term | 64 years 2 months 12 days | 64 years 2 months 12 days |
Weighted average discount rate (in percent) | 7.86% | 7.85% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($)property | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)property | Jun. 30, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Management Agreements | ||||||
Term of management agreements with HHMLP (in years) | 5 years | |||||
Base management fee as percentage of gross revenues (percentage) | 3.00% | |||||
Base management fees incurred | $ 564,000 | $ 3,949,000 | $ 2,933,000 | $ 6,942,000 | ||
Incentive management fees incurred | 0 | 0 | 0 | 0 | ||
Accounting and Information Technology Fees | ||||||
Accounting fees | 319,000 | 315,000 | 644,000 | 631,000 | ||
Information technology fees | 103,000 | 102,000 | $ 208,000 | 203,000 | ||
Capital Expenditure Fees | ||||||
Fee on all capital expenditures and pending renovation projects at the properties (percentage) | 5.00% | |||||
Fees incurred on capital expenditures | 56,000 | 989,000 | $ 956,000 | 1,513,000 | ||
Acquisitions From Affiliates | ||||||
Period of right of first refusal per option agreement with officers and affiliated trustees after termination | 1 year | |||||
Hotel Supplies | ||||||
Hotel supplies | 11,000 | 80,000 | $ 63,000 | 214,000 | ||
Charges for capital expenditure purchases | 176,000 | 3,882,000 | 1,056,000 | 4,417,000 | ||
Capital expenditures included in accounts payable | 26,000 | 26,000 | $ 9,000 | |||
Lessee Disclosure | ||||||
Rent forgiven | $ 103,000 | |||||
Due from Related Parties, Unclassified | ||||||
Due from related parties | 2,363,000 | 2,363,000 | 6,113,000 | |||
Due to Related Parties | ||||||
Due to related parties | $ 0 | $ 0 | $ 0 | |||
Hotel | ||||||
Lessee Disclosure | ||||||
Number of real estate properties (property) | property | 3 | 3 | ||||
Minimum | ||||||
Franchise Agreements | ||||||
Terms of franchise agreements (in years) | 10 years | |||||
Accounting and Information Technology Fees | ||||||
Monthly fees for accounting services per property for hotels managed by HHMLP | $ 2,000 | |||||
Monthly information technology fees per property for hotels managed by HHMLP, minimum | $ 1,000 | |||||
Maximum | ||||||
Franchise Agreements | ||||||
Terms of franchise agreements (in years) | 20 years | |||||
Accounting and Information Technology Fees | ||||||
Monthly fees for accounting services per property for hotels managed by HHMLP | $ 3,000 | |||||
Monthly information technology fees per property for hotels managed by HHMLP, minimum | 2,000 | |||||
Executive Officer | ||||||
Hotel Supplies | ||||||
Related party transaction, purchases from related party | $ 1,388,000 | 1,269,000 | $ 2,984,000 | 2,706,000 | ||
Lessee Disclosure | ||||||
Ownership percentage in related party (in percentage) | 70.00% | 70.00% | ||||
Revenue from related parties | $ 0 | 143,000 | ||||
Lease Agreements | Executive Officer | ||||||
Lessee Disclosure | ||||||
Term of lease (in years) | 5 years | 5 years | ||||
Franchise | ||||||
Franchise Agreements | ||||||
Franchise fee expense | $ 775,000 | $ 6,508,000 | $ 4,603,000 | $ 11,483,000 |
FAIR VALUE MEASUREMENTS AND D_3
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Fair Value Of Interest Rate Swaps And Caps) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 01, 2020 | Dec. 31, 2019 | |
Derivatives, Fair Value | |||
Estimated Fair Value | $ (32,971) | $ 175 | |
Interest Rate Swap | Credit Facility October 3, 2019 | |||
Derivatives, Fair Value | |||
Strike Rate | 1.341% | ||
Index | 2.20% | ||
Effective Date | Oct. 3, 2019 | ||
Derivative Contract Maturity Date | Aug. 2, 2021 | ||
Notional Amount | $ 150,000 | ||
Estimated Fair Value | $ (1,965) | 539 | |
Interest Rate Swap | Credit Facility September 10, 2019 | |||
Derivatives, Fair Value | |||
Strike Rate | 1.46% | ||
Index | 2.00% | ||
Effective Date | Sep. 10, 2019 | ||
Derivative Contract Maturity Date | Sep. 10, 2024 | ||
Notional Amount | $ 300,000 | ||
Estimated Fair Value | $ (15,695) | 1,776 | |
Interest Rate Swap | Courtyard, LA Westside, Culver City, CA | |||
Derivatives, Fair Value | |||
Strike Rate | 0.495% | ||
Index | 2.75% | ||
Effective Date | Jun. 1, 2020 | ||
Derivative Contract Maturity Date | Aug. 1, 2021 | ||
Notional Amount | $ 35,000 | $ 35,000 | |
Estimated Fair Value | $ (134) | 0 | |
Interest Rate Swap | Hilton Garden Inn Tribeca, New York, NY | |||
Derivatives, Fair Value | |||
Strike Rate | 1.768% | ||
Index | 2.25% | ||
Effective Date | Jul. 25, 2019 | ||
Derivative Contract Maturity Date | Jul. 25, 2024 | ||
Notional Amount | $ 22,725 | ||
Estimated Fair Value | $ (1,438) | (169) | |
Interest Rate Swap | Hilton Garden Inn 52nd Street, New York, NY | |||
Derivatives, Fair Value | |||
Strike Rate | 1.54% | ||
Index | 2.30% | ||
Effective Date | Dec. 4, 2019 | ||
Derivative Contract Maturity Date | Dec. 4, 2022 | ||
Notional Amount | $ 44,325 | ||
Estimated Fair Value | $ (1,515) | 23 | |
Interest Rate Swap | Credit Facility September 3, 2019 | |||
Derivatives, Fair Value | |||
Strike Rate | 1.316% | ||
Index | 2.20% | ||
Effective Date | Sep. 3, 2019 | ||
Derivative Contract Maturity Date | Aug. 2, 2021 | ||
Notional Amount | $ 43,900 | ||
Estimated Fair Value | $ (563) | 175 | |
Interest Rate Swap | Courtyard, LA Westside, Culver City, CA | |||
Derivatives, Fair Value | |||
Strike Rate | 1.683% | ||
Index | 2.75% | ||
Effective Date | Aug. 1, 2017 | ||
Derivative Contract Maturity Date | Aug. 1, 2020 | ||
Notional Amount | $ 35,000 | $ 35,000 | |
Estimated Fair Value | $ 0 | (8) | |
Interest Rate Swap | Hyatt Union Square, New York, NY | |||
Derivatives, Fair Value | |||
Strike Rate | 1.87% | ||
Index | 2.30% | ||
Effective Date | Jun. 7, 2019 | ||
Derivative Contract Maturity Date | Jun. 7, 2023 | ||
Notional Amount | $ 56,000 | ||
Estimated Fair Value | $ (2,827) | (556) | |
Interest Rate Swap | Hilton Garden Inn Tribeca, New York, NY | |||
Derivatives, Fair Value | |||
Strike Rate | 1.768% | ||
Index | 2.25% | ||
Effective Date | Jul. 25, 2019 | ||
Derivative Contract Maturity Date | Jul. 25, 2024 | ||
Notional Amount | $ 22,725 | ||
Estimated Fair Value | $ (1,438) | (169) | |
Interest Rate Swap | Credit Facility September 3, 2019 | |||
Derivatives, Fair Value | |||
Strike Rate | 1.824% | ||
Index | 2.20% | ||
Effective Date | Sep. 3, 2019 | ||
Derivative Contract Maturity Date | Aug. 10, 2022 | ||
Notional Amount | $ 103,500 | ||
Estimated Fair Value | $ (3,698) | (718) | |
Interest Rate Swap | Credit Facility September 3, 2019 | |||
Derivatives, Fair Value | |||
Strike Rate | 1.824% | ||
Index | 2.20% | ||
Effective Date | Sep. 3, 2019 | ||
Derivative Contract Maturity Date | Aug. 10, 2022 | ||
Notional Amount | $ 103,500 | ||
Estimated Fair Value | $ (3,698) | (718) | |
Interest Rate Cap | Annapolis Waterfront Hotel, MD | |||
Derivatives, Fair Value | |||
Strike Rate | 3.35% | ||
Index | 2.65% | ||
Effective Date | May 1, 2018 | ||
Derivative Contract Maturity Date | May 1, 2021 | ||
Notional Amount | $ 28,000 | ||
Estimated Fair Value | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS AND D_4
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Derivatives, Fair Value | |||||
Loss on fair value of derivative instruments | $ (792) | $ (5,234) | $ (30,941) | $ (8,155) | |
Unrealized gain (loss) reclassified from accumulated other comprehensive income to interest expense | 1,228 | $ 1,112 | 2,205 | $ 2,253 | |
Loss to be reclassified to interest expense during next 12 months | 14,197 | 14,197 | |||
Old Swap | |||||
Derivatives, Fair Value | |||||
Fair value of old swap | 67 | 67 | |||
Carrying (Reported) Amount, Fair Value Disclosure | |||||
Derivatives, Fair Value | |||||
Carrying value and estimated fair value of debt | 1,175,131 | 1,175,131 | $ 1,128,199 | ||
Estimate of Fair Value, Fair Value Disclosure | |||||
Derivatives, Fair Value | |||||
Carrying value and estimated fair value of debt | $ 1,150,217 | $ 1,150,217 | $ 1,098,082 |
SHARE BASED PAYMENTS (Narrative
SHARE BASED PAYMENTS (Narrative) (Details) - $ / shares | Apr. 13, 2020 | Apr. 10, 2020 | Jun. 30, 2020 |
LTIP Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (in shares) | 1,101,924 | ||
Share price (in dollar per share) | $ 3.58 | ||
Compensation cost not yet recognized, period for recognition (in years) | 1 year 6 months | ||
Restricted Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (in shares) | 135,740 | ||
Compensation cost not yet recognized, period for recognition (in years) | 10 months 24 days | ||
Short Term Incentive Program | LTIP Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (in shares) | 833,539 | ||
Vesting period (in years) | 2 years | ||
Multi-Year EIP | LTIP Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (in shares) | 240,923 | ||
Vesting period (in years) | 3 years | ||
Multi-Year EIP | LTIP Unit Awards | Share-based Compensation Award, Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting schedule (percentage) | 50.00% | ||
Multi-Year EIP | LTIP Unit Awards | Share-based Compensation Award, Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting schedule (percentage) | 50.00% |
SHARE BASED PAYMENTS (Summary O
SHARE BASED PAYMENTS (Summary Of Share Based Compensation Activity) (Details) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
LTIP Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |
Unvested balance, beginning of the period (in shares) | 441,201 |
Granted (in shares) | 1,101,924 |
Vested (in shares) | (120,459) |
Forfeited (in shares) | 0 |
Unvested balance, end of the period (in shares) | 1,422,666 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, unvested balance at the beginning of the period (in dollars per share) | $ / shares | $ 17.99 |
Weighted average grant date fair value, unvested balance, granted (in dollars per share) | $ / shares | 5.23 |
Weighted average grant date fair value, unvested balance, vested (in dollars per share) | $ / shares | 5.23 |
Weighted average grant date fair value, unvested balance at the end of the period (in dollars per share) | $ / shares | $ 9.19 |
Restricted Share Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |
Unvested balance, beginning of the period (in shares) | 92,102 |
Granted (in shares) | 135,740 |
Vested (in shares) | (75,384) |
Forfeited (in shares) | (113) |
Unvested balance, end of the period (in shares) | 152,345 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |
Weighted average grant date fair value, unvested balance at the beginning of the period (in dollars per share) | $ / shares | $ 17.07 |
Weighted average grant date fair value, unvested balance, granted (in dollars per share) | $ / shares | 5.21 |
Weighted average grant date fair value, unvested balance, vested (in dollars per share) | $ / shares | 12.74 |
Weighted average grant date fair value, unvested balance, forefeited (in dollars per share) | $ / shares | 18 |
Weighted average grant date fair value, unvested balance at the end of the period (in dollars per share) | $ / shares | $ 8.65 |
Share Awards | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |
Unvested balance, beginning of the period (in shares) | 0 |
Granted (in shares) | 0 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Unvested balance, end of the period (in shares) | 0 |
SHARE BASED PAYMENTS (Summary_2
SHARE BASED PAYMENTS (Summary of share based compensation expense and unearned compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share Based Compensation Expense | $ 1,799 | $ 3,474 | $ 4,255 | $ 5,432 | |
Unearned Compensation | 7,369 | 7,369 | $ 6,668 | ||
LTIP Unit Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share Based Compensation Expense | 1,142 | 1,428 | 2,951 | 2,791 | |
Unearned Compensation | 4,179 | 4,179 | 2,878 | ||
Restricted Share Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share Based Compensation Expense | 342 | 459 | 674 | 795 | |
Unearned Compensation | 1,080 | 1,080 | 1,051 | ||
Share Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share Based Compensation Expense | 0 | 402 | 0 | 402 | |
Unearned Compensation | 0 | 0 | 0 | ||
Market Based | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share Based Compensation Expense | 315 | 430 | 630 | 689 | |
Unearned Compensation | 2,110 | 2,110 | 2,739 | ||
Performance Based | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Share Based Compensation Expense | 0 | $ 755 | 0 | $ 755 | |
Unearned Compensation | $ 0 | $ 0 | $ 0 |
SHARE BASED PAYMENTS (Remaining
SHARE BASED PAYMENTS (Remaining unvested target units expected to vest) (Details) | Jun. 30, 2020shares |
2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 528,324 |
2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 1,042,502 |
2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 3,654 |
2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 531 |
LTIP Unit Awards | 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 524,540 |
LTIP Unit Awards | 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 898,126 |
LTIP Unit Awards | 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 0 |
LTIP Unit Awards | 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 0 |
Restricted Share Awards | 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 3,784 |
Restricted Share Awards | 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 144,376 |
Restricted Share Awards | 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 3,654 |
Restricted Share Awards | 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 531 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Basic and Diluted | |||||
Net (Loss) Income | $ (71,780) | $ 5,559 | $ (97,752) | $ (2,323) | |
Loss allocated to Noncontrolling Interests | 10,360 | 41 | 13,257 | 1,264 | |
Distributions to Preferred Shareholders | (6,044) | (6,043) | (12,088) | (12,087) | |
Dividends Paid on Unvested Restricted Shares and LTIP Units | 0 | (271) | 0 | (553) | |
Net Loss applicable to Common Shareholders | $ (67,464) | $ (714) | $ (96,583) | $ (13,699) | |
DENOMINATOR: | |||||
Basic (in shares) | 38,609,922 | 39,127,385 | 38,587,011 | 39,121,421 | |
Effect of dilutive securities: | |||||
Restricted stock awards and LTIP units (unvested) (in shares) | 0 | 0 | 0 | 0 | |
Contingently issued shares and units (in shares) | 0 | 0 | 0 | 0 | |
Weighted average number of common shares - diluted (in shares) | [1] | 38,609,922 | 39,127,385 | 38,587,011 | 39,121,421 |
[1] | Income (Loss) allocated to noncontrolling interest in Hersha Hospitality Limited Partnership (the “Operating Partnership” or “HHLP”) has been excluded from the numerator and the Class A common shares issuable upon any redemption of the Operating Partnership’s common units of limited partnership interest (“Common Units”) and the Operating Partnership’s vested LTIP units (“Vested LTIP Units”) have been omitted from the denominator for the purpose of computing diluted earnings per share because the effect of including these shares and units in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders. |
CASH FLOW DISCLOSURES AND NON_3
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Narrative) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 21,488 | $ 27,802 |
Net payments (proceeds) for interest rate derivatives | 1,505 | (2,443) |
Cash paid for income taxes | $ 233 | $ 466 |
CASH FLOW DISCLOSURES AND NON_4
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Non-cash Investing And Financing Activities) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Noncash Investing and Financing Items [Abstract] | ||
Common Shares issued as part of the Dividend Reinvestment Plan | $ 14 | $ 42 |
Issuance of share based payments | 6,404 | 12,119 |
Accrued payables for capital expenditures placed into service | 1,398 | 1,268 |
Adjustment to Record Noncontrolling Interest at Redemption Value | (3,196) | 148 |
Adjustment to Record Right of Use Asset & Lease Liability | $ 0 | $ 55,515 |
CASH FLOW DISCLOSURES AND NON_5
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Reconciliation of Cash) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 23,228 | $ 27,012 | $ 36,780 | |
Escrowed cash | 7,374 | 9,973 | 10,767 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 30,602 | $ 36,985 | $ 47,547 | $ 40,783 |