Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 07, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-32319 | ||
Entity Registrant Name | Sunstone Hotel Investors, Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 20-1296886 | ||
Entity Address, Address Line One | 200 Spectrum Center Drive, 21st Floor | ||
Entity Address, City or Town | Irvine | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92618 | ||
City Area Code | 949 | ||
Local Phone Number | 330-4000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.7 | ||
Entity Common Stock, Shares Outstanding | 219,333,783 | ||
Entity Central Index Key | 0001295810 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Irvine, California | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | SHO | ||
Security Exchange Name | NYSE | ||
Series H Cumulative Redeemable Preferred Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series H Cumulative Redeemable Preferred Stock, $0.01 par value | ||
Trading Symbol | SHO.PRH | ||
Security Exchange Name | NYSE | ||
Series I Cumulative Redeemable Preferred Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series I Cumulative Redeemable Preferred Stock, $0.01 par value | ||
Trading Symbol | SHO.PRI | ||
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 120,483 | $ 368,406 |
Restricted cash | 42,234 | 47,733 |
Accounts receivable, net | 28,733 | 8,566 |
Prepaid expenses and other current assets | 14,338 | 10,440 |
Assets held for sale, net | 76,308 | |
Total current assets | 282,096 | 435,145 |
Investment in hotel properties, net | 2,720,016 | 2,461,498 |
Finance lease right-of-use asset, net | 46,182 | |
Operating lease right-of-use assets, net | 23,161 | 26,093 |
Deferred financing costs, net | 2,580 | 4,354 |
Other assets, net | 13,196 | 12,445 |
Total assets | 3,041,049 | 2,985,717 |
Current liabilities: | ||
Accounts payable and accrued expenses | 47,701 | 37,326 |
Accrued payroll and employee benefits | 19,753 | 15,392 |
Dividends payable | 3,513 | 3,208 |
Other current liabilities | 58,884 | 32,606 |
Current portion of notes payable, net | 20,694 | 2,261 |
Liabilities of assets held for sale | 25,213 | |
Total current liabilities | 175,758 | 90,793 |
Notes payable, less current portion, net | 588,741 | 742,528 |
Finance lease obligation, less current portion | 15,569 | |
Operating lease obligations, less current portion | 25,120 | 29,954 |
Other liabilities | 11,656 | 17,494 |
Total liabilities | 801,275 | 896,338 |
Commitments and contingencies (Note 13) | ||
Equity | ||
Common stock, $0.01 par value, 500,000,000 shares authorized, 219,333,783 shares issued and outstanding at December 31, 2021 and 215,593,401 shares issued and outstanding at December 31, 2020 | 2,193 | 2,156 |
Additional paid in capital | 2,631,484 | 2,586,108 |
Retained earnings | 948,064 | 913,766 |
Cumulative dividends and distributions | (1,664,024) | (1,643,386) |
Total stockholders' equity | 2,198,967 | 2,048,644 |
Noncontrolling interest in consolidated joint venture | 40,807 | 40,735 |
Total equity | 2,239,774 | 2,089,379 |
Total liabilities and equity | 3,041,049 | 2,985,717 |
Series E Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | 115,000 | |
Series F Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | $ 75,000 | |
Series G Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | 66,250 | |
Series H Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | 115,000 | |
Series I Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | $ 100,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 219,333,783 | 215,593,401 |
Common stock, shares outstanding (in shares) | 219,333,783 | 215,593,401 |
Series E Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.95% | |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 0 | 4,600,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 0 | 4,600,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | |
Series F Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.45% | |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 0 | 3,000,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 0 | 3,000,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | |
Series G Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 2,650,000 | 0 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 2,650,000 | 0 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | |
Series H Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.125% | |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,600,000 | 0 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 0 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | |
Series I Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 5.70% | |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,000,000 | 0 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 0 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
REVENUES | |||
Revenues | $ 509,150 | $ 267,906 | $ 1,115,167 |
OPERATING EXPENSES | |||
Advertising and promotion | 31,156 | 23,741 | 54,369 |
Repairs and maintenance | 33,898 | 27,084 | 41,619 |
Utilities | 20,745 | 17,311 | 27,311 |
Franchise costs | 11,354 | 7,060 | 32,265 |
Property tax, ground lease and insurance | 64,139 | 76,848 | 83,265 |
Other property-level expenses | 71,415 | 49,854 | 130,321 |
Corporate overhead | 40,269 | 28,149 | 30,264 |
Depreciation and amortization | 128,682 | 137,051 | 147,748 |
Impairment losses | 2,685 | 146,944 | 24,713 |
Total operating expenses | 597,272 | 661,795 | 977,794 |
Interest and other income (loss) | (343) | 2,836 | 16,557 |
Interest expense | (30,898) | (53,307) | (54,223) |
Gain on sale of assets | 152,524 | 34,298 | 42,935 |
(Loss) gain on extinguishment of debt | (57) | 6,146 | |
Income (loss) before income taxes | 33,104 | (403,916) | 142,642 |
Income tax (provision) benefit, net | (109) | (6,590) | 151 |
NET INCOME (LOSS) | 32,995 | (410,506) | 142,793 |
Loss (income) from consolidated joint venture attributable to noncontrolling interest | 1,303 | 5,817 | (7,060) |
Preferred stock dividends and redemption charges | (20,638) | (12,830) | (12,830) |
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 13,660 | $ (417,519) | $ 122,903 |
Basic and diluted per share amounts: | |||
Basic and diluted income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.06 | $ (1.93) | $ 0.54 |
Basic and diluted weighted average common shares outstanding (in shares) | 216,296 | 215,934 | 225,681 |
Room | |||
REVENUES | |||
Revenues | $ 352,974 | $ 169,522 | $ 767,392 |
OPERATING EXPENSES | |||
Expenses | 98,723 | 76,977 | 202,889 |
Food and beverage | |||
REVENUES | |||
Revenues | 83,915 | 54,900 | 272,869 |
OPERATING EXPENSES | |||
Expenses | 79,807 | 63,140 | 186,436 |
Other operating | |||
REVENUES | |||
Revenues | 72,261 | 43,484 | 74,906 |
OPERATING EXPENSES | |||
Expenses | $ 14,399 | $ 7,636 | $ 16,594 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Series E Cumulative Redeemable Preferred StockPreferred Stock | Series E Cumulative Redeemable Preferred StockAdditional Paid In Capital | Series E Cumulative Redeemable Preferred StockCumulative dividends and distributions | Series E Cumulative Redeemable Preferred Stock | Series F Cumulative Redeemable Preferred StockPreferred Stock | Series F Cumulative Redeemable Preferred StockAdditional Paid In Capital | Series F Cumulative Redeemable Preferred StockCumulative dividends and distributions | Series F Cumulative Redeemable Preferred Stock | Series G Cumulative Redeemable Preferred StockPreferred Stock | Series G Cumulative Redeemable Preferred StockAdditional Paid In Capital | Series G Cumulative Redeemable Preferred StockCumulative dividends and distributions | Series G Cumulative Redeemable Preferred Stock | Series H Cumulative Redeemable Preferred StockPreferred Stock | Series H Cumulative Redeemable Preferred StockAdditional Paid In Capital | Series H Cumulative Redeemable Preferred StockCumulative dividends and distributions | Series H Cumulative Redeemable Preferred Stock | Series I Cumulative Redeemable Preferred StockPreferred Stock | Series I Cumulative Redeemable Preferred StockAdditional Paid In Capital | Series I Cumulative Redeemable Preferred StockCumulative dividends and distributions | Series I Cumulative Redeemable Preferred Stock | Preferred Stock | Common Stock | Additional Paid In Capital | Retained Earnings | Cumulative dividends and distributions | Non-Controlling Interest in Consolidated Joint Venture | Total |
Beginning Balance at Dec. 31, 2018 | $ 190,000 | $ 2,282 | $ 2,728,684 | $ 1,182,722 | $ (1,440,202) | $ 47,685 | $ 2,711,171 | ||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 7,600,000 | 228,246,247 | |||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||
Amortization of deferred stock compensation | 9,719 | 9,719 | |||||||||||||||||||||||||
Issuance of restricted common stock, net | $ 4 | (4,439) | (4,435) | ||||||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 396,972 | ||||||||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (3,932) | ||||||||||||||||||||||||||
Common stock distributions and distributions payable | (166,747) | (166,747) | |||||||||||||||||||||||||
Preferred stock dividends and dividends payable | $ (7,993) | $ (7,993) | $ (4,837) | $ (4,837) | |||||||||||||||||||||||
Distributions to noncontrolling interest | (8,512) | (8,512) | |||||||||||||||||||||||||
Repurchases of outstanding common stock | $ (37) | (50,051) | (50,088) | ||||||||||||||||||||||||
Repurchases of outstanding common stock (in shares) | (3,783,936) | ||||||||||||||||||||||||||
Net income (loss) | 135,733 | 7,060 | 142,793 | ||||||||||||||||||||||||
Ending Balance at Dec. 31, 2019 | $ 190,000 | $ 2,249 | 2,683,913 | 1,318,455 | (1,619,779) | 46,233 | 2,621,071 | ||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2019 | 7,600,000 | 224,855,351 | |||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||
Amortization of deferred stock compensation | 9,988 | 9,988 | |||||||||||||||||||||||||
Issuance of restricted common stock, net | $ 5 | (3,997) | (3,992) | ||||||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 550,635 | ||||||||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (42,504) | ||||||||||||||||||||||||||
Common stock distributions and distributions payable | (10,777) | (10,777) | |||||||||||||||||||||||||
Preferred stock dividends and dividends payable | (7,992) | (7,992) | (4,838) | (4,838) | |||||||||||||||||||||||
Distributions to noncontrolling interest | (2,000) | (2,000) | |||||||||||||||||||||||||
Contribution from noncontrolling interest | 2,319 | 2,319 | |||||||||||||||||||||||||
Repurchases of outstanding common stock | $ (98) | (103,796) | (103,894) | ||||||||||||||||||||||||
Repurchases of outstanding common stock (in shares) | (9,770,081) | ||||||||||||||||||||||||||
Net income (loss) | (404,689) | (5,817) | (410,506) | ||||||||||||||||||||||||
Ending Balance at Dec. 31, 2020 | $ 190,000 | $ 2,156 | 2,586,108 | 913,766 | (1,643,386) | 40,735 | 2,089,379 | ||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2020 | 7,600,000 | 215,593,401 | |||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||
Amortization of deferred stock compensation | 13,278 | 13,278 | |||||||||||||||||||||||||
Issuance of restricted common stock, net | $ 10 | (4,887) | (4,877) | ||||||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 1,062,106 | ||||||||||||||||||||||||||
Forfeiture of restricted common stock | $ (2) | 2 | |||||||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (235,406) | ||||||||||||||||||||||||||
Preferred stock dividends and dividends payable | (3,552) | (3,552) | (2,969) | (2,969) | $ (619) | $ (619) | $ (4,246) | $ (4,246) | $ (2,612) | $ (2,612) | |||||||||||||||||
Contribution from noncontrolling interest | 1,375 | 1,375 | |||||||||||||||||||||||||
Net proceeds from issuance of common stock | $ 29 | 37,630 | 37,659 | ||||||||||||||||||||||||
Number of shares of common stock issued (in shares) | 2,913,682 | ||||||||||||||||||||||||||
Net issuance of preferred stock in connection with hotel acquisition | $ 66,250 | $ (142) | $ 66,108 | ||||||||||||||||||||||||
Net issuance of preferred stock in connection with hotel acquisition (in shares) | 2,650,000 | ||||||||||||||||||||||||||
Net proceeds from issuance of preferred stock | $ 115,000 | $ (3,801) | $ 111,199 | $ 100,000 | $ (3,344) | $ 96,656 | |||||||||||||||||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | 4,000,000 | |||||||||||||||||||||||||
Redemption of preferred stock | $ (115,000) | $ 4,016 | $ (4,016) | $ (115,000) | $ (75,000) | $ 2,624 | $ (2,624) | $ (75,000) | |||||||||||||||||||
Redemption of preferred stock (in shares) | (4,600,000) | (3,000,000) | |||||||||||||||||||||||||
Net income (loss) | 34,298 | (1,303) | 32,995 | ||||||||||||||||||||||||
Ending Balance at Dec. 31, 2021 | $ 281,250 | $ 2,193 | $ 2,631,484 | $ 948,064 | $ (1,664,024) | $ 40,807 | $ 2,239,774 | ||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2021 | 11,250,000 | 219,333,783 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Common stock distributions and distributions payable, per share (in dollars per share) | $ 0.05 | $ 0.74 | |
Series E Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.772222 | 1.7375 | 1.7375 |
Series F Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.989896 | $ 1.6125 | $ 1.6125 |
Series G Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.233685 | ||
Series H Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.923004 | ||
Series I Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.653125 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ 32,995 | $ (410,506) | $ 142,793 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Bad debt expense | 323 | 384 | 361 |
Gain on sale of assets, net | (152,442) | (34,298) | (42,935) |
Loss (gain) on extinguishment of debt, net | 57 | (6,146) | |
Noncash interest on derivatives and finance lease obligations, net | (3,405) | 4,740 | 6,051 |
Depreciation | 128,619 | 137,010 | 147,669 |
Amortization of franchise fees and other intangibles | 63 | 41 | 79 |
Amortization of deferred financing costs | 2,925 | 3,126 | 2,791 |
Amortization of deferred stock compensation | 12,788 | 9,576 | 9,313 |
Impairment losses | 2,685 | 146,944 | 24,713 |
Deferred income taxes, net | 7,415 | 688 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (20,515) | 26,827 | (1,726) |
Prepaid expenses and other assets | (18) | 3,663 | (1,387) |
Accounts payable and other liabilities | 21,705 | 4,065 | 2,935 |
Accrued payroll and employee benefits | 3,934 | (8,286) | 357 |
Operating lease right-of-use assets and obligations | (1,344) | (1,260) | (782) |
Net cash provided by (used in) operating activities | 28,370 | (116,705) | 290,920 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from sale of assets | 183,553 | 166,737 | 49,538 |
Disposition deposit | 4,000 | ||
Acquisitions of hotel properties and other assets | (363,498) | (1,398) | (730) |
Renovations and additions to hotel properties and other assets | (63,663) | (51,440) | (95,958) |
Payment for interest rate derivative | (80) | (111) | |
Net cash (used in) provided by investing activities | (239,688) | 113,788 | (47,150) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from preferred stock offerings | 215,000 | ||
Redemptions of preferred stock | (190,000) | ||
Proceeds from common stock offerings | 38,443 | ||
Repurchases of outstanding common stock | (103,894) | (50,088) | |
Repurchases of common stock for employee tax obligations | (4,877) | (3,992) | (4,435) |
Proceeds from credit facility | 110,000 | 300,000 | |
Payments on credit facility | (110,000) | (300,000) | |
Payments on notes payable | (79,884) | (149,743) | (7,965) |
Payments of costs related to extinguishment of debt | (27,975) | ||
Payments of deferred financing costs | (397) | (4,361) | |
Dividends and distributions paid | (13,693) | (156,271) | (170,166) |
Distributions to noncontrolling interest | (2,000) | (8,512) | |
Contributions from noncontrolling interest | 1,375 | 2,319 | |
Net cash used in financing activities | (42,104) | (445,917) | (241,166) |
Net (decrease) increase in cash and cash equivalents and restricted cash | (253,422) | (448,834) | 2,604 |
Cash and cash equivalents and restricted cash, beginning of year | 416,139 | 864,973 | 862,369 |
Cash and cash equivalents and restricted cash, end of year | 162,717 | 416,139 | 864,973 |
Supplemental Disclosure of Cash Flow Information | |||
Cash and cash equivalents | 120,483 | 368,406 | 816,857 |
Restricted cash | 42,234 | 47,733 | 48,116 |
Cash and cash equivalents and restricted cash, end of year | 162,717 | 416,139 | 864,973 |
Cash paid for interest | 31,431 | 40,309 | 45,301 |
Cash paid (refund) for income taxes, net | 35 | (996) | (395) |
Operating cash flows used for operating leases | 6,803 | 10,112 | 7,238 |
Changes in operating lease right-of-use assets | 3,796 | 3,483 | 3,447 |
Changes in operating lease obligations | (5,140) | (4,743) | (4,229) |
Changes in operating lease right-of-use assets and lease obligations, net | (1,344) | (1,260) | (782) |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Accrued renovations and additions to hotel properties and other assets | 8,527 | 3,344 | 9,771 |
Amortization of deferred stock compensation - construction activities | 490 | 412 | 406 |
Preferred stock redemption charges | 6,640 | ||
Operating lease right-of-use assets obtained in exchange for operating lease obligations | 864 | 45,677 | |
Dividends and distributions payable | 3,513 | 3,208 | 135,872 |
Montage Healdsburg | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Issuance of preferred stock in connection with hotel acquisition | 66,250 | ||
Embassy Suites La Jolla | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of loan in connection with disposition of hotel | (56,624) | ||
Hilton Times Square | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Loss (gain) on extinguishment of debt, net | (300) | ||
Impairment losses | 107,857 | ||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assets transferred to lender in assignment-in-lieu transaction | (74,583) | ||
Liabilities transferred to lender in assignment-in-lieu transaction | (108,947) | ||
Operating lease | Hilton Times Square | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of lease right-of-use asset in connection with disposition of hotel | (12,518) | ||
Assignment of lease obligation in connection with disposition of hotel | $ (14,695) | ||
Finance lease | Courtyard by Marriott Los Angeles | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of lease right-of-use asset in connection with disposition of hotel | (6,605) | ||
Assignment of lease obligation in connection with disposition of hotel | $ (11,620) | ||
Preferred Stock | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payment of stock issuance costs | (7,287) | ||
Common Stock | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payment of stock issuance costs | $ (784) |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business Sunstone Hotel Investors, Inc. (the “Company”) was incorporated in Maryland on June 28, 2004 in anticipation of an initial public offering of common stock, which was consummated on October 26, 2004. The Company elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes, commencing with its taxable year ended on December 31, 2004. The Company, through its 100% controlling interest in Sunstone Hotel Partnership, LLC (the “Operating Partnership”), of which the Company is the sole managing member, and the subsidiaries of the Operating Partnership, including Sunstone Hotel TRS Lessee, Inc. (the “TRS Lessee”) and its subsidiaries, is currently engaged in acquiring, owning, asset managing and renovating or repositioning hotel properties, and may also selectively sell hotels that no longer fit its stated strategy. As a REIT, certain tax laws limit the amount of “non-qualifying” income the Company can earn, including income derived directly from the operation of hotels. The Company leases all of its hotels to its TRS Lessee, which in turn enters into long-term management agreements with third parties to manage the operations of the Company’s hotels, in transactions that are intended to generate qualifying income. As of December 31, 2021, the Company had interests in 17 hotels, one of which was considered held for sale, leaving 16 hotels (the “16 Hotels”) currently held for investment. The Company’s third-party managers included the following: Number of Hotels Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) 6 Crestline Hotels & Resorts 2 Interstate Hotels & Resorts, Inc. 2 Davidson Hotels & Resorts 1 (1) Four Seasons Hotels Limited 1 Highgate Hotels L.P. and an affiliate 1 Hilton Worldwide 1 Hyatt Corporation 1 Montage North America, LLC 1 Singh Hospitality, LLC 1 Total hotels owned as of December 31, 2021 17 (1) The Hyatt Centric Chicago Magnificent Mile was considered held for sale as of December 31, 2021, and subsequently sold on February 1, 2022 (see Note 14). COVID-19 Impact In March 2020, the novel coronavirus (“COVID-19”) cancellations, corporate and government travel restrictions and an unprecedented decline in hotel demand. As a result of these cancellations, restrictions and the health concerns related to COVID-19, the Company determined that it was in t temporarily suspend operations at 14 of the Company’s hotels. As of December 31, 2021, all of the Company’s hotels were open and operating. During 2021, leisure demand was the dominant source of business at many of the Company’s hotels, while business transient demand and group demand both improved as compared to 2020, but remained well below pre-pandemic levels. The Company believes that the return of traditional business transient and group business will ultimately depend on the speed of vaccine distribution, the management and control of COVID-19 and its variants, and the degree and speed to which business returns. The effects of the COVID-19 pandemic on the hotel industry have been significant and unprecedented, and the Company has limited visibility to predict future operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of December 31, 2021 and 2020, and for the years ended December 31, 2021, 2020 and 2019, include the accounts of the Company, the Operating Partnership, the TRS Lessee, and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Cash and Cash Equivalents Cash and cash equivalents includes cash on hand and in various bank accounts plus credit card receivables and all short-term investments with an original maturity of three months or less. The Company maintains cash and cash equivalents and certain other financial instruments with various financial institutions. These financial institutions are located throughout the country and the Company’s policy is designed to limit exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. At December 31, 2021 and 2020, the Company had amounts in banks that were in excess of federally insured amounts. Restricted Cash Restricted cash is comprised of reserve accounts for debt service, interest, seasonality, capital replacements, ground leases, property taxes and any hotel-generated cash that is held in accounts for the benefit of lenders. These restricted funds are subject to disbursement approval based on in-place agreements and policies by certain of the Company’s lenders, ground lessors and/or hotel managers. At times, restricted cash also includes earnest money either paid to a seller or potential seller of a hotel, or received from a buyer or potential buyer of one of the Company’s hotels and held in escrow until either the purchase or sale is completed or subject to the terms of the related purchase and sale agreement. In addition, restricted cash as of December 31, 2021 and 2020 includes $10.4 million and $11.6 million, respectively, held in escrow related to certain current and potential employee-related obligations in accordance with the assignment-in-lieu agreement between the Company and the mortgage holder of one of the Company’s former hotels (see Note 13). Accounts Receivable Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. Accounts receivable also includes, among other things, receivables from tenants who lease space in the Company’s hotels. The Company maintains an allowance for doubtful accounts sufficient to cover potential credit losses. Acquisitions of Hotel Properties and Other Entities Accounting for the acquisition of a hotel property or other entity requires an allocation of the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective relative fair values for an asset acquisition or at their estimated fair values for a business combination. The most difficult estimations of individual fair values are those involving long-lived assets, such as property, equipment and intangible assets, together with any finance or operating lease right-of-use assets and their related obligations. When the Company acquires a hotel property or other entity, it uses all available information to make these fair value determinations, including discounted cash flow analyses, market comparable data and replacement cost data. In addition, the Company makes significant estimations regarding capitalization rates, discount rates, average daily rates, revenue growth rates and occupancy. The Company also engages independent valuation specialists to assist in the fair value determinations of the long-lived assets acquired and the liabilities assumed. The determination of fair value is subjective and is based on assumptions and estimates that could differ materially from actual results in future periods. In addition, the acquisition of a hotel property or other entity requires an analysis of the transaction to determine if it qualifies as the purchase of a business or an asset. If the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, then the transaction is an asset acquisition. Transaction costs associated with asset acquisitions are capitalized and subsequently depreciated over the life of the related asset, while the same costs associated with a business combination are expensed as incurred and included in corporate overhead on the Company’s consolidated statements of operations. Also, asset acquisitions are not subject to a measurement period, as are business combinations. Investments in Hotel Properties Investments in hotel properties, including land, buildings, furniture, fixtures and equipment (“FF&E”) and identifiable intangible assets are recorded at their respective relative fair values for an asset acquisition or at their estimated fair values for a business acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation is removed from the Company’s accounts and any resulting gain or loss is included in the consolidated statements of operations. Depreciation expense is based on the estimated life of the Company’s assets. The life of the assets is based on a number of assumptions, including the cost and timing of capital expenditures to maintain and refurbish the Company’s hotels, as well as specific market and economic conditions. Hotel properties are depreciated using the straight-line method over estimated useful lives primarily ranging from five to 40 years for buildings and improvements and three to 12 years for FF&E. Finance lease right-of-use assets other than land are depreciated using the straight-line method over the shorter of either their estimated useful life or the life of the related finance lease obligation. Intangible assets are amortized using the straight-line method over the shorter of their estimated useful life or over the length of the related agreement. The Company’s investment in hotel properties, net also includes initial franchise fees which are recorded at cost and amortized using the straight-line method over the terms of the franchise agreements ranging from 14 to 20 years . All other franchise fees that are based on the Company’s results of operations are expensed as incurred. While the Company believes its estimates are reasonable, a change in the estimated lives could affect depreciation expense and net income or the gain or loss on the sale of any of the Company’s hotels. The Company has not changed the useful lives of any of its assets during the periods discussed. Impairment losses are recorded on long-lived assets to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows, including potential sale proceeds, expected to be generated by those assets based on the Company’s anticipated investment horizon, are less than the assets’ carrying amount. The Company evaluates its long-lived assets to determine if there are indicators of impairment on a quarterly basis. No single indicator would necessarily result in the Company preparing an estimate to determine if a hotel’s future undiscounted cash flows are less than the book value of the hotel. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a hotel requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. If a hotel is considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. The Company performs a fair value assessment, using one or more discounted cash flow analyses to estimate the fair value of the hotel, taking into account the hotel’s expected cash flow from operations, the Company’s estimate of how long it will own the hotel and the estimated proceeds from the disposition of the hotel. When multiple cash flow analyses are prepared, a probability is assigned to each cash flow analysis based upon the estimated likelihood of each scenario occurring. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. The Company’s judgment is required in determining the discount rate applied to estimated cash flows, the estimated growth of revenues and expenses, net operating income and margins, the need for capital expenditures, as well as specific market and economic conditions. Based on the Company’s review, three hotels were impaired in 2020 and one hotel was impaired in 2019 (see Note 5). In 2021, the Company recognized a $2.7 million impairment loss on the Hilton New Orleans St. Charles due to Hurricane Ida-related damage at the hotel (see Notes 5 and 13). Fair value represents the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than a forced or liquidation sale. The estimation process involved in determining if assets have been impaired and in the determination of fair value is inherently uncertain because it requires estimates of current market yields as well as future events and conditions. Such future events and conditions include economic and market conditions, as well as the availability of suitable financing. The realization of the Company’s investment in hotel properties is dependent upon future uncertain events and conditions and, accordingly, the actual timing and amounts realized by the Company may be materially different from their estimated fair values. Assets Held for Sale The Company considers a hotel held for sale if it is probable that the sale will be completed within 12 months , among other requirements. A sale is considered to be probable once the buyer completes its due diligence of the asset, there is an executed purchase and sale agreement between the Company and the buyer, the buyer waives any closing contingencies, there are no third-party approvals necessary and the Company has received a substantial non-refundable deposit. Depreciation ceases when a property is held for sale. Should an impairment loss be required for assets held for sale, the related assets are adjusted to their estimated fair values, less costs to sell. If the sale of the hotel represents a strategic shift that will have a major effect on the Company’s operations and financial results, the hotel qualifies as a discontinued operation, and operating results are removed from income from continuing operations and reported as discontinued operations. The operating results for any such assets for any prior periods presented must also be reclassified as discontinued operations. As of December 31, 2021, one hotel was considered held for sale (see Note 4). No hotels were considered held for sale as of December 31, 2020. Deferred Financing Costs Deferred financing costs consist of loan fees and other financing costs related to the Company’s outstanding indebtedness and credit facility commitments, and are amortized to interest expense over the terms of the related debt or commitment. If a loan is refinanced or paid before its maturity, any unamortized deferred financing costs will generally be expensed unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs related to the Company’s undrawn credit facility are included on the Company’s consolidated balance sheets as an asset, and are amortized ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. Deferred financing costs related to the Company’s outstanding debt are included on the Company’s consolidated balance sheets as a contra-liability (see Note 7), and subsequently amortized ratably over the term of the related debt. Interest Rate Derivatives The Company’s objective in holding interest rate derivatives is to manage its exposure to the interest rate risks related to its floating rate debt. To accomplish this objective, the Company uses interest rate caps and swaps, none of which qualifies for effective hedge accounting treatment. The Company records interest rate caps and swaps on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in the consolidated statements of operations. Finance and Operating Leases The Company determines if a contract is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Expense for these short-term leases is recognized on a straight-line basis over the lease term. For leases with an initial term greater than 12 months , the Company records a right-of-use (“ROU”) asset and a corresponding lease obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make fixed lease payments as stipulated by the lease. The Company has elected to not separate lease components from nonlease components, resulting in the Company accounting for lease and nonlease components as one single lease component. Leases are accounted for using a dual approach, classifying leases as either operating or financing based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the Company. This classification determines whether the lease expense is recognized on a straight-line basis over the term of the lease for operating leases or based on an effective interest method for finance leases. Operating lease ROU assets are recognized at the lease commencement date and include the amount of the initial operating lease obligation, any lease payments made at or before the commencement date, excluding any lease incentives received, and any initial direct costs incurred. For leases that have extension options that the Company can exercise at its discretion, management uses judgment to determine if it is reasonably certain that the Company will in fact exercise such option. If the extension option is reasonably certain to occur, the Company includes the extended term’s lease payments in the calculation of the respective lease liability. None of the Company’s leases contain any material residual value guarantees or material restrictive covenants. Operating lease obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on information available at the commencement date in determining the present value of lease payments over the lease term. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In order to estimate the Company’s IBR, the Company first looks to its own unsecured debt offerings, and adjusts the rate for both length of term and secured borrowing using available market data as well as consultations with leading national financial institutions that are active in the issuance of both secured and unsecured notes. The Company reviews its right-of-use assets for indicators of impairment. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Based on the Company’s review, no operating or finance lease ROU assets were impaired during 2021. While no finance lease ROU assets were impaired during 2020, the operating lease ROU asset at one hotel was impaired (see Note 5) based on the Company’s 2020 review. Noncontrolling Interest The Company’s consolidated financial statements include an entity in which the Company has a controlling financial interest. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interest is reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from the less-than-wholly-owned subsidiary are reported at their consolidated amounts, including both the amounts attributable to the Company and the noncontrolling interest. Income or loss is allocated to the noncontrolling interest based on its weighted average ownership percentage for the applicable period. The consolidated statements of equity include beginning balances, activity for the period and ending balances for each component of stockholders’ equity, noncontrolling interest and total equity. At December 31, 2021, 2020 and 2019, the noncontrolling interest reported in the Company’s consolidated financial statements consisted of a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to hotel guests, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Room revenue and other occupancy based fees are recognized over a guest’s stay at the previously agreed upon daily rate. Some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is recognized by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is recognized by the Company on a gross basis, with the related discount or commission recognized in room expense. A majority of the Company’s hotels participate in frequent guest programs sponsored by the hotel brand owners whereby the hotel allows guests to earn loyalty points during their hotel stay. The Company expenses charges associated with these programs as incurred, and recognizes revenue at the amount it will receive from the brand when a guest redeems their loyalty points by staying at one of the Company’s hotels. In addition, some contracts for rooms or food and beverage services require an advance deposit, which the Company records as deferred revenue (or a contract liability) and recognizes once the performance obligations are satisfied. Cancellation fees and attrition fees, which are charged to groups when they do not fulfill their contracted minimum number of room nights or minimum food and beverage spending requirements, are typically recognized as revenue in the period the Company determines it is probable that a significant reversal in the amount of revenue recognized will not occur, which is generally the period in which these fees are collected. Food and beverage revenue and other ancillary services revenue are generated when a customer chooses to purchase goods or services separately from a hotel room. The revenue is recognized when the goods or services are provided to the customer at the amount the Company expects to be entitled to in exchange for those goods or services. For ancillary services provided by third parties, the Company assesses whether it is the principal or the agent. If the Company is the principal, revenue is recognized based upon the gross sales price. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. Additionally, the Company collects sales, use, occupancy and other similar taxes from customers at its hotels at the time of purchase, which are not included in revenue. The Company records a liability upon collection of such taxes from the customer, and relieves the liability when payments are remitted to the applicable governmental agency. Trade receivables and contract liabilities consisted of the following (in thousands): December 31, December 31, 2021 2020 Trade receivables, net (1) $ 16,055 $ 8,110 Contract liabilities (2) $ 40,226 $ 16,815 (1) Trade receivables are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits and are included in either other current liabilities or other liabilities on the accompanying consolidated balance sheets. During 2021 and 2020, the Company recognized approximately $2.2 million and $10.2 million, respectively, in revenue related to its outstanding contract liabilities. Advertising and Promotion Costs Advertising and promotion costs are expensed when incurred. Advertising and promotion costs represent the expense for advertising and reservation systems under the terms of the hotel franchise and brand management agreements and general and administrative expenses that are directly attributable to advertising and promotions. Stock Based Compensation Compensation expense related to awards of restricted shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. Income Taxes The Company is subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, the TRS Lessee, which leases the Company’s hotels from the Operating Partnership, is subject to federal and state income taxes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reviews any uncertain tax positions and, if necessary, records the expected future tax consequences of uncertain tax positions in its consolidated financial statements. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. The Company recognizes any penalties and interest related to unrecognized tax benefits in income tax expense in its consolidated statements of operations. Dividends Under current federal income tax laws related to REITs, the Company is required to distribute at least 90% of its REIT taxable income to its stockholders. Currently, the Company pays quarterly cash dividends to its preferred stockholders as declared by the Company’s board of directors. At this time, the Company’s board of directors has not reinstated its common stock dividend. The Company may not need to pay a quarterly dividend on its common stock during 2022 due to the COVID-19 pandemic’s negative effect on the Company’s income. The resumption in quarterly common stock dividends will be determined by the Company’s board of directors after considering the Company’s obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and risks affecting its business. The Company’s ability to pay dividends is dependent on the receipt of distributions from the Operating Partnership. Earnings Per Share The Company applies the two-class method when computing its earnings per share. Net income per share for each class of stock is calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and are included in the computation of earnings per share. Basic earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards, using the more dilutive of either the two-class method or the treasury stock method. The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2021 December 31, 2020 December 31, 2019 Numerator: Net income (loss) $ 32,995 $ (410,506) $ 142,793 Loss (income) from consolidated joint venture attributable to noncontrolling interest 1,303 5,817 (7,060) Preferred stock dividends and redemption charges (20,638) (12,830) (12,830) Distributions paid on unvested restricted stock compensation — (69) (901) Undistributed income allocated to unvested restricted stock compensation (92) — — Numerator for basic and diluted income (loss) attributable to common stockholders $ 13,568 $ (417,588) $ 122,002 Denominator: Weighted average basic and diluted common shares outstanding 216,296 215,934 225,681 Basic and diluted income (loss) attributable to common stockholders per common share $ 0.06 $ (1.93) $ 0.54 The Company’s unvested restricted shares associated with its long-term incentive plan have been excluded from the above calculation of earnings per share for the years ended December 31, 2021, 2020 and 2019, as their inclusion would have been anti-dilutive. Segment Reporting The Company considers each of its hotels to be an operating segment, and allocates resources and assesses the operating performance for each hotel. Because all of the Company’s hotels have similar economic characteristics, facilities and services, the hotels have been aggregated into one single reportable segment, hotel ownership. New Accounting Standards and Accounting Changes In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. ASU No. 2020-04 is effective upon issuance, and is applied prospectively from any date beginning March 12, 2020. The relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022. The Company intends to take advantage of the expedients offered by ASU No. 2020-04 when it modifies its variable rate debt and its interest rate cap and swap derivatives, which will affect the Company’s $220.0 million loan secured by the Hilton San Diego Bayfront, its credit facility and its unsecured term loans. The adoption of ASU No. 2020-04 is not expected to have a material impact on the Company’s consolidated financial statements. |
Investment in Hotel Properties
Investment in Hotel Properties | 12 Months Ended |
Dec. 31, 2021 | |
Investment in Hotel Properties | |
Investment in Hotel Properties | 3. Investment in Hotel Properties Investment in hotel properties, net consisted of the following (in thousands): December 31, 2021 2020 Land $ 604,692 $ 571,212 Buildings and improvements 2,729,461 2,523,750 Furniture, fixtures and equipment 431,780 431,918 Intangible assets 42,689 21,192 Franchise fees 428 743 Construction in progress 41,260 15,831 Investment in hotel properties, gross 3,850,310 3,564,646 Accumulated depreciation and amortization (1,130,294) (1,103,148) Investment in hotel properties, net $ 2,720,016 $ 2,461,498 Acquisitions The Company purchased two hotels in 2021, both of which were accounted for as asset acquisitions. In April 2021, the Company purchased the fee-simple interest in the newly-developed 130 -room Montage Healdsburg, California for $265.0 million, excluding acquisition costs and prorations. In December 2021, the Company purchased the fee-simple interest in the newly-developed 85-room Four Seasons Resort Napa Valley, California for $177.5 million, excluding acquisition costs and prorations. The acquisition was funded through a combination of cash on hand and $110.0 million borrowed under the Company’s revolving credit facility (see Note 7). Intangible Assets Intangible assets included in the Company’s investment in hotel properties, net consisted of the following (in thousands): December 31, 2021 2020 Element agreement (1) $ 18,436 $ 18,436 Airspace agreements (2) 1,916 1,795 Advance bookings (3) 221 — Residential program agreements (4) 21,038 — Trade names (5) 117 — Below market management agreement (6) 961 961 42,689 21,192 Accumulated amortization (891) (777) $ 41,798 $ 20,415 (1) The Element agreement as of both December 31, 2021 and 2020 included the exclusive perpetual rights to certain space at the Renaissance Washington DC. The Element has an indefinite useful life and is not amortized. (2) Airspace agreements as of both December 31, 2021 and 2020 consisted of dry slip agreements at the Oceans Edge Resort & Marina. The dry slips at the Oceans Edge Resort & Marina have indefinite useful lives and are not amortized. (3) Advance bookings as of December 31, 2021 consisted of advance deposits related to our acquisition of the Four Seasons Resort Napa Valley. As part of the purchase price allocation, the contractual advance hotel bookings were recorded at a discounted present value based on estimated collectability. They are amortized using the straight-line method over the periods the amounts are expected to be collected. The amortization expense for contractual advance hotel bookings is included in depreciation and amortization expense in the Company’s consolidated statements of operations. The advance bookings will be fully amortized in September 2022. (4) Residential program agreements as of December 31, 2021 included $13.7 million and $7.3 million at the Montage Healdsburg and the Four Seasons Resort Napa Valley, respectively. The value of the agreements were determined based on each hotel’s purchase price allocation. The agreements relate to the hotels’ residential rental programs, whereby owners of the adjacent separately owned Montage Residences Healdsburg and Four Seasons Private Residences Napa Valley will be eligible to participate in optional rental programs and have access to the hotels’ facilities. In addition, the agreements at the Montage Healdsburg include a social membership program. The residential program agreements will be amortized over the life of the related remaining 25-year Montage Healdsburg management agreement and 20-year Four Seasons Resort Napa Valley management agreement once the hotels begin to recognize revenue related to the programs. As of December 31, 2021, no revenue had been recognized. (5) Trade names as of December 31, 2021 included $0.1 million related to trademarks and bottle labeling used by the Elusa Winery at the Four Seasons Resort Napa Valley. The value of the trade names were determined as part of the hotel’s purchase price allocation. The trade names have indefinite useful lives and are not amortized. (6) The below market management agreement consists of an agreement at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. The agreement is amortized using the straight-line method over the remaining non-cancelable term, and will be fully amortized in December 2022. |
Disposals
Disposals | 12 Months Ended |
Dec. 31, 2021 | |
Disposal Group, Not Including Discontinued Operations | |
Disposals | 4. Disposals Held for Sale The Company classified the Hyatt Centric Chicago Magnificent Mile as held for sale at December 31, 2021, and subsequently sold the hotel in February 2022 (see Note 14). The sale did not represent a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, the hotel did not qualify as a discontinued operation. The Company classified the assets and liabilities of the Hyatt Centric Chicago Magnificent Mile as held for sale at December 31, 2021 as follows (in thousands): December 31, 2021 Accounts receivable, net $ 287 Prepaid expenses and other current assets 182 Investment in hotel properties, net 31,015 Finance lease right-of-use asset, net 44,712 Other assets, net 112 Assets held for sale, net $ 76,308 Accounts payable and accrued expenses $ 1,076 Accrued payroll and employee benefits 660 Other current liabilities 3,881 Finance lease obligation, less current portion 15,567 Other liabilities 4,029 Liabilities of assets held for sale $ 25,213 Disposals - 2021 In October 2021 and December 2021, the Company sold the Renaissance Westchester, located in New York, and the Embassy Suites La Jolla located in California, respectively. Neither of these sales represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, neither of the hotels qualified as a discontinued operation. The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Westchester (1) $ 17,054 $ 3,733 Embassy Suites La Jolla 166,499 148,791 $ 183,553 $ 152,524 (1) During 2020, the Company wrote down the hotel’s assets and recorded an impairment loss of $18.7 million (see Note 5). Disposals - 2020 In July 2020 and December 2020, the Company sold the Renaissance Harborplace, located in Maryland, and the Renaissance Los Angeles Airport, located in California, respectively. Neither of these sales represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, neither of the hotels qualified as a discontinued operation. The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Harborplace (1) $ 76,855 $ 189 Renaissance Los Angeles Airport 89,882 34,109 $ 166,737 $ 34,298 (1) During 2020 and 2019, the Company wrote down the hotel’s assets and recorded impairment losses of $18.1 million and $24.7 million, respectively. (see Note 5). In December 2020, an assignment-in-lieu agreement was filed in the Office of the City Register of the City of New York, and the Company transferred possession and control of its leasehold interest in the Hilton Times Square to the lender of the hotel’s non-recourse mortgage (see Note 7). As such, and in conjunction with the FASB ASC Subtopic (610-20) Gains and Losses from the Derecognition of Nonfinancial Assets , the Company concluded that it lost control of the hotel and removed the hotel’s net assets and liabilities from its balance sheet at December 31, 2020. The disposition of the Hilton Times Square did not represent a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, the hotel did not qualify as a discontinued operation. Disposals - 2019 The Company sold the Courtyard by Marriott Los Angeles, located in California, in October 2019, for net proceeds of $49.5 million, recording a net gain of $42.9 million on the sale. The sale did not represent a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, the hotel did not qualify as a discontinued operation. Results of Operations – Disposed Hotels The following table provides summary results of operations for the hotels disposed of in 2021, 2020 and 2019, which are included in net income (loss) for their respective ownership periods (in thousands): 2021 2020 2019 Total revenues $ 15,046 $ 38,564 $ 181,595 (Loss) income before income taxes (1) $ (8,716) $ (58,597) $ 2,494 Gain on sale of assets $ 152,524 $ 34,298 $ 42,935 (1) (Loss) income before income taxes does not include the gain recognized on the hotel sales. |
Fair Value Measurements and Int
Fair Value Measurements and Interest Rate Derivatives | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements and Interest Rate Derivatives | |
Fair Value Measurements and Interest Rate Derivatives | 5. Fair Value Measurements and Interest Rate Derivatives Fair Value Measurements As of December 31, 2021 and 2020, the carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses were representative of their fair values due to the short-term maturity of these instruments. A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value is as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. As of both December 31, 2021 and 2020, the Company measured its interest rate derivatives at fair value on a recurring basis. The Company estimated the fair value of its interest rate derivatives using Level 2 measurements based on quotes obtained from the counterparties, which are based upon the consideration that would be required to terminate the agreements. The Company recorded the following impairment losses during 2021, 2020 and 2019, each of which is discussed below, as follows (in thousands): 2021 2020 2019 Hilton New Orleans St. Charles $ 2,685 $ — $ — Renaissance Harborplace — 18,100 24,713 Hilton Times Square — 107,857 — Renaissance Westchester — 18,685 — Abandoned development costs — 2,302 — $ 2,685 $ 146,944 $ 24,713 Hilton New Orleans St. Charles Renaissance Harborplace In 2020, the Company determined that the fair value of the Renaissance Harborplace less costs to sell the hotel was lower than the carrying value of the hotel. The 2020 impairment loss was determined using Level 2 measurements, consisting of the third-party offer price less estimated costs to sell the hotel. In 2019, the Company reviewed the operational performance and management’s estimated hold period for the Renaissance Harborplace. During this review, the Company identified indicators of impairment related to declining demand trends at both the hotel and in the Baltimore market, along with management’s plan for the hotel’s estimated hold period. These indicators were significant so that, in accordance with the Company’s policy, the Company prepared an estimate of the future undiscounted cash flows expected to be generated by the hotel during its anticipated holding period, using assumptions for forecasted revenue and operating expenses as well as the estimated market value of the hotel. Based on this analysis, the Company concluded the hotel should be impaired as the estimated future undiscounted cash flows were less than the hotel’s carrying value. To determine the impairment loss to be recognized in 2019, the Company applied Level 3 measurements to estimate the fair value of the Renaissance Harborplace, using a discounted cash flow analysis, taking into account the hotel’s expected cash flow and its estimated market value based upon the hotel’s anticipated holding period. Hilton Times Square . The Company disposed of the Hilton Times Square in December 2020 (see Notes 4 and 7). I In 2020, the Company identified indicators of impairment at the Hilton Times Square related to deteriorating profitability exacerbated by the effects of the COVID - Renaissance Westchester . The Company sold the Renaissance Westchester in October 2021 (see Note 4). In In 2020, the Company identified indicators of impairment at the Renaissance Westchester related to deteriorating profitability exacerbated by the effects of the COVID - Abandoned development costs . In 2020, the Company recorded an impairment loss of The following table presents the Company’s assets measured at fair value on a recurring and nonrecurring basis at December 31, 2021 and 2020 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 December 31, 2021: Interest rate cap derivative $ 3 $ — $ 3 $ — Total assets measured at fair value at December 31, 2021 $ 3 $ — $ 3 $ — December 31, 2020: Renaissance Westchester (1) $ 14,125 $ — $ 14,125 $ — Interest rate cap derivative — — — — Total assets measured at fair value at December 31, 2020 $ 14,125 $ — $ 14,125 $ — (1) The fair market value of the Renaissance Westchester is included in investment in hotel properties, net on the accompanying consolidated balance sheets at December 31, 2020. The Company sold the Renaissance Westchester in October 2021 (see Note 4). The following table presents the Company’s liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2021 and 2020 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 December 31, 2021: Interest rate swap derivatives $ 2,228 $ — $ 2,228 $ — Total liabilities measured at fair value at December 31, 2021 $ 2,228 $ — $ 2,228 $ — December 31, 2020: Interest rate swap derivatives $ 5,710 $ — $ 5,710 $ — Total liabilities measured at fair value at December 31, 2020 $ 5,710 $ — $ 5,710 $ — Interest Rate Derivatives The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following at December 31, 2021 and 2020 (in thousands): Estimated Fair Value of Assets (Liabilities) (1) Strike / Capped Effective Maturity Notional December 31, Hedged Debt Type LIBOR Rate Index Date Date Amount 2021 2020 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2020 December 15, 2021 N/A $ N/A $ — Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2021 December 15, 2022 $ 220,000 3 N/A Term Loan 1 Swap 1.591 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ 85,000 (744) (2,100) Term Loan 2 Swap 1.853 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 (1,484) (3,610) $ (2,225) $ (5,710) (1) The fair values of the cap agreements are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets as of December 31, 2021 and 2020. The fair value of Term Loan 1’s swap agreement is included in other current liabilities on the accompanying consolidated balance sheets as of December 31, 2021 and in other liabilities as of December 31, 2020. The fair value of Term Loan 2’s swap agreement is included in other liabilities on the accompanying consolidated balance sheets as of both December 31, 2021 and 2020. Noncash changes in the fair values of the Company’s interest rate derivatives resulted in (decreases) increases to interest expense for the years ended December 31, 2021, 2020 and 2019 as follows (in thousands): 2021 2020 2019 Noncash interest on derivatives $ (3,405) $ 4,740 $ 5,870 Fair Value of Debt As of December 31, 2021 and 2020, 64.0% and 70.6%, respectively, of the Company’s outstanding debt had fixed interest rates, including the effects of interest rate swap agreements. The Company uses Level 3 measurements to estimate the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates. The Company’s principal balances and fair market values of its consolidated debt as of December 31, 2021 and 2020 were as follows (in thousands): December 31, 2021 December 31, 2020 Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Debt $ 611,437 $ 590,359 $ 747,945 $ 715,042 (1) The principal balance of debt is presented before any unamortized deferred financing costs. (2) Due to prevailing market conditions and the uncertain economic environment caused by the COVID-19 pandemic, actual interest rates could vary materially from those estimated, which would result in variances in the Company’s calculations of the fair market value of its debt. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets. | |
Other Assets | 6. Other Assets Other assets, net consisted of the following (in thousands): December 31, 2021 2020 Property and equipment, net $ 5,912 $ 6,767 Deferred rent on straight-lined third-party tenant leases 2,455 2,819 Other receivables 3,914 2,633 Other 915 226 Total other assets, net $ 13,196 $ 12,445 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosures | |
Notes Payable | 7. Notes Payable Notes payable consisted of the following (in thousands): December 31, 2021 2020 Note payable requiring payments of interest only, bearing a blended rate of one-month LIBOR plus 105 basis points, resulting in effective interest rates of 1.140% and 1.192% at December 31, 2021 and 2020, respectively; matures on December 9, 2022 with one remaining one-year option to extend, which the Company intends to exercise. The note is collateralized by a first deed of trust on one hotel property. $ 220,000 $ 220,000 Note payable requiring payments of interest and principal, with a fixed rate of 4.15% ; matures on December 11, 2024 . The note is collateralized by a first deed of trust on one hotel property. 78,137 80,055 Note payable requiring payments of interest and principal, with a fixed rate of 4.12% ; scheduled maturity on January 6, 2025 , but loan was assigned to the hotel’s buyer in December 2021 upon sale of the hotel property securing the loan. — 57,890 Unsecured Term Loan 1 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points. LIBOR has been swapped to a fixed rate of 1.591% , resulting in an effective interest rate of 3.941% . Matures on September 3, 2022 . 19,400 85,000 Unsecured Term Loan 2 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points. LIBOR has been swapped to a fixed rate of 1.853% , resulting in an effective interest rate of 4.203% . Matures on January 31, 2023 . 88,900 100,000 Unsecured Series A Senior Notes requiring semi-annual payments of interest only, bearing interest at 5.94% . Matures on January 10, 2026 . 90,000 90,000 Unsecured Series B Senior Notes requiring semi-annual payments of interest only, bearing interest at 6.04% Matures on January 10, 2028 . 115,000 115,000 Total notes payable $ 611,437 $ 747,945 Current portion of notes payable $ 21,401 $ 3,305 Less: current portion of deferred financing costs (707) (1,044) Carrying value of current portion of notes payable $ 20,694 $ 2,261 Notes payable, less current portion $ 590,036 $ 744,640 Less: long-term portion of deferred financing costs (1,295) (2,112) Carrying value of notes payable, less current portion $ 588,741 $ 742,528 Aggregate future principal maturities and amortization of notes payable at December 31, 2021, are as follows (in thousands): 2022 $ 21,401 (1) 2023 310,986 (1) 2024 74,050 2025 — 2026 90,000 Thereafter 115,000 Total $ 611,437 (1) Reflects the intended exercise of the remaining one-year option to extend the maturity date of the $220.0 million loan secured by the Hilton San Diego Bayfront from December 2022 to December 2023. Notes Payable Transactions - 2021 Secured Debt In December 2021, the Company exercised its second option to extend the maturity of the $220.0 million loan secured by the Hilton San Diego Bayfront from December 2021 to December 2022. In addition, the Company purchased an interest rate cap derivative for $0.1 million that will continue to cap the floating rate interest on the loan at 6.0% until December 2022 (see Note 5). Certain of the Company’s loan agreements contain cash trap provisions that may be triggered if the performance of the hotels securing the loans decline. These provisions were triggered in January 2021 for the loan secured by the JW Marriott New Orleans, and in May 2021 for the loan secured by the Hilton San Diego Bayfront. As of December 31, 2021, no excess cash was held in lockbox accounts for the benefit of the lenders. The cash trap provisions triggered on the loans will remain until the hotels reach profitability levels that terminate the cash traps. Unsecured Debt . In November and December 2021, the Company drew a total of $110.0 million under the revolving portion of its credit facility to fund a portion of its purchase of the Four Seasons Resort Napa Valley in December 2021 (see Note 3). The Company repaid the outstanding balance of $110.0 million in December 2021. As of December 31, 2021 the Company had no amount outstanding on its credit facility, with $500.0 million of capacity available for additional borrowing under the facility. The Company’s ability to draw on the credit facility may be subject to the Company’s compliance with various financial covenants on its secured and unsecured debt. The credit facility agreement matures on April 14, 2023 , but may be extended for two six-month periods to April 14, 2024 , upon the payment of applicable fees and satisfaction of certain customary conditions. In July 2021 and November 2021, the Company completed amendments to its unsecured debt, consisting of its revolving credit facility, term loans and senior notes (the “2021 Unsecured Debt Amendments”). The 2021 Unsecured Debt Amendments were deemed to be debt modifications and were accounted for accordingly. Key terms of the 2021 Unsecured Debt Amendments include: ● Extends the Covenant Relief Period (defined below) through the required financial covenant test for the period ended September 30, 2022 (the “Extended Covenant Relief Period”), subject to the satisfaction of certain conditions including the achievement of a minimum fixed charge coverage ratio of 1.0 as of June 30, 2022; ● Following the end of the Extended Covenant Relief Period, the original financial covenants will now be phased-in over the following five quarters after the Extended Covenant Relief Period; ● Provides the Company with the right, exercisable one time each with respect to its term loans, to request an extension of the applicable maturity date by twelve months upon the payment of an extension fee of 0.15% of the principal amount being extended; ● Following the end of the Extended Covenant Relief Period, certain financial covenants will be modified until January 1, 2024, unless the Company, subject to meeting the original financial covenants, elects to terminate the period on an earlier date; ● Specifies that various income metrics used to calculate the financial covenants, including Adjusted NOI, Adjusted EBITDA and Fixed Charges (each as defined in the Amended Credit Agreement) will be calculated by annualizing such metrics as more fully set forth in the Amended Credit Agreement for the testing periods commencing September 30, 2022 (or the first testing period if the Extended Covenant Relief Period is terminated early) through September 30, 2023 (or earlier if the Extended Covenant Relief Period is terminated early); and ● Provides for a floor of $0 for purposes of calculating EBITDA and NOI with respect to any individual hotel from the amendment date to and including March 31, 2022 or, in the event that the senior notes are no longer outstanding, September 30, 2022. In December 2021, the Company used a portion of the proceeds received from its sale of the Embassy Suites La Jolla to repay $65.6 million on its Term Loan 1 and $11.1 million on its Term Loan 2, resulting in a Term Loan 1 balance of $19.4 million and a Term Loan 2 balance of $88.9 million as of December 31, 2021. In conjunction with the repayments, the Company recorded a $0.3 million loss on extinguishment of debt related to the write-off of deferred financing costs. Notes Payable Transactions - 2020 Secured Debt Additionally, in December 2020, the Company exercised its first option to extend the maturity date of the mortgage secured by the Hilton San Diego Bayfront from December 2020 to December 2021. Finally, in December 2020, the Company executed an assignment-in-lieu agreement with the holder of the $77.2 million mortgage secured by the Hilton Times Square (see Note 4). As stipulated by the agreement, the Company satisfied all outstanding debt obligations, including regular and default interest or late charges that were assessed, in exchange for a $20.0 million payment, the credit of $3.2 million of restricted cash held by the noteholder and $0.8 million of the hotel’s unrestricted cash, the assignment of the Company’s leasehold interest in the Hilton Times Square, and the retention of certain potential employee-related obligations. In conjunction with this agreement, the Company wrote off approximately $22.2 million of various accrued expenses related to the hotel’s operating lease and sublease, including, but not limited to, accrued property taxes, recapture of deferred taxes due from a prior deferral period, accrued ground rent and accrued easement payments. The Company removed the net assets and liabilities related to the hotel from its December 31, 2020 balance sheet; however, the Company retained approximately $11.6 million in certain current and potential employee-related obligations, which is currently held in escrow until those obligations are resolved (see Note 13). The Company recorded a $6.4 million gain on extinguishment of debt as a result of this transaction. Unsecured Debt . In March 2020, the Company drew $300.0 million under the revolving portion of its credit facility as a precautionary measure to increase the Company’s cash position and preserve financial flexibility due to the Company’s temporary hotel operating suspensions and the decrease in demand caused by the COVID-19 pandemic. In June 2020 and August 2020, the Company repaid $250.0 million and $11.2 million, respectively, of the outstanding credit facility balance after determining that it had sufficient cash on hand in addition to access to its credit facility. In addition, in August 2020, the Company used a portion of the proceeds it received from the sale of the Renaissance Harborplace to repay $38.8 million of the outstanding credit facility balance as stipulated in the Unsecured Debt Amendments described below. In September 2020, the Company repaid $35.0 million of its senior notes, comprising $30.0 million to the Series A note holders and $5.0 million to the Series B note holders, using a portion of the proceeds the Company received from the sale of the Renaissance Harborplace as stipulated in the Unsecured Debt Amendments described below. In conjunction with the repayments, the Company recorded a $0.2 million loss on extinguishment of debt related to the write-off of deferred financing costs. In July and December 2020, the Company completed amendments to its unsecured debt, consisting of its revolving credit facility, term loans and senior notes (the “2020 Unsecured Debt Amendments”). The 2020 Unsecured Debt Amendments were deemed to be debt modifications and were accounted for accordingly. Key terms of the 2020 Unsecured Debt Amendments include: ● Waiver of required financial covenants through the end of the first quarter of 2022, with quarterly testing resuming for the period ending March 31, 2022 (the “Covenant Relief Period”). The Company can elect to terminate the Covenant Relief Period early, subject to the achievement of the original financial covenants at the end of any quarterly measurement period; ● Following the end of the Covenant Relief Period, original financial covenants will be phased-in over the following four quarters to ease compliance; ● Continued payment of existing preferred stock dividends and the ability to issue up to $200.0 million of additional preferred stock, subject to the satisfaction of certain conditions; ● Unlimited ability to fund future acquisitions with proceeds from the issuance of common equity or through the sale of unencumbered hotels; ● Flexibility to invest up to $250.0 million into acquisitions (in addition to acquisitions funded with equity or with hotel sale proceeds) subject to maintaining certain minimum liquidity thresholds; ● Ability to invest up to $100.0 million into capital improvements during 2021; ● Ability to pay dividends on common stock to the extent required to maintain REIT status and comply with IRS regulations; ● Addition of a 25 -basis point LIBOR floor for the remaining term of the revolving credit facility and term loan facilities. The applicable LIBOR spread for each of the facilities is fixed during the Covenant Relief Period at 240 basis points for the revolving credit facility and 235 basis points for the term loan facilities, which is the high end of the pricing grid plus 15 basis points; ● Addition of 125 basis points to the annual interest rate of the senior notes during the Covenant Relief Period which will decrease by 25 basis points following the Covenant Relief Period until the Company’s leverage ratio is below 5.0 x as follows: o Until the Company achieves a leverage ratio less than 6.50 x, the interest rate on the senior notes will be increased by 100 basis points; o From the period the leverage ratio is less than 6.50 x but greater than 5.00 x the interest rate on the senior notes will be increased by 75 basis points; and ● Addition of certain restrictions and covenants during the Covenant Relief Period including, but not limited to, restrictions on share repurchases, maintenance of minimum liquidity of at least $180.0 million, certain required mandatory debt prepayments on asset sales and equity issuances (if funds are not used to purchase assets) and restrictions on the incurrence of new indebtedness. Deferred Financing Costs and (Loss) Gain on Extinguishment of Debt Deferred financing costs and (loss) gain on extinguishment of debt for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): 2021 (1) 2020 (2) 2019 Payments of deferred financing costs $ 397 $ 4,361 $ — (Loss) gain on extinguishment of debt, net $ (57) $ 6,146 $ — (1) During 2021, the Company paid a total of $0.4 million in deferred financing costs related to its 2021 Unsecured Debt Amendments. In addition, the Company recognized a net loss of $0.1 million, comprising a loss of $0.4 million related to the write-off of deferred financing costs associated with the assignment of the mortgage secured by the Embassy Suites La Jolla to the hotel’s buyer and the repayments of a portion of the term loans, partially offset by a gain of $0.3 million associated with the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder due to reassessments of the potential employee-related obligations currently held in escrow. (2) During 2020, the Company paid a total of $4.4 million in deferred financing costs related to the 2020 Unsecured Debt Amendments. In addition, the Company recognized a net gain on extinguishment of debt of $6.1 million, comprising a gain of $6.4 million related to the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder, partially offset by a loss of $0.2 million related to the Company’s repayment of a portion of the senior notes. Interest Expense Total interest incurred and expensed on the notes payable and finance lease obligations for the years ended December 31, 2021, 2020 and 2019 was as follows (in thousands): 2021 2020 2019 Interest expense on debt and finance lease obligation $ 31,378 $ 45,441 $ 45,381 Noncash interest on derivatives and finance lease obligations, net (3,405) 4,740 6,051 Amortization of deferred financing costs 2,925 3,126 2,791 Total interest expense $ 30,898 $ 53,307 $ 54,223 |
Other Current Liabilities and O
Other Current Liabilities and Other Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Other Current Liabilities and Other Liabilities | |
Other Current Liabilities and Other Liabilities | 8. Other Current Liabilities and Other Liabilities Other Current Liabilities Other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Property, sales and use taxes payable $ 12,591 $ 10,134 Accrued interest 6,858 6,914 Advance deposits 33,750 13,341 Interest rate swap derivative 744 — Management fees payable 1,691 169 Other 3,250 2,048 Total other current liabilities $ 58,884 $ 32,606 Other Liabilities Other liabilities consisted of the following (in thousands): December 31, 2021 2020 Deferred revenue $ 6,598 $ 7,911 Interest rate swap derivative 1,484 5,710 Other 3,574 3,873 Total other liabilities $ 11,656 $ 17,494 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 9. Leases Lessee Accounting As of December 31, 2021, the Company had both finance and operating leases for ground, building, office, equipment and airspace leases. The building finance lease obligation and associated right-of-use asset, net were related to the Hyatt Centric Chicago Magnificent Mile, which was classified as held for sale as of December 31, 2021 (see Note 4). Upon sale of the hotel in February 2022 (see Note 14), the Company is no longer obligated under the building lease. Maturity dates for the remaining ground, office, equipment and airspace leases range from 2024 through 2097, including expected renewal options. Including all renewal options available to the Company, the lease maturity date extends to 2147. Leases were included on the Company’s consolidated balance sheet as follows (in thousands): December 31, December 31, 2021 2020 Finance Lease: Right-of-use asset, gross (buildings and improvements) $ — 58,799 Accumulated amortization — (12,617) Right-of-use asset, net (1) $ — $ 46,182 Accounts payable and accrued expenses $ — $ 1 Lease obligation, less current portion — 15,569 Total lease obligation (1) $ — $ 15,570 Operating Leases: Right-of-use assets, net $ 23,161 $ 26,093 Accounts payable and accrued expenses $ 5,586 $ 5,028 Lease obligations, less current portion 25,120 29,954 Total lease obligations $ 30,706 $ 34,982 Weighted average remaining lease term 33 years Weighted average discount rate 5.1 % (1) The finance lease right-of-use asset and related total lease obligation are for a building lease at the Hyatt Centric Chicago Magnificent Mile. The Company classified the hotel as held for sale as of December 31, 2021 (see Note 4). As such, the finance lease right-of-use asset and related total lease obligation are included in assets held for sale, net and liabilities of assets held for sale on the accompanying consolidated balance sheet as of December 31, 2021. The components of lease expense were as follows (in thousands): 2021 2020 2019 Finance lease cost: Amortization of right-of-use asset $ 1,470 $ 1,470 $ 1,470 Interest on lease obligations (1) 1,404 1,404 2,357 Operating lease cost (2) 5,457 9,300 6,914 Variable lease cost (3) 393 27 6,142 Total lease cost $ 8,724 $ 12,201 $ 16,883 (1) Interest on lease obligations for the year ended December 31, 2019 included interest expense of $1.0 million on the Courtyard by Marriott Los Angeles’s finance lease obligation before the hotel’s sale in October 2019 (see Note 4). (2) Prior to the Company’s December 2020 assignment-in-lieu agreement with the Hilton Times Square’s mortgage holder (see Notes 4 and 7), operating lease cost increased by $2.6 million in 2020 under the terms of the operating lease agreement based on 90% of the landlord’s estimate of the lease land’s fair value. (3) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. At December 31, 2021, future maturities of the Company’s finance and operating lease obligations were as follows (in thousands): Finance Lease (1) Operating Leases 2022 $ 1,403 $ 6,993 2023 1,403 7,047 2024 1,403 7,032 2025 1,403 6,959 2026 1,403 2,025 Thereafter 99,593 5,898 Total lease payments 106,608 35,954 Less: interest (2) (91,039) (5,248) Present value of lease obligations $ 15,569 $ 30,706 (1) Finance lease obligation relates to a building lease at the Hyatt Centric Chicago Magnificent Mile. The Company classified this hotel as held for sale as of December 31, 2021 due to its subsequent sale in February 2022. Upon the sale of the hotel in February 2022 (see Note 14), the Company is no longer obligated for this liability. (2) Calculated using the respective discount rate for each lease. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2021 2020 Deferred Tax Assets: Net operating loss carryforward $ 21,252 $ 20,406 Other reserves 526 761 State taxes and other 2,128 2,628 Depreciation 515 473 Total gross deferred tax assets 24,421 24,268 Deferred Tax Liabilities: Amortization (27) (34) Deferred revenue (51) (191) Other (47) (46) Total gross deferred tax liabilities (125) (271) Less: valuation allowance (24,296) (23,997) Deferred tax assets, net $ — $ — At December 31, 2021 and 2020, the net operating loss carryforwards for federal income tax purposes totaled approximately $97.4 million and $89.6 million, respectively. These losses, which begin to expire in 2031, are available to offset future income through 2034. The Company’s income tax (provision) benefit, net was included in the consolidated statements of operations as follows (in thousands): 2021 2020 2019 Current: Federal $ — $ 817 $ 790 State (109) 8 49 Current income tax (provision) benefit, net (109) 825 839 Deferred: Federal 1,262 15,724 (1,112) State (963) 858 424 Change in valuation allowance (299) (23,997) — Deferred income tax provision, net — (7,415) (688) Income tax (provision) benefit, net $ (109) $ (6,590) $ 151 The differences between the income tax benefit (provision) calculated at the statutory U.S. federal income tax rate of 21% and the actual income tax (provision) benefit, net recorded for continuing operations were as follows (in thousands): 2021 2020 2019 Expected federal tax expense at statutory rate $ (7,226) $ (86,369) $ (29,955) Tax impact of REIT election 8,823 103,273 29,810 Expected tax benefit (provision) of TRS 1,597 16,904 (145) State income tax (provision) benefit, net of federal benefit (760) 678 335 Change in valuation allowance (299) (23,997) — Other permanent items (647) 645 562 Alternative minimum tax refund receivable — (820) (601) Income tax (provision) benefit, net $ (109) $ (6,590) $ 151 The Company’s tax years from 2018 to 2021 will remain open to examination by the federal and state authorities for three and four years, respectively. In 2020, the Company recorded a full valuation allowance on its deferred income tax assets, net. The Company was no longer assured that it would be able to realize these assets due to uncertainties regarding how long the COVID-19 pandemic would last or what the long-term impact would be on the Company’s hotel operations. Characterization of Distributions For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. For the years ended December 31, 2021, 2020 and 2019, distributions paid per share were characterized as follows (unaudited): 2021 2020 2019 Amount % Amount % Amount % Common Stock: Ordinary income (1) $ — — % $ 0.050 100 % $ 0.606 81.84 % Capital gain — — — — 0.134 18.16 Return of capital — — — — — — Total $ — — % $ 0.050 100 % $ 0.740 100 % Preferred Stock — Series E Ordinary income (1) $ 0.772 100 % $ 1.738 100 % $ 1.422 81.84 % Capital gain — — — — 0.316 18.16 Return of capital — — — — — — Total $ 0.772 100 % $ 1.738 100 % $ 1.738 100 % Preferred Stock — Series F Ordinary income (1) $ 0.990 100 % $ 1.613 100 % $ 1.320 81.84 % Capital gain — — — — 0.293 18.16 Return of capital — — — — — — Total $ 0.990 100 % $ 1.613 100 % $ 1.613 100 % Preferred Stock — Series G Ordinary income (1) $ 0.234 100 % $ — — % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.234 100 % $ — — % $ — — % Preferred Stock — Series H Ordinary income (1) $ 0.923 100 % $ — — % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.923 100 % $ — — % $ — — % Preferred Stock — Series I Ordinary income (1) $ 0.653 100 % $ — — % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.653 100 % $ — — % $ — — % (1) Ordinary income qualifies for Section 199A treatment per the 2017 Tax Cuts and Jobs Act (“TCJA”). |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity Series E Cumulative Redeemable Preferred Stock In June 2021, the Company redeemed all 4,600,000 shares of its 6.95% Series E preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. An additional redemption charge of $4.0 million was recognized related to the original issuance costs of the Series E preferred stock, which were previously included in additional paid in capital. After the redemption date, the Company has no outstanding shares of Series E preferred stock, and all rights of the holders of such shares were terminated. Because the redemption of the Series E preferred stock was a redemption in full, trading of the Series E preferred stock on the New York Stock Exchange ceased on the June 11, 2021 redemption date. Series F Cumulative Redeemable Preferred Stock In August 2021, the Company redeemed all 3,000,000 shares of its 6.45% Series F preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. An additional redemption charge of $2.6 million was recognized related to the original issuance costs of the Series F preferred stock, which were previously included in additional paid in capital. After the redemption date, the Company has no outstanding shares of Series F preferred stock, and all rights of the holders of such shares were terminated. Because the redemption of the Series F preferred stock was a redemption in full, trading of the Series F preferred stock on the New York Stock Exchange ceased on the August 12, 2021 redemption date. Series G Cumulative Redeemable Preferred Stock Contemporaneous with the Company’s April 2021 purchase of the Montage Healdsburg, the Company issued 2,650,000 shares of its Series G preferred stock to the hotel’s seller as partial payment of the hotel (see Note 3). The Series G preferred stock, which is callable at its $25.00 redemption price plus accrued and unpaid dividends by the Company at any time, accrues dividends at an initial rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s investment in the hotel. The Series G preferred stock is not convertible into any other security. Series H Cumulative Redeemable Preferred Stock In May 2021, the Company issued 4,600,000 shares of its 6.125% Series H preferred stock with a liquidation preference of $25.00. On or after May 24, 2026, the Series H preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a change of control, as defined by the Articles Supplementary for Series H preferred stock, the Company may at its option redeem the Series H preferred stock for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. If the Company chooses not to redeem the Series H preferred stock upon the occurrence of a change of control, holders of the Series H preferred stock may convert their preferred shares into shares of the Company’s common stock. Series I Cumulative Redeemable Preferred Stock In July 2021, the Company issued 4,000,000 shares of its 5.70% Series I preferred stock with a liquidation preference of $25.00. On or after July 16, 2026, the Series I preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a change of control, as defined by the Articles Supplementary for Series I preferred stock, the Company may at its option redeem the Series I preferred stock for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. If the Company chooses not to redeem the Series I preferred stock upon the occurrence of a change of control, holders of the Series I preferred stock may convert their preferred shares into shares of the Company’s common stock. Common Stock ATM Agreements J.P. Morgan Securities LLC and Wells Fargo Securities, LLC In accordance with the terms of the ATM Agreements, During 2021, 2020 and 2019, details of the Company’s issuances of common stock under the ATM Agreements were as follows (dollars in thousands): 2021 2020 2019 Number of shares issued 2,913,682 — — Gross proceeds $ 38,443 $ — $ — As of December 31, 2021, the Company has $137.0 million available for sale under the ATM Agreements. Stock Repurchase Program common and preferred stock, and in February 2021, the Company’s board of directors reauthorized the $500.0 million stock repurchase program. During 2021, 2020 and 2019, details of the Company’s repurchases were as follows (dollars in thousands): 2021 2020 2019 Number of common shares repurchased — 9,770,081 3,783,936 Cost, including fees and commissions $ — $ 103,894 $ 50,088 Number of preferred shares repurchased (1) — — — (1) The redemptions of the Series E preferred stock and the Series F preferred stock in June 2021 and August 2021, respectively, were completed through separate authorizations by the Company’s board of directors. As of December 31, 2021, $500.0 million remains available for repurchase under the stock repurchase program. Future repurchases will depend on various factors, including the Company’s capital needs, restrictions under its various financing agreements and the price of the Company’s common and preferred stock. Dividends and Distributions The Company declared dividends and distributions per share on its preferred stock and common stock, respectively, during 2021, 2020 and 2019 as follows: 2021 2020 2019 Series E preferred stock $ 0.772222 $ 1.7375 $ 1.7375 Series F preferred stock $ 0.989896 $ 1.6125 $ 1.6125 Series G preferred stock $ 0.233685 $ — $ — Series H preferred stock $ 0.923004 $ — $ — Series I preferred stock $ 0.653125 $ — $ — Common stock $ — $ 0.0500 $ 0.7400 |
Long-Term Incentive Plan
Long-Term Incentive Plan | 12 Months Ended |
Dec. 31, 2021 | |
Long-Term Incentive Plan | |
Long-Term Incentive Plan | 12. Long-Term Incentive Plan The Company’s Long-Term Incentive Plan (“LTIP”) provides for granting awards to directors, officers and eligible employees. The awards may be made in the form of incentive or nonqualified stock options, restricted shares or units, performance shares or units, share appreciation rights, or any combination thereof. The Company has reserved 12,050,000 common shares for issuance under the LTIP, and 1,668,397 shares remain available for future issuance as of December 31, 2021. At December 31, 2021, there were no stock options, restricted units, performance shares or units, or share appreciation rights issued or outstanding under the LTIP. Stock Grants Restricted shares granted pursuant to the Company’s LTIP generally vest over a period of three years from the date of grant. Should a stock grant be forfeited prior to its vesting, the shares covered by the stock grant are added back to the LTIP and remain available for future issuance. Shares of common stock tendered or withheld to satisfy the grant or exercise price or tax withholding obligations upon the vesting of a stock grant are not added back to the LTIP. Compensation expense related to awards of restricted shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. The Company has elected to account for forfeitures as they occur. The Company’s amortization expense and forfeitures related to restricted shares for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): 2021 2020 2019 Amortization expense, including forfeitures (1) $ 12,788 $ 9,576 $ 9,313 Capitalized compensation cost (2) $ 490 $ 412 $ 406 (1) In 2021, the Company recognized $1.1 million in amortization of deferred stock compensation expense related to the departure of its former Chief Executive Officer. (2) The Company capitalizes compensation costs related to restricted shares granted to certain employees whose work is directly related to the Company’s capital investment in hotels. The following is a summary of non-vested restricted stock grant activity: 2021 2020 2019 Weighted Weighted Weighted Average Average Average Shares Price Shares Price Shares Price Outstanding at beginning of year 1,336,836 $ 14.01 1,217,850 $ 14.88 1,177,760 $ 14.89 Granted 1,478,874 $ 11.55 852,601 $ 12.91 701,754 $ 14.35 Vested (1,116,989) $ 13.65 (691,111) $ 14.20 (657,732) $ 14.32 Forfeited (235,406) $ 11.81 (42,504) $ 14.05 (3,932) $ 15.48 Outstanding at end of year 1,463,315 $ 12.15 1,336,836 $ 14.01 1,217,850 $ 14.88 As of December 31, 2021, $11.4 million in compensation expense related to non-vested restricted stock grants remained to be recognized over a weighted-average period of 23 months . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Management Agreements Management agreements with the Company’s third-party hotel managers require the Company to pay between 1.75% and 3.0% of total revenue of the managed hotels to the third-party managers each month as a basic management fee. In addition to basic management fees, provided that certain operating thresholds are met, the Company may also be required to pay incentive management fees to certain of its third-party managers. Total basic management and incentive management fees incurred by the Company during the years ended December 31, 2021, 2020 and 2019 were included in other property-level expenses on the Company’s consolidated statements of operations as follows (in thousands): 2021 2020 2019 Basic management fees $ 13,406 $ 7,095 $ 31,061 Incentive management fees 1,806 — 8,005 Total basic and incentive management fees $ 15,212 $ 7,095 $ 39,066 License and Franchise Agreements The Company has entered into license and franchise agreements related to certain of its hotels. The license and franchise agreements require the Company to, among other things, pay monthly fees that are calculated based on specified percentages of certain revenues. The license and franchise agreements generally contain specific standards for, and restrictions and limitations on, the operation and maintenance of the hotels which are established by the franchisors to maintain uniformity in the system created by each such franchisor. Such standards generally regulate the appearance of the hotel, quality and type of goods and services offered, signage and protection of trademarks. Compliance with such standards may from time to time require the Company to make significant expenditures for capital improvements. Total license and franchise fees incurred by the Company during the years ended December 31, 2021, 2020 and 2019 were included in franchise costs on the Company’s consolidated statements of operations as follows (in thousands): 2021 2020 2019 Franchise assessments (1) $ 9,060 $ 5,998 $ 24,389 Franchise royalties (2) 2,294 1,062 7,876 Total franchise costs $ 11,354 $ 7,060 $ 32,265 (1) Includes advertising, reservation, and frequent guest program assessments. (2) Includes key money received from one of the Company’s franchisors, which the Company is amortizing over the term of the hotel’s franchise agreement. Renovation and Construction Commitments At December 31, 2021, the Company had various contracts outstanding with third parties in connection with the ongoing renovations of certain of its hotel properties. The remaining commitments under these contracts at December 31, 2021 totaled $71.7 million. 401(k) Savings and Retirement Plan The Company’s corporate employees may participate, subject to eligibility, in the Company’s 401(k) Savings and Retirement Plan (the “401(k) Plan”). Qualified employees are eligible to participate in the 401(k) Plan after attaining 21 years of age and after the first of the month following the completion of six calendar months of employment. Three percent of eligible employee annual base earnings are contributed by the Company as a Safe Harbor elective contribution. Safe Harbor contributions made by the Company totaled $0.2 million in each of the years 2021, 2020 and 2019, and were included in corporate overhead expense. The Company is also responsible for funding various retirement plans at certain hotels operated by its management companies. Other property-level expenses on the Company’s consolidated statements of operations includes matching contributions into these various retirement plans of $1.0 million in 2021, $0.8 million in 2020 and $1.4 million in 2019. Collective Bargaining Agreements The Company is subject to exposure to collective bargaining agreements at certain hotels operated by its management companies. At December 31, 2021, approximately 29.7% of workers employed by the Company’s third-party managers were covered by such collective bargaining agreements. Concentration of Risk The concentration of the Company’s hotels in California, Florida, Hawaii and Massachusetts exposes the Company’s business to economic and severe weather conditions, competition and real and personal property tax rates unique to these locales. As of December 31, 2021, 10 of the 16 Hotels were geographically concentrated as follows: Percentage of Percentage of Total 2021 Number of Hotels Total Rooms Consolidated Revenue California 5 32 % 34 % Florida 2 12 % 13 % Hawaii 1 7 % 23 % Massachusetts 2 18 % 14 % Hurricane Ida During the third quarter of 2021, the Company’s New Orleans hotels were impacted to varying degrees by Hurricane Ida. While both hotels remained open during the storm, they sustained wind-driven damage, rain infiltration and water damage. The Company maintains customary property, casualty, environmental, flood and business interruption insurance at all of its hotels, the coverage of which is subject to certain limitations including higher deductibles in the event of a named storm. The Company is working with its insurers to identify and settle a property damage claim at the Hilton New Orleans St. Charles for portions of the costs related to Hurricane Ida. The Company is also pursuing a business interruption insurance claim at the Hilton New Orleans St. Charles. The Company has concluded that the cost to restore damages at the JW Marriott New Orleans will not exceed the hotel’s deductible. During 2021, the Company incurred Hurricane Ida-related restoration expenses of $2.9 million at the Hilton New Orleans St. Charles and $1.3 million at the JW Marriott New Orleans, both of which are included in repairs and maintenance expense in the accompanying consolidated statements of operations for the year ended December 31, 2021. In addition, the Company wrote-off $2.7 million in assets at the Hilton New Orleans St. Charles due to Hurricane Ida-related damage, which is included in impairment losses in the accompanying consolidated statements of operations for the year ended December 31, 2021. The Company may incur additional Hurricane Ida-related expenses at both New Orleans hotels in the future. Any additional expenses will be recognized as incurred and any business interruption recovery will not be recognized until a final settlement has been reached with the Company’s insurers. Other In accordance with the assignment-in-lieu agreement executed in December 2020 between the Company and the mortgage holder of the Hilton Times Square, the Company was required to retain approximately $11.6 million related to certain current and potential employee-related obligations (the “potential obligation”), which was included in restricted cash on the accompanying consolidated balance sheet at December 31, 2020. During 2021, $0.8 million of the potential obligation was paid to the hotel’s employees. In addition, the potential obligation was reassessed each quarter during 2021, resulting in a gain on extinguishment of debt of $0.3 million, which is included in (loss) gain on extinguishment of debt, net on the accompanying consolidated statement of operations for the year ended December 31, 2021. As of December 31, 2021, $10.4 million remains in restricted cash on the accompanying consolidated balance sheet, which will continue to be held in escrow until the potential obligation is resolved. Other current liabilities on the accompanying consolidated balance sheets as of December 31, 2021 and 2020 included the potential obligation balances of $10.5 million and $11.6 million, respectively. Coterminous with the Company’s acquisition of the Four Seasons Resort Napa Valley, the Company was required to deposit $3.1 million into a restricted bank account owned by the Company, but to which the hotel’s management company, Four Seasons Hotels Limited (“Four Seasons”), has sole and unrestricted access to withdraw funds for the purpose of satisfying any severance or similar obligations that arise in connection with the termination of hotel personnel and any employment claim by hotel personnel (“severance obligations”). Prior to Four Seasons withdrawing funds from the restricted account, the Company has the option to pay the severance obligations using its cash on hand. Should amounts in the restricted bank account be used to fund the severance obligations, the Company will be required to deposit additional funds into the restricted bank account so that the amount in the account totals any estimated future severance obligations. Currently, the estimated future severance obligations total $3.1 million; however, the estimated future severance obligations may increase up to a maximum of $5.0 million. The Company incurred $0.4 million and $34.3 million of additional expenses as a result of the COVID-19 pandemic during 2021 and 2020, respectively, related to wages and benefits for furloughed or laid off hotel employees. These additional expenses were offset by $1.4 million and $5.2 million during 2021 and 2020, respectively, in employee retention tax credits and various industry grants received by the Company’s hotels, which are included in other property-level expenses on the accompanying consolidated statements of operations for the years ended December 31, 2021 and 2020. The Company has provided customary unsecured indemnities to certain lenders, including in particular, environmental indemnities. The Company has performed due diligence on the potential environmental risks, including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate the Company to reimburse the indemnified parties for damages related to certain environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, the Company could have recourse against other previous owners or a claim against its environmental insurance policies. At December 31, 2021, the Company had $0.2 million of outstanding irrevocable letters of credit to guarantee the Company’s financial obligations related to workers’ compensation insurance programs from prior policy years. The beneficiaries of these letters of credit may draw upon the letters of credit in the event of a contractual default by the Company relating to each respective obligation. No draws have been made through December 31, 2021. The Company is subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business, regarding the operation of its hotels, its managers and other Company matters. While it is not possible to ascertain the ultimate outcome of such matters, the Company believes that the aggregate identifiable amount of such liabilities, if any, in excess of amounts covered by insurance will not have a material adverse impact on its financial condition or results of operations. The outcome of claims, lawsuits and legal proceedings, including any potential COVID-19-related litigation, brought against the Company, however, is subject to significant uncertainties. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Event | |
Subsequent Event | 14. Subsequent Events On February 1, 2022, the Company sold the Hyatt Centric Chicago Magnificent Mile for a gross sale price of $67.5 million, excluding closing costs. The Company is under contract to sell two hotels during the first quarter of 2022 for a combined gross sale price of approximately $129 million. The sale of the hotels is subject to the satisfaction of customary closing conditions, and the Company can give no assurances that the sale will be completed. |
Schedule III-Real Estate and Ac
Schedule III-Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2021 | |
Schedule III-Real Estate and Accumulated Depreciation | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure | SUNSTONE HOTEL INVESTORS, INC. SCHEDULE II I—REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2021 (In thousands) Cost Capitalized Gross Amount at Initial costs Subsequent to Acquisition December 31, 2021 (1) Bldg. and Bldg. and Bldg. and Accum. Date Depr. Encmbr. Land Impr. Land Impr. Land Impr. Totals Depr. Acquired Life Boston Park Plaza $ — (2) $ 58,527 $ 170,589 $ — $ 128,021 $ 58,527 $ 298,610 $ 357,137 $ 96,900 7/2/2013 5 - 35 Embassy Suites Chicago — 79 46,886 6,348 26,464 6,427 73,350 79,777 41,549 12/18/2002 5 - 35 Four Seasons Resort Napa Valley — (2) 23,514 128,645 — — 23,514 128,645 152,159 301 12/1/2021 5 - 40 Hilton Garden Inn Chicago Downtown/Magnificent Mile — (2) 14,040 66,350 — 12,645 14,040 78,995 93,035 16,848 7/19/2012 5 - 50 Hilton New Orleans St. Charles — (2) 3,698 53,578 — 7,574 3,698 61,152 64,850 12,571 5/1/2013 5 - 35 Hilton San Diego Bayfront 220,000 — 424,992 — 24,339 — 449,331 449,331 90,204 4/15/2011 5 - 57 Hyatt Regency San Francisco — (2) 116,140 131,430 — 62,541 116,140 193,971 310,111 71,552 12/2/2013 5 - 35 JW Marriott New Orleans 78,137 — 73,420 15,147 38,069 15,147 111,489 126,636 33,102 2/15/2011 5 - 35 Marriott Boston Long Wharf — (2) 51,598 170,238 — 76,677 51,598 246,915 298,513 111,143 3/23/2007 5 - 35 Montage Healdsburg — (2) 40,326 194,589 — 215 40,326 194,804 235,130 4,265 4/22/2021 5 - 40 Oceans Edge Resort & Marina — (2) 92,510 74,361 2,000 6,124 94,510 80,485 174,995 10,082 7/25/2017 5 - 40 Renaissance Long Beach — (2) 10,437 37,300 — 27,590 10,437 64,890 75,327 31,794 6/23/2005 5 - 35 Renaissance Orlando at SeaWorld ® — (2) — 119,733 30,717 68,572 30,717 188,305 219,022 90,716 6/23/2005 5 - 35 Renaissance Washington DC — (2) 14,563 132,800 — 68,070 14,563 200,870 215,433 96,977 7/13/2005 5 - 35 The Bidwell Marriott Portland — (2) 5,341 20,705 — 27,453 5,341 48,158 53,499 19,606 8/11/2000 5 - 35 Wailea Beach Resort — (2) 119,707 194,137 — 115,354 119,707 309,491 429,198 72,031 7/14/2014 5 - 40 $ 298,137 $ 550,480 $ 2,039,753 $ 54,212 $ 689,708 $ 604,692 $ 2,729,461 $ 3,334,153 $ 799,641 (1) The aggregate cost of properties for federal income tax purposes is approximately $3.7 billion (unaudited) at December 31, 2021. (2) Hotel is pledged as collateral by the Company’s credit facility. As of December 31, 2021, the Company has no outstanding indebtedness under its credit facility. The following is a reconciliation of real estate assets and accumulated depreciation (in thousands): Hotel Properties 2021 2020 2019 Reconciliation of land and buildings and improvements: Balance at the beginning of the year $ 3,094,962 $ 3,551,715 $ 3,595,301 Activity during year: Acquisitions 387,074 1,296 704 Improvements 36,884 47,547 78,579 Impairment losses (3,264) (252,909) (34,888) Changes in reporting presentation (1) (53,068) — (58,799) Dispositions (128,435) (252,687) (29,182) Balance at the end of the year $ 3,334,153 $ 3,094,962 $ 3,551,715 Reconciliation of accumulated depreciation: Balance at the beginning of the year $ 772,289 $ 888,378 $ 815,628 Depreciation 96,508 101,218 107,949 Impairment losses (579) (137,292) (12,572) Changes in reporting presentation (1) (24,144) — (9,677) Dispositions (44,433) (80,015) (12,950) Balance at the end of the year $ 799,641 $ 772,289 $ 888,378 (1) Changes in reporting presentation in 2021 include the net assets for the Hyatt Centric Chicago Magnificent Mile, which the Company classified as held for sale as of December 31, 2021 due to its sale in February 2022. Changes in reporting presentation in 2019 include the reclasses necessary upon the Company’s implementation of Leases (Topic 842) of the FASB ASC to move the Hyatt Centric Chicago Magnificent Mile’s finance lease asset from investment in hotel properties, net to finance lease right-of-use asset, net. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of December 31, 2021 and 2020, and for the years ended December 31, 2021, 2020 and 2019, include the accounts of the Company, the Operating Partnership, the TRS Lessee, and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash on hand and in various bank accounts plus credit card receivables and all short-term investments with an original maturity of three months or less. The Company maintains cash and cash equivalents and certain other financial instruments with various financial institutions. These financial institutions are located throughout the country and the Company’s policy is designed to limit exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. At December 31, 2021 and 2020, the Company had amounts in banks that were in excess of federally insured amounts. |
Restricted Cash | Restricted Cash Restricted cash is comprised of reserve accounts for debt service, interest, seasonality, capital replacements, ground leases, property taxes and any hotel-generated cash that is held in accounts for the benefit of lenders. These restricted funds are subject to disbursement approval based on in-place agreements and policies by certain of the Company’s lenders, ground lessors and/or hotel managers. At times, restricted cash also includes earnest money either paid to a seller or potential seller of a hotel, or received from a buyer or potential buyer of one of the Company’s hotels and held in escrow until either the purchase or sale is completed or subject to the terms of the related purchase and sale agreement. In addition, restricted cash as of December 31, 2021 and 2020 includes $10.4 million and $11.6 million, respectively, held in escrow related to certain current and potential employee-related obligations in accordance with the assignment-in-lieu agreement between the Company and the mortgage holder of one of the Company’s former hotels (see Note 13). |
Accounts Receivable | Accounts Receivable Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. Accounts receivable also includes, among other things, receivables from tenants who lease space in the Company’s hotels. The Company maintains an allowance for doubtful accounts sufficient to cover potential credit losses. |
Acquisitions of Hotel Properties and Other Entities | Acquisitions of Hotel Properties and Other Entities Accounting for the acquisition of a hotel property or other entity requires an allocation of the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective relative fair values for an asset acquisition or at their estimated fair values for a business combination. The most difficult estimations of individual fair values are those involving long-lived assets, such as property, equipment and intangible assets, together with any finance or operating lease right-of-use assets and their related obligations. When the Company acquires a hotel property or other entity, it uses all available information to make these fair value determinations, including discounted cash flow analyses, market comparable data and replacement cost data. In addition, the Company makes significant estimations regarding capitalization rates, discount rates, average daily rates, revenue growth rates and occupancy. The Company also engages independent valuation specialists to assist in the fair value determinations of the long-lived assets acquired and the liabilities assumed. The determination of fair value is subjective and is based on assumptions and estimates that could differ materially from actual results in future periods. In addition, the acquisition of a hotel property or other entity requires an analysis of the transaction to determine if it qualifies as the purchase of a business or an asset. If the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, then the transaction is an asset acquisition. Transaction costs associated with asset acquisitions are capitalized and subsequently depreciated over the life of the related asset, while the same costs associated with a business combination are expensed as incurred and included in corporate overhead on the Company’s consolidated statements of operations. Also, asset acquisitions are not subject to a measurement period, as are business combinations. |
Investments in Hotel Properties | Investments in Hotel Properties Investments in hotel properties, including land, buildings, furniture, fixtures and equipment (“FF&E”) and identifiable intangible assets are recorded at their respective relative fair values for an asset acquisition or at their estimated fair values for a business acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation is removed from the Company’s accounts and any resulting gain or loss is included in the consolidated statements of operations. Depreciation expense is based on the estimated life of the Company’s assets. The life of the assets is based on a number of assumptions, including the cost and timing of capital expenditures to maintain and refurbish the Company’s hotels, as well as specific market and economic conditions. Hotel properties are depreciated using the straight-line method over estimated useful lives primarily ranging from five to 40 years for buildings and improvements and three to 12 years for FF&E. Finance lease right-of-use assets other than land are depreciated using the straight-line method over the shorter of either their estimated useful life or the life of the related finance lease obligation. Intangible assets are amortized using the straight-line method over the shorter of their estimated useful life or over the length of the related agreement. The Company’s investment in hotel properties, net also includes initial franchise fees which are recorded at cost and amortized using the straight-line method over the terms of the franchise agreements ranging from 14 to 20 years . All other franchise fees that are based on the Company’s results of operations are expensed as incurred. While the Company believes its estimates are reasonable, a change in the estimated lives could affect depreciation expense and net income or the gain or loss on the sale of any of the Company’s hotels. The Company has not changed the useful lives of any of its assets during the periods discussed. Impairment losses are recorded on long-lived assets to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows, including potential sale proceeds, expected to be generated by those assets based on the Company’s anticipated investment horizon, are less than the assets’ carrying amount. The Company evaluates its long-lived assets to determine if there are indicators of impairment on a quarterly basis. No single indicator would necessarily result in the Company preparing an estimate to determine if a hotel’s future undiscounted cash flows are less than the book value of the hotel. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a hotel requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. If a hotel is considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. The Company performs a fair value assessment, using one or more discounted cash flow analyses to estimate the fair value of the hotel, taking into account the hotel’s expected cash flow from operations, the Company’s estimate of how long it will own the hotel and the estimated proceeds from the disposition of the hotel. When multiple cash flow analyses are prepared, a probability is assigned to each cash flow analysis based upon the estimated likelihood of each scenario occurring. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. The Company’s judgment is required in determining the discount rate applied to estimated cash flows, the estimated growth of revenues and expenses, net operating income and margins, the need for capital expenditures, as well as specific market and economic conditions. Based on the Company’s review, three hotels were impaired in 2020 and one hotel was impaired in 2019 (see Note 5). In 2021, the Company recognized a $2.7 million impairment loss on the Hilton New Orleans St. Charles due to Hurricane Ida-related damage at the hotel (see Notes 5 and 13). Fair value represents the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than a forced or liquidation sale. The estimation process involved in determining if assets have been impaired and in the determination of fair value is inherently uncertain because it requires estimates of current market yields as well as future events and conditions. Such future events and conditions include economic and market conditions, as well as the availability of suitable financing. The realization of the Company’s investment in hotel properties is dependent upon future uncertain events and conditions and, accordingly, the actual timing and amounts realized by the Company may be materially different from their estimated fair values. |
Assets Held for Sale | Assets Held for Sale The Company considers a hotel held for sale if it is probable that the sale will be completed within 12 months , among other requirements. A sale is considered to be probable once the buyer completes its due diligence of the asset, there is an executed purchase and sale agreement between the Company and the buyer, the buyer waives any closing contingencies, there are no third-party approvals necessary and the Company has received a substantial non-refundable deposit. Depreciation ceases when a property is held for sale. Should an impairment loss be required for assets held for sale, the related assets are adjusted to their estimated fair values, less costs to sell. If the sale of the hotel represents a strategic shift that will have a major effect on the Company’s operations and financial results, the hotel qualifies as a discontinued operation, and operating results are removed from income from continuing operations and reported as discontinued operations. The operating results for any such assets for any prior periods presented must also be reclassified as discontinued operations. As of December 31, 2021, one hotel was considered held for sale (see Note 4). No hotels were considered held for sale as of December 31, 2020. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs consist of loan fees and other financing costs related to the Company’s outstanding indebtedness and credit facility commitments, and are amortized to interest expense over the terms of the related debt or commitment. If a loan is refinanced or paid before its maturity, any unamortized deferred financing costs will generally be expensed unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs related to the Company’s undrawn credit facility are included on the Company’s consolidated balance sheets as an asset, and are amortized ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. Deferred financing costs related to the Company’s outstanding debt are included on the Company’s consolidated balance sheets as a contra-liability (see Note 7), and subsequently amortized ratably over the term of the related debt. |
Interest Rate Derivatives | Interest Rate Derivatives The Company’s objective in holding interest rate derivatives is to manage its exposure to the interest rate risks related to its floating rate debt. To accomplish this objective, the Company uses interest rate caps and swaps, none of which qualifies for effective hedge accounting treatment. The Company records interest rate caps and swaps on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in the consolidated statements of operations. |
Finance and Operating Leases | Finance and Operating Leases The Company determines if a contract is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Expense for these short-term leases is recognized on a straight-line basis over the lease term. For leases with an initial term greater than 12 months , the Company records a right-of-use (“ROU”) asset and a corresponding lease obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make fixed lease payments as stipulated by the lease. The Company has elected to not separate lease components from nonlease components, resulting in the Company accounting for lease and nonlease components as one single lease component. Leases are accounted for using a dual approach, classifying leases as either operating or financing based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the Company. This classification determines whether the lease expense is recognized on a straight-line basis over the term of the lease for operating leases or based on an effective interest method for finance leases. Operating lease ROU assets are recognized at the lease commencement date and include the amount of the initial operating lease obligation, any lease payments made at or before the commencement date, excluding any lease incentives received, and any initial direct costs incurred. For leases that have extension options that the Company can exercise at its discretion, management uses judgment to determine if it is reasonably certain that the Company will in fact exercise such option. If the extension option is reasonably certain to occur, the Company includes the extended term’s lease payments in the calculation of the respective lease liability. None of the Company’s leases contain any material residual value guarantees or material restrictive covenants. Operating lease obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on information available at the commencement date in determining the present value of lease payments over the lease term. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In order to estimate the Company’s IBR, the Company first looks to its own unsecured debt offerings, and adjusts the rate for both length of term and secured borrowing using available market data as well as consultations with leading national financial institutions that are active in the issuance of both secured and unsecured notes. The Company reviews its right-of-use assets for indicators of impairment. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Based on the Company’s review, no operating or finance lease ROU assets were impaired during 2021. While no finance lease ROU assets were impaired during 2020, the operating lease ROU asset at one hotel was impaired (see Note 5) based on the Company’s 2020 review. |
Noncontrolling Interest | Noncontrolling Interest The Company’s consolidated financial statements include an entity in which the Company has a controlling financial interest. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interest is reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from the less-than-wholly-owned subsidiary are reported at their consolidated amounts, including both the amounts attributable to the Company and the noncontrolling interest. Income or loss is allocated to the noncontrolling interest based on its weighted average ownership percentage for the applicable period. The consolidated statements of equity include beginning balances, activity for the period and ending balances for each component of stockholders’ equity, noncontrolling interest and total equity. At December 31, 2021, 2020 and 2019, the noncontrolling interest reported in the Company’s consolidated financial statements consisted of a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to hotel guests, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Room revenue and other occupancy based fees are recognized over a guest’s stay at the previously agreed upon daily rate. Some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is recognized by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is recognized by the Company on a gross basis, with the related discount or commission recognized in room expense. A majority of the Company’s hotels participate in frequent guest programs sponsored by the hotel brand owners whereby the hotel allows guests to earn loyalty points during their hotel stay. The Company expenses charges associated with these programs as incurred, and recognizes revenue at the amount it will receive from the brand when a guest redeems their loyalty points by staying at one of the Company’s hotels. In addition, some contracts for rooms or food and beverage services require an advance deposit, which the Company records as deferred revenue (or a contract liability) and recognizes once the performance obligations are satisfied. Cancellation fees and attrition fees, which are charged to groups when they do not fulfill their contracted minimum number of room nights or minimum food and beverage spending requirements, are typically recognized as revenue in the period the Company determines it is probable that a significant reversal in the amount of revenue recognized will not occur, which is generally the period in which these fees are collected. Food and beverage revenue and other ancillary services revenue are generated when a customer chooses to purchase goods or services separately from a hotel room. The revenue is recognized when the goods or services are provided to the customer at the amount the Company expects to be entitled to in exchange for those goods or services. For ancillary services provided by third parties, the Company assesses whether it is the principal or the agent. If the Company is the principal, revenue is recognized based upon the gross sales price. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. Additionally, the Company collects sales, use, occupancy and other similar taxes from customers at its hotels at the time of purchase, which are not included in revenue. The Company records a liability upon collection of such taxes from the customer, and relieves the liability when payments are remitted to the applicable governmental agency. Trade receivables and contract liabilities consisted of the following (in thousands): December 31, December 31, 2021 2020 Trade receivables, net (1) $ 16,055 $ 8,110 Contract liabilities (2) $ 40,226 $ 16,815 (1) Trade receivables are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits and are included in either other current liabilities or other liabilities on the accompanying consolidated balance sheets. During 2021 and 2020, the Company recognized approximately $2.2 million and $10.2 million, respectively, in revenue related to its outstanding contract liabilities. |
Advertising and Promotion Costs | Advertising and Promotion Costs Advertising and promotion costs are expensed when incurred. Advertising and promotion costs represent the expense for advertising and reservation systems under the terms of the hotel franchise and brand management agreements and general and administrative expenses that are directly attributable to advertising and promotions. |
Stock Based Compensation | Stock Based Compensation Compensation expense related to awards of restricted shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. |
Income Taxes | Income Taxes The Company is subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, the TRS Lessee, which leases the Company’s hotels from the Operating Partnership, is subject to federal and state income taxes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reviews any uncertain tax positions and, if necessary, records the expected future tax consequences of uncertain tax positions in its consolidated financial statements. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. The Company recognizes any penalties and interest related to unrecognized tax benefits in income tax expense in its consolidated statements of operations. |
Dividends | Dividends Under current federal income tax laws related to REITs, the Company is required to distribute at least 90% of its REIT taxable income to its stockholders. Currently, the Company pays quarterly cash dividends to its preferred stockholders as declared by the Company’s board of directors. At this time, the Company’s board of directors has not reinstated its common stock dividend. The Company may not need to pay a quarterly dividend on its common stock during 2022 due to the COVID-19 pandemic’s negative effect on the Company’s income. The resumption in quarterly common stock dividends will be determined by the Company’s board of directors after considering the Company’s obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and risks affecting its business. The Company’s ability to pay dividends is dependent on the receipt of distributions from the Operating Partnership. |
Earnings Per Share | Earnings Per Share The Company applies the two-class method when computing its earnings per share. Net income per share for each class of stock is calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and are included in the computation of earnings per share. Basic earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards, using the more dilutive of either the two-class method or the treasury stock method. The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2021 December 31, 2020 December 31, 2019 Numerator: Net income (loss) $ 32,995 $ (410,506) $ 142,793 Loss (income) from consolidated joint venture attributable to noncontrolling interest 1,303 5,817 (7,060) Preferred stock dividends and redemption charges (20,638) (12,830) (12,830) Distributions paid on unvested restricted stock compensation — (69) (901) Undistributed income allocated to unvested restricted stock compensation (92) — — Numerator for basic and diluted income (loss) attributable to common stockholders $ 13,568 $ (417,588) $ 122,002 Denominator: Weighted average basic and diluted common shares outstanding 216,296 215,934 225,681 Basic and diluted income (loss) attributable to common stockholders per common share $ 0.06 $ (1.93) $ 0.54 The Company’s unvested restricted shares associated with its long-term incentive plan have been excluded from the above calculation of earnings per share for the years ended December 31, 2021, 2020 and 2019, as their inclusion would have been anti-dilutive. |
Segment Reporting | Segment Reporting The Company considers each of its hotels to be an operating segment, and allocates resources and assesses the operating performance for each hotel. Because all of the Company’s hotels have similar economic characteristics, facilities and services, the hotels have been aggregated into one single reportable segment, hotel ownership. |
New Accounting Standards and Accounting Changes | New Accounting Standards and Accounting Changes In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. ASU No. 2020-04 is effective upon issuance, and is applied prospectively from any date beginning March 12, 2020. The relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022. The Company intends to take advantage of the expedients offered by ASU No. 2020-04 when it modifies its variable rate debt and its interest rate cap and swap derivatives, which will affect the Company’s $220.0 million loan secured by the Hilton San Diego Bayfront, its credit facility and its unsecured term loans. The adoption of ASU No. 2020-04 is not expected to have a material impact on the Company’s consolidated financial statements. |
Organization and Description _2
Organization and Description of Business (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Description of Business | |
Schedule of number of hotels managed by each third-party manager | As of December 31, 2021, the Company had interests in 17 hotels, one of which was considered held for sale, leaving 16 hotels (the “16 Hotels”) currently held for investment. The Company’s third-party managers included the following: Number of Hotels Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) 6 Crestline Hotels & Resorts 2 Interstate Hotels & Resorts, Inc. 2 Davidson Hotels & Resorts 1 (1) Four Seasons Hotels Limited 1 Highgate Hotels L.P. and an affiliate 1 Hilton Worldwide 1 Hyatt Corporation 1 Montage North America, LLC 1 Singh Hospitality, LLC 1 Total hotels owned as of December 31, 2021 17 (1) The Hyatt Centric Chicago Magnificent Mile was considered held for sale as of December 31, 2021, and subsequently sold on February 1, 2022 (see Note 14). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of contract assets and liabilities | Trade receivables and contract liabilities consisted of the following (in thousands): December 31, December 31, 2021 2020 Trade receivables, net (1) $ 16,055 $ 8,110 Contract liabilities (2) $ 40,226 $ 16,815 (1) Trade receivables are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits and are included in either other current liabilities or other liabilities on the accompanying consolidated balance sheets. |
Schedule of computation of basic and diluted earnings (loss) per common share | The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2021 December 31, 2020 December 31, 2019 Numerator: Net income (loss) $ 32,995 $ (410,506) $ 142,793 Loss (income) from consolidated joint venture attributable to noncontrolling interest 1,303 5,817 (7,060) Preferred stock dividends and redemption charges (20,638) (12,830) (12,830) Distributions paid on unvested restricted stock compensation — (69) (901) Undistributed income allocated to unvested restricted stock compensation (92) — — Numerator for basic and diluted income (loss) attributable to common stockholders $ 13,568 $ (417,588) $ 122,002 Denominator: Weighted average basic and diluted common shares outstanding 216,296 215,934 225,681 Basic and diluted income (loss) attributable to common stockholders per common share $ 0.06 $ (1.93) $ 0.54 |
Investment in Hotel Properties
Investment in Hotel Properties (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investment in Hotel Properties | |
Schedule of investment in hotel properties | Investment in hotel properties, net consisted of the following (in thousands): December 31, 2021 2020 Land $ 604,692 $ 571,212 Buildings and improvements 2,729,461 2,523,750 Furniture, fixtures and equipment 431,780 431,918 Intangible assets 42,689 21,192 Franchise fees 428 743 Construction in progress 41,260 15,831 Investment in hotel properties, gross 3,850,310 3,564,646 Accumulated depreciation and amortization (1,130,294) (1,103,148) Investment in hotel properties, net $ 2,720,016 $ 2,461,498 |
Schedule of intangible assets included in Investment in Hotel Properties | Intangible assets included in the Company’s investment in hotel properties, net consisted of the following (in thousands): December 31, 2021 2020 Element agreement (1) $ 18,436 $ 18,436 Airspace agreements (2) 1,916 1,795 Advance bookings (3) 221 — Residential program agreements (4) 21,038 — Trade names (5) 117 — Below market management agreement (6) 961 961 42,689 21,192 Accumulated amortization (891) (777) $ 41,798 $ 20,415 (1) The Element agreement as of both December 31, 2021 and 2020 included the exclusive perpetual rights to certain space at the Renaissance Washington DC. The Element has an indefinite useful life and is not amortized. (2) Airspace agreements as of both December 31, 2021 and 2020 consisted of dry slip agreements at the Oceans Edge Resort & Marina. The dry slips at the Oceans Edge Resort & Marina have indefinite useful lives and are not amortized. (3) Advance bookings as of December 31, 2021 consisted of advance deposits related to our acquisition of the Four Seasons Resort Napa Valley. As part of the purchase price allocation, the contractual advance hotel bookings were recorded at a discounted present value based on estimated collectability. They are amortized using the straight-line method over the periods the amounts are expected to be collected. The amortization expense for contractual advance hotel bookings is included in depreciation and amortization expense in the Company’s consolidated statements of operations. The advance bookings will be fully amortized in September 2022. (4) Residential program agreements as of December 31, 2021 included $13.7 million and $7.3 million at the Montage Healdsburg and the Four Seasons Resort Napa Valley, respectively. The value of the agreements were determined based on each hotel’s purchase price allocation. The agreements relate to the hotels’ residential rental programs, whereby owners of the adjacent separately owned Montage Residences Healdsburg and Four Seasons Private Residences Napa Valley will be eligible to participate in optional rental programs and have access to the hotels’ facilities. In addition, the agreements at the Montage Healdsburg include a social membership program. The residential program agreements will be amortized over the life of the related remaining 25-year Montage Healdsburg management agreement and 20-year Four Seasons Resort Napa Valley management agreement once the hotels begin to recognize revenue related to the programs. As of December 31, 2021, no revenue had been recognized. (5) Trade names as of December 31, 2021 included $0.1 million related to trademarks and bottle labeling used by the Elusa Winery at the Four Seasons Resort Napa Valley. The value of the trade names were determined as part of the hotel’s purchase price allocation. The trade names have indefinite useful lives and are not amortized. (6) The below market management agreement consists of an agreement at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. The agreement is amortized using the straight-line method over the remaining non-cancelable term, and will be fully amortized in December 2022. |
Disposals (Tables)
Disposals (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Held for sale, not considered a discontinued operation | |
Schedule of assets and liabilities held for sale | The Company classified the assets and liabilities of the Hyatt Centric Chicago Magnificent Mile as held for sale at December 31, 2021 as follows (in thousands): December 31, 2021 Accounts receivable, net $ 287 Prepaid expenses and other current assets 182 Investment in hotel properties, net 31,015 Finance lease right-of-use asset, net 44,712 Other assets, net 112 Assets held for sale, net $ 76,308 Accounts payable and accrued expenses $ 1,076 Accrued payroll and employee benefits 660 Other current liabilities 3,881 Finance lease obligation, less current portion 15,567 Other liabilities 4,029 Liabilities of assets held for sale $ 25,213 |
Sold, not considered a discontinued operation | |
Schedule of operating results for sold entities | Results of Operations – Disposed Hotels The following table provides summary results of operations for the hotels disposed of in 2021, 2020 and 2019, which are included in net income (loss) for their respective ownership periods (in thousands): 2021 2020 2019 Total revenues $ 15,046 $ 38,564 $ 181,595 (Loss) income before income taxes (1) $ (8,716) $ (58,597) $ 2,494 Gain on sale of assets $ 152,524 $ 34,298 $ 42,935 (1) (Loss) income before income taxes does not include the gain recognized on the hotel sales. |
2021 Disposals | Sold, not considered a discontinued operation | |
Schedule of proceeds and gain on sale of hotels | The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Westchester (1) $ 17,054 $ 3,733 Embassy Suites La Jolla 166,499 148,791 $ 183,553 $ 152,524 (1) During 2020, the Company wrote down the hotel’s assets and recorded an impairment loss of $18.7 million (see Note 5). |
2020 Disposals | Sold, not considered a discontinued operation | |
Schedule of proceeds and gain on sale of hotels | The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Harborplace (1) $ 76,855 $ 189 Renaissance Los Angeles Airport 89,882 34,109 $ 166,737 $ 34,298 (1) During 2020 and 2019, the Company wrote down the hotel’s assets and recorded impairment losses of $18.1 million and $24.7 million, respectively. (see Note 5). |
Fair Value Measurements and I_2
Fair Value Measurements and Interest Rate Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Measurements and Interest Rate Derivatives | |
Schedule of hotel impairment losses | The Company recorded the following impairment losses during 2021, 2020 and 2019, each of which is discussed below, as follows (in thousands): 2021 2020 2019 Hilton New Orleans St. Charles $ 2,685 $ — $ — Renaissance Harborplace — 18,100 24,713 Hilton Times Square — 107,857 — Renaissance Westchester — 18,685 — Abandoned development costs — 2,302 — $ 2,685 $ 146,944 $ 24,713 |
Schedule of assets measured at fair value on a recurring and nonrecurring basis | The following table presents the Company’s assets measured at fair value on a recurring and nonrecurring basis at December 31, 2021 and 2020 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 December 31, 2021: Interest rate cap derivative $ 3 $ — $ 3 $ — Total assets measured at fair value at December 31, 2021 $ 3 $ — $ 3 $ — December 31, 2020: Renaissance Westchester (1) $ 14,125 $ — $ 14,125 $ — Interest rate cap derivative — — — — Total assets measured at fair value at December 31, 2020 $ 14,125 $ — $ 14,125 $ — (1) The fair market value of the Renaissance Westchester is included in investment in hotel properties, net on the accompanying consolidated balance sheets at December 31, 2020. The Company sold the Renaissance Westchester in October 2021 (see Note 4). |
Schedule of liabilities measured at fair value on a recurring and nonrecurring basis | The following table presents the Company’s liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2021 and 2020 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 December 31, 2021: Interest rate swap derivatives $ 2,228 $ — $ 2,228 $ — Total liabilities measured at fair value at December 31, 2021 $ 2,228 $ — $ 2,228 $ — December 31, 2020: Interest rate swap derivatives $ 5,710 $ — $ 5,710 $ — Total liabilities measured at fair value at December 31, 2020 $ 5,710 $ — $ 5,710 $ — |
Schedule of interest rate derivatives | The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following at December 31, 2021 and 2020 (in thousands): Estimated Fair Value of Assets (Liabilities) (1) Strike / Capped Effective Maturity Notional December 31, Hedged Debt Type LIBOR Rate Index Date Date Amount 2021 2020 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2020 December 15, 2021 N/A $ N/A $ — Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2021 December 15, 2022 $ 220,000 3 N/A Term Loan 1 Swap 1.591 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ 85,000 (744) (2,100) Term Loan 2 Swap 1.853 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 (1,484) (3,610) $ (2,225) $ (5,710) (1) The fair values of the cap agreements are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets as of December 31, 2021 and 2020. The fair value of Term Loan 1’s swap agreement is included in other current liabilities on the accompanying consolidated balance sheets as of December 31, 2021 and in other liabilities as of December 31, 2020. The fair value of Term Loan 2’s swap agreement is included in other liabilities on the accompanying consolidated balance sheets as of both December 31, 2021 and 2020. |
Schedule of changes in fair value of interest rate derivatives | Noncash changes in the fair values of the Company’s interest rate derivatives resulted in (decreases) increases to interest expense for the years ended December 31, 2021, 2020 and 2019 as follows (in thousands): 2021 2020 2019 Noncash interest on derivatives $ (3,405) $ 4,740 $ 5,870 |
Schedule of principal values and estimated fair values of debt | The Company’s principal balances and fair market values of its consolidated debt as of December 31, 2021 and 2020 were as follows (in thousands): December 31, 2021 December 31, 2020 Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Debt $ 611,437 $ 590,359 $ 747,945 $ 715,042 (1) The principal balance of debt is presented before any unamortized deferred financing costs. (2) Due to prevailing market conditions and the uncertain economic environment caused by the COVID-19 pandemic, actual interest rates could vary materially from those estimated, which would result in variances in the Company’s calculations of the fair market value of its debt. |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets. | |
Schedule of other assets | Other assets, net consisted of the following (in thousands): December 31, 2021 2020 Property and equipment, net $ 5,912 $ 6,767 Deferred rent on straight-lined third-party tenant leases 2,455 2,819 Other receivables 3,914 2,633 Other 915 226 Total other assets, net $ 13,196 $ 12,445 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosures | |
Schedule of notes payable | Notes payable consisted of the following (in thousands): December 31, 2021 2020 Note payable requiring payments of interest only, bearing a blended rate of one-month LIBOR plus 105 basis points, resulting in effective interest rates of 1.140% and 1.192% at December 31, 2021 and 2020, respectively; matures on December 9, 2022 with one remaining one-year option to extend, which the Company intends to exercise. The note is collateralized by a first deed of trust on one hotel property. $ 220,000 $ 220,000 Note payable requiring payments of interest and principal, with a fixed rate of 4.15% ; matures on December 11, 2024 . The note is collateralized by a first deed of trust on one hotel property. 78,137 80,055 Note payable requiring payments of interest and principal, with a fixed rate of 4.12% ; scheduled maturity on January 6, 2025 , but loan was assigned to the hotel’s buyer in December 2021 upon sale of the hotel property securing the loan. — 57,890 Unsecured Term Loan 1 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points. LIBOR has been swapped to a fixed rate of 1.591% , resulting in an effective interest rate of 3.941% . Matures on September 3, 2022 . 19,400 85,000 Unsecured Term Loan 2 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points. LIBOR has been swapped to a fixed rate of 1.853% , resulting in an effective interest rate of 4.203% . Matures on January 31, 2023 . 88,900 100,000 Unsecured Series A Senior Notes requiring semi-annual payments of interest only, bearing interest at 5.94% . Matures on January 10, 2026 . 90,000 90,000 Unsecured Series B Senior Notes requiring semi-annual payments of interest only, bearing interest at 6.04% Matures on January 10, 2028 . 115,000 115,000 Total notes payable $ 611,437 $ 747,945 Current portion of notes payable $ 21,401 $ 3,305 Less: current portion of deferred financing costs (707) (1,044) Carrying value of current portion of notes payable $ 20,694 $ 2,261 Notes payable, less current portion $ 590,036 $ 744,640 Less: long-term portion of deferred financing costs (1,295) (2,112) Carrying value of notes payable, less current portion $ 588,741 $ 742,528 |
Schedule of aggregate future principal maturities and amortization of notes payable | Aggregate future principal maturities and amortization of notes payable at December 31, 2021, are as follows (in thousands): 2022 $ 21,401 (1) 2023 310,986 (1) 2024 74,050 2025 — 2026 90,000 Thereafter 115,000 Total $ 611,437 (1) Reflects the intended exercise of the remaining one-year option to extend the maturity date of the $220.0 million loan secured by the Hilton San Diego Bayfront from December 2022 to December 2023. |
Schedule of deferred financing costs and (loss) gain on extinguishment of debt | Deferred financing costs and (loss) gain on extinguishment of debt for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): 2021 (1) 2020 (2) 2019 Payments of deferred financing costs $ 397 $ 4,361 $ — (Loss) gain on extinguishment of debt, net $ (57) $ 6,146 $ — (1) During 2021, the Company paid a total of $0.4 million in deferred financing costs related to its 2021 Unsecured Debt Amendments. In addition, the Company recognized a net loss of $0.1 million, comprising a loss of $0.4 million related to the write-off of deferred financing costs associated with the assignment of the mortgage secured by the Embassy Suites La Jolla to the hotel’s buyer and the repayments of a portion of the term loans, partially offset by a gain of $0.3 million associated with the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder due to reassessments of the potential employee-related obligations currently held in escrow. (2) During 2020, the Company paid a total of $4.4 million in deferred financing costs related to the 2020 Unsecured Debt Amendments. In addition, the Company recognized a net gain on extinguishment of debt of $6.1 million, comprising a gain of $6.4 million related to the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder, partially offset by a loss of $0.2 million related to the Company’s repayment of a portion of the senior notes. |
Schedule of interest expense | Total interest incurred and expensed on the notes payable and finance lease obligations for the years ended December 31, 2021, 2020 and 2019 was as follows (in thousands): 2021 2020 2019 Interest expense on debt and finance lease obligation $ 31,378 $ 45,441 $ 45,381 Noncash interest on derivatives and finance lease obligations, net (3,405) 4,740 6,051 Amortization of deferred financing costs 2,925 3,126 2,791 Total interest expense $ 30,898 $ 53,307 $ 54,223 |
Other Current Liabilities and_2
Other Current Liabilities and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Current Liabilities and Other Liabilities | |
Schedule of other current liabilities | Other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Property, sales and use taxes payable $ 12,591 $ 10,134 Accrued interest 6,858 6,914 Advance deposits 33,750 13,341 Interest rate swap derivative 744 — Management fees payable 1,691 169 Other 3,250 2,048 Total other current liabilities $ 58,884 $ 32,606 |
Schedule of other liabilities | Other liabilities consisted of the following (in thousands): December 31, 2021 2020 Deferred revenue $ 6,598 $ 7,911 Interest rate swap derivative 1,484 5,710 Other 3,574 3,873 Total other liabilities $ 11,656 $ 17,494 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of supplemental balance sheet information related to leases | Leases were included on the Company’s consolidated balance sheet as follows (in thousands): December 31, December 31, 2021 2020 Finance Lease: Right-of-use asset, gross (buildings and improvements) $ — 58,799 Accumulated amortization — (12,617) Right-of-use asset, net (1) $ — $ 46,182 Accounts payable and accrued expenses $ — $ 1 Lease obligation, less current portion — 15,569 Total lease obligation (1) $ — $ 15,570 Operating Leases: Right-of-use assets, net $ 23,161 $ 26,093 Accounts payable and accrued expenses $ 5,586 $ 5,028 Lease obligations, less current portion 25,120 29,954 Total lease obligations $ 30,706 $ 34,982 Weighted average remaining lease term 33 years Weighted average discount rate 5.1 % (1) The finance lease right-of-use asset and related total lease obligation are for a building lease at the Hyatt Centric Chicago Magnificent Mile. The Company classified the hotel as held for sale as of December 31, 2021 (see Note 4). As such, the finance lease right-of-use asset and related total lease obligation are included in assets held for sale, net and liabilities of assets held for sale on the accompanying consolidated balance sheet as of December 31, 2021. |
Lease costs | The components of lease expense were as follows (in thousands): 2021 2020 2019 Finance lease cost: Amortization of right-of-use asset $ 1,470 $ 1,470 $ 1,470 Interest on lease obligations (1) 1,404 1,404 2,357 Operating lease cost (2) 5,457 9,300 6,914 Variable lease cost (3) 393 27 6,142 Total lease cost $ 8,724 $ 12,201 $ 16,883 (1) Interest on lease obligations for the year ended December 31, 2019 included interest expense of $1.0 million on the Courtyard by Marriott Los Angeles’s finance lease obligation before the hotel’s sale in October 2019 (see Note 4). (2) Prior to the Company’s December 2020 assignment-in-lieu agreement with the Hilton Times Square’s mortgage holder (see Notes 4 and 7), operating lease cost increased by $2.6 million in 2020 under the terms of the operating lease agreement based on 90% of the landlord’s estimate of the lease land’s fair value. (3) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. |
Summary of Future payments on leases, Finance lease | At December 31, 2021, future maturities of the Company’s finance and operating lease obligations were as follows (in thousands): Finance Lease (1) Operating Leases 2022 $ 1,403 $ 6,993 2023 1,403 7,047 2024 1,403 7,032 2025 1,403 6,959 2026 1,403 2,025 Thereafter 99,593 5,898 Total lease payments 106,608 35,954 Less: interest (2) (91,039) (5,248) Present value of lease obligations $ 15,569 $ 30,706 (1) Finance lease obligation relates to a building lease at the Hyatt Centric Chicago Magnificent Mile. The Company classified this hotel as held for sale as of December 31, 2021 due to its subsequent sale in February 2022. Upon the sale of the hotel in February 2022 (see Note 14), the Company is no longer obligated for this liability. (2) Calculated using the respective discount rate for each lease. |
Summary of Future payments on leases, Operating lease | Finance Lease (1) Operating Leases 2022 $ 1,403 $ 6,993 2023 1,403 7,047 2024 1,403 7,032 2025 1,403 6,959 2026 1,403 2,025 Thereafter 99,593 5,898 Total lease payments 106,608 35,954 Less: interest (2) (91,039) (5,248) Present value of lease obligations $ 15,569 $ 30,706 (1) Finance lease obligation relates to a building lease at the Hyatt Centric Chicago Magnificent Mile. The Company classified this hotel as held for sale as of December 31, 2021 due to its subsequent sale in February 2022. Upon the sale of the hotel in February 2022 (see Note 14), the Company is no longer obligated for this liability. (2) Calculated using the respective discount rate for each lease. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of deferred tax assets (liabilities) | The significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2021 2020 Deferred Tax Assets: Net operating loss carryforward $ 21,252 $ 20,406 Other reserves 526 761 State taxes and other 2,128 2,628 Depreciation 515 473 Total gross deferred tax assets 24,421 24,268 Deferred Tax Liabilities: Amortization (27) (34) Deferred revenue (51) (191) Other (47) (46) Total gross deferred tax liabilities (125) (271) Less: valuation allowance (24,296) (23,997) Deferred tax assets, net $ — $ — |
Schedule of income tax (provision) benefit, net | The Company’s income tax (provision) benefit, net was included in the consolidated statements of operations as follows (in thousands): 2021 2020 2019 Current: Federal $ — $ 817 $ 790 State (109) 8 49 Current income tax (provision) benefit, net (109) 825 839 Deferred: Federal 1,262 15,724 (1,112) State (963) 858 424 Change in valuation allowance (299) (23,997) — Deferred income tax provision, net — (7,415) (688) Income tax (provision) benefit, net $ (109) $ (6,590) $ 151 |
Schedule of effective income tax rate reconciliation | The differences between the income tax benefit (provision) calculated at the statutory U.S. federal income tax rate of 21% and the actual income tax (provision) benefit, net recorded for continuing operations were as follows (in thousands): 2021 2020 2019 Expected federal tax expense at statutory rate $ (7,226) $ (86,369) $ (29,955) Tax impact of REIT election 8,823 103,273 29,810 Expected tax benefit (provision) of TRS 1,597 16,904 (145) State income tax (provision) benefit, net of federal benefit (760) 678 335 Change in valuation allowance (299) (23,997) — Other permanent items (647) 645 562 Alternative minimum tax refund receivable — (820) (601) Income tax (provision) benefit, net $ (109) $ (6,590) $ 151 |
Schedule of characterization of distributions | Characterization of Distributions For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. For the years ended December 31, 2021, 2020 and 2019, distributions paid per share were characterized as follows (unaudited): 2021 2020 2019 Amount % Amount % Amount % Common Stock: Ordinary income (1) $ — — % $ 0.050 100 % $ 0.606 81.84 % Capital gain — — — — 0.134 18.16 Return of capital — — — — — — Total $ — — % $ 0.050 100 % $ 0.740 100 % Preferred Stock — Series E Ordinary income (1) $ 0.772 100 % $ 1.738 100 % $ 1.422 81.84 % Capital gain — — — — 0.316 18.16 Return of capital — — — — — — Total $ 0.772 100 % $ 1.738 100 % $ 1.738 100 % Preferred Stock — Series F Ordinary income (1) $ 0.990 100 % $ 1.613 100 % $ 1.320 81.84 % Capital gain — — — — 0.293 18.16 Return of capital — — — — — — Total $ 0.990 100 % $ 1.613 100 % $ 1.613 100 % Preferred Stock — Series G Ordinary income (1) $ 0.234 100 % $ — — % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.234 100 % $ — — % $ — — % Preferred Stock — Series H Ordinary income (1) $ 0.923 100 % $ — — % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.923 100 % $ — — % $ — — % Preferred Stock — Series I Ordinary income (1) $ 0.653 100 % $ — — % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.653 100 % $ — — % $ — — % (1) Ordinary income qualifies for Section 199A treatment per the 2017 Tax Cuts and Jobs Act (“TCJA”). |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Schedule of At the Market common stock issuances | During 2021, 2020 and 2019, details of the Company’s issuances of common stock under the ATM Agreements were as follows (dollars in thousands): 2021 2020 2019 Number of shares issued 2,913,682 — — Gross proceeds $ 38,443 $ — $ — |
Schedule of repurchases of common and preferred stock | During 2021, 2020 and 2019, details of the Company’s repurchases were as follows (dollars in thousands): 2021 2020 2019 Number of common shares repurchased — 9,770,081 3,783,936 Cost, including fees and commissions $ — $ 103,894 $ 50,088 Number of preferred shares repurchased (1) — — — (1) The redemptions of the Series E preferred stock and the Series F preferred stock in June 2021 and August 2021, respectively, were completed through separate authorizations by the Company’s board of directors. |
Schedule of dividends and distributions declared per share | The Company declared dividends and distributions per share on its preferred stock and common stock, respectively, during 2021, 2020 and 2019 as follows: 2021 2020 2019 Series E preferred stock $ 0.772222 $ 1.7375 $ 1.7375 Series F preferred stock $ 0.989896 $ 1.6125 $ 1.6125 Series G preferred stock $ 0.233685 $ — $ — Series H preferred stock $ 0.923004 $ — $ — Series I preferred stock $ 0.653125 $ — $ — Common stock $ — $ 0.0500 $ 0.7400 |
Long-Term Incentive Plan (Table
Long-Term Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Long-Term Incentive Plan | |
Schedule of amortization expense and forfeitures related to restricted shares | The Company’s amortization expense and forfeitures related to restricted shares for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands): 2021 2020 2019 Amortization expense, including forfeitures (1) $ 12,788 $ 9,576 $ 9,313 Capitalized compensation cost (2) $ 490 $ 412 $ 406 (1) In 2021, the Company recognized $1.1 million in amortization of deferred stock compensation expense related to the departure of its former Chief Executive Officer. (2) The Company capitalizes compensation costs related to restricted shares granted to certain employees whose work is directly related to the Company’s capital investment in hotels. |
Schedule of non-vested stock grant activity | The following is a summary of non-vested restricted stock grant activity: 2021 2020 2019 Weighted Weighted Weighted Average Average Average Shares Price Shares Price Shares Price Outstanding at beginning of year 1,336,836 $ 14.01 1,217,850 $ 14.88 1,177,760 $ 14.89 Granted 1,478,874 $ 11.55 852,601 $ 12.91 701,754 $ 14.35 Vested (1,116,989) $ 13.65 (691,111) $ 14.20 (657,732) $ 14.32 Forfeited (235,406) $ 11.81 (42,504) $ 14.05 (3,932) $ 15.48 Outstanding at end of year 1,463,315 $ 12.15 1,336,836 $ 14.01 1,217,850 $ 14.88 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Schedule of basic and incentive management fees | Total basic management and incentive management fees incurred by the Company during the years ended December 31, 2021, 2020 and 2019 were included in other property-level expenses on the Company’s consolidated statements of operations as follows (in thousands): 2021 2020 2019 Basic management fees $ 13,406 $ 7,095 $ 31,061 Incentive management fees 1,806 — 8,005 Total basic and incentive management fees $ 15,212 $ 7,095 $ 39,066 |
Schedule of license and franchise costs | Total license and franchise fees incurred by the Company during the years ended December 31, 2021, 2020 and 2019 were included in franchise costs on the Company’s consolidated statements of operations as follows (in thousands): 2021 2020 2019 Franchise assessments (1) $ 9,060 $ 5,998 $ 24,389 Franchise royalties (2) 2,294 1,062 7,876 Total franchise costs $ 11,354 $ 7,060 $ 32,265 (1) Includes advertising, reservation, and frequent guest program assessments. (2) Includes key money received from one of the Company’s franchisors, which the Company is amortizing over the term of the hotel’s franchise agreement. |
Schedule of hotel geographic concentration of risk | As of December 31, 2021, 10 of the 16 Hotels were geographically concentrated as follows: Percentage of Percentage of Total 2021 Number of Hotels Total Rooms Consolidated Revenue California 5 32 % 34 % Florida 2 12 % 13 % Hawaii 1 7 % 23 % Massachusetts 2 18 % 14 % |
Organization and Description _3
Organization and Description of Business (Details) - property | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Organization and Description of Business | ||
Number of hotels whose operations have been temporarily suspended due to COVID-19 | 14 | |
Sunstone Hotel Partnership, LLC | ||
Organization and Description of Business | ||
Controlling interest owned (as a percent) | 100.00% | |
Hotel owned by the Company | ||
Organization and Description of Business | ||
Number of hotels owned by the Company | 17 | |
Number of hotels managed by third parties | 17 | |
Hotel owned by the Company | Marriott | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 6 | |
Hotel owned by the Company | Crestline Hotels & Resorts | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 2 | |
Hotel owned by the Company | Interstate Hotels & Resorts, Inc | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 2 | |
Hotel owned by the Company | Davidson Hotels & Resorts | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 | |
Hotel owned by the Company | Four Seasons Hotels Limited | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 | |
Hotel owned by the Company | Highgate Hotels L.P. and an affiliate | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 | |
Hotel owned by the Company | Hilton Worldwide | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 | |
Hotel owned by the Company | Hyatt Corporation | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 | |
Hotel owned by the Company | Montage North America, LLC | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 | |
Hotel owned by the Company | Singh Hospitality, LLC | ||
Organization and Description of Business | ||
Number of hotels managed by third parties | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)property | Dec. 31, 2020USD ($)property | Dec. 31, 2019USD ($)property | |
Investments in Hotel Properties | |||
Impairment losses | $ 2,685 | $ 146,944 | $ 24,713 |
Assets Held for Sale | |||
Maximum time period for sale for classification of asset as held for sale | 12 months | ||
Number of hotels and/or other assets held for sale | property | 1 | 0 | |
Leases | |||
Leases Initial Maximum Term Not Recorded On Balance Sheet | 12 months | ||
Leases Initial Minimum Term Recorded Right Of Use Assets | 12 months | ||
Number of hotels with operating lease right-of-use asset impairment | property | 1 | ||
Revenue Recognition | |||
Trade receivables, net | $ 16,055 | $ 8,110 | |
Contract liabilities | 40,226 | 16,815 | |
Deferred revenue recognized | $ 2,200 | $ 10,200 | |
Entity that owns the Hilton San Diego Bayfront | |||
Stockholders' Equity Attributable to Noncontrolling Interest | |||
Noncontrolling interest percentage in Hilton San Diego Bayfront | 25.00% | 25.00% | 25.00% |
Franchise fees | Minimum | |||
Investments in Hotel Properties | |||
Estimated useful life | 14 years | ||
Franchise fees | Maximum | |||
Investments in Hotel Properties | |||
Estimated useful life | 20 years | ||
Buildings and improvements | Minimum | |||
Investments in Hotel Properties | |||
Estimated useful life for property, plant and equipment | 5 years | ||
Buildings and improvements | Maximum | |||
Investments in Hotel Properties | |||
Estimated useful life for property, plant and equipment | 40 years | ||
Furniture, fixtures and equipment | Minimum | |||
Investments in Hotel Properties | |||
Estimated useful life for property, plant and equipment | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
Investments in Hotel Properties | |||
Estimated useful life for property, plant and equipment | 12 years | ||
Impaired hotels | |||
Investments in Hotel Properties | |||
Number of hotels impaired | property | 3 | 1 | |
Hilton New Orleans St. Charles | |||
Investments in Hotel Properties | |||
Impairment losses | $ 2,685 | ||
Entity that owns the Hilton San Diego Bayfront | |||
Revenue Recognition | |||
Outstanding balance of secured debt | 220,000 | ||
Hilton Times Square | |||
Restricted Cash | |||
Restricted Cash | $ 10,400 | $ 11,600 | |
Investments in Hotel Properties | |||
Impairment losses | $ 107,857 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net income (loss) | $ 32,995 | $ (410,506) | $ 142,793 |
Loss (income) from consolidated joint venture attributable to noncontrolling interest | 1,303 | 5,817 | (7,060) |
Preferred stock dividends and redemption charges | (20,638) | (12,830) | (12,830) |
Distributions paid on unvested restricted stock compensation | (69) | (901) | |
Undistributed income allocated to unvested restricted stock compensation | (92) | ||
Numerator for basic and diluted income (loss) attributable to common stockholders | $ 13,568 | $ (417,588) | $ 122,002 |
Denominator: | |||
Weighted average basic and diluted common shares outstanding (in shares) | 216,296 | 215,934 | 225,681 |
Basic and diluted income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.06 | $ (1.93) | $ 0.54 |
Investment in Hotel Propertie_2
Investment in Hotel Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Investment in Hotel Properties | ||
Land | $ 604,692 | $ 571,212 |
Buildings and improvements | 2,729,461 | 2,523,750 |
Furniture, fixtures and equipment | 431,780 | 431,918 |
Intangible assets | 42,689 | 21,192 |
Franchise Fees | 428 | 743 |
Construction in progress | 41,260 | 15,831 |
Investment in hotel properties, gross | 3,850,310 | 3,564,646 |
Accumulated depreciation and amortization | (1,130,294) | (1,103,148) |
Investment in hotel properties, net | $ 2,720,016 | $ 2,461,498 |
Investment in Hotel Propertie_3
Investment in Hotel Properties - Acquisitions (Details) - 2021 asset acquisition member $ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2021USD ($)room | Apr. 30, 2021USD ($)roomshares | Dec. 31, 2021roomproperty | |
Asset Acquisition [Line Items] | |||
Number of hotels acquired | property | 2 | ||
Montage Healdsburg | |||
Asset Acquisition [Line Items] | |||
Number of rooms in acquired hotel | room | 130 | ||
Asset acquisition, consideration transferred | $ 265 | ||
Montage Healdsburg | Series G Cumulative Redeemable Preferred Stock | |||
Asset Acquisition [Line Items] | |||
Asset acquisition, consideration transferred, equity interest issued and issuable | $ 66.3 | ||
Number of shares of preferred stock issued (in shares) | shares | 2,650,000 | ||
Four Seasons Resort Napa Valley | |||
Asset Acquisition [Line Items] | |||
Number of rooms in acquired hotel | room | 85 | 85 | |
Asset acquisition, consideration transferred | $ 177.5 | ||
Four Seasons Resort Napa Valley | Senior unsecured revolving credit facility | |||
Asset Acquisition [Line Items] | |||
Proceeds from draw on revolving credit facility | $ 110 |
Investment in Hotel Propertie_4
Investment in Hotel Properties - Intangible Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 31, 2021 | Apr. 30, 2021 | Dec. 31, 2020 | |
Intangible Assets | |||
Intangible assets | $ 42,689 | $ 21,192 | |
Intangible assets included in hotel properties | |||
Intangible Assets | |||
Intangible assets | 42,689 | 21,192 | |
Accumulated amortization | (891) | (777) | |
Intangible assets, net | 41,798 | 20,415 | |
Renaissance Washington D.C. | Intangible assets included in hotel properties | Easement agreements | |||
Intangible Assets | |||
Element agreement, gross | 18,436 | 18,436 | |
Oceans Edge Resort & Marina | Intangible assets included in hotel properties | Ground/air lease agreements | |||
Intangible Assets | |||
Airspace agreements, gross | 1,916 | 1,795 | |
Napa/Sonoma Hotels Member | Intangible assets included in hotel properties | Residential program agreements | |||
Intangible Assets | |||
Residential program agreements, gross | 21,038 | ||
Four Seasons Resort Napa Valley | Residential program agreements | |||
Intangible Assets | |||
Finite-lived intangible assets acquired | $ 7,300 | ||
Estimated useful life for finite-lived intangible assets | 20 years | ||
Four Seasons Resort Napa Valley | Trade names | |||
Intangible Assets | |||
Indefinite-lived intangible assets acquired | $ 100 | ||
Four Seasons Resort Napa Valley | Intangible assets included in hotel properties | Advanced bookings | |||
Intangible Assets | |||
Advance bookings, gross | 221 | ||
Four Seasons Resort Napa Valley | Intangible assets included in hotel properties | Trade names | |||
Intangible Assets | |||
Trade names, gross | 117 | ||
Montage Healdsburg | Residential program agreements | |||
Intangible Assets | |||
Finite-lived intangible assets acquired | $ 13,700 | ||
Estimated useful life for finite-lived intangible assets | 25 years | ||
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Intangible assets included in hotel properties | Below-market management agreement | |||
Intangible Assets | |||
Below market management agreement, gross | $ 961 | $ 961 |
Disposals (Details)
Disposals (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Detail of Amounts Held for Sale | |||
Assets held for sale, net | $ 76,308 | ||
Finance lease obligation, less current portion | $ 15,569 | ||
Liabilities of assets held for sale | 25,213 | ||
Detail of Disposals | |||
Gain on sale of assets | 152,524 | 34,298 | $ 42,935 |
Impairment losses | 2,685 | 146,944 | 24,713 |
Held for sale, not considered a discontinued operation | Hyatt Centric Chicago Magnificent Mile | |||
Detail of Amounts Held for Sale | |||
Accounts receivable, net | 287 | ||
Prepaids and other current assets | 182 | ||
Investment in hotel properties, net | 31,015 | ||
Finance lease right-of-use asset | 44,712 | ||
Other assets, net | 112 | ||
Assets held for sale, net | 76,308 | ||
Accounts payable and accrued expenses | 1,076 | ||
Accrued payroll and employee benefits | 660 | ||
Other current liabilities | 3,881 | ||
Finance lease obligation, less current portion | 15,567 | ||
Other noncurrent liabilities | 4,029 | ||
Liabilities of assets held for sale | 25,213 | ||
Sold, not considered a discontinued operation | |||
Detail of Disposals | |||
Gain on sale of assets | 152,524 | 34,298 | 42,935 |
Total revenues | 15,046 | 38,564 | 181,595 |
(Loss) income before income taxes | (8,716) | (58,597) | 2,494 |
Sold, not considered a discontinued operation | 2021 Disposals | |||
Detail of Disposals | |||
Net proceeds received from sale | 183,553 | ||
Gain on sale of assets | 152,524 | ||
Sold, not considered a discontinued operation | Renaissance Westchester | |||
Detail of Disposals | |||
Net proceeds received from sale | 17,054 | ||
Gain on sale of assets | 3,733 | ||
Impairment losses | 18,700 | ||
Sold, not considered a discontinued operation | Embassy Suites La Jolla | |||
Detail of Disposals | |||
Net proceeds received from sale | 166,499 | ||
Gain on sale of assets | $ 148,791 | ||
Sold, not considered a discontinued operation | 2020 Disposals | |||
Detail of Disposals | |||
Net proceeds received from sale | 166,737 | ||
Gain on sale of assets | 34,298 | ||
Sold, not considered a discontinued operation | Renaissance Harborplace | |||
Detail of Disposals | |||
Net proceeds received from sale | 76,855 | ||
Gain on sale of assets | 189 | ||
Impairment losses | 18,100 | 24,700 | |
Sold, not considered a discontinued operation | Renaissance Los Angeles Airport | |||
Detail of Disposals | |||
Net proceeds received from sale | 89,882 | ||
Gain on sale of assets | $ 34,109 | ||
Sold, not considered a discontinued operation | Courtyard by Marriott Los Angeles | |||
Detail of Disposals | |||
Net proceeds received from sale | 49,500 | ||
Gain on sale of assets | $ 42,900 |
Fair Value Measurements and I_3
Fair Value Measurements and Interest Rate Derivatives - Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Asset Impairment Charges | |||
Impairment losses | $ 2,685 | $ 146,944 | $ 24,713 |
Hilton New Orleans St. Charles | |||
Asset Impairment Charges | |||
Impairment losses | 2,685 | ||
Renaissance Harborplace | |||
Asset Impairment Charges | |||
Impairment losses | 18,100 | 24,713 | |
Hilton Times Square | |||
Asset Impairment Charges | |||
Impairment losses | 107,857 | ||
Renaissance Westchester | |||
Asset Impairment Charges | |||
Impairment losses | 18,685 | ||
Abandoned hotel project | |||
Asset Impairment Charges | |||
Impairment losses | 2,302 | ||
Abandoned hotel project | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 2,300 | ||
Level 2 | |||
Assets: | |||
Total assets | 3 | 14,125 | |
Liabilities: | |||
Total liabilities | 2,228 | 5,710 | |
Level 2 | Interest Rate Cap Agreement | |||
Assets: | |||
Interest rate derivative assets | 3 | ||
Level 2 | Interest Rate Swap Agreement | |||
Liabilities: | |||
Interest rate derivative liabilities | 2,228 | 5,710 | |
Level 2 | Renaissance Harborplace | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 18,100 | ||
Level 2 | Renaissance Westchester | |||
Assets: | |||
Asset measured at fair value | 14,125 | ||
Level 2 | Renaissance Westchester | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 18,700 | ||
Level 3 | Renaissance Harborplace | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | $ 24,700 | ||
Level 3 | Hilton Times Square | |||
Asset Impairment Charges | |||
Impairment losses | 107,900 | ||
Level 3 | Hilton Times Square | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 89,400 | ||
Level 3 | Hilton Times Square | Operating Lease Right-Of-Use Asset | |||
Asset Impairment Charges | |||
Operating lease impairment loss | 18,500 | ||
Total at the end of the period | |||
Assets: | |||
Total assets | 3 | 14,125 | |
Liabilities: | |||
Total liabilities | 2,228 | 5,710 | |
Total at the end of the period | Interest Rate Cap Agreement | |||
Assets: | |||
Interest rate derivative assets | 3 | ||
Total at the end of the period | Interest Rate Swap Agreement | |||
Liabilities: | |||
Interest rate derivative liabilities | $ 2,228 | 5,710 | |
Total at the end of the period | Renaissance Westchester | |||
Assets: | |||
Asset measured at fair value | $ 14,125 |
Fair Value Measurements and I_4
Fair Value Measurements and Interest Rate Derivatives - Interest Rate Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest Rate Derivatives | |||
Payment for interest rate derivative | $ 80 | $ 111 | |
Noncash interest on derivatives | $ (3,405) | $ 4,740 | $ 5,870 |
Term loan #1 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.591% | 1.591% | |
Term loan #2 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |
Interest rate derivative agreements. | |||
Interest Rate Derivatives | |||
Fair value of interest rate derivatives, net | $ (2,225) | $ (5,710) | |
Interest Rate Cap Agreement | Not designated as hedging instrument | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||
Interest Rate Derivatives | |||
Strike rate under interest rate cap agreement | 6.00% | ||
Interest rate, description of reference rate | one-month LIBOR | ||
Interest rate derivative effective date | Dec. 9, 2020 | ||
Interest rate derivative maturity date | Dec. 15, 2021 | ||
Hilton San Diego Bayfront new interest rate cap | Not designated as hedging instrument | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||
Interest Rate Derivatives | |||
Strike rate under interest rate cap agreement | 6.00% | ||
Interest rate, description of reference rate | one-month LIBOR | ||
Interest rate derivative effective date | Dec. 9, 2021 | ||
Interest rate derivative maturity date | Dec. 15, 2022 | ||
Notional amount | $ 220,000 | ||
Fair value of interest rate derivatives, net | $ 3 | ||
Interest Rate Swap Agreement | Not designated as hedging instrument | Term loan #1 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.591% | 1.591% | |
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Interest rate derivative effective date | Oct. 29, 2015 | Oct. 29, 2015 | |
Interest rate derivative maturity date | Sep. 2, 2022 | Sep. 2, 2022 | |
Notional amount | $ 85,000 | ||
Fair value of interest rate derivatives, net | $ (744) | $ (2,100) | |
Interest Rate Swap Agreement | Not designated as hedging instrument | Term loan #2 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Interest rate derivative effective date | Jan. 29, 2016 | Jan. 29, 2016 | |
Interest rate derivative maturity date | Jan. 31, 2023 | Jan. 31, 2023 | |
Notional amount | $ 100,000 | ||
Fair value of interest rate derivatives, net | $ (1,484) | $ (3,610) |
Fair Value Measurements and I_5
Fair Value Measurements and Interest Rate Derivatives - Fair Value of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Percentage of Debt Bearing Fixed Interest Rates | 64.00% | 70.60% |
Total notes payable | $ 611,437 | $ 747,945 |
Level 3 | ||
Fair value of debt | $ 590,359 | $ 715,042 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other assets, net | ||
Property and equipment, net | $ 5,912 | $ 6,767 |
Deferred rent on straight-lined third-party tenant leases | 2,455 | 2,819 |
Other receivables | 3,914 | 2,633 |
Other | 915 | 226 |
Total other assets, net | $ 13,196 | $ 12,445 |
Notes Payable (Details)
Notes Payable (Details) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2020 | Dec. 31, 2021USD ($)property | Dec. 31, 2020USD ($)property | |
Notes Payable | |||
Total notes payable | $ 611,437,000 | $ 747,945,000 | |
Current portion of notes payable | 21,401,000 | 3,305,000 | |
Less: current portion of deferred financing costs | (707,000) | (1,044,000) | |
Current portion of notes payable, net | 20,694,000 | 2,261,000 | |
Notes payable, less current portion | 590,036,000 | 744,640,000 | |
Less: long-term portion of deferred financing costs | (1,295,000) | (2,112,000) | |
Carrying value of notes payable, less current portion | 588,741,000 | 742,528,000 | |
Aggregate Future Principal Maturities and Amortization of Notes Payable | |||
2022 | 21,401,000 | ||
2023 | 310,986,000 | ||
2024 | 74,050,000 | ||
2025 | 0 | ||
2026 | 90,000,000 | ||
Thereafter | 115,000,000 | ||
Total | 611,437,000 | ||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||
Notes Payable | |||
Outstanding balance of secured debt | $ 220,000,000 | $ 220,000,000 | |
Interest rate added to base rate (as a percent) | 1.05% | 1.05% | |
Total interest rate, including effect of derivative | 1.14% | 1.192% | |
Debt maturity date | Dec. 9, 2022 | Dec. 9, 2022 | |
Number of hotels provided as collateral | property | 1 | 1 | |
Number of extension periods available for secured debt | 1 | ||
Term of extension period for secured debt | 1 year | ||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | Not designated as hedging instrument | Interest Rate Cap Agreement | |||
Notes Payable | |||
Interest rate, description of reference rate | one-month LIBOR | ||
JW Marriott New Orleans Mortgage | |||
Notes Payable | |||
Outstanding balance of secured debt | $ 78,137,000 | $ 80,055,000 | |
Debt maturity date | Dec. 11, 2024 | Dec. 11, 2024 | |
Number of hotels provided as collateral | 1 | 1 | |
Fixed interest rate (as a percent) | 4.15% | 4.15% | |
Embassy Suites La Jolla Mortgage | |||
Notes Payable | |||
Outstanding balance of secured debt | $ 57,890,000 | ||
Debt maturity date | Jan. 6, 2025 | ||
Fixed interest rate (as a percent) | 4.12% | ||
Term loan #1 | |||
Notes Payable | |||
Total interest rate, including effect of derivative | 3.941% | 3.941% | |
Debt maturity date | Sep. 3, 2022 | Sep. 3, 2022 | |
Outstanding balance of unsecured debt | $ 19,400,000 | $ 85,000,000 | |
Fixed rate under interest rate swap agreement | 1.591% | 1.591% | |
Term loan #1 | Not designated as hedging instrument | Interest Rate Swap Agreement | |||
Notes Payable | |||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Fixed rate under interest rate swap agreement | 1.591% | 1.591% | |
Term loan #1 | Minimum | |||
Notes Payable | |||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |
Term loan #1 | Minimum | Base Rate | |||
Notes Payable | |||
Debt instrument variable rate floor | 0.25% | 0.25% | |
Term loan #1 | Maximum | |||
Notes Payable | |||
Interest rate added to base rate (as a percent) | 2.20% | 2.20% | |
Term loan #2 | |||
Notes Payable | |||
Total interest rate, including effect of derivative | 4.203% | 4.203% | |
Debt maturity date | Jan. 31, 2023 | Jan. 31, 2023 | |
Outstanding balance of unsecured debt | $ 88,900,000 | $ 100,000,000 | |
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |
Term loan #2 | Not designated as hedging instrument | Interest Rate Swap Agreement | |||
Notes Payable | |||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |
Term loan #2 | Minimum | |||
Notes Payable | |||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |
Term loan #2 | Minimum | Base Rate | |||
Notes Payable | |||
Debt instrument variable rate floor | 0.25% | 0.25% | |
Term loan #2 | Maximum | |||
Notes Payable | |||
Interest rate added to base rate (as a percent) | 2.20% | 2.20% | |
Series A Senior Notes | |||
Notes Payable | |||
Debt maturity date | Jan. 10, 2026 | Jan. 10, 2026 | |
Fixed interest rate (as a percent) | 5.94% | 5.94% | |
Outstanding balance of unsecured debt | $ 90,000,000 | $ 90,000,000 | |
Series B Senior Notes | |||
Notes Payable | |||
Debt maturity date | Jan. 10, 2028 | Jan. 10, 2028 | |
Fixed interest rate (as a percent) | 6.04% | 6.04% | |
Outstanding balance of unsecured debt | $ 115,000,000 | $ 115,000,000 | |
Senior unsecured revolving credit facility | Unsecured Term Loans | |||
Notes Payable | |||
Debt instrument variable rate floor | 0.25% |
Notes Payable - 2021 Transactio
Notes Payable - 2021 Transactions (Details) | Dec. 31, 2021USD ($) | Aug. 28, 2020USD ($) | Aug. 11, 2020USD ($) | Dec. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2022 |
Debt Instruments [Line Items] | |||||||||||
Payment for interest rate derivative | $ 80,000 | $ 111,000 | |||||||||
Unsecured Debt | |||||||||||
Proceeds from credit facility | 110,000,000 | 300,000,000 | |||||||||
Payments on credit facility | 110,000,000 | 300,000,000 | |||||||||
Embassy Suites La Jolla Mortgage | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Outstanding balance of secured debt | 57,890,000 | ||||||||||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Outstanding balance of secured debt | $ 220,000,000 | $ 220,000,000 | $ 220,000,000 | $ 220,000,000 | $ 220,000,000 | ||||||
Total interest rate, including effect of derivative | 1.14% | 1.14% | 1.14% | 1.14% | 1.192% | ||||||
Unsecured Term Loans | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Write-off of deferred financing costs | $ 300,000 | ||||||||||
Unsecured Debt | |||||||||||
Number of extension periods for unsecured debt | 1 | 1 | 1 | 1 | |||||||
Term of extension period for unsecured debt | 12 months | ||||||||||
Debt extension fee percentage | 0.15% | 0.15% | 0.15% | 0.15% | |||||||
Write-off of deferred financing costs | $ 300,000 | ||||||||||
Term loan #1 | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Total interest rate, including effect of derivative | 3.941% | 3.941% | 3.941% | 3.941% | 3.941% | ||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | $ 65,600,000 | ||||||||||
Outstanding balance of unsecured debt | $ 19,400,000 | $ 19,400,000 | $ 19,400,000 | $ 19,400,000 | $ 85,000,000 | ||||||
Term loan #2 | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Total interest rate, including effect of derivative | 4.203% | 4.203% | 4.203% | 4.203% | 4.203% | ||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | $ 11,100,000 | ||||||||||
Outstanding balance of unsecured debt | $ 88,900,000 | 88,900,000 | $ 88,900,000 | $ 88,900,000 | $ 100,000,000 | ||||||
Senior Notes | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Write-off of deferred financing costs | $ 200,000 | 200,000 | |||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | 35,000,000 | ||||||||||
Write-off of deferred financing costs | 200,000 | 200,000 | |||||||||
Series A Senior Notes | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | 30,000,000 | ||||||||||
Outstanding balance of unsecured debt | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | ||||||
Series B Senior Notes | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | $ 5,000,000 | ||||||||||
Outstanding balance of unsecured debt | 115,000,000 | 115,000,000 | 115,000,000 | 115,000,000 | $ 115,000,000 | ||||||
Senior unsecured revolving credit facility | |||||||||||
Unsecured Debt | |||||||||||
Proceeds from credit facility | $ 300,000,000 | 110,000,000 | |||||||||
Payments on credit facility | $ 11,200,000 | $ 38,800,000 | 110,000,000 | $ 250,000,000 | |||||||
Outstanding indebtedness under credit facility | 0 | 0 | 0 | 0 | |||||||
Remaining borrowing capacity available | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | |||||||
Credit facility expiration date | Apr. 14, 2023 | ||||||||||
Number of extension periods for unsecured debt | 2 | 2 | 2 | 2 | |||||||
Term of extension period for unsecured debt | 6 months | ||||||||||
Credit facility expiration date after extensions | Apr. 14, 2024 | ||||||||||
Secured debt | Embassy Suites La Jolla Mortgage | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Assignment of loan in connection with disposition of hotel | $ 56,600,000 | ||||||||||
Write-off of deferred financing costs | 100,000 | $ 400,000 | |||||||||
Unsecured Debt | |||||||||||
Write-off of deferred financing costs | 100,000 | 400,000 | |||||||||
Secured debt | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Outstanding balance of secured debt | $ 220,000,000 | 220,000,000 | $ 220,000,000 | 220,000,000 | |||||||
Unsecured Debt | Minimum | |||||||||||
Unsecured Debt | |||||||||||
Fixed charge coverage ratio | 1 | ||||||||||
Debt covenant financial floor | $ 0 | ||||||||||
Hilton San Diego Bayfront new interest rate cap | Secured debt | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||||||
Debt Instruments [Line Items] | |||||||||||
Payment for interest rate derivative | $ 100,000 | ||||||||||
Total interest rate, including effect of derivative | 6.00% | 6.00% | 6.00% | 6.00% |
Notes Payable - 2020 Transactio
Notes Payable - 2020 Transactions (Details) $ in Thousands | Aug. 28, 2020USD ($) | Aug. 11, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2022 | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2022USD ($) |
Debt Instruments [Line Items] | ||||||||||||
Payment for interest rate derivative | $ 80 | $ 111 | ||||||||||
Extinguishment of Debt Disclosures [Abstract] | ||||||||||||
Payments of debt extinguishment costs | 27,975 | |||||||||||
Gain (loss) on extinguishment of debt | (57) | 6,146 | ||||||||||
Unsecured Debt | ||||||||||||
Proceeds from credit facility | 110,000 | 300,000 | ||||||||||
Payments on credit facility | 110,000 | 300,000 | ||||||||||
Hilton Times Square Mortgage | ||||||||||||
Extinguishment of Debt Disclosures [Abstract] | ||||||||||||
Extinguishment of Debt, Amount | $ 77,200 | |||||||||||
Payments of debt extinguishment costs | 20,000 | |||||||||||
Payment concessions upon extinguishment of debt - restricted cash | 3,200 | |||||||||||
Payment concessions upon extinguishment of debt - unrestricted cash | 800 | |||||||||||
Write-off of accrued liabilities in connection with extinguishment of debt | 22,200 | |||||||||||
Gain (loss) on extinguishment of debt | 6,400 | |||||||||||
Loss contingency accrued balance | 11,600 | $ 11,600 | ||||||||||
Senior unsecured revolving credit facility | ||||||||||||
Unsecured Debt | ||||||||||||
Proceeds from credit facility | $ 300,000 | $ 110,000 | ||||||||||
Payments on credit facility | $ 11,200 | $ 38,800 | $ 110,000 | $ 250,000 | ||||||||
Debt instrument basis spread on variable rate during covenant relief period | 2.40% | |||||||||||
Renaissance Washington DC Mortgage | ||||||||||||
Debt Instruments [Line Items] | ||||||||||||
Repayment of mortgage debt | $ 107,900 | |||||||||||
Unsecured Term Loans | ||||||||||||
Debt Instruments [Line Items] | ||||||||||||
Write-off of deferred financing costs | 300 | |||||||||||
Unsecured Debt | ||||||||||||
Write-off of deferred financing costs | $ 300 | |||||||||||
Debt instrument basis spread on variable rate during covenant relief period | 2.35% | |||||||||||
Unsecured Term Loans | Senior unsecured revolving credit facility | ||||||||||||
Unsecured Debt | ||||||||||||
Debt Covenant Preferred Stock Authorization | $ 200,000 | |||||||||||
Debt Covenant Cash Available For Acquisitions | $ 250,000 | |||||||||||
Debt covenant cash available for capital improvements | $ 100,000 | |||||||||||
Debt instrument basis addition to spread rate | 0.15% | |||||||||||
Minimum liquidity required due to debt covenants | $ 180,000 | |||||||||||
Term loan #1 | ||||||||||||
Debt Instruments [Line Items] | ||||||||||||
Total interest rate, including effect of derivative | 3.941% | 3.941% | 3.941% | 3.941% | 3.941% | |||||||
Unsecured Debt | ||||||||||||
Payments on unsecured debt | $ 65,600 | |||||||||||
Outstanding balance of unsecured debt | $ 19,400 | $ 85,000 | $ 19,400 | $ 19,400 | $ 85,000 | |||||||
Term loan #2 | ||||||||||||
Debt Instruments [Line Items] | ||||||||||||
Total interest rate, including effect of derivative | 4.203% | 4.203% | 4.203% | 4.203% | 4.203% | |||||||
Unsecured Debt | ||||||||||||
Payments on unsecured debt | $ 11,100 | |||||||||||
Outstanding balance of unsecured debt | 88,900 | $ 100,000 | $ 88,900 | $ 88,900 | $ 100,000 | |||||||
Senior Notes | ||||||||||||
Debt Instruments [Line Items] | ||||||||||||
Write-off of deferred financing costs | $ 200 | 200 | ||||||||||
Unsecured Debt | ||||||||||||
Payments on unsecured debt | 35,000 | |||||||||||
Write-off of deferred financing costs | 200 | 200 | ||||||||||
Increase (decrease) in interest rate (as a percent) | (0.25%) | 1.25% | ||||||||||
Increase in interest rate due to maximum leverage ratio (as a percent) | 1.00% | |||||||||||
Increase in interest rate due to elevated leverage ratio (as a percent) | 0.75% | |||||||||||
Senior Notes | Minimum | ||||||||||||
Unsecured Debt | ||||||||||||
Leverage ratio | 5 | 5 | ||||||||||
Senior Notes | Maximum | ||||||||||||
Unsecured Debt | ||||||||||||
Leverage ratio | 6.50 | |||||||||||
Series A Senior Notes | ||||||||||||
Unsecured Debt | ||||||||||||
Payments on unsecured debt | 30,000 | |||||||||||
Outstanding balance of unsecured debt | 90,000 | 90,000 | 90,000 | $ 90,000 | 90,000 | |||||||
Series B Senior Notes | ||||||||||||
Unsecured Debt | ||||||||||||
Payments on unsecured debt | $ 5,000 | |||||||||||
Outstanding balance of unsecured debt | $ 115,000 | $ 115,000 | $ 115,000 | $ 115,000 | $ 115,000 |
Notes Payable - Deferred Financ
Notes Payable - Deferred Financing Costs and Interest Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Payments of deferred financing costs | $ 397 | $ 4,361 | |||
Loss (gain) on extinguishment of debt, net | 57 | (6,146) | |||
Interest Expense | |||||
Noncash interest on derivatives and finance lease obligations, net | (3,405) | 4,740 | $ 6,051 | ||
Amortization of deferred financing costs | 2,925 | 3,126 | 2,791 | ||
Total interest expense | 30,898 | 53,307 | 54,223 | ||
Notes payable. | |||||
Interest Expense | |||||
Interest expense on debt and finance lease obligation | 31,378 | 45,441 | 45,381 | ||
Noncash interest on derivatives and finance lease obligations, net | (3,405) | 4,740 | 6,051 | ||
Amortization of deferred financing costs | 2,925 | 3,126 | 2,791 | ||
Total interest expense | 30,898 | 53,307 | $ 54,223 | ||
Embassy Suites La Jolla Mortgage, Term Loans and Hilton Times Square Mortgage | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Loss (gain) on extinguishment of debt, net | 100 | ||||
Hilton Times Square Mortgage and Senior Notes | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Loss (gain) on extinguishment of debt, net | (6,100) | ||||
Unsecured Term Loans | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Write-off of deferred financing costs | $ 300 | ||||
Senior Notes | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Write-off of deferred financing costs | $ 200 | 200 | |||
Senior unsecured revolving credit facility | Unsecured Debt | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Payments of deferred financing costs | 400 | ||||
Senior unsecured revolving credit facility | Unsecured Term Loans | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Payments of deferred financing costs | 4,400 | ||||
Secured debt | Embassy Suites La Jolla Mortgage | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Write-off of deferred financing costs | $ 100 | 400 | |||
Secured debt | Hilton Times Square Mortgage | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Loss (gain) on extinguishment of debt, net | $ (300) | $ (6,400) |
Other Current Liabilities and_3
Other Current Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other Current Liabilities | ||
Property, sales and use taxes payable | $ 12,591 | $ 10,134 |
Accrued interest | 6,858 | 6,914 |
Advance deposits | 33,750 | 13,341 |
Interest rate swap derivative, current | 744 | |
Management fees payable | 1,691 | 169 |
Other | 3,250 | 2,048 |
Total other current liabilities | 58,884 | 32,606 |
Other Liabilities | ||
Deferred revenue | 6,598 | 7,911 |
Interest rate swap derivative, noncurrent | 1,484 | 5,710 |
Other | 3,574 | 3,873 |
Total other liabilities | $ 11,656 | $ 17,494 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Finance Lease | ||
Finance lease right-of-use asset, net | $ 46,182 | |
Finance lease obligation, current | $ 1 | |
Accounts payable and accrued expenses | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent | |
Finance lease obligation, less current portion | $ 15,569 | |
Total finance lease obligation | 15,570 | $ 15,569 |
Operating Leases | ||
Operating lease right-of-use assets, net | 26,093 | 23,161 |
Operating lease obligations, current | $ 5,028 | $ 5,586 |
Accounts payable and accrued expenses | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent |
Operating lease obligations, less current portion | $ 29,954 | $ 25,120 |
Total operating lease obligations | 34,982 | $ 30,706 |
Weighted average remaining operating lease term | 33 years | |
Weighted average operating lease discount rate | 5.10% | |
Buildings and improvements | ||
Finance Lease | ||
Finance lease, right-of-use asset, gross | 58,799 | |
Finance lease, right-of-use asset, accumulated amortization | (12,617) | |
Finance lease right-of-use asset, net | 46,182 | |
Operating lease | Hilton Times Square | ||
Operating Leases | ||
Assignment of lease right-of-use asset in connection with disposition of hotel | (12,518) | |
Assignment of lease obligation in connection with disposition of hotel | $ (14,695) |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Cost | |||
Amortization of right-of-use asset | $ 1,470 | $ 1,470 | $ 1,470 |
Interest on lease obligation | 1,404 | 1,404 | 2,357 |
Operating lease cost | 5,457 | 9,300 | 6,914 |
Variable lease cost | 393 | 27 | 6,142 |
Total lease cost | $ 8,724 | 12,201 | 16,883 |
Courtyard by Marriott Los Angeles | |||
Lease Cost | |||
Interest on lease obligation | $ 1,000 | ||
Hilton Times Square | |||
Lease Cost | |||
Operating lease cost | $ 2,600 |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finance Lease | ||
2022 | $ 1,403 | |
2023 | 1,403 | |
2024 | 1,403 | |
2025 | 1,403 | |
2026 | 1,403 | |
Thereafter | 99,593 | |
Total lease payments | 106,608 | |
Less: interest | (91,039) | |
Present value of lease obligations | 15,569 | $ 15,570 |
Operating Leases | ||
2022 | 6,993 | |
2023 | 7,047 | |
2024 | 7,032 | |
2025 | 6,959 | |
2026 | 2,025 | |
Thereafter | 5,898 | |
Total lease payments | 35,954 | |
Less: interest | (5,248) | |
Present value of lease obligations | $ 30,706 | $ 34,982 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets | |||
Net operating loss carryforward | $ 21,252 | $ 20,406 | |
Other reserves | 526 | 761 | |
State taxes and other | 2,128 | 2,628 | |
Depreciation | 515 | 473 | |
Total gross deferred tax assets | 24,421 | 24,268 | |
Deferred tax liabilities | |||
Amortization | (27) | (34) | |
Deferred revenue | (51) | (191) | |
Other | (47) | (46) | |
Total gross deferred tax liabilities | (125) | (271) | |
Valuation allowance | (24,296) | (23,997) | |
Deferred tax assets, net | |||
Net operating loss carryforwards for federal income tax purposes | 97,400 | 89,600 | |
Current income tax (provision) benefit, net: | |||
Federal | 817 | $ 790 | |
State and Local tax | (109) | 8 | 49 |
Current income tax (provision) benefit, net | (109) | 825 | 839 |
Deferred income tax provision, net: | |||
Federal | 1,262 | 15,724 | (1,112) |
State | (963) | 858 | 424 |
Change in valuation allowance | (299) | (23,997) | |
Deferred income tax provision, net | (7,415) | (688) | |
Income tax (provision) benefit, net | $ (109) | $ (6,590) | $ 151 |
Corporate tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
Effective Income Tax Rate Reconciliation, Amount | |||
Expected federal tax expense at statutory rate | $ (7,226) | $ (86,369) | $ (29,955) |
Tax impact of REIT election | 8,823 | 103,273 | 29,810 |
Expected tax benefit (provision) of TRS | 1,597 | 16,904 | (145) |
State income tax (provision) benefit, net of federal benefit | (760) | 678 | 335 |
Change in valuation allowance | (299) | (23,997) | |
Other permanent items | (647) | 645 | 562 |
Alternative minimum tax refund receivable | (820) | (601) | |
Income tax (provision) benefit, net | $ (109) | $ (6,590) | $ 151 |
Income Taxes - Characterization
Income Taxes - Characterization of Distributions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Common Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.050 | $ 0.606 | |
Capital gain (in dollars per share) | 0.134 | ||
Total (in dollars per share) | $ 0.050 | $ 0.740 | |
Ordinary income (as a percent) | 100.00% | 81.84% | |
Capital gain (as a percent) | 18.16% | ||
Total (as a percent) | 100.00% | 100.00% | |
Series E Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.772 | $ 1.738 | $ 1.422 |
Capital gain (in dollars per share) | 0.316 | ||
Total (in dollars per share) | $ 0.772 | $ 1.738 | $ 1.738 |
Ordinary income (as a percent) | 100.00% | 100.00% | 81.84% |
Capital gain (as a percent) | 18.16% | ||
Total (as a percent) | 100.00% | 100.00% | 100.00% |
Series F Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.990 | $ 1.613 | $ 1.320 |
Capital gain (in dollars per share) | 0.293 | ||
Total (in dollars per share) | $ 0.990 | $ 1.613 | $ 1.613 |
Ordinary income (as a percent) | 100.00% | 100.00% | 81.84% |
Capital gain (as a percent) | 18.16% | ||
Total (as a percent) | 100.00% | 100.00% | 100.00% |
Series G Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.234 | ||
Total (in dollars per share) | $ 0.234 | ||
Ordinary income (as a percent) | 100.00% | ||
Total (as a percent) | 100.00% | ||
Series H Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.923 | ||
Total (in dollars per share) | $ 0.923 | ||
Ordinary income (as a percent) | 100.00% | ||
Total (as a percent) | 100.00% | ||
Series I Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.653 | ||
Total (in dollars per share) | $ 0.653 | ||
Ordinary income (as a percent) | 100.00% | ||
Total (as a percent) | 100.00% |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 12, 2021 | Jun. 11, 2021 | Jul. 31, 2021 | May 31, 2021 | Apr. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Stockholders' equity | |||||||
Preferred stock redemption charges | $ 6,640 | ||||||
Series E Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Number of shares redeemed (in shares) | 4,600,000 | ||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.95% | 6.95% | |||||
Redemption price (in dollars per share) | $ 25 | ||||||
Preferred stock redemption charges | $ 4,000 | ||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 0 | 0 | 4,600,000 | ||||
Liquidation preference (in dollars per share) | $ 25 | ||||||
Series F Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Number of shares redeemed (in shares) | 3,000,000 | ||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.45% | 6.45% | |||||
Redemption price (in dollars per share) | $ 25 | ||||||
Preferred stock redemption charges | $ 2,600 | ||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 0 | 0 | 3,000,000 | ||||
Liquidation preference (in dollars per share) | $ 25 | ||||||
Series G Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 2,650,000 | 0 | |||||
Liquidation preference (in dollars per share) | $ 25 | ||||||
Series G Cumulative Redeemable Preferred Stock | Montage Healdsburg | |||||||
Stockholders' equity | |||||||
Redemption price (in dollars per share) | $ 25 | ||||||
Number of shares of preferred stock issued (in shares) | 2,650,000 | ||||||
Series H Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.125% | 6.125% | |||||
Redemption price (in dollars per share) | $ 25 | ||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 0 | |||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | ||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | |||||
Series I Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 5.70% | 5.70% | |||||
Redemption price (in dollars per share) | $ 25 | ||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 0 | |||||
Number of shares of preferred stock issued (in shares) | 4,000,000 | ||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | |||||
Preferred Stock | Series E Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Number of shares redeemed (in shares) | (4,600,000) | ||||||
Preferred Stock | Series F Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Number of shares redeemed (in shares) | (3,000,000) | ||||||
Preferred Stock | Series H Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | ||||||
Preferred Stock | Series I Cumulative Redeemable Preferred Stock | |||||||
Stockholders' equity | |||||||
Number of shares of preferred stock issued (in shares) | 4,000,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2017 | |
Stockholders' equity | ||||||
Proceeds from issuance of common stock | $ 38,443 | |||||
Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Repurchase Program, remaining authorized capacity | 500,000 | |||||
Maximum | Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Stock Repurchase Program, maximum amount authorized for repurchase | $ 500,000 | $ 500,000 | $ 300,000 | |||
Common Stock | ||||||
Stockholders' equity | ||||||
Payment of stock offering costs | 784 | |||||
Common Stock | Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Repurchase Program, number of shares repurchased (in shares) | 9,770,081 | 3,783,936 | ||||
Repurchase Program, value of shares repurchased | $ 103,894 | $ 50,088 | ||||
Common Stock | At The Market | ||||||
Stockholders' equity | ||||||
Proceeds from issuance of common stock | $ 38,443 | |||||
ATM Program, number of shares sold or issued (in shares) | 2,913,682 | |||||
ATM Program, remaining amount authorized for issuance | $ 137,000 | |||||
Common Stock | Maximum | At The Market | ||||||
Stockholders' equity | ||||||
ATM Program, maximum amount authorized for issuance | $ 300,000 | $ 300,000 | ||||
Preferred Stock | ||||||
Stockholders' equity | ||||||
Payment of stock offering costs | $ 7,287 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Dividends | |||
Common stock dividends declared (in dollars per share) | $ 0.05 | $ 0.74 | |
Series E Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.772222 | 1.7375 | 1.7375 |
Series F Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.989896 | 1.6125 | 1.6125 |
Series G Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.233685 | ||
Series H Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.923004 | ||
Series I Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.653125 | ||
Common Stock | |||
Dividends | |||
Common stock dividends declared (in dollars per share) | $ 0.0500 | $ 0.7400 |
Long-Term Incentive Plan (Detai
Long-Term Incentive Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Compensation Expense and Forfeitures | |||
Capitalized compensation cost related to shares issued to design and construction employees | $ 490 | $ 412 | $ 406 |
Restricted Shares and Performance awards | |||
Long-Term Incentive Plan | |||
Number of common shares reserved for issuance under LTIP (in shares) | 12,050,000 | ||
Number of shares available for future issuance (in shares) | 1,668,397 | ||
Vesting period | 3 years | ||
Compensation Expense and Forfeitures | |||
Amortization Expense, including forfeitures | $ 12,788 | 9,576 | 9,313 |
Capitalized compensation cost related to shares issued to design and construction employees | $ 490 | $ 412 | $ 406 |
Non-Vested Stock Grants, Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 1,336,836 | 1,217,850 | 1,177,760 |
Granted (in shares) | 1,478,874 | 852,601 | 701,754 |
Vested (in shares) | (1,116,989) | (691,111) | (657,732) |
Forfeited (in shares) | (235,406) | (42,504) | (3,932) |
Outstanding at the end of the period (in shares) | 1,463,315 | 1,336,836 | 1,217,850 |
Non-Vested Stock Grants, Weighted Average Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 14.01 | $ 14.88 | $ 14.89 |
Granted (in dollars per share) | 11.55 | 12.91 | 14.35 |
Vested (in dollars per share) | 13.65 | 14.20 | 14.32 |
Forfeited (in dollars per share) | 11.81 | 14.05 | 15.48 |
Outstanding at the end of the period (in dollars per share) | $ 12.15 | $ 14.01 | $ 14.88 |
Compensation cost to be recognized related to non-vested restricted stock grants | $ 11,400 | ||
Weighted average period over which compensation cost will be recognized | 23 months | ||
Restricted Shares and Performance awards | Former Chief Executive Officer | |||
Compensation Expense and Forfeitures | |||
Amortization Expense, including forfeitures | $ 1,100 | ||
Deferred shares, share purchase rights, or share appreciation rights issued or outstanding under the LTIP | |||
Long-Term Incentive Plan | |||
Number of awards other than grants outstanding | 0 |
Commitments and Contingencies -
Commitments and Contingencies - Management Fees, Franchise Costs and Renovation Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Basic and incentive management fees incurred | |||
Other property-level expenses | $ 71,415 | $ 49,854 | $ 130,321 |
License and Franchise Agreements | |||
Franchise assessments | 9,060 | 5,998 | 24,389 |
Franchise royalties | 2,294 | 1,062 | 7,876 |
Franchise costs | 11,354 | 7,060 | 32,265 |
Basic management fees | |||
Basic and incentive management fees incurred | |||
Other property-level expenses | 13,406 | 7,095 | 31,061 |
Incentive management fees | |||
Basic and incentive management fees incurred | |||
Other property-level expenses | 1,806 | 8,005 | |
Total basic and incentive management fees | |||
Basic and incentive management fees incurred | |||
Other property-level expenses | $ 15,212 | $ 7,095 | $ 39,066 |
Minimum | |||
Management Agreements | |||
Basic management fees (as a percent) | 1.75% | ||
Maximum | |||
Management Agreements | |||
Basic management fees (as a percent) | 3.00% | ||
Renovation and Construction Commitments | |||
Renovation and Construction Commitments | |||
Remaining construction commitments | $ 71,700 |
Commitments and Contingencies_2
Commitments and Contingencies - Other Commitments and Concentration of Risk (Details) $ in Thousands | Dec. 31, 2021USD ($)property | Dec. 31, 2021USD ($)property | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Loss Contingencies | ||||
Impairment losses | $ 2,685 | $ 146,944 | $ 24,713 | |
Gain on extinguishment of debt | $ (57) | 6,146 | ||
Term of unsecured environmental indemnities | 0 years | |||
Damage limitation of unsecured environmental indemnities | $ 0 | |||
Payments on credit facility | $ 110,000 | $ 300,000 | ||
Safe Harbor Plan | ||||
401(k) Savings and Hotel Retirement Plans | ||||
Age required for participating in 401(k) plan | 21 years | 21 years | 21 years | |
Employment period required for participating in 401(k) plan | 6 months | 6 months | 6 months | |
Percentage of eligible employee annual base earnings contributed by the company (as a percent) | 3.00% | 3.00% | 3.00% | |
Contributions to retirement plans | $ 200 | $ 200 | $ 200 | |
Retirement plans | ||||
401(k) Savings and Hotel Retirement Plans | ||||
Contributions to retirement plans | 1,000 | 800 | $ 1,400 | |
Hilton New Orleans St. Charles | ||||
Loss Contingencies | ||||
Impairment losses | 2,685 | |||
Hilton Times Square | ||||
Loss Contingencies | ||||
Impairment losses | 107,857 | |||
Loss contingency accrued balance | $ 10,500 | 10,500 | 11,600 | |
Loss contingency payment | 800 | |||
Restricted Cash | 10,400 | 10,400 | 11,600 | |
Gain on extinguishment of debt | 300 | |||
Four Seasons Resort Napa Valley | ||||
Loss Contingencies | ||||
Loss contingency accrued balance | 3,100 | 3,100 | ||
Four Seasons Resort Napa Valley | Maximum | ||||
Loss Contingencies | ||||
Maximum estimated future severance obligations | $ 5,000 | $ 5,000 | ||
Workforce Subject to Collective Bargaining Arrangements | Collective Bargaining Agreements | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 29.70% | |||
Number of rooms | Geographic Concentration Risk [Member] | California | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 32.00% | |||
Number of rooms | Geographic Concentration Risk [Member] | Florida | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 12.00% | |||
Number of rooms | Geographic Concentration Risk [Member] | Hawaii | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 7.00% | |||
Number of rooms | Geographic Concentration Risk [Member] | Massachusetts | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 18.00% | |||
Revenue generated by hotels | Geographic Concentration Risk [Member] | California | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 34.00% | |||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Florida | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 13.00% | |||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Hawaii | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 23.00% | |||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Massachusetts | ||||
Concentration of Risk | ||||
Concentration risk (as a percent) | 14.00% | |||
COVID-19 pandemic | ||||
Loss Contingencies | ||||
Wages, benefits and severance for furloughed or terminated employees | $ 400 | 34,300 | ||
Employee retention credits and industry grants | 1,400 | $ 5,200 | ||
Workers' compensation insurance programs | ||||
Loss Contingencies | ||||
Outstanding irrevocable letters of credit | $ 200 | 200 | ||
Payments on credit facility | 0 | |||
Hurricane Ida | Hilton New Orleans St. Charles | ||||
Loss Contingencies | ||||
Hurricane-related restoration expenses | 2,900 | |||
Impairment losses | 2,700 | |||
Hurricane Ida | JW Marriott New Orleans | ||||
Loss Contingencies | ||||
Hurricane-related restoration expenses | $ 1,300 | |||
Hotel owned by the Company | ||||
Concentration of Risk | ||||
Number of hotels owned by the Company | property | 17 | 17 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | California | ||||
Concentration of Risk | ||||
Number of hotels owned by the Company | property | 5 | 5 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Florida | ||||
Concentration of Risk | ||||
Number of hotels owned by the Company | property | 2 | 2 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Hawaii | ||||
Concentration of Risk | ||||
Number of hotels owned by the Company | property | 1 | 1 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Massachusetts | ||||
Concentration of Risk | ||||
Number of hotels owned by the Company | property | 2 | 2 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - Disposal group, not considered a discontinued operation $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)property | Feb. 01, 2022USD ($) | |
Disposal Group, Not Including Discontinued Operations | ||
Gross sale price of hotel | $ 129 | |
Number of hotels sold | property | 2 | |
Hyatt Centric Chicago Magnificent Mile | ||
Disposal Group, Not Including Discontinued Operations | ||
Gross sale price of hotel | $ 67.5 |
Schedule III-Real Estate and _2
Schedule III-Real Estate and Accumulated Depreciation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Gross Amount at year end | |
Aggregate cost of properties for federal income tax purposes | $ 3,700,000 |
Hotel properties | |
Real Estate and Accumulated Depreciation | |
Encmbr | 298,137 |
Initial costs | |
Land | 550,480 |
Bldg. and Impr | 2,039,753 |
Cost Capitalized Subsequent to Acquisition | |
Land | 54,212 |
Bldg. and Impr | 689,708 |
Gross Amount at year end | |
Land | 604,692 |
Bldg. and Impr | 2,729,461 |
Totals | 3,334,153 |
Accum. Depr. | $ 799,641 |
Boston Park Plaza | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Boston Park Plaza | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Boston Park Plaza | Hotel properties | |
Initial costs | |
Land | $ 58,527 |
Bldg. and Impr | 170,589 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 128,021 |
Gross Amount at year end | |
Land | 58,527 |
Bldg. and Impr | 298,610 |
Totals | 357,137 |
Accum. Depr. | $ 96,900 |
Date Acquired | Jul. 2, 2013 |
Embassy Suites Chicago | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Embassy Suites Chicago | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Embassy Suites Chicago | Hotel properties | |
Initial costs | |
Land | $ 79 |
Bldg. and Impr | 46,886 |
Cost Capitalized Subsequent to Acquisition | |
Land | 6,348 |
Bldg. and Impr | 26,464 |
Gross Amount at year end | |
Land | 6,427 |
Bldg. and Impr | 73,350 |
Totals | 79,777 |
Accum. Depr. | $ 41,549 |
Date Acquired | Dec. 18, 2002 |
Four Seasons Resort Napa Valley | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Four Seasons Resort Napa Valley | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Four Seasons Resort Napa Valley | Hotel properties | |
Initial costs | |
Land | $ 23,514 |
Bldg. and Impr | 128,645 |
Gross Amount at year end | |
Land | 23,514 |
Bldg. and Impr | 128,645 |
Totals | 152,159 |
Accum. Depr. | $ 301 |
Date Acquired | Dec. 1, 2021 |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Maximum | |
Gross Amount at year end | |
Depr. Life | 50 years |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Hotel properties | |
Initial costs | |
Land | $ 14,040 |
Bldg. and Impr | 66,350 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 12,645 |
Gross Amount at year end | |
Land | 14,040 |
Bldg. and Impr | 78,995 |
Totals | 93,035 |
Accum. Depr. | $ 16,848 |
Date Acquired | Jul. 19, 2012 |
Hilton New Orleans St. Charles | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton New Orleans St. Charles | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hilton New Orleans St. Charles | Hotel properties | |
Initial costs | |
Land | $ 3,698 |
Bldg. and Impr | 53,578 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 7,574 |
Gross Amount at year end | |
Land | 3,698 |
Bldg. and Impr | 61,152 |
Totals | 64,850 |
Accum. Depr. | $ 12,571 |
Date Acquired | May 1, 2013 |
Entity that owns the Hilton San Diego Bayfront | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Entity that owns the Hilton San Diego Bayfront | Maximum | |
Gross Amount at year end | |
Depr. Life | 57 years |
Entity that owns the Hilton San Diego Bayfront | Hotel properties | |
Real Estate and Accumulated Depreciation | |
Encmbr | $ 220,000 |
Initial costs | |
Bldg. and Impr | 424,992 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 24,339 |
Gross Amount at year end | |
Bldg. and Impr | 449,331 |
Totals | 449,331 |
Accum. Depr. | $ 90,204 |
Date Acquired | Apr. 15, 2011 |
Hyatt Regency San Francisco | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hyatt Regency San Francisco | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hyatt Regency San Francisco | Hotel properties | |
Initial costs | |
Land | $ 116,140 |
Bldg. and Impr | 131,430 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 62,541 |
Gross Amount at year end | |
Land | 116,140 |
Bldg. and Impr | 193,971 |
Totals | 310,111 |
Accum. Depr. | $ 71,552 |
Date Acquired | Dec. 2, 2013 |
JW Marriott New Orleans | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
JW Marriott New Orleans | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
JW Marriott New Orleans | Hotel properties | |
Real Estate and Accumulated Depreciation | |
Encmbr | $ 78,137 |
Initial costs | |
Bldg. and Impr | 73,420 |
Cost Capitalized Subsequent to Acquisition | |
Land | 15,147 |
Bldg. and Impr | 38,069 |
Gross Amount at year end | |
Land | 15,147 |
Bldg. and Impr | 111,489 |
Totals | 126,636 |
Accum. Depr. | $ 33,102 |
Date Acquired | Feb. 15, 2011 |
Marriott Boston Long Wharf | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Boston Long Wharf | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Boston Long Wharf | Hotel properties | |
Initial costs | |
Land | $ 51,598 |
Bldg. and Impr | 170,238 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 76,677 |
Gross Amount at year end | |
Land | 51,598 |
Bldg. and Impr | 246,915 |
Totals | 298,513 |
Accum. Depr. | $ 111,143 |
Date Acquired | Mar. 23, 2007 |
Montage Healdsburg | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Montage Healdsburg | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Montage Healdsburg | Hotel properties | |
Initial costs | |
Land | $ 40,326 |
Bldg. and Impr | 194,589 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 215 |
Gross Amount at year end | |
Land | 40,326 |
Bldg. and Impr | 194,804 |
Totals | 235,130 |
Accum. Depr. | $ 4,265 |
Date Acquired | Apr. 22, 2021 |
Oceans Edge Resort & Marina | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Oceans Edge Resort & Marina | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Oceans Edge Resort & Marina | Hotel properties | |
Initial costs | |
Land | $ 92,510 |
Bldg. and Impr | 74,361 |
Cost Capitalized Subsequent to Acquisition | |
Land | 2,000 |
Bldg. and Impr | 6,124 |
Gross Amount at year end | |
Land | 94,510 |
Bldg. and Impr | 80,485 |
Totals | 174,995 |
Accum. Depr. | $ 10,082 |
Date Acquired | Jul. 25, 2017 |
Renaissance Long Beach | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Long Beach | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Long Beach | Hotel properties | |
Initial costs | |
Land | $ 10,437 |
Bldg. and Impr | 37,300 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 27,590 |
Gross Amount at year end | |
Land | 10,437 |
Bldg. and Impr | 64,890 |
Totals | 75,327 |
Accum. Depr. | $ 31,794 |
Date Acquired | Jun. 23, 2005 |
Renaissance Orlando at SeaWorld | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Orlando at SeaWorld | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Orlando at SeaWorld | Hotel properties | |
Initial costs | |
Bldg. and Impr | $ 119,733 |
Cost Capitalized Subsequent to Acquisition | |
Land | 30,717 |
Bldg. and Impr | 68,572 |
Gross Amount at year end | |
Land | 30,717 |
Bldg. and Impr | 188,305 |
Totals | 219,022 |
Accum. Depr. | $ 90,716 |
Date Acquired | Jun. 23, 2005 |
Renaissance Washington D.C. | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Washington D.C. | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Washington D.C. | Hotel properties | |
Initial costs | |
Land | $ 14,563 |
Bldg. and Impr | 132,800 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 68,070 |
Gross Amount at year end | |
Land | 14,563 |
Bldg. and Impr | 200,870 |
Totals | 215,433 |
Accum. Depr. | $ 96,977 |
Date Acquired | Jul. 13, 2005 |
The Bidwell Marriott Portland | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
The Bidwell Marriott Portland | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
The Bidwell Marriott Portland | Hotel properties | |
Initial costs | |
Land | $ 5,341 |
Bldg. and Impr | 20,705 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 27,453 |
Gross Amount at year end | |
Land | 5,341 |
Bldg. and Impr | 48,158 |
Totals | 53,499 |
Accum. Depr. | $ 19,606 |
Date Acquired | Aug. 11, 2000 |
Wailea Beach Resort | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Wailea Beach Resort | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Wailea Beach Resort | Hotel properties | |
Initial costs | |
Land | $ 119,707 |
Bldg. and Impr | 194,137 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 115,354 |
Gross Amount at year end | |
Land | 119,707 |
Bldg. and Impr | 309,491 |
Totals | 429,198 |
Accum. Depr. | $ 72,031 |
Date Acquired | Jul. 14, 2014 |
Senior corporate credit facility | |
Gross Amount at year end | |
Outstanding indebtedness under credit facility | $ 0 |
Schedule III-Reconciliation of
Schedule III-Reconciliation of Carrying Amounts and Accumulated Depreciation (Details) - Hotel properties [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of land and buildings and improvements | |||
Balance at the beginning of the year | $ 3,094,962 | $ 3,551,715 | $ 3,595,301 |
Acquisitions | 387,074 | 1,296 | 704 |
Improvements | 36,884 | 47,547 | 78,579 |
Impairment losses | (3,264) | (252,909) | (34,888) |
Changes in reporting presentation | (53,068) | (58,799) | |
Dispositions | (128,435) | (252,687) | (29,182) |
Balance at the end of the year | 3,334,153 | 3,094,962 | 3,551,715 |
Reconciliation of accumulated depreciation | |||
Balance at the beginning of the year | 772,289 | 888,378 | 815,628 |
Depreciation | 96,508 | 101,218 | 107,949 |
Impairment losses | (579) | (137,292) | (12,572) |
Changes in reporting presentation | (24,144) | (9,677) | |
Retirement | (44,433) | (80,015) | (12,950) |
Balance at the end of the year | $ 799,641 | $ 772,289 | $ 888,378 |