Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 212,316,344 | |
Entity Central Index Key | 0001295810 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
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 | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 107,329 | $ 120,483 |
Restricted cash | 45,611 | 42,234 |
Accounts receivable, net | 42,151 | 28,733 |
Prepaid expenses and other current assets | 14,137 | 14,338 |
Assets held for sale, net | 76,308 | |
Total current assets | 209,228 | 282,096 |
Investment in hotel properties, net | 2,847,800 | 2,720,016 |
Operating lease right-of-use assets, net | 18,881 | 23,161 |
Deferred financing costs, net | 1,406 | 2,580 |
Other assets, net | 9,308 | 13,196 |
Total assets | 3,086,623 | 3,041,049 |
Current liabilities: | ||
Accounts payable and accrued expenses | 63,451 | 47,701 |
Accrued payroll and employee benefits | 18,716 | 19,753 |
Dividends payable | 4,360 | 3,513 |
Other current liabilities | 63,715 | 58,884 |
Current portion of notes payable, net | 1,646 | 20,694 |
Liabilities of assets held for sale | 25,213 | |
Total current liabilities | 151,888 | 175,758 |
Notes payable, less current portion, net | 802,376 | 588,741 |
Operating lease obligations, less current portion | 19,796 | 25,120 |
Other liabilities | 9,118 | 11,656 |
Total liabilities | 983,178 | 801,275 |
Commitments and contingencies (Note 12) | ||
Equity | ||
Common stock, $0.01 par value, 500,000,000 shares authorized, 212,450,788 shares issued and outstanding at June 30, 2022 and 219,333,783 shares issued and outstanding at December 31, 2021 | 2,125 | 2,193 |
Additional paid in capital | 2,494,238 | 2,631,484 |
Retained earnings | 997,402 | 948,064 |
Cumulative dividends and distributions | (1,671,570) | (1,664,024) |
Total stockholders' equity | 2,103,445 | 2,198,967 |
Noncontrolling interest in consolidated joint venture | 40,807 | |
Total equity | 2,103,445 | 2,239,774 |
Total liabilities and equity | 3,086,623 | 3,041,049 |
Series G Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | 66,250 | 66,250 |
Series H Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | 115,000 | 115,000 |
Series I Cumulative Redeemable Preferred Stock | ||
Equity | ||
Cumulative Redeemable Preferred Stock | $ 100,000 | $ 100,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
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) | 212,450,788 | 219,333,783 |
Common stock, shares outstanding (in shares) | 212,450,788 | 219,333,783 |
Series G Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 2,650,000 | 2,650,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 2,650,000 | 2,650,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Series H Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.125% | 6.125% |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,600,000 | 4,600,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 4,600,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Series I Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 5.70% | 5.70% |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
REVENUES | ||||
Revenues | $ 251,280 | $ 117,210 | $ 423,595 | $ 167,843 |
OPERATING EXPENSES | ||||
Advertising and promotion | 11,621 | 7,042 | 22,095 | 11,917 |
Repairs and maintenance | 8,273 | 7,132 | 17,987 | 12,677 |
Utilities | 6,239 | 4,683 | 11,944 | 8,834 |
Franchise costs | 4,280 | 2,296 | 7,284 | 3,287 |
Property tax, ground lease and insurance | 17,455 | 15,632 | 33,446 | 30,293 |
Other property-level expenses | 30,391 | 16,067 | 54,301 | 26,544 |
Corporate overhead | 8,717 | 9,467 | 19,431 | 16,644 |
Depreciation and amortization | 30,893 | 32,729 | 62,253 | 63,499 |
Total operating expenses | 207,759 | 137,149 | 386,847 | 235,220 |
Interest and other income (loss) | 116 | 21 | 4,496 | (358) |
Interest expense | (5,938) | (8,065) | (11,019) | (15,714) |
Gain on sale of assets | 22,946 | |||
Gain (loss) on extinguishment of debt | 21 | 88 | (192) | 310 |
Income (loss) before income taxes | 37,720 | (27,895) | 52,979 | (83,139) |
Income tax provision, net | (28) | (23) | (164) | (66) |
NET INCOME (LOSS) | 37,692 | (27,918) | 52,815 | (83,205) |
(Income) loss from consolidated joint venture attributable to noncontrolling interest | (2,343) | 596 | (3,477) | 2,571 |
Preferred stock dividends and redemption charge | (3,773) | (7,795) | (7,546) | (11,002) |
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 31,576 | $ (35,117) | $ 41,792 | $ (91,636) |
Basic and diluted per share amounts: | ||||
Basic income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.15 | $ (0.16) | $ 0.19 | $ (0.43) |
Diluted income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.15 | $ (0.16) | $ 0.19 | $ (0.43) |
Basic weighted average common shares outstanding (in shares) | 213,183 | 215,113 | 215,216 | 214,778 |
Diluted weighted average common shares outstanding (in shares) | 213,183 | 215,113 | 215,216 | 214,778 |
Room | ||||
REVENUES | ||||
Revenues | $ 161,721 | $ 84,597 | $ 270,493 | $ 118,816 |
OPERATING EXPENSES | ||||
Expenses | 37,342 | 22,946 | 67,803 | 34,586 |
Food and beverage | ||||
REVENUES | ||||
Revenues | 71,658 | 15,238 | 111,241 | 20,209 |
OPERATING EXPENSES | ||||
Expenses | 46,459 | 15,669 | 78,778 | 21,648 |
Other operating | ||||
REVENUES | ||||
Revenues | 17,901 | 17,375 | 41,861 | 28,818 |
OPERATING EXPENSES | ||||
Expenses | $ 6,089 | $ 3,486 | $ 11,525 | $ 5,291 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Series E Cumulative Redeemable Preferred Stock Preferred Stock | Series E Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series E Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series E Cumulative Redeemable Preferred Stock | Series F Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series F Cumulative Redeemable Preferred Stock | Series G Cumulative Redeemable Preferred Stock Preferred Stock | Series G Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series G Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series G Cumulative Redeemable Preferred Stock | Series H Cumulative Redeemable Preferred Stock Preferred Stock | Series H Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series H Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series H Cumulative Redeemable Preferred Stock | Series I Cumulative Redeemable Preferred Stock Cumulative 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, 2020 | $ 190,000 | $ 2,156 | $ 2,586,108 | $ 913,766 | $ (1,643,386) | $ 40,735 | $ 2,089,379 | ||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2020 | 7,600,000 | 215,593,401 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||
Amortization of deferred stock compensation | 2,869 | 2,869 | |||||||||||||||||||||
Issuance of restricted common stock, net | $ 6 | (3,522) | (3,516) | ||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 581,683 | ||||||||||||||||||||||
Preferred stock dividends and dividends payable | $ (1,998) | $ (1,998) | $ (1,209) | $ (1,209) | |||||||||||||||||||
Contribution from noncontrolling interest | 1,375 | 1,375 | |||||||||||||||||||||
Net income (loss) | (53,312) | (1,975) | (55,287) | ||||||||||||||||||||
Ending Balance at Mar. 31, 2021 | $ 190,000 | $ 2,162 | 2,585,455 | 860,454 | (1,646,593) | 40,135 | 2,031,613 | ||||||||||||||||
Ending Balance (in shares) at Mar. 31, 2021 | 7,600,000 | 216,175,084 | |||||||||||||||||||||
Beginning Balance at Dec. 31, 2020 | $ 190,000 | $ 2,156 | 2,586,108 | 913,766 | (1,643,386) | 40,735 | 2,089,379 | ||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2020 | 7,600,000 | 215,593,401 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||
Net income (loss) | (83,205) | ||||||||||||||||||||||
Ending Balance at Jun. 30, 2021 | $ 256,250 | $ 2,190 | 2,626,582 | 833,132 | (1,654,388) | 39,539 | 2,103,305 | ||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2021 | 10,250,000 | 219,043,105 | |||||||||||||||||||||
Beginning Balance at Mar. 31, 2021 | $ 190,000 | $ 2,162 | 2,585,455 | 860,454 | (1,646,593) | 40,135 | 2,031,613 | ||||||||||||||||
Beginning Balance (in shares) at Mar. 31, 2021 | 7,600,000 | 216,175,084 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||
Amortization of deferred stock compensation | 4,784 | 4,784 | |||||||||||||||||||||
Issuance of restricted common stock, net | $ (1) | (1,360) | (1,361) | ||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | (45,661) | ||||||||||||||||||||||
Preferred stock dividends and dividends payable | (1,554) | (1,554) | $ (1,209) | $ (1,209) | $ (292) | $ (292) | $ (724) | $ (724) | |||||||||||||||
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 | ||||||||||||||||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | ||||||||||||||||||||||
Redemption of preferred stock | $ (115,000) | $ 4,016 | $ (4,016) | $ (115,000) | |||||||||||||||||||
Redemption of preferred stock (in shares) | (4,600,000) | ||||||||||||||||||||||
Net income (loss) | (27,322) | (596) | (27,918) | ||||||||||||||||||||
Ending Balance at Jun. 30, 2021 | $ 256,250 | $ 2,190 | 2,626,582 | 833,132 | (1,654,388) | 39,539 | 2,103,305 | ||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2021 | 10,250,000 | 219,043,105 | |||||||||||||||||||||
Beginning Balance at Dec. 31, 2021 | $ 281,250 | $ 2,193 | 2,631,484 | 948,064 | (1,664,024) | 40,807 | 2,239,774 | ||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2021 | 11,250,000 | 219,333,783 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||
Amortization of deferred stock compensation | 3,701 | 3,701 | |||||||||||||||||||||
Issuance of restricted common stock, net | $ 2 | (3,353) | (3,351) | ||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 213,179 | ||||||||||||||||||||||
Preferred stock dividends and dividends payable | (587) | (587) | (1,761) | (1,761) | $ (1,425) | $ (1,425) | |||||||||||||||||
Repurchases of outstanding common stock | $ (38) | (43,427) | (43,465) | ||||||||||||||||||||
Repurchases of outstanding common stock (in shares) | (3,879,025) | ||||||||||||||||||||||
Net income (loss) | 13,989 | 1,134 | 15,123 | ||||||||||||||||||||
Ending Balance at Mar. 31, 2022 | $ 281,250 | $ 2,157 | 2,588,405 | 962,053 | (1,667,797) | 41,941 | 2,208,009 | ||||||||||||||||
Ending Balance (in shares) at Mar. 31, 2022 | 11,250,000 | 215,667,937 | |||||||||||||||||||||
Beginning Balance at Dec. 31, 2021 | $ 281,250 | $ 2,193 | 2,631,484 | 948,064 | (1,664,024) | 40,807 | 2,239,774 | ||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2021 | 11,250,000 | 219,333,783 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||
Net income (loss) | 52,815 | ||||||||||||||||||||||
Ending Balance at Jun. 30, 2022 | $ 281,250 | $ 2,125 | 2,494,238 | 997,402 | (1,671,570) | 2,103,445 | |||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2022 | 11,250,000 | 212,450,788 | |||||||||||||||||||||
Beginning Balance at Mar. 31, 2022 | $ 281,250 | $ 2,157 | 2,588,405 | 962,053 | (1,667,797) | 41,941 | 2,208,009 | ||||||||||||||||
Beginning Balance (in shares) at Mar. 31, 2022 | 11,250,000 | 215,667,937 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||
Amortization of deferred stock compensation | 2,971 | 2,971 | |||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (34,807) | ||||||||||||||||||||||
Preferred stock dividends and dividends payable | $ (587) | $ (587) | $ (1,761) | $ (1,761) | $ (1,425) | $ (1,425) | |||||||||||||||||
Distribution to noncontrolling interest | (5,500) | (5,500) | |||||||||||||||||||||
Issuance of restricted common stock | $ 1 | (92) | (91) | ||||||||||||||||||||
Issuance of restricted common stock (in shares) | 53,616 | ||||||||||||||||||||||
Repurchases of outstanding common stock | $ (33) | (34,482) | (34,515) | ||||||||||||||||||||
Repurchases of outstanding common stock (in shares) | (3,235,958) | ||||||||||||||||||||||
Acquisition of noncontrolling interest, net | (62,564) | (38,784) | (101,348) | ||||||||||||||||||||
Net income (loss) | 35,349 | $ 2,343 | 37,692 | ||||||||||||||||||||
Ending Balance at Jun. 30, 2022 | $ 281,250 | $ 2,125 | $ 2,494,238 | $ 997,402 | $ (1,671,570) | $ 2,103,445 | |||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2022 | 11,250,000 | 212,450,788 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | |
Series E Cumulative Redeemable Preferred Stock | ||||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.337847 | $ 0.434375 | ||
Series F Cumulative Redeemable Preferred Stock | ||||
Preferred stock dividends and dividends payable (in dollars per share) | 0.403125 | $ 0.403125 | ||
Series G Cumulative Redeemable Preferred Stock | ||||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.221475 | $ 0.221475 | 0.110259 | |
Series H Cumulative Redeemable Preferred Stock | ||||
Preferred stock dividends and dividends payable (in dollars per share) | 0.382813 | 0.382813 | $ 0.157378 | |
Series I Cumulative Redeemable Preferred Stock | ||||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.356250 | $ 0.356250 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ 37,692 | $ 52,815 | $ (83,205) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Bad debt expense | 313 | 157 | |
(Gain) loss on sale of assets | (22,946) | 70 | |
Loss (gain) on extinguishment of debt | (21) | 192 | (310) |
Noncash interest on derivatives, net | (2,865) | (1,578) | |
Depreciation | 62,011 | 63,478 | |
Amortization of franchise fees and other intangibles | 218 | 21 | |
Amortization of deferred financing costs | 671 | 1,351 | 1,472 |
Amortization of deferred stock compensation | 6,431 | 7,411 | |
Gain on hurricane-related damage | (4,369) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (12,147) | (16,771) | |
Prepaid expenses and other assets | 5,705 | 4,426 | |
Accounts payable and other liabilities | 7,063 | 10,191 | |
Accrued payroll and employee benefits | (2,419) | 1,384 | |
Operating lease right-of-use assets and obligations | (700) | (669) | |
Net cash provided by (used in) operating activities | 90,653 | (13,923) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from sale of assets | 191,291 | ||
Proceeds from property insurance | 4,369 | ||
Acquisitions of hotel properties and other assets | (232,506) | (195,646) | |
Renovations and additions to hotel properties and other assets | (62,621) | (16,785) | |
Net cash used in investing activities | (99,467) | (212,431) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Acquisition of noncontrolling interest, including transaction costs | (101,348) | ||
Proceeds from preferred stock offerings | 115,000 | ||
Redemption of preferred stock | (115,000) | ||
Proceeds from common stock offerings | 38,443 | ||
Repurchases of outstanding common stock | (77,980) | ||
Repurchases of common stock for employee tax obligations | (3,351) | (4,877) | |
Proceeds from credit facility | 230,000 | ||
Payments on notes payable | (35,994) | (1,642) | |
Dividends paid | (6,699) | (7,969) | |
Distribution to noncontrolling interest | (5,500) | ||
Contribution from noncontrolling interest | 1,375 | ||
Net cash (used in) provided by financing activities | (963) | 20,603 | |
Net decrease in cash and cash equivalents and restricted cash | (9,777) | (205,751) | |
Cash and cash equivalents and restricted cash, beginning of period | 162,717 | 416,139 | |
Cash and cash equivalents and restricted cash, end of period | 152,940 | 152,940 | 210,388 |
Supplemental Disclosure of Cash Flow Information | |||
Cash and cash equivalents | 107,329 | 107,329 | 162,898 |
Restricted cash | 45,611 | 45,611 | 47,490 |
Cash and cash equivalents and restricted cash, end of period | 152,940 | 152,940 | 210,388 |
Cash paid for interest | 13,412 | 15,699 | |
Cash paid for income taxes, net | 134 | 5 | |
Operating cash flows used for operating leases | 3,407 | 3,364 | |
Changes in operating lease right-of-use assets | 2,005 | 1,836 | |
Changes in operating lease obligations | (2,705) | (2,505) | |
Changes in operating lease right-of-use assets and lease obligations, net | (700) | (669) | |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Accrued renovations and additions to hotel properties and other assets | 18,725 | 7,114 | |
Amortization of deferred stock compensation - construction activities | 241 | 242 | |
Preferred stock redemption charges | 4,016 | ||
Dividends payable | 4,360 | 4,360 | 2,225 |
Montage Healdsburg | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Issuance of preferred stock in connection with hotel acquisition | 66,250 | ||
Hyatt Centric Chicago Magnificent Mile | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Disposition deposit received in prior year in connection with sale of hotel | 4,000 | ||
Assignment of finance lease right-of-use asset in connection with sale of hotel | 44,712 | 44,712 | |
Assignment of finance lease obligation in connection with sale of hotel | 15,569 | 15,569 | |
Hilton Garden Inn Chicago Downtown/Magnificent Mile | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of operating lease right-of-use asset in connection with sale of hotel | 2,275 | 2,275 | |
Assignment of operating lease obligation in connection with sale of hotel | $ 2,609 | 2,609 | |
Preferred Stock | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payment of stock issuance costs | (3,943) | ||
Common Stock | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payment of stock issuance costs | $ (91) | $ (784) |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022, the Company owned 15 hotels (the “15 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 Hyatt Hotels Corporation 2 Interstate Hotels & Resorts, Inc. 2 Four Seasons Hotels Limited 1 Highgate Hotels L.P. and an affiliate 1 Hilton Worldwide 1 Montage North America, LLC 1 Singh Hospitality, LLC 1 Total hotels owned as of June 30, 2022 15 COVID-19 Operational Update COVID-19 and its variants have had and continue to have a detrimental effect on the hotel industry and the Company’s business, including significant room and event cancellations, corporate and government travel restrictions and an unprecedented decline in hotel demand. While operations have gradually improved since the onset of the COVID-19 pandemic in 2020, the Omicron variant in December 2021 led to a slowdown in demand recovery at the Company’s hotels. However, demand began to recover again in February 2022 as Omicron-related case counts subsided and travel patterns re-accelerated. During the first half of 2022, corporate transient and group demand accelerated and reduced the Company’s reliance on leisure demand, which was the dominant source of business at many of the Company’s hotels during 2021. While leisure demand continued to be robust, the greatest demand growth during the second quarter of 2022 occurred at the Company’s urban and group-oriented hotels which experienced increased near-term booking activity, higher than expected attendance at group events and increased business transient volume. The amount of corporate negotiated business at the Company’s hotels continues to grow and the Company expects business travel to continue to increase as the year progresses. The Company anticipates that group demand will compose a much more meaningful component of its total room nights during the remainder of 2022. However, the negative effects of the COVID-19 pandemic on the hotel industry have been unprecedented, and the Company continues to have limited visibility to predict future operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 and December 31, 2021, and for the three and six months ended June 30, 2022 and 2021, 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 accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission. In the Company’s opinion, the interim financial statements presented herein reflect all adjustments, consisting solely of normal and recurring adjustments, which are necessary to fairly present the interim financial statements. These financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 23, 2022. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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 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. 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 and units, 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 (unaudited and in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 37,692 $ (27,918) $ 52,815 $ (83,205) (Income) loss from consolidated joint venture attributable to noncontrolling interest (2,343) 596 (3,477) 2,571 Preferred stock dividends and redemption charge (3,773) (7,795) (7,546) (11,002) Undistributed income allocated to unvested restricted stock compensation (266) — (327) — Numerator for basic and diluted income (loss) attributable to common stockholders $ 31,310 $ (35,117) $ 41,465 $ (91,636) Denominator: Weighted average basic and diluted common shares outstanding 213,183 215,113 215,216 214,778 Basic and diluted income (loss) attributable to common stockholders per common share $ 0.15 $ (0.16) $ 0.19 $ (0.43) At June 30, 2022 and 2021, the Company excluded 1,289,146 and 1,382,494 anti-dilutive unvested time-based restricted stock awards, respectively, from its calculation of diluted earnings per share. The unvested time-based restricted stock awards generally vest over periods ranging from three years to five years . The Company also had outstanding performance awards as of June 30, 2022 that were granted based on a target threshold performance as follows: 169,832 shares that vest based on the achievement of the Company’s total relative shareholder return following a two year performance period (the “Two Year Performance Period Shares”); 254,748 shares that vest based on the achievement of the Company’s total relative shareholder return following a three year performance period (the “Three Year Performance Period Shares”); and 188,004 shares that vest based on the achievement of pre-determined stock price targets during a five year performance period (the “Five Year Performance Period Shares”). Based on the Company’s common stock performance during the six months ended June 30, 2022, the Company excluded 203,798 antidilutive Two Year Performance Period Shares, 305,698 anti-dilutive Three Year Performance Period Shares and zero anti-dilutive Five Year Performance Period Shares from its June 30, 2022 calculations of diluted earnings per share. Restricted Cash Restricted cash primarily includes lender reserves required by the Company’s debt agreements and reserves for operating expenses and capital expenditures required by certain of the Company’s management and franchise agreements. At times, restricted cash also includes hotel acquisition or disposition-related earnest money held in escrow reserves pending completion of the associated transaction. In addition, restricted cash as of June 30, 2022 and December 31, 2021 included $10.3 million and $10.4 million, respectively, held in escrow related to certain current and potential employee-related obligations of one of the Company’s former hotels, $3.1 million held in escrow as of both June 30, 2022 and December 31, 2021 for the purpose of satisfying any potential employee-related obligations that arise in connection with the termination of hotel personnel and any employment claim by hotel personnel at the Four Seasons Resort Napa Valley and $0.2 million held as collateral for certain letters of credit as of both June 30, 2022 and December 31, 2021 (see Note 12). 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 15 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, no hotels were impaired during either the three and six months ended June 30, 2022 or 2021. 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. 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. 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. 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 either the three and six months ended June 30, 2022 or 2021. Noncontrolling Interest In June 2022, the Company acquired the 25.0% outside equity interest in the Hilton San Diego Bayfront (see Note 3). Prior to this acquisition, the noncontrolling interest reported in the accompanying consolidated financial statements consisted of a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. 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. 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): June 30, December 31, 2022 2021 (unaudited) Trade receivables, net (1) $ 23,541 $ 16,055 Contract liabilities (2) $ 47,578 $ 40,226 (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 the three months ended June 30, 2022 and 2021, the Company recognized approximately $8.6 million and $0.3 million, respectively, in revenue related to its outstanding contract liabilities. During the six months ended June 30, 2022 and 2021, the Company recognized approximately $22.4 million and $1.1 million, respectively, in revenue related to its outstanding contract liabilities. 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 reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Contracts that meet the following criteria are eligible for relief from the modification accounting requirements in GAAP: the contract references LIBOR or another rate that is expected to be discontinued due to reference rate reform; the modified terms directly replace or have the potential to replace the reference rate that is expected to be discontinued due to reference rate reform; and any contemporaneous changes to other terms that change or have the potential to change the amount and timing of contractual cash flows must be related to the replacement of the reference rate. For a contract that meets the criteria, the guidance generally allows an entity to account for and present modifications as an event that does 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 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 | 6 Months Ended |
Jun. 30, 2022 | |
Investment in Hotel Properties | |
Investment in Hotel Properties | 3. Investment in Hotel Properties Investment in hotel properties, net consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Land $ 672,531 $ 604,692 Buildings and improvements 2,741,546 2,729,461 Furniture, fixtures and equipment 410,042 431,780 Intangible assets 42,408 43,117 Construction in progress 83,252 41,260 Investment in hotel properties, gross 3,949,779 3,850,310 Accumulated depreciation and amortization (1,101,979) (1,130,294) Investment in hotel properties, net $ 2,847,800 $ 2,720,016 In June 2022, the Company purchased the fee-simple interest in the 339 -room The Confidante Miami Beach, Florida for a contractual purchase price of $232.0 million. The acquisition was funded from available cash and with $140.0 million of proceeds received from the Company’s revolving credit facility (see Note 7). As part of the purchase price allocation for The Confidante Miami Beach, the Company allocated $0.5 million to intangible assets related to an in-place lease agreement. The $0.5 million will be amortized over the remaining five-year life of the lease. In June 2022, the Company acquired the 25.0% noncontrolling partner’s ownership interest in the Hilton San Diego Bayfront for a contractual purchase price of $102.0 million plus 25.0% of closing date working capital and cash. The Company paid a preliminary purchase price of $101.3 million on the closing date based on estimated working capital and cash amounts, with the actual amounts to be determined within 90 days. Following this acquisition, the Company owns 100% of the hotel. The acquisition was funded from available cash and with $90.0 million of proceeds received from the Company’s revolving credit facility (see Note 7). The transaction was accounted for as an equity transaction. The acquisition date noncontrolling interest balance of $38.8 million was reclassified to additional paid in capital. In addition, the $62.5 million of excess cash paid to acquire the 25.0% noncontrolling partner’s ownership interest was classified as additional paid in capital. No gain or loss was recognized in the accompanying consolidated statements of operations for either the three or six months ended June 30, 2022 related to the acquisition. |
Disposals
Disposals | 6 Months Ended |
Jun. 30, 2022 | |
Disposal Group, Not Including Discontinued Operations | |
Disposals | 4. Disposals In February 2022, the Company sold the Hyatt Centric Chicago Magnificent Mile for net proceeds of $67.2 million, including a $4.0 million deposit received from the buyer of the hotel in December 2021, and recorded a gain of $11.3 million. In March 2022, the Company sold the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile for combined net proceeds of $128.1 million and recorded a combined gain of $11.6 million. None of these sales represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore none of the hotels qualified as a discontinued operation. |
Fair Value Measurements and Int
Fair Value Measurements and Interest Rate Derivatives | 6 Months Ended |
Jun. 30, 2022 | |
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 June 30, 2022 and December 31, 2021, 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 June 30, 2022 and December 31, 2021, 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. Fair Value of Debt As of June 30, 2022 and December 31, 2021, 44.1% and 64.0%, 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 June 30, 2022 (unaudited) and December 31, 2021 were as follows (in thousands): June 30, 2022 December 31, 2021 Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Debt $ 805,443 $ 789,665 $ 611,437 $ 590,359 (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. Interest Rate Derivatives The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following at June 30, 2022 (unaudited) and December 31, 2021 (in thousands): Estimated Fair Value of Assets (Liabilities) (1) Strike / Capped Effective Maturity Notional June 30, December 31, Hedged Debt Type Rate Index Date Date Amount 2022 2021 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2021 December 15, 2022 $ 220,000 $ 5 $ 3 Term Loan 1 Swap 1.591 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ 85,000 65 (744) Term Loan 2 Swap 1.853 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 570 (1,484) $ 640 $ (2,225) (1) The fair values of the cap agreement are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets as of both June 30, 2022 and December 31, 2021. The fair values of both swap agreements are included in prepaid expenses and other current assets on the accompanying consolidated balance sheet as of June 30, 2022. As of December 31, 2021, the fair values of the Term Loan 1 swap agreement and the Term Loan 2 swap agreement are included in other current liabilities and other liabilities, respectively, on the accompanying consolidated balance sheet. Noncash changes in the fair values of the Company’s interest rate derivatives resulted in decreases to interest expense for the three and six months ended June 30, 2022 and 2021 as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Noncash interest on derivatives, net $ (1,023) $ (709) $ (2,865) $ (1,578) |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2022 | |
Other Assets. | |
Other Assets | 6. Other Assets Other assets, net consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Property and equipment, net $ 5,392 $ 5,912 Deferred rent on straight-lined third-party tenant leases 2,239 2,455 Liquor licenses 905 826 Other receivables 688 3,914 Other 84 89 Total other assets, net $ 9,308 $ 13,196 |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosures | |
Notes Payable | 7. Notes Payable Notes payable consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) 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 2.305% and 1.140% at June 30, 2022 and December 31, 2021, respectively; matures on December 9, 2022 with one remaining one-year option to extend (subject to a 25 basis point increase in the LIBOR spread), 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. 77,143 78,137 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 as of June 30, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR has been swapped to a fixed rate of 1.591% , resulting in effective interest rates of 2.941% and 3.941% at June 30, 2022 and December 31, 2021, respectively. Matures on September 3, 2022 . (1) 19,400 19,400 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 as of June 30, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR has been swapped to a fixed rate of 1.853% , resulting in effective interest rates of 3.203% and 4.203% at June 30, 2022 and December 31, 2021, respectively. Matures on January 31, 2023 . (1) 88,900 88,900 Unsecured revolving credit facility requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 140 to 225 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points, resulting in an effective interest rate of 3.18597% at June 30, 2022. Matures on April 14, 2023 . The interests of 13 hotel subsidiaries are pledged to the credit facility. (1) 230,000 — Unsecured Series A Senior Notes requiring semi-annual payments of interest only, bearing interest at 5.94% . Matures on January 10, 2026 . 65,000 90,000 Unsecured Series B Senior Notes requiring semi-annual payments of interest only, bearing interest at 6.04% . Matures on January 10, 2028 . 105,000 115,000 Total notes payable $ 805,443 $ 611,437 Current portion of notes payable $ 2,043 $ 21,401 Less: current portion of deferred financing costs (397) (707) Carrying value of current portion of notes payable $ 1,646 $ 20,694 Notes payable, less current portion $ 803,400 $ 590,036 Less: long-term portion of deferred financing costs (1,024) (1,295) Carrying value of notes payable, less current portion $ 802,376 $ 588,741 (1) In July 2022, the Company amended the agreements related to its credit facility and term loans, resulting in an increase in the aggregate amount of the term loans from $108.3 million to $350.0 million and the repayment of the $230.0 million outstanding under the credit facility (see Note 13). In February 2022, the Company used a portion of the proceeds received from the disposition of the Hyatt Centric Chicago Magnificent Mile to repay $25.0 million of its unsecured Series A Senior Notes and $10.0 million of its unsecured Series B Senior Notes, resulting in remaining balances of $65.0 million and $105.0 million, respectively, as of June 30, 2022. 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 March 2022, the Company elected to early terminate the covenant relief period related to its unsecured debt, having satisfied the financial covenants stipulated in the 2020 and 2021 amendments to its unsecured debt agreements (the “Unsecured Debt Amendments”) for the quarter ended December 31, 2021. The Unsecured Debt Amendments were scheduled to provide covenant relief through the end of the third quarter of 2022, with quarterly testing resuming for the period ending September 30, 2022. Following the Company’s early termination of the covenant relief period in March 2022, the original financial covenants on its unsecured debt agreements will be phased-in over the following five quarters to ease compliance. By exiting the covenant relief period, the Company is no longer subject to the additional restrictions on debt issuance and repayment, capital investment, share repurchases and dividend distributions that were imposed as part of the Unsecured Debt Amendments. In June 2022, the Company drew a total of $230.0 million under the revolving portion of its credit facility to fund the acquisitions of The Confidante Miami Beach and the 25.0% noncontrolling interest in the Hilton San Diego Bayfront (see Note 3). As of June 30, 2022, the Company had $230.0 million outstanding on its credit facility, with $270.0 million of capacity available for additional borrowing under the facility (see Note 13). 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. 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. In April 2022, the loan secured by the Hilton San Diego Bayfront exited the cash trap. The cash trap provision triggered on the loan secured by the JW Marriott New Orleans will remain until the hotel reaches profitability levels that terminate the cash trap. As of June 30, 2022, no excess cash generated by the JW Marriott New Orleans was held in a lockbox account for the benefit of the lender. Interest Expense Total interest incurred and expensed on the notes payable and finance lease obligation was as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Interest expense on debt and finance lease obligation $ 6,290 $ 8,037 $ 12,533 $ 15,820 Noncash interest on derivatives, net (1,023) (709) (2,865) (1,578) Amortization of deferred financing costs 671 737 1,351 1,472 Total interest expense $ 5,938 $ 8,065 $ 11,019 $ 15,714 |
Other Current Liabilities and O
Other Current Liabilities and Other Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
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): June 30, December 31, 2022 2021 (unaudited) Property, sales and use taxes payable $ 10,773 $ 12,591 Accrued interest 5,978 6,858 Advance deposits 41,319 33,750 Interest rate swap derivative — 744 Management fees payable 1,688 1,691 Other 3,957 3,250 Total other current liabilities $ 63,715 $ 58,884 Other Liabilities Other liabilities consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Deferred revenue $ 6,367 $ 6,598 Interest rate swap derivative — 1,484 Other 2,751 3,574 Total other liabilities $ 9,118 $ 11,656 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 9. Leases As of both June 30, 2022 and December 31, 2021, the Company had operating leases for ground, office, equipment and airspace leases with maturity dates ranging from 2024 through 2097, excluding renewal options. Including renewal options available to the Company, the lease maturity date extends to 2147. Operating leases were included on the Company’s consolidated balance sheets as follows (in thousands): June 30, December 31, 2022 2021 (unaudited) Right-of-use assets, net $ 18,881 $ 23,161 Accounts payable and accrued expenses $ 5,596 $ 5,586 Lease obligations, less current portion 19,796 25,120 Total lease obligations $ 25,392 $ 30,706 Weighted average remaining lease term 34 years Weighted average discount rate 5.0 % As of December 31, 2021, the Company had an operating lease related to certain office and parking space at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. Upon the hotel’s sale in March 2022 (see Note 4), the Company was no longer obligated under the operating lease and the related $2.3 million right-of-use asset, net and $2.6 million lease obligation were removed from the Company’s consolidated balance sheet. As of December 31, 2021, the Company also had a finance lease related to the building occupied by the Hyatt Centric Chicago Magnificent Mile. The related lease obligation and right-of-use asset, net were classified as held for sale on the accompanying consolidated balance sheet as of December 31, 2021. Upon the hotel’s sale in February 2022 (see Note 4), the Company was no longer obligated under the building lease and the related $44.7 million right-of-use asset, net and $15.6 million finance lease obligation were removed from the Company’s consolidated balance sheet. The components of lease expense were as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Finance lease cost (1): Amortization of right-of-use asset $ — $ 367 $ — $ 735 Interest on lease obligation — 351 117 702 Operating lease cost 1,327 1,366 2,716 2,686 Variable lease cost (2) 1,978 13 2,859 13 Total lease cost $ 3,305 $ 2,097 $ 5,692 $ 4,136 (1) Finance lease cost for the six months ended June 30, 2022 and the three and six months ended June 30, 2021 included expenses for the Hyatt Centric Chicago Magnificent Mile’s finance lease obligation before the hotel’s sale in February 2022 (see Note 4). (2) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 10. Stockholders’ Equity 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 Cumulative Redeemable Preferred Stock (“Series G preferred stock”) to the hotel’s seller as partial payment of the hotel. 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 resort. The annual dividend rate is expected to increase in 2023 to the greater of 3.0% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort. 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 Cumulative Redeemable Preferred Stock (“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 Cumulative Redeemable Preferred Stock (“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 Stock Repurchase Program ATM Agreements . In February 2017, the Company entered into separate “At the Market” Agreements (the “ATM Agreements”) with each of BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC. In accordance with the terms of the ATM Agreements, the Company may from time to time offer and sell shares of its common stock having an aggregate offering price of up to $300.0 million. In February 2022, the Company’s board of directors reauthorized the $300.0 million ATM Agreements, or new similar agreements. No common stock was issued under the ATM Agreements during the first six months of 2022, leaving $300.0 million available for sale. |
Long-Term Incentive Plan
Long-Term Incentive Plan | 6 Months Ended |
Jun. 30, 2022 | |
Long-Term Incentive Plan | |
Long-Term Incentive Plan | 11. 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 in the form of incentive or nonqualified stock options, restricted shares or units, performance shares or units, share appreciation rights, or any combination thereof. As of June 30, 2022, the Company’s issued and outstanding awards consist of both time-based and performance-based restricted stock grants. Time-based restricted shares generally vest over periods ranging from three years to five years from the date of grant. Performance-based restricted shares generally vest based on the Company’s total relative shareholder return and achievement of pre-determined stock price targets during performance periods ranging from two years to five years . 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, including forfeitures related to restricted shares was as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Amortization expense, including forfeitures $ 2,853 $ 4,659 $ 6,431 $ 7,411 Capitalized compensation cost (1) $ 118 $ 125 $ 241 $ 242 (1) 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 its hotels. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Management Agreements Management agreements with the Company’s third-party hotel managers currently require the Company to pay between 2.0% 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 and incentive management fees were included in other property-level expenses on the Company’s consolidated statements of operations as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic management fees $ 6,946 $ 3,073 $ 11,615 $ 4,376 Incentive management fees 3,067 — 4,625 — Total basic and incentive management fees $ 10,013 $ 3,073 $ 16,240 $ 4,376 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 were included in franchise costs on the Company’s consolidated statements of operations as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Franchise assessments (1) $ 3,969 $ 1,852 $ 6,687 $ 2,720 Franchise royalties (2) 311 444 597 567 Total franchise costs $ 4,280 $ 2,296 $ 7,284 $ 3,287 (1) Includes advertising, reservation and frequent guest program assessments. (2) Prior to the sale of the Hyatt Centric Chicago Magnificent Mile in February 2022 (see Note 4), franchise royalties included key money received from the hotel’s franchisor, which the Company was amortizing over the term of the hotel’s franchise agreement. Renovation and Construction Commitments At June 30, 2022, 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 June 30, 2022 totaled $76.9 million. 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 June 30, 2022, 11 of the 15 Hotels were geographically concentrated as follows (unaudited): Trailing 12-Month Percentage of Total Consolidated Number of Hotels Total Rooms Revenue California 5 34 % 38 % Florida 3 17 % 14 % Hawaii 1 7 % 21 % Massachusetts 2 19 % 15 % 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 and a business interruption claim at the Hilton New Orleans St. Charles for portions of the costs related to Hurricane Ida. The Company has concluded that the cost to restore damages at the JW Marriott New Orleans will not exceed the hotel’s deductible. During the second quarter and first six months of 2022, the Company incurred Hurricane Ida-related restoration expenses of 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 additional property damage or business interruption recoveries will not be recognized until final settlements have 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”). As of June 30, 2022, $0.9 million of the potential obligation has been paid to the hotel’s employees, including $0.1 million paid during the first six months of 2022. In addition, the potential obligation is reassessed at the end of every quarter, resulting in nominal gains on extinguishment of debt included on the accompanying consolidated statements of operations for the three and six months ended June 30, 2022, and gains on extinguishment of debt of $0.1 million and $0.3 million for the three and six months ended June 30, 2021, respectively. As of June 30, 2022 and December 31, 2021, restricted cash on the accompanying consolidated balance sheets included $10.3 million and $10.4 million, respectively, 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 June 30, 2022 and December 31, 2021, included the potential obligation balances of $10.4 million and $10.5 million, respectively. Coterminous with the Company’s acquisition of the Four Seasons Resort Napa Valley in 2021, 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, has sole and unrestricted access to withdraw funds for the purpose of satisfying any potential employee-related 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, which is included in restricted cash on the accompanying consolidated balance sheets as of June 30, 2022 and December 31, 2021; however, the estimated future severance obligations may increase up to a maximum of $5.0 million. 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 June 30, 2022, 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 June 30, 2022. The letters of credit are collateralized with $0.2 million held in a restricted bank account owned by the Company, which is included in restricted cash on the accompanying consolidated balance sheets as of June 30, 2022 and 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 Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Event | 13. Subsequent Events In July 2022, the Company repurchased 134,444 shares of its common stock for $1.3 million, including fees and commissions, increasing the year to date amount repurchased to 7,249,427 shares of its common stock for $79.3 million, including fees and commissions, and leaving $420.8 million remaining for repurchase under the program. In July 2022, the Company entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”) which expands its unsecured borrowing capacity and extends the maturity of the in-place loans. The Amended Credit Agreement continues to provide for a $500.0 million revolving credit facility and increases the aggregate amount of the Company’s two term loans from $108.3 million to $350.0 million. The facilities will bear interest pursuant to a leverage-based pricing grid ranging from 1.35% to 2.25% over the applicable adjusted term SOFR . The $500.0 million revolving credit facility has two six-month extension options, which would result in an extended maturity of July 2027 . The two term loan facilities each have a balance of $175.0 million and mature in July 2027 and January 2028 . The Company utilized the proceeds received from the incremental borrowing on the term loans to fully repay the $230.0 million that was outstanding on its revolving credit facility. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of June 30, 2022 and December 31, 2021, and for the three and six months ended June 30, 2022 and 2021, 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 accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission. In the Company’s opinion, the interim financial statements presented herein reflect all adjustments, consisting solely of normal and recurring adjustments, which are necessary to fairly present the interim financial statements. These financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 23, 2022. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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 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. |
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 and units, 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 (unaudited and in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 37,692 $ (27,918) $ 52,815 $ (83,205) (Income) loss from consolidated joint venture attributable to noncontrolling interest (2,343) 596 (3,477) 2,571 Preferred stock dividends and redemption charge (3,773) (7,795) (7,546) (11,002) Undistributed income allocated to unvested restricted stock compensation (266) — (327) — Numerator for basic and diluted income (loss) attributable to common stockholders $ 31,310 $ (35,117) $ 41,465 $ (91,636) Denominator: Weighted average basic and diluted common shares outstanding 213,183 215,113 215,216 214,778 Basic and diluted income (loss) attributable to common stockholders per common share $ 0.15 $ (0.16) $ 0.19 $ (0.43) At June 30, 2022 and 2021, the Company excluded 1,289,146 and 1,382,494 anti-dilutive unvested time-based restricted stock awards, respectively, from its calculation of diluted earnings per share. The unvested time-based restricted stock awards generally vest over periods ranging from three years to five years . The Company also had outstanding performance awards as of June 30, 2022 that were granted based on a target threshold performance as follows: 169,832 shares that vest based on the achievement of the Company’s total relative shareholder return following a two year performance period (the “Two Year Performance Period Shares”); 254,748 shares that vest based on the achievement of the Company’s total relative shareholder return following a three year performance period (the “Three Year Performance Period Shares”); and 188,004 shares that vest based on the achievement of pre-determined stock price targets during a five year performance period (the “Five Year Performance Period Shares”). Based on the Company’s common stock performance during the six months ended June 30, 2022, the Company excluded 203,798 antidilutive Two Year Performance Period Shares, 305,698 anti-dilutive Three Year Performance Period Shares and zero anti-dilutive Five Year Performance Period Shares from its June 30, 2022 calculations of diluted earnings per share. |
Restricted Cash | Restricted Cash Restricted cash primarily includes lender reserves required by the Company’s debt agreements and reserves for operating expenses and capital expenditures required by certain of the Company’s management and franchise agreements. At times, restricted cash also includes hotel acquisition or disposition-related earnest money held in escrow reserves pending completion of the associated transaction. In addition, restricted cash as of June 30, 2022 and December 31, 2021 included $10.3 million and $10.4 million, respectively, held in escrow related to certain current and potential employee-related obligations of one of the Company’s former hotels, $3.1 million held in escrow as of both June 30, 2022 and December 31, 2021 for the purpose of satisfying any potential employee-related obligations that arise in connection with the termination of hotel personnel and any employment claim by hotel personnel at the Four Seasons Resort Napa Valley and $0.2 million held as collateral for certain letters of credit as of both June 30, 2022 and December 31, 2021 (see Note 12). |
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 15 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, no hotels were impaired during either the three and six months ended June 30, 2022 or 2021. 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. |
Leases | 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. 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. 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 either the three and six months ended June 30, 2022 or 2021. |
Noncontrolling Interest | Noncontrolling Interest In June 2022, the Company acquired the 25.0% outside equity interest in the Hilton San Diego Bayfront (see Note 3). Prior to this acquisition, the noncontrolling interest reported in the accompanying consolidated financial statements consisted of a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. 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. |
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): June 30, December 31, 2022 2021 (unaudited) Trade receivables, net (1) $ 23,541 $ 16,055 Contract liabilities (2) $ 47,578 $ 40,226 (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 the three months ended June 30, 2022 and 2021, the Company recognized approximately $8.6 million and $0.3 million, respectively, in revenue related to its outstanding contract liabilities. During the six months ended June 30, 2022 and 2021, the Company recognized approximately $22.4 million and $1.1 million, respectively, in revenue related to its outstanding contract liabilities. |
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 reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Contracts that meet the following criteria are eligible for relief from the modification accounting requirements in GAAP: the contract references LIBOR or another rate that is expected to be discontinued due to reference rate reform; the modified terms directly replace or have the potential to replace the reference rate that is expected to be discontinued due to reference rate reform; and any contemporaneous changes to other terms that change or have the potential to change the amount and timing of contractual cash flows must be related to the replacement of the reference rate. For a contract that meets the criteria, the guidance generally allows an entity to account for and present modifications as an event that does 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 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) | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Description of Business | |
Schedule of number of hotels managed by each third-party manager | As of June 30, 2022, the Company owned 15 hotels (the “15 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 Hyatt Hotels Corporation 2 Interstate Hotels & Resorts, Inc. 2 Four Seasons Hotels Limited 1 Highgate Hotels L.P. and an affiliate 1 Hilton Worldwide 1 Montage North America, LLC 1 Singh Hospitality, LLC 1 Total hotels owned as of June 30, 2022 15 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
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 (unaudited and in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net income (loss) $ 37,692 $ (27,918) $ 52,815 $ (83,205) (Income) loss from consolidated joint venture attributable to noncontrolling interest (2,343) 596 (3,477) 2,571 Preferred stock dividends and redemption charge (3,773) (7,795) (7,546) (11,002) Undistributed income allocated to unvested restricted stock compensation (266) — (327) — Numerator for basic and diluted income (loss) attributable to common stockholders $ 31,310 $ (35,117) $ 41,465 $ (91,636) Denominator: Weighted average basic and diluted common shares outstanding 213,183 215,113 215,216 214,778 Basic and diluted income (loss) attributable to common stockholders per common share $ 0.15 $ (0.16) $ 0.19 $ (0.43) |
Schedule of contract assets and liabilities | Trade receivables and contract liabilities consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Trade receivables, net (1) $ 23,541 $ 16,055 Contract liabilities (2) $ 47,578 $ 40,226 (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. |
Investment in Hotel Properties
Investment in Hotel Properties (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investment in Hotel Properties | |
Schedule of investment in hotel properties | Investment in hotel properties, net consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Land $ 672,531 $ 604,692 Buildings and improvements 2,741,546 2,729,461 Furniture, fixtures and equipment 410,042 431,780 Intangible assets 42,408 43,117 Construction in progress 83,252 41,260 Investment in hotel properties, gross 3,949,779 3,850,310 Accumulated depreciation and amortization (1,101,979) (1,130,294) Investment in hotel properties, net $ 2,847,800 $ 2,720,016 |
Fair Value Measurements and I_2
Fair Value Measurements and Interest Rate Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements and Interest Rate Derivatives | |
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 June 30, 2022 (unaudited) and December 31, 2021 were as follows (in thousands): June 30, 2022 December 31, 2021 Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Debt $ 805,443 $ 789,665 $ 611,437 $ 590,359 (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. |
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 June 30, 2022 (unaudited) and December 31, 2021 (in thousands): Estimated Fair Value of Assets (Liabilities) (1) Strike / Capped Effective Maturity Notional June 30, December 31, Hedged Debt Type Rate Index Date Date Amount 2022 2021 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2021 December 15, 2022 $ 220,000 $ 5 $ 3 Term Loan 1 Swap 1.591 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ 85,000 65 (744) Term Loan 2 Swap 1.853 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 570 (1,484) $ 640 $ (2,225) (1) The fair values of the cap agreement are included in prepaid expenses and other current assets on the accompanying consolidated balance sheets as of both June 30, 2022 and December 31, 2021. The fair values of both swap agreements are included in prepaid expenses and other current assets on the accompanying consolidated balance sheet as of June 30, 2022. As of December 31, 2021, the fair values of the Term Loan 1 swap agreement and the Term Loan 2 swap agreement are included in other current liabilities and other liabilities, respectively, on the accompanying consolidated balance sheet. |
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 to interest expense for the three and six months ended June 30, 2022 and 2021 as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Noncash interest on derivatives, net $ (1,023) $ (709) $ (2,865) $ (1,578) |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Assets. | |
Schedule of other assets | Other assets, net consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Property and equipment, net $ 5,392 $ 5,912 Deferred rent on straight-lined third-party tenant leases 2,239 2,455 Liquor licenses 905 826 Other receivables 688 3,914 Other 84 89 Total other assets, net $ 9,308 $ 13,196 |
Notes Payable (Tables)
Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosures | |
Schedule of notes payable | Notes payable consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) 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 2.305% and 1.140% at June 30, 2022 and December 31, 2021, respectively; matures on December 9, 2022 with one remaining one-year option to extend (subject to a 25 basis point increase in the LIBOR spread), 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. 77,143 78,137 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 as of June 30, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR has been swapped to a fixed rate of 1.591% , resulting in effective interest rates of 2.941% and 3.941% at June 30, 2022 and December 31, 2021, respectively. Matures on September 3, 2022 . (1) 19,400 19,400 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 as of June 30, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR has been swapped to a fixed rate of 1.853% , resulting in effective interest rates of 3.203% and 4.203% at June 30, 2022 and December 31, 2021, respectively. Matures on January 31, 2023 . (1) 88,900 88,900 Unsecured revolving credit facility requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 140 to 225 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points, resulting in an effective interest rate of 3.18597% at June 30, 2022. Matures on April 14, 2023 . The interests of 13 hotel subsidiaries are pledged to the credit facility. (1) 230,000 — Unsecured Series A Senior Notes requiring semi-annual payments of interest only, bearing interest at 5.94% . Matures on January 10, 2026 . 65,000 90,000 Unsecured Series B Senior Notes requiring semi-annual payments of interest only, bearing interest at 6.04% . Matures on January 10, 2028 . 105,000 115,000 Total notes payable $ 805,443 $ 611,437 Current portion of notes payable $ 2,043 $ 21,401 Less: current portion of deferred financing costs (397) (707) Carrying value of current portion of notes payable $ 1,646 $ 20,694 Notes payable, less current portion $ 803,400 $ 590,036 Less: long-term portion of deferred financing costs (1,024) (1,295) Carrying value of notes payable, less current portion $ 802,376 $ 588,741 (1) In July 2022, the Company amended the agreements related to its credit facility and term loans, resulting in an increase in the aggregate amount of the term loans from $108.3 million to $350.0 million and the repayment of the $230.0 million outstanding under the credit facility (see Note 13). |
Schedule of interest expense | Total interest incurred and expensed on the notes payable and finance lease obligation was as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Interest expense on debt and finance lease obligation $ 6,290 $ 8,037 $ 12,533 $ 15,820 Noncash interest on derivatives, net (1,023) (709) (2,865) (1,578) Amortization of deferred financing costs 671 737 1,351 1,472 Total interest expense $ 5,938 $ 8,065 $ 11,019 $ 15,714 |
Other Current Liabilities and_2
Other Current Liabilities and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Other Current Liabilities and Other Liabilities | |
Schedule of other current liabilities | Other current liabilities consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Property, sales and use taxes payable $ 10,773 $ 12,591 Accrued interest 5,978 6,858 Advance deposits 41,319 33,750 Interest rate swap derivative — 744 Management fees payable 1,688 1,691 Other 3,957 3,250 Total other current liabilities $ 63,715 $ 58,884 |
Schedule of other liabilities | Other liabilities consisted of the following (in thousands): June 30, December 31, 2022 2021 (unaudited) Deferred revenue $ 6,367 $ 6,598 Interest rate swap derivative — 1,484 Other 2,751 3,574 Total other liabilities $ 9,118 $ 11,656 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of supplemental balance sheet information related to leases | Operating leases were included on the Company’s consolidated balance sheets as follows (in thousands): June 30, December 31, 2022 2021 (unaudited) Right-of-use assets, net $ 18,881 $ 23,161 Accounts payable and accrued expenses $ 5,596 $ 5,586 Lease obligations, less current portion 19,796 25,120 Total lease obligations $ 25,392 $ 30,706 Weighted average remaining lease term 34 years Weighted average discount rate 5.0 % |
Lease costs | The components of lease expense were as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Finance lease cost (1): Amortization of right-of-use asset $ — $ 367 $ — $ 735 Interest on lease obligation — 351 117 702 Operating lease cost 1,327 1,366 2,716 2,686 Variable lease cost (2) 1,978 13 2,859 13 Total lease cost $ 3,305 $ 2,097 $ 5,692 $ 4,136 (1) Finance lease cost for the six months ended June 30, 2022 and the three and six months ended June 30, 2021 included expenses for the Hyatt Centric Chicago Magnificent Mile’s finance lease obligation before the hotel’s sale in February 2022 (see Note 4). (2) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. |
Long-Term Incentive Plan (Table
Long-Term Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Long-Term Incentive Plan | |
Schedule of amortization expense and forfeitures related to restricted shares | The Company’s amortization expense, including forfeitures related to restricted shares was as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Amortization expense, including forfeitures $ 2,853 $ 4,659 $ 6,431 $ 7,411 Capitalized compensation cost (1) $ 118 $ 125 $ 241 $ 242 (1) 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 its hotels. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Schedule of basic and incentive management fees | Total basic and incentive management fees were included in other property-level expenses on the Company’s consolidated statements of operations as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Basic management fees $ 6,946 $ 3,073 $ 11,615 $ 4,376 Incentive management fees 3,067 — 4,625 — Total basic and incentive management fees $ 10,013 $ 3,073 $ 16,240 $ 4,376 |
Schedule of license and franchise costs | Total license and franchise fees were included in franchise costs on the Company’s consolidated statements of operations as follows (unaudited and in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Franchise assessments (1) $ 3,969 $ 1,852 $ 6,687 $ 2,720 Franchise royalties (2) 311 444 597 567 Total franchise costs $ 4,280 $ 2,296 $ 7,284 $ 3,287 (1) Includes advertising, reservation and frequent guest program assessments. (2) Prior to the sale of the Hyatt Centric Chicago Magnificent Mile in February 2022 (see Note 4), franchise royalties included key money received from the hotel’s franchisor, which the Company was amortizing over the term of the hotel’s franchise agreement. |
Schedule of hotel geographic concentration of risk | As of June 30, 2022, 11 of the 15 Hotels were geographically concentrated as follows (unaudited): Trailing 12-Month Percentage of Total Consolidated Number of Hotels Total Rooms Revenue California 5 34 % 38 % Florida 3 17 % 14 % Hawaii 1 7 % 21 % Massachusetts 2 19 % 15 % |
Organization and Description _3
Organization and Description of Business (Details) | 6 Months Ended |
Jun. 30, 2022 property | |
Organization and Description of Business | |
Number of hotels owned by the Company | 15 |
Sunstone Hotel Partnership, LLC | |
Organization and Description of Business | |
Controlling interest owned (as a percent) | 100% |
Marriott | |
Organization and Description of Business | |
Number of hotels owned by the Company | 6 |
Hyatt Corporation | |
Organization and Description of Business | |
Number of hotels owned by the Company | 2 |
Interstate Hotels & Resorts, Inc | |
Organization and Description of Business | |
Number of hotels owned by the Company | 2 |
Four Seasons Hotels Limited | |
Organization and Description of Business | |
Number of hotels owned by the Company | 1 |
Highgate Hotels L.P. and an affiliate | |
Organization and Description of Business | |
Number of hotels owned by the Company | 1 |
Hilton Worldwide | |
Organization and Description of Business | |
Number of hotels owned by the Company | 1 |
Montage North America, LLC | |
Organization and Description of Business | |
Number of hotels owned by the Company | 1 |
Singh Hospitality, LLC | |
Organization and Description of Business | |
Number of hotels owned by the Company | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Investments in Hotel Properties | ||||||
Number of hotels impaired | property | 0 | 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 | 0 | 0 | ||||
Revenue Recognition | ||||||
Trade receivables, net | $ 23,541,000 | $ 23,541,000 | $ 16,055,000 | |||
Contract liabilities | 47,578,000 | 47,578,000 | 40,226,000 | |||
Deferred revenue recognized | 8,600,000 | $ 300,000 | $ 22,400,000 | $ 1,100,000 | ||
Segment Reporting | ||||||
Number of operating segments | 1 | |||||
Financial standby letter of credit | ||||||
Restricted Cash | ||||||
Restricted Cash | $ 200,000 | $ 200,000 | 200,000 | |||
Hilton San Diego Bayfront [Member] | ||||||
Stockholders' Equity Attributable to Noncontrolling Interest | ||||||
Noncontrolling interest percentage acquired | 25% | 25% | ||||
Noncontrolling interest percentage in Hilton San Diego Bayfront | 25% | 25% | ||||
Franchise fees | Minimum | ||||||
Investments in Hotel Properties | ||||||
Estimated useful life | 15 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 | |||||
Hilton San Diego Bayfront [Member] | ||||||
Segment Reporting | ||||||
Outstanding balance of secured debt | $ 220,000,000 | $ 220,000,000 | ||||
Hilton Times Square | ||||||
Restricted Cash | ||||||
Restricted Cash | 10,300,000 | 10,300,000 | 10,400,000 | $ 11,600,000 | ||
Four Seasons Resort Napa Valley | ||||||
Restricted Cash | ||||||
Restricted Cash | $ 3,100,000 | $ 3,100,000 | $ 3,100,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||||||
Net income (loss) | $ 37,692 | $ 15,123 | $ (27,918) | $ (55,287) | $ 52,815 | $ (83,205) | ||
(Income) loss from consolidated joint venture attributable to noncontrolling interest | (2,343) | 596 | (3,477) | 2,571 | ||||
Preferred stock dividends and redemption charge | (3,773) | (7,795) | (7,546) | (11,002) | ||||
Undistributed income allocated to unvested restricted stock compensation | (266) | (327) | ||||||
Numerator for basic and diluted income (loss) attributable to common stockholders | $ 31,310 | $ (35,117) | $ 41,465 | $ (91,636) | ||||
Denominator: | ||||||||
Weighted average basic common shares outstanding (in shares) | 213,183,000 | 215,113,000 | 215,216,000 | 214,778,000 | ||||
Weighted average diluted common shares outstanding (in shares) | 213,183,000 | 215,113,000 | 215,216,000 | 214,778,000 | ||||
Basic income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.15 | $ (0.16) | $ 0.19 | $ (0.43) | ||||
Diluted income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.15 | $ (0.16) | $ 0.19 | $ (0.43) | ||||
Restricted Stock [Member] | ||||||||
Denominator: | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,289,146 | 1,382,494 | ||||||
Performance Shares [Member] | Total Relative Shareholder Return Two Year Vest | ||||||||
Denominator: | ||||||||
Outstanding at the end of the period (in shares) | 169,832 | 169,832 | 169,832 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 203,798 | |||||||
Vesting period | 2 years | |||||||
Performance Shares [Member] | Total Relative Shareholder Return Three Year Vest | ||||||||
Denominator: | ||||||||
Outstanding at the end of the period (in shares) | 254,748 | 254,748 | 254,748 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 305,698 | |||||||
Vesting period | 3 years | |||||||
Performance Shares [Member] | Stock Price Targets Five Year Vest [Member] | ||||||||
Denominator: | ||||||||
Outstanding at the end of the period (in shares) | 188,004 | 188,004 | 188,004 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | |||||||
Vesting period | 5 years | |||||||
Minimum | Restricted Stock [Member] | ||||||||
Denominator: | ||||||||
Vesting period | 3 years | 3 years | ||||||
Maximum | Restricted Stock [Member] | ||||||||
Denominator: | ||||||||
Vesting period | 5 years | 5 years |
Investment in Hotel Propertie_2
Investment in Hotel Properties (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investment in Hotel Properties | ||
Land | $ 672,531 | $ 604,692 |
Buildings and improvements | 2,741,546 | 2,729,461 |
Furniture, fixtures and equipment | 410,042 | 431,780 |
Intangible assets | 42,408 | 43,117 |
Construction in progress | 83,252 | 41,260 |
Investment in hotel properties, gross | 3,949,779 | 3,850,310 |
Accumulated depreciation and amortization | (1,101,979) | (1,130,294) |
Investment in hotel properties, net | $ 2,847,800 | $ 2,720,016 |
Investment in Hotel Propertie_3
Investment in Hotel Properties - Acquisitions (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 USD ($) room | Jun. 30, 2022 USD ($) room | Jun. 30, 2022 USD ($) room | |
Asset Acquisition [Line Items] | |||
Acquisition of noncontrolling interest, including transaction costs | $ (101,348) | ||
Acquisition of noncontrolling interest | $ 101,348 | ||
Hilton San Diego Bayfront Outside Equity Interest [Member] | |||
Asset Acquisition [Line Items] | |||
Asset Acquisition, Price of Acquisition, Expected | $ 102,000 | ||
Additional Paid In Capital | |||
Asset Acquisition [Line Items] | |||
Acquisition of noncontrolling interest | 62,564 | ||
Non-Controlling Interest in Consolidated Joint Venture | |||
Asset Acquisition [Line Items] | |||
Acquisition of noncontrolling interest | $ 38,784 | ||
Hilton San Diego Bayfront [Member] | |||
Asset Acquisition [Line Items] | |||
Noncontrolling interest percentage acquired | 25% | 25% | 25% |
Noncontrolling interest, ownership percentage by parent | 100% | 100% | 100% |
The Confidante Miami Beach [Member] | |||
Asset Acquisition [Line Items] | |||
Number of rooms in acquired hotel | room | 339 | 339 | 339 |
Asset acquisition, consideration transferred | $ 232,000 | ||
Finite-Lived Intangible Asset, Acquired-in-Place Leases | $ 500 | $ 500 | $ 500 |
Estimated useful life for finite-lived intangible assets | 5 years | ||
The Confidante Miami Beach [Member] | Senior unsecured revolving credit facility | |||
Asset Acquisition [Line Items] | |||
Proceeds from draw on revolving credit facility | $ 140,000 | ||
Hilton San Diego Bayfront Outside Equity Interest [Member] | |||
Asset Acquisition [Line Items] | |||
Noncontrolling interest percentage acquired | 25% | 25% | 25% |
Asset acquisition, consideration transferred, percentage of working capital and cash | 25% | ||
Acquisition of noncontrolling interest, including transaction costs | $ 101,300 | ||
Hilton San Diego Bayfront Outside Equity Interest [Member] | Additional Paid In Capital | |||
Asset Acquisition [Line Items] | |||
Acquisition of noncontrolling interest | 62,500 | ||
Hilton San Diego Bayfront Outside Equity Interest [Member] | Non-Controlling Interest in Consolidated Joint Venture | |||
Asset Acquisition [Line Items] | |||
Acquisition of noncontrolling interest | 38,800 | ||
Hilton San Diego Bayfront Outside Equity Interest [Member] | Senior unsecured revolving credit facility | |||
Asset Acquisition [Line Items] | |||
Proceeds from draw on revolving credit facility | $ 90,000 |
Disposals (Details)
Disposals (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Feb. 28, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Detail of Disposals | ||||
Gain on sale of assets | $ 22,946 | |||
Sold, not considered a discontinued operation | Hyatt Centric Chicago Magnificent Mile | ||||
Detail of Disposals | ||||
Net proceeds received from sale | $ 67,200 | |||
Earnest money deposits | $ 4,000 | |||
Gain on sale of assets | $ 11,300 | |||
Sold, not considered a discontinued operation | Chicago Two Pack | ||||
Detail of Disposals | ||||
Net proceeds received from sale | $ 128,100 | |||
Gain on sale of assets | $ 11,600 |
Fair Value Measurements and I_3
Fair Value Measurements and Interest Rate Derivatives - Fair Value of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | |
Percentage of Debt Bearing Fixed Interest Rates | 44.10% | 64% | |
Total notes payable | [1] | $ 805,443 | $ 611,437 |
Level 3 | |||
Fair value of debt | [2] | $ 789,665 | $ 590,359 |
[1] The principal balance of debt is presented before any unamortized deferred financing costs. 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. |
Fair Value Measurements and I_4
Fair Value Measurements and Interest Rate Derivatives - Interest Rate Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Interest Rate Derivatives | |||||
Fair value of interest rate derivatives, net | $ 640 | $ 640 | $ (2,225) | ||
Noncash interest on derivatives, net | $ (1,023) | $ (709) | $ (2,865) | $ (1,578) | |
Term loan #1 | |||||
Interest Rate Derivatives | |||||
Fixed rate under interest rate swap agreement | 1.591% | 1.591% | 1.591% | ||
Term loan #2 | |||||
Interest Rate Derivatives | |||||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | 1.853% | ||
Interest Rate Cap Derivative | 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% | 6% | 6% | ||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Interest rate derivative effective date | Dec. 09, 2021 | Dec. 09, 2021 | |||
Interest rate derivative maturity date | Dec. 15, 2022 | Dec. 15, 2022 | |||
Notional amount | $ 220,000 | $ 220,000 | $ 220,000 | ||
Fair values of derivative assets | $ 5 | $ 5 | $ 3 | ||
Interest Rate Swap Derivative | Not designated as hedging instrument | Term loan #1 | |||||
Interest Rate Derivatives | |||||
Fixed rate under interest rate swap agreement | 1.591% | 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. 02, 2022 | Sep. 02, 2022 | |||
Notional amount | $ 85,000 | $ 85,000 | $ 85,000 | ||
Fair values of derivative liabilities | $ (744) | ||||
Fair values of derivative assets | $ 65 | $ 65 | |||
Interest Rate Swap Derivative | Not designated as hedging instrument | Term loan #2 | |||||
Interest Rate Derivatives | |||||
Fixed rate under interest rate swap agreement | 1.853% | 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 | $ 100,000 | $ 100,000 | ||
Fair values of derivative liabilities | $ (1,484) | ||||
Fair values of derivative assets | $ 570 | $ 570 | |||
London Interbank Offered Rate (LIBOR) | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||
Interest Rate Derivatives | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
London Interbank Offered Rate (LIBOR) | Term loan #1 | |||||
Interest Rate Derivatives | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
London Interbank Offered Rate (LIBOR) | Term loan #2 | |||||
Interest Rate Derivatives | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Other assets, net | ||
Property and equipment, net | $ 5,392 | $ 5,912 |
Deferred rent on straight-lined third-party tenant leases | 2,239 | 2,455 |
Liquor license | 905 | 826 |
Other receivables | 688 | 3,914 |
Other | 84 | 89 |
Total other assets, net | $ 9,308 | $ 13,196 |
Notes Payable (Details)
Notes Payable (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jul. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) property | Dec. 31, 2023 | Dec. 31, 2021 USD ($) property | ||
Notes Payable | |||||
Total notes payable | [1] | $ 805,443 | $ 611,437 | ||
Current portion of notes payable | 2,043 | 21,401 | |||
Less: current portion of deferred financing costs | (397) | (707) | |||
Current portion of notes payable, net | 1,646 | 20,694 | |||
Notes payable, less current portion | 803,400 | 590,036 | |||
Less: long-term portion of deferred financing costs | (1,024) | (1,295) | |||
Carrying value of notes payable, less current portion | 802,376 | 588,741 | |||
Hilton San Diego Bayfront mortgage | |||||
Notes Payable | |||||
Outstanding balance of secured debt | $ 220,000 | $ 220,000 | |||
Interest rate added to base rate (as a percent) | 1.05% | 1.05% | |||
Total interest rate, including effect of derivative | 2.305% | 1.14% | |||
Debt maturity date | Dec. 09, 2022 | Dec. 09, 2022 | |||
Debt instrument increase in spread on variable rate | 0.25% | ||||
Number of hotels provided as collateral | property | 1 | 1 | |||
Number of extension periods available for secured debt | 1 | 1 | |||
Term of extension period for secured debt | 1 year | 1 year | |||
Hilton San Diego Bayfront mortgage | London Interbank Offered Rate (LIBOR) | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Hilton San Diego Bayfront mortgage | Not designated as hedging instrument | Interest Rate Cap Derivative | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
JW Marriott New Orleans Mortgage | |||||
Notes Payable | |||||
Outstanding balance of secured debt | $ 77,143 | $ 78,137 | |||
Debt maturity date | Dec. 11, 2024 | Dec. 11, 2024 | |||
Number of hotels provided as collateral | property | 1 | 1 | |||
Fixed interest rate (as a percent) | 4.15% | 4.15% | |||
Unsecured Term Loans | |||||
Notes Payable | |||||
Outstanding balance of unsecured debt | $ 350,000 | $ 108,300 | |||
Term loan #1 | |||||
Notes Payable | |||||
Total interest rate, including effect of derivative | 2.941% | 3.941% | |||
Debt maturity date | Sep. 03, 2022 | Sep. 03, 2022 | |||
Outstanding balance of unsecured debt | $ 19,400 | $ 19,400 | |||
Fixed rate under interest rate swap agreement | 1.591% | 1.591% | |||
Term loan #1 | London Interbank Offered Rate (LIBOR) | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Term loan #1 | Base Rate | |||||
Notes Payable | |||||
Debt instrument variable rate floor | 0.25% | 0.25% | |||
Term loan #1 | Not designated as hedging instrument | Interest Rate Swap Derivative | |||||
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 | Maximum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||
Term loan #2 | |||||
Notes Payable | |||||
Total interest rate, including effect of derivative | 3.203% | 4.203% | |||
Debt maturity date | Jan. 31, 2023 | Jan. 31, 2023 | |||
Outstanding balance of unsecured debt | $ 88,900 | $ 88,900 | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |||
Term loan #2 | London Interbank Offered Rate (LIBOR) | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Term loan #2 | Base Rate | |||||
Notes Payable | |||||
Debt instrument variable rate floor | 0.25% | 0.25% | |||
Term loan #2 | Not designated as hedging instrument | Interest Rate Swap Derivative | |||||
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 | Maximum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||
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 | $ 65,000 | $ 90,000 | |||
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 | $ 105,000 | $ 115,000 | |||
Senior unsecured revolving credit facility | |||||
Notes Payable | |||||
Debt maturity date | Apr. 14, 2023 | ||||
Number of hotels provided as collateral | property | 13 | ||||
Interest rate, description of reference rate | one-month LIBOR | ||||
Debt instrument variable rate floor | 0.25% | ||||
Line of Credit Facility, Interest Rate at Period End | 3.18597% | ||||
Outstanding indebtedness under credit facility | $ 230,000 | ||||
Repayment of revolving credit facility | $ 230,000 | ||||
Senior unsecured revolving credit facility | Minimum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 1.40% | ||||
Senior unsecured revolving credit facility | Maximum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 2.25% | ||||
[1] The principal balance of debt is presented before any unamortized deferred financing costs. |
Notes Payable - 2022 Transactio
Notes Payable - 2022 Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Feb. 28, 2022 | Jun. 30, 2022 | Jul. 31, 2022 | Dec. 31, 2021 | |
Unsecured Debt | |||||
Proceeds from credit facility | $ 230,000 | ||||
Unsecured Term Loans | |||||
Unsecured Debt | |||||
Outstanding balance of unsecured debt | $ 108,300 | 108,300 | $ 350,000 | ||
Senior Notes | |||||
Unsecured Debt | |||||
Write-off of deferred financing costs | $ 200 | ||||
Series A Senior Notes | |||||
Unsecured Debt | |||||
Payments on unsecured debt | 25,000 | ||||
Outstanding balance of unsecured debt | 65,000 | 65,000 | $ 90,000 | ||
Series B Senior Notes | |||||
Unsecured Debt | |||||
Payments on unsecured debt | $ 10,000 | ||||
Outstanding balance of unsecured debt | $ 105,000 | $ 105,000 | $ 115,000 | ||
Hilton San Diego Bayfront Outside Equity Interest [Member] | |||||
Asset Acquisition [Line Items] | |||||
Noncontrolling interest percentage acquired | 25% | 25% | |||
Senior unsecured revolving credit facility | |||||
Unsecured Debt | |||||
Outstanding indebtedness under credit facility | $ 230,000 | $ 230,000 | |||
Remaining borrowing capacity available | 270,000 | $ 270,000 | |||
Proceeds from credit facility | $ 230,000 |
Notes Payable - Interest Expens
Notes Payable - Interest Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Loss (gain) on extinguishment of debt | $ (21) | $ (88) | $ 192 | $ (310) | |
Interest Expense | |||||
Interest expense on debt and finance lease obligation | 6,290 | 8,037 | 12,533 | 15,820 | |
Noncash interest on derivatives, net | (1,023) | (709) | (2,865) | (1,578) | |
Amortization of deferred financing costs | 671 | 737 | 1,351 | 1,472 | |
Total interest expense | $ 5,938 | $ 8,065 | $ 11,019 | $ 15,714 | |
Senior Notes | |||||
Deferred Financing Costs and Losses on Extinguishment of Debt | |||||
Write-off of deferred financing costs | $ 200 |
Other Current Liabilities and_3
Other Current Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Other Current Liabilities | ||
Property, sales and use taxes payable | $ 10,773 | $ 12,591 |
Accrued interest | 5,978 | 6,858 |
Advance deposits | 41,319 | 33,750 |
Interest rate swap derivatives, current | 744 | |
Management fees payable | 1,688 | 1,691 |
Other | 3,957 | 3,250 |
Total other current liabilities | 63,715 | 58,884 |
Other Liabilities | ||
Deferred revenue | 6,367 | 6,598 |
Interest rate swap derivative, noncurrent | 1,484 | |
Other | 2,751 | 3,574 |
Total other liabilities | $ 9,118 | $ 11,656 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Feb. 28, 2022 | Dec. 31, 2021 |
Operating Leases | ||||
Operating lease right-of-use assets, net | $ 18,881 | $ 23,161 | ||
Operating lease obligations, current | $ 5,596 | $ 5,586 | ||
Accounts payable and accrued expenses | Accounts payable and accrued expenses | Accounts payable and accrued expenses | ||
Operating lease obligations, less current portion | $ 19,796 | $ 25,120 | ||
Total operating lease obligations | $ 25,392 | $ 30,706 | ||
Weighted average remaining operating lease term | 34 years | |||
Weighted average operating lease discount rate | 5% | |||
Hilton Garden Inn Chicago Downtown/Magnificent Mile | ||||
Operating Leases | ||||
Assignment of operating lease right-of-use asset in connection with sale of hotel | $ 2,275 | |||
Assignment of operating lease obligation in connection with sale of hotel | 2,609 | |||
Hyatt Centric Chicago Magnificent Mile | ||||
Finance Lease | ||||
Assignment of finance lease right-of-use asset in connection with sale of hotel | 44,712 | |||
Assignment of finance lease obligation in connection with sale of hotel | $ 15,569 | |||
Operating lease | Hilton Garden Inn Chicago Downtown/Magnificent Mile | ||||
Operating Leases | ||||
Assignment of operating lease right-of-use asset in connection with sale of hotel | $ 2,300 | |||
Assignment of operating lease obligation in connection with sale of hotel | $ 2,600 | |||
Finance lease | Hyatt Centric Chicago Magnificent Mile | ||||
Finance Lease | ||||
Assignment of finance lease right-of-use asset in connection with sale of hotel | $ 44,700 | |||
Assignment of finance lease obligation in connection with sale of hotel | $ 15,600 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Lease Cost | ||||
Amortization of right-of-use asset | $ 367 | $ 735 | ||
Interest on lease obligation | 351 | $ 117 | 702 | |
Operating lease cost | $ 1,327 | 1,366 | 2,716 | 2,686 |
Variable lease cost | 1,978 | 13 | 2,859 | 13 |
Total lease cost | $ 3,305 | $ 2,097 | $ 5,692 | $ 4,136 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 | Dec. 31, 2021 | Jul. 31, 2021 | May 31, 2021 | Apr. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2023 | |
Stockholders' equity | ||||||||
Preferred stock redemption charges | $ 4,016 | |||||||
Series G Cumulative Redeemable Preferred Stock | ||||||||
Stockholders' equity | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 2,650,000 | 2,650,000 | ||||||
Liquidation preference (in dollars per share) | $ 25 | $ 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 G Cumulative Redeemable Preferred Stock | Maximum | Montage Healdsburg | ||||||||
Stockholders' equity | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 3% | |||||||
Series H Cumulative Redeemable Preferred Stock | ||||||||
Stockholders' equity | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.125% | 6.125% | 6.125% | |||||
Redemption price (in dollars per share) | $ 25 | |||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 4,600,000 | ||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | |||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | |||||
Preferred stock redemption date | May 24, 2026 | |||||||
Series I Cumulative Redeemable Preferred Stock | ||||||||
Stockholders' equity | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 5.70% | 5.70% | 5.70% | |||||
Redemption price (in dollars per share) | $ 25 | |||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 4,000,000 | ||||||
Number of shares of preferred stock issued (in shares) | 4,000,000 | |||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | |||||
Preferred stock redemption date | Jul. 16, 2026 | |||||||
Preferred Stock | Series E Cumulative Redeemable Preferred Stock | ||||||||
Stockholders' equity | ||||||||
Number of shares redeemed (in shares) | (4,600,000) | |||||||
Preferred Stock | Series H Cumulative Redeemable Preferred Stock | ||||||||
Stockholders' equity | ||||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Feb. 28, 2022 | Feb. 28, 2021 | Feb. 28, 2017 | |
Stockholders' equity | |||||||
Proceeds from issuance of common stock | $ 38,443 | ||||||
Share Repurchase Program | |||||||
Stockholders' equity | |||||||
Repurchase Program, number of shares repurchased (in shares) | 3,235,958 | 3,879,025 | |||||
Repurchase Program, value of shares repurchased | $ 34,500 | $ 43,500 | |||||
Repurchase Program, remaining authorized capacity | 422,200 | $ 422,200 | |||||
Maximum | Share Repurchase Program | |||||||
Stockholders' equity | |||||||
Stock Repurchase Program, maximum amount authorized for repurchase | $ 500,000 | ||||||
Common Stock | |||||||
Stockholders' equity | |||||||
Payment of stock offering costs | $ 91 | 784 | |||||
Common Stock | At The Market | |||||||
Stockholders' equity | |||||||
ATM Program, number of shares sold or issued (in shares) | 0 | ||||||
ATM Program, remaining amount authorized for issuance | $ 300,000 | $ 300,000 | |||||
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 | $ 3,943 |
Long-Term Incentive Plan (Detai
Long-Term Incentive Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Compensation Expense and Forfeitures | ||||
Capitalized compensation cost related to shares issued to design and construction employees | $ 241 | $ 242 | ||
Restricted Stock [Member] | Minimum | ||||
Long-Term Incentive Plan | ||||
Vesting period | 3 years | |||
Restricted Stock [Member] | Maximum | ||||
Long-Term Incentive Plan | ||||
Vesting period | 5 years | |||
Performance Shares [Member] | Minimum | ||||
Long-Term Incentive Plan | ||||
Vesting period | 2 years | |||
Performance Shares [Member] | Maximum | ||||
Long-Term Incentive Plan | ||||
Vesting period | 5 years | |||
Restricted Shares and Performance awards | ||||
Compensation Expense and Forfeitures | ||||
Amortization Expense, including forfeitures | $ 2,853 | $ 4,659 | $ 6,431 | 7,411 |
Capitalized compensation cost related to shares issued to design and construction employees | $ 118 | $ 125 | $ 241 | $ 242 |
Commitments and Contingencies -
Commitments and Contingencies - Management Fees, Franchise Costs and Renovation Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Basic and incentive management fees incurred | ||||
Other property-level expenses | $ 30,391 | $ 16,067 | $ 54,301 | $ 26,544 |
License and Franchise Agreements | ||||
Franchise assessments | 3,969 | 1,852 | 6,687 | 2,720 |
Franchise royalties | 311 | 444 | 597 | 567 |
Franchise costs | 4,280 | 2,296 | 7,284 | 3,287 |
Basic management fees | ||||
Basic and incentive management fees incurred | ||||
Other property-level expenses | 6,946 | 3,073 | 11,615 | 4,376 |
Incentive management fees | ||||
Basic and incentive management fees incurred | ||||
Other property-level expenses | 3,067 | 4,625 | ||
Total basic and incentive management fees | ||||
Basic and incentive management fees incurred | ||||
Other property-level expenses | 10,013 | $ 3,073 | $ 16,240 | $ 4,376 |
Minimum | ||||
Management Agreements | ||||
Basic management fees (as a percent) | 2% | |||
Maximum | ||||
Management Agreements | ||||
Basic management fees (as a percent) | 3% | |||
Renovation and Construction Commitments | ||||
Renovation and Construction Commitments | ||||
Remaining construction commitments | $ 76,900 | $ 76,900 |
Commitments and Contingencies_2
Commitments and Contingencies - Other Commitments and Concentration of Risk (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 30 Months Ended | |||
Dec. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) property | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) property | Jun. 30, 2022 USD ($) property | Dec. 31, 2020 USD ($) | |
Concentration of Risk | ||||||||
Number of hotels owned by the Company | property | 15 | 15 | 15 | 15 | ||||
Loss Contingencies | ||||||||
Proceeds from property insurance | $ 4,369 | |||||||
Gain on extinguishment of debt | $ 21 | $ 88 | $ (192) | $ 310 | ||||
Term of unsecured environmental indemnities | 0 years | |||||||
Damage limitation of unsecured environmental indemnities | $ 0 | |||||||
Hilton Times Square | ||||||||
Loss Contingencies | ||||||||
Loss contingency accrued balance | $ 10,500 | 10,400 | 10,400 | $ 10,400 | $ 10,400 | |||
Loss contingency payment | 100 | 900 | ||||||
Restricted Cash | 10,400 | 10,300 | 10,300 | 10,300 | 10,300 | $ 11,600 | ||
Gain on extinguishment of debt | $ 100 | $ 300 | ||||||
Four Seasons Resort Napa Valley | ||||||||
Loss Contingencies | ||||||||
Loss contingency accrued balance | 3,100 | 3,100 | 3,100 | 3,100 | 3,100 | |||
Loss contingency increase (decrease) | 3,100 | |||||||
Restricted Cash | 3,100 | 3,100 | 3,100 | 3,100 | 3,100 | |||
Four Seasons Resort Napa Valley | Maximum | ||||||||
Loss Contingencies | ||||||||
Maximum estimated future severance obligations | 5,000 | $ 5,000 | $ 5,000 | 5,000 | ||||
Number of rooms | Geographic Concentration Risk [Member] | California | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 34% | |||||||
Number of rooms | Geographic Concentration Risk [Member] | Florida | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 17% | |||||||
Number of rooms | Geographic Concentration Risk [Member] | Hawaii | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 7% | |||||||
Number of rooms | Geographic Concentration Risk [Member] | Massachusetts | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 19% | |||||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | California | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 38% | |||||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Florida | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 14% | |||||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Hawaii | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 21% | |||||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Massachusetts | ||||||||
Concentration of Risk | ||||||||
Concentration risk (as a percent) | 15% | |||||||
Financial standby letter of credit | ||||||||
Loss Contingencies | ||||||||
Restricted Cash | $ 200 | 200 | $ 200 | $ 200 | 200 | |||
Outstanding irrevocable letters of credit | 200 | 200 | 200 | $ 200 | ||||
Payments on credit facility | 0 | |||||||
Hurricane Ida | Hilton New Orleans St. Charles | ||||||||
Loss Contingencies | ||||||||
Hurricane-related restoration expenses | $ 100 | 1,500 | 4,500 | |||||
Hurricane Ida | JW Marriott New Orleans | ||||||||
Loss Contingencies | ||||||||
Hurricane-related restoration expenses | 100 | $ 1,400 | ||||||
Hurricane Ida | Insurance Claims [Member] | Hilton New Orleans St. Charles | ||||||||
Loss Contingencies | ||||||||
Proceeds from property insurance | 4,400 | |||||||
Insurance Recoveries | $ 1,000 | |||||||
Hotel owned by the Company | Geographic Concentration Risk [Member] | California | ||||||||
Concentration of Risk | ||||||||
Number of hotels owned by the Company | property | 5 | 5 | 5 | 5 | ||||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Florida | ||||||||
Concentration of Risk | ||||||||
Number of hotels owned by the Company | property | 3 | 3 | 3 | 3 | ||||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Hawaii | ||||||||
Concentration of Risk | ||||||||
Number of hotels owned by the Company | property | 1 | 1 | 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 | 2 | 2 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 7 Months Ended | |||
Jul. 31, 2022 USD ($) item | Jul. 31, 2022 USD ($) item shares | Jun. 30, 2022 USD ($) shares | Mar. 31, 2022 USD ($) shares | Jun. 30, 2022 USD ($) | Jul. 31, 2022 USD ($) item shares | Jul. 01, 2022 USD ($) | |
Senior unsecured revolving credit facility | |||||||
Line of credit facility | |||||||
Interest rate, description of reference rate | one-month LIBOR | ||||||
Debt maturity date | Apr. 14, 2023 | ||||||
Repayment of revolving credit facility | $ 230 | ||||||
Senior unsecured revolving credit facility | Minimum | |||||||
Line of credit facility | |||||||
Interest rate added to base rate (as a percent) | 1.40% | ||||||
Senior unsecured revolving credit facility | Maximum | |||||||
Line of credit facility | |||||||
Interest rate added to base rate (as a percent) | 2.25% | ||||||
Share Repurchase Program | |||||||
Stockholders' equity | |||||||
Repurchase Program, number of shares repurchased (in shares) | shares | 3,235,958 | 3,879,025 | |||||
Repurchase Program, value of shares repurchased | $ 34.5 | $ 43.5 | |||||
Repurchase Program, remaining authorized capacity | $ 422.2 | $ 422.2 | |||||
Subsequent Event [Member] | Second Amended and Restated Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||||
Line of credit facility | |||||||
Interest rate, description of reference rate | SOFR | ||||||
Subsequent Event [Member] | Second Amended and Restated Credit Agreement | Minimum | |||||||
Line of credit facility | |||||||
Interest rate added to base rate (as a percent) | 1.35% | ||||||
Subsequent Event [Member] | Second Amended and Restated Credit Agreement | Maximum | |||||||
Line of credit facility | |||||||
Interest rate added to base rate (as a percent) | 2.25% | ||||||
Subsequent Event [Member] | Senior unsecured revolving credit facility | |||||||
Line of credit facility | |||||||
Maximum borrowing capacity for unsecured revolving credit facility | $ 500 | $ 500 | $ 500 | ||||
Number of extension periods for unsecured debt | item | 2 | 2 | 2 | ||||
Term of extension period for unsecured debt | 6 months | ||||||
Credit facility expiration date after extensions | Jul. 01, 2027 | ||||||
Repayment of revolving credit facility | $ 230 | ||||||
Subsequent Event [Member] | Unsecured Term Loans | |||||||
Line of credit facility | |||||||
Outstanding balance of unsecured debt | $ 350 | 350 | $ 350 | $ 108.3 | |||
Subsequent Event [Member] | Term loan #1 | |||||||
Line of credit facility | |||||||
Outstanding balance of unsecured debt | 175 | $ 175 | 175 | ||||
Debt maturity date | Jul. 01, 2027 | ||||||
Subsequent Event [Member] | Term loan #2 | |||||||
Line of credit facility | |||||||
Outstanding balance of unsecured debt | 175 | $ 175 | $ 175 | ||||
Debt maturity date | Jan. 01, 2028 | ||||||
Subsequent Event [Member] | Share Repurchase Program | |||||||
Stockholders' equity | |||||||
Repurchase Program, number of shares repurchased (in shares) | shares | 134,444 | 7,249,427 | |||||
Repurchase Program, value of shares repurchased | $ 1.3 | $ 79.3 | |||||
Repurchase Program, remaining authorized capacity | $ 420.8 | $ 420.8 | $ 420.8 |