Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 08, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SOHO | |
Entity Registrant Name | SOTHERLY HOTELS INC. | |
Entity Central Index Key | 1,301,236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 13,798,051 | |
Sotherly Hotels LP [Member] | ||
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | SOTHERLY HOTELS LP | |
Entity Central Index Key | 1,301,236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
ASSETS | ||
Investment in hotel properties, net | $ 355,997,751 | $ 348,593,912 |
Investment in hotel properties held for sale, net | 5,333,000 | |
Cash and cash equivalents | 21,743,744 | 31,766,775 |
Restricted cash | 4,644,532 | 4,596,145 |
Accounts receivable, net | 5,601,922 | 4,127,748 |
Accounts receivable-affiliate | 475,537 | 4,175 |
Prepaid expenses, inventory and other assets | 5,662,512 | 4,648,469 |
Deferred income taxes | 6,831,290 | 6,949,340 |
TOTAL ASSETS | 400,957,288 | 406,019,564 |
LIABILITIES | ||
Mortgage loans, net | 279,269,154 | 282,708,289 |
Unsecured notes, net | 24,392,721 | 24,308,713 |
Accounts payable and accrued liabilities | 14,445,106 | 12,970,960 |
Advance deposits | 3,405,606 | 2,315,787 |
Dividends and distributions payable | 2,430,869 | 2,376,527 |
TOTAL LIABILITIES | 323,943,456 | 324,680,276 |
Commitments and contingencies (See Note 6) | ||
Sotherly Hotels Inc. stockholders’ equity | ||
8% Series B cumulative redeemable perpetual preferred stock, par value $0.01, 11,000,000 shares authorized, liquidation preference $25 per share, 1,610,000 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 16,100 | 16,100 |
Common stock, par value $0.01, 49,000,000 shares authorized, 13,798,051 shares and 14,468,551 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 137,980 | 144,685 |
Additional paid-in capital | 118,495,927 | 118,395,082 |
Unearned ESOP Shares | (4,874,758) | |
Distributions in excess of retained earnings | (39,142,720) | (39,545,754) |
Total Sotherly Hotels Inc. stockholders’ equity | 74,632,529 | 79,010,113 |
Noncontrolling interest | 2,381,303 | 2,329,175 |
TOTAL EQUITY | 77,013,832 | 81,339,288 |
TOTAL LIABILITIES AND EQUITY | 400,957,288 | 406,019,564 |
Sotherly Hotels LP [Member] | ||
ASSETS | ||
Investment in hotel properties, net | 355,997,751 | 348,593,912 |
Investment in hotel properties held for sale, net | 5,333,000 | |
Cash and cash equivalents | 21,743,744 | 31,766,775 |
Restricted cash | 4,644,532 | 4,596,145 |
Accounts receivable, net | 5,601,922 | 4,127,748 |
Accounts receivable-affiliate | 495,463 | 4,175 |
Loan receivable - affiliate | 4,874,758 | |
Prepaid expenses, inventory and other assets | 5,662,512 | 4,648,469 |
Deferred income taxes | 6,831,290 | 6,949,340 |
TOTAL ASSETS | 405,851,972 | 406,019,564 |
LIABILITIES | ||
Mortgage loans, net | 279,269,154 | 282,708,289 |
Unsecured notes, net | 24,392,721 | 24,308,713 |
Accounts payable and accrued liabilities | 14,445,106 | 12,970,960 |
Advance deposits | 3,405,606 | 2,315,787 |
Dividends and distributions payable | 2,430,869 | 2,376,527 |
TOTAL LIABILITIES | 323,943,456 | 324,680,276 |
Commitments and contingencies (See Note 6) | ||
Sotherly Hotels Inc. stockholders’ equity | ||
TOTAL LIABILITIES AND EQUITY | 405,851,972 | 406,019,564 |
PARTNERS’ CAPITAL | ||
8% Series B Cumulative Redeemable Perpetual Preferred units, liquidation preference $25 per unit, 1,610,000 units issued and outstanding at March 31, 2017 and December 31, 2016 | 37,766,531 | 37,766,531 |
General Partner: 162,587 units and 162,467 units issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 695,131 | 681,389 |
Limited Partners: 16,096,104 units and 16,084,224 units issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 43,446,854 | 42,891,368 |
TOTAL PARTNERS’ CAPITAL | $ 81,908,516 | $ 81,339,288 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Preferred stock, dividend rate percentage | 8.00% | |
Preferred stock, shares authorized | 11,000,000 | |
Preferred stock, liquidation preference per share | $ 25 | |
Preferred stock, shares issued | 1,610,000 | 1,610,000 |
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 49,000,000 | 49,000,000 |
Common stock, shares issued | 13,798,051 | 14,468,551 |
Common stock, shares outstanding | 13,798,051 | 14,468,551 |
Sotherly Hotels LP [Member] | ||
General Partner, units issued | 162,587 | 162,467 |
General Partner, units outstanding | 162,587 | 162,467 |
Limited Partner, units issued | 16,096,104 | 16,084,224 |
Limited Partner, units outstanding | 16,096,104 | 16,084,224 |
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred units, dividend rate percentage | 8.00% | 8.00% |
Preferred units, liquidation preference per units | $ 25 | $ 25 |
Preferred units, issued | 1,610,000 | 1,610,000 |
Preferred units, outstanding | 1,610,000 | 1,610,000 |
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Preferred stock, dividend rate percentage | 8.00% | 8.00% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 11,000,000 | 11,000,000 |
Preferred stock, liquidation preference per share | $ 25 | $ 25 |
Preferred stock, shares issued | 1,610,000 | 1,610,000 |
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUE | ||
Rooms department | $ 27,366,634 | $ 27,322,413 |
Food and beverage department | 8,323,759 | 8,249,679 |
Other operating departments | 3,004,493 | 2,238,052 |
Total revenue | 38,694,886 | 37,810,144 |
Hotel operating expenses | ||
Rooms department | 6,682,279 | 7,080,633 |
Food and beverage department | 5,728,473 | 5,939,861 |
Other operating departments | 600,020 | 593,969 |
Indirect | 14,205,231 | 14,135,595 |
Total hotel operating expenses | 27,216,003 | 27,750,058 |
Depreciation and amortization | 4,061,097 | 3,668,638 |
Corporate general and administrative | 1,712,082 | 1,607,294 |
Total operating expenses | 32,989,182 | 33,025,990 |
NET OPERATING INCOME | 5,705,704 | 4,784,154 |
Other income (expense) | ||
Interest expense | (3,813,717) | (4,632,632) |
Interest income | 39,705 | 8,830 |
Unrealized loss on hedging activities | (15,945) | (50,557) |
Gain on sale of assets | 100,407 | |
Gain on involuntary conversion of assets | 1,041,815 | |
Net income before income taxes | 3,057,969 | 109,795 |
Income tax (provision) benefit | (171,937) | 436,079 |
Net income | 2,886,032 | 545,874 |
Less: Net income attributable to noncontrolling interest | (229,942) | (62,779) |
Net income attributable to the Company | 2,656,090 | 483,095 |
Distributions to preferred stockholders | (805,000) | |
Net income available to common stockholders | $ 1,851,090 | $ 483,095 |
Net income per share available to common stockholders | ||
Basic and diluted | $ 0.13 | $ 0.03 |
Weighted average number of common shares outstanding | ||
Basic and diluted | 14,025,489 | 14,792,911 |
Sotherly Hotels LP [Member] | ||
REVENUE | ||
Rooms department | $ 27,366,634 | $ 27,322,413 |
Food and beverage department | 8,323,759 | 8,249,679 |
Other operating departments | 3,004,493 | 2,238,052 |
Total revenue | 38,694,886 | 37,810,144 |
Hotel operating expenses | ||
Rooms department | 6,682,279 | 7,080,633 |
Food and beverage department | 5,728,473 | 5,939,861 |
Other operating departments | 600,020 | 593,969 |
Indirect | 14,205,231 | 14,135,595 |
Total hotel operating expenses | 27,216,003 | 27,750,058 |
Depreciation and amortization | 4,061,097 | 3,668,638 |
Corporate general and administrative | 1,712,082 | 1,607,294 |
Total operating expenses | 32,989,182 | 33,025,990 |
NET OPERATING INCOME | 5,705,704 | 4,784,154 |
Other income (expense) | ||
Interest expense | (3,813,717) | (4,632,632) |
Interest income | 59,631 | 8,830 |
Unrealized loss on hedging activities | (15,945) | (50,557) |
Gain on sale of assets | 100,407 | |
Gain on involuntary conversion of assets | 1,041,815 | |
Net income before income taxes | 3,077,895 | 109,795 |
Income tax (provision) benefit | (171,937) | 436,079 |
Net income | 2,905,958 | 545,874 |
Net income available to common stockholders | $ 2,100,958 | $ 545,874 |
Net income per share available to common stockholders | ||
Basic and diluted | $ 0.13 | $ 0.03 |
Weighted average number of common shares outstanding | ||
Basic and diluted | 16,252,691 | 16,715,044 |
Distributions to preferred unit holders | $ (805,000) | |
Net income available to operating partnership unit holders | $ 2,100,958 | $ 545,874 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - 3 months ended Mar. 31, 2017 - USD ($) | Total | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Unearned ESOP Shares [Member] | Distributions in Excess of Retained Earnings [Member] | Noncontrolling Interest [Member] |
Balances, beginning at Dec. 31, 2016 | $ 81,339,288 | $ 16,100 | $ 144,685 | $ 118,395,082 | $ (39,545,754) | $ 2,329,175 | |
Balances, shares, beginning at Dec. 31, 2016 | 1,610,000 | 14,468,551 | |||||
Net income (loss) | 2,886,032 | 2,656,090 | 229,942 | ||||
Issuance of restricted common stock awards | 89,160 | $ 120 | 89,040 | ||||
Issuance of restricted common stock awards, shares | 12,000 | ||||||
Unearned ESOP Shares and dividends | (4,874,758) | $ (6,825) | 6,825 | $ (4,874,758) | |||
Unearned ESOP Shares and dividends, shares | (682,500) | ||||||
Amortization of restricted stock award | 4,980 | 4,980 | |||||
Preferred stock dividends declared | (805,000) | (805,000) | |||||
Common stockholders' dividends and distributions declared | (1,625,870) | (1,448,056) | (177,814) | ||||
Balances, ending at Mar. 31, 2017 | $ 77,013,832 | $ 16,100 | $ 137,980 | $ 118,495,927 | $ (4,874,758) | $ (39,142,720) | $ 2,381,303 |
Balances, shares, ending at Mar. 31, 2017 | 1,610,000 | 13,798,051 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 2,886,032 | $ 545,874 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,061,097 | 3,668,638 |
Amortization of deferred financing costs | 214,357 | 313,410 |
Amortization of mortgage premium | (6,170) | (6,479) |
Gain on involuntary conversion of assets | (1,041,815) | |
Unrealized loss on derivative instrument | 15,945 | 50,557 |
Gain on sale of assets | (100,407) | |
Charges related to equity-based compensation | 94,140 | 196,742 |
Changes in assets and liabilities: | ||
Restricted cash | (403,086) | (120,693) |
Accounts receivable | (1,209,174) | 222,714 |
Prepaid expenses, inventory and other assets | (1,066,260) | (342,455) |
Deferred income taxes | 118,050 | (487,469) |
Accounts payable and other accrued liabilities | 1,435,722 | 1,892,725 |
Advance deposits | 1,089,819 | 669,690 |
Accounts receivable - affiliate | (471,361) | 17,826 |
Net cash provided by operating activities | 5,616,889 | 6,621,080 |
Cash flows from investing activities: | ||
Acquisitions of hotel properties | (3,986,849) | |
Improvements and additions to hotel properties | (6,304,669) | (4,956,359) |
Funding of restricted cash reserves | (1,804,485) | (1,674,236) |
Proceeds of restricted cash reserves | 2,159,185 | 3,958,496 |
Proceeds from the sale of hotel property | 5,434,856 | |
Proceeds from insurance conversion | 776,815 | |
Proceeds from the sale of assets | 2,955 | |
Net cash used in investing activities | (3,722,192) | (2,672,099) |
Cash flows from financing activities: | ||
Proceeds from mortgage loan receivable | 2,600,711 | |
Repurchase of common stock | (1,103,130) | |
Payments on mortgage loans | (3,566,914) | (1,446,688) |
Refund (payments) of deferred financing costs | 3,600 | (278,899) |
Funding of ESOP stock purchase | (4,874,758) | |
Dividends and distributions paid | (2,376,526) | (1,332,094) |
Net cash used in financing activities | (11,917,728) | (456,970) |
Net increase (decrease) in cash and cash equivalents | (10,023,031) | 3,492,011 |
Cash and cash equivalents at the beginning of the period | 31,766,775 | 11,493,914 |
Cash and cash equivalents at the end of the period | 21,743,744 | 14,985,925 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 3,513,312 | 3,606,752 |
Cash paid during the period for income taxes | 81,361 | 9,165 |
Non-cash investing and financing activities: | ||
Change in amount of hotel property improvements in accounts payable and accrued liabilities | (1,141,553) | (7,209) |
Sotherly Hotels LP [Member] | ||
Cash flows from operating activities: | ||
Net income | 2,905,958 | 545,874 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,061,097 | 3,668,638 |
Amortization of deferred financing costs | 214,357 | 313,410 |
Amortization of mortgage premium | (6,170) | (6,479) |
Gain on involuntary conversion of assets | (1,041,815) | |
Unrealized loss on derivative instrument | 15,945 | 50,557 |
Gain on sale of assets | (100,407) | |
Charges related to equity-based compensation | 94,140 | 196,742 |
Changes in assets and liabilities: | ||
Restricted cash | (403,086) | (120,693) |
Accounts receivable | (1,209,174) | 222,714 |
Prepaid expenses, inventory and other assets | (1,066,260) | (342,455) |
Deferred income taxes | 118,050 | (487,469) |
Accounts payable and other accrued liabilities | 1,435,722 | 1,892,725 |
Advance deposits | 1,089,819 | 669,690 |
Accounts receivable - affiliate | (491,287) | 17,826 |
Net cash provided by operating activities | 5,616,889 | 6,621,080 |
Cash flows from investing activities: | ||
Acquisitions of hotel properties | (3,986,849) | |
Improvements and additions to hotel properties | (6,304,669) | (4,956,359) |
Funding of restricted cash reserves | (1,804,485) | (1,674,236) |
Proceeds of restricted cash reserves | 2,159,185 | 3,958,496 |
Proceeds from the sale of hotel property | 5,434,856 | |
Loan receivable - affiliate | (4,874,758) | |
Proceeds from insurance conversion | 776,815 | |
Proceeds from the sale of assets | 2,955 | |
Net cash used in investing activities | (8,596,950) | (2,672,099) |
Cash flows from financing activities: | ||
Proceeds from mortgage loan receivable | 2,600,711 | |
Repurchase of common stock | (1,103,130) | |
Payments on mortgage loans | (3,566,914) | (1,446,688) |
Refund (payments) of deferred financing costs | 3,600 | (278,899) |
Dividends and distributions paid | (2,376,526) | (1,332,094) |
Net cash used in financing activities | (7,042,970) | (456,970) |
Net increase (decrease) in cash and cash equivalents | (10,023,031) | 3,492,011 |
Cash and cash equivalents at the beginning of the period | 31,766,775 | 11,493,914 |
Cash and cash equivalents at the end of the period | 21,743,744 | 14,985,925 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 3,513,312 | 3,606,752 |
Cash paid during the period for income taxes | 81,361 | 9,165 |
Non-cash investing and financing activities: | ||
Change in amount of hotel property improvements in accounts payable and accrued liabilities | $ (1,141,553) | $ (7,209) |
Consolidated Statement of Chan7
Consolidated Statement of Changes in Partners' Capital - 3 months ended Mar. 31, 2017 - USD ($) | Total | Sotherly Hotels LP [Member] | Sotherly Hotels LP [Member]General Partner [Member] | Sotherly Hotels LP [Member]Limited Partner [Member] | Sotherly Hotels LP [Member]Preferred Units [Member] |
Balances, beginning at Dec. 31, 2016 | $ 81,339,288 | $ 681,389 | $ 42,891,368 | $ 37,766,531 | |
Balances, units, beginning at Dec. 31, 2016 | 162,467 | 16,084,224 | 1,610,000 | ||
Issuance of common partnership units | 89,160 | $ 892 | $ 88,268 | ||
Issuance of common partnership units, number of units | 120 | 11,880 | |||
Amortization of restricted units award | $ 4,980 | 4,980 | $ 50 | $ 4,930 | |
Preferred units distributions declared | (805,000) | $ (805,000) | |||
Partnership units distributions declared | (1,625,870) | (16,260) | (1,609,610) | ||
Net income | $ 2,886,032 | 2,905,958 | 29,060 | 2,071,898 | 805,000 |
Balances, ending at Mar. 31, 2017 | $ 81,908,516 | $ 695,131 | $ 43,446,854 | $ 37,766,531 | |
Balances, units, ending at Mar. 31, 2017 | 162,587 | 16,096,104 | 1,610,000 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Sotherly Hotels Inc., (the “Company”), is a self-managed and self-administered lodging real estate investment trust (“REIT”) that was incorporated in Maryland on August 20, 2004 to own full-service, primarily upscale and upper-upscale hotels located in primary and secondary markets in the mid-Atlantic and southern United States. Currently, the Company is focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the southern United States. The Company’s portfolio consists of investments in eleven hotel properties, comprising 2,838 rooms, and the hotel commercial condominium unit of the Hyde Resort & Residences condominium hotel. All of the Company’s hotels, except for the Georgian Terrace, The Whitehall and the Hyde Resort & Residences, operate under the Hilton, Crowne Plaza, DoubleTree, and Sheraton brands. The Company commenced operations on December 21, 2004 when it completed its initial public offering and thereafter consummated the acquisition of six hotel properties (the “initial properties”). Substantially all of the Company’s assets are held by, and all of its operations are conducted through, Sotherly Hotels LP, (the “Operating Partnership”). Pursuant to the terms of the Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) of the Operating Partnership, the Company, as general partner, is not entitled to compensation for its services to the Operating Partnership. The Company, as general partner, conducts substantially all of its operations through the Operating Partnership and the Company’s administrative expenses are the obligations of the Operating Partnership. Additionally, the Company is entitled to reimbursement for any expenditure incurred by it on the Operating Partnership’s behalf. For the Company to qualify as a REIT, it cannot operate hotels. Therefore, the Operating Partnership, which, at March 31, 2017, was approximately 89.1% owned by the Company, and its subsidiaries, lease the hotels to direct and indirect subsidiaries of MHI Hospitality TRS Holding, Inc., MHI Hospitality TRS, LLC and certain of its subsidiaries, (collectively, “MHI TRS”), each of which is a wholly-owned subsidiary of the Operating Partnership. MHI TRS then engages an eligible independent hotel management company, MHI Hotels Services, LLC, which does business as Chesapeake Hospitality (“Chesapeake Hospitality”), to operate the hotels under a management contract. MHI TRS is treated as a taxable REIT subsidiary for federal income tax purposes. All references in this report to “we”, “us” and “our” refer to the Company, its Operating Partnership and its subsidiaries and predecessors, collectively, unless the context otherwise requires or where otherwise indicated. Significant transactions occurring during the current and prior fiscal year include the following: On March 21, 2016, we entered into an agreement with the existing lender to extend the maturity of the mortgage on The Whitehall until November 2017. On June 27, 2016, we entered into a promissory note and other loan documents to secure a $35.0 million mortgage on the Hilton Savannah DeSoto with MONY Life Insurance Company. The mortgage term is ten years maturing July 1, 2026, subject to certain criteria. The mortgage bears a fixed interest rate of 4.25%. The mortgage amortizes on a 25-year schedule after a 1-year interest-only period. The Company used the proceeds to repay the existing first mortgage on the Hilton Savannah DeSoto and to pay closing costs, and will use the balance of the proceeds to fund ongoing renovations at the hotel and for general corporate purposes. On June 30, 2016, we entered into a loan agreement and other loan documents, including a guaranty of payment by the Operating Partnership, to secure a $19.0 million mortgage on the Crowne Plaza Tampa Westshore with Fifth Third Bank. The mortgage term has an initial term of three years, and may be extended for two additional periods of one year each, subject to certain conditions. The mortgage bears a floating interest rate of the 30-day LIBOR plus 3.75%, subject to a floor rate of 3.75%. The mortgage amortizes on a 25-year schedule. The Company used the proceeds to repay the existing first mortgage on the Crowne Plaza Tampa Westshore and to pay closing costs, and will use the balance of the proceeds for general corporate purposes. On August 23, 2016, the Company sold 1,610,000 shares of 8% Series B Cumulative Redeemable Perpetual Preferred stock, for net proceeds after all expenses of approximately $37.8 million, which it contributed to the Operating Partnership for an equivalent number of preferred units. On September 30, 2016, the Operating Partnership redeemed the entire $27.6 million aggregate principal amount of its outstanding 8% Notes. On October 12, 2016, we entered into a loan agreement to secure a $20.5 million mortgage on The Whitehall with the International Bank of Commerce. Pursuant to the loan documents, the loan provides initial proceeds of $15.0 million, with an additional $5.5 million available upon the satisfaction of certain conditions, has a term of five years, bears a floating interest rate of the one month LIBOR plus 3.5%, subject to a floor rate of 4.0%, amortizes on an 18-year schedule after a 2-year interest only period, is subject to prepayment fees, and is guaranteed by Sotherly Hotels LP. On November 3, 2016, On November 3, 2016, we entered into a loan agreement to modify and extend the mortgage on the Crowne Plaza Hampton Marina with TowneBank. Pursuant to the amended loan documents, the loan continues to bear a fixed interest rate of 5.00%, has a maturity date of November 1, 2019, and beginning on December 1, 2016 requires monthly principal payments of $15,367 plus interest. On December 1, 2016, we entered into a promissory note and other loan documents to secure a $35.0 million mortgage on the Hilton Wilmington Riverside with MONY Life Insurance Company. Pursuant to the loan documents, the loan: provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions. The mortgage term is ten years maturing November 30, 2026, subject to certain criteria. The mortgage bears a fixed interest rate of 4.25%. The mortgage amortizes on a 25-year schedule after a 1-year interest-only period. The Company used the proceeds to repay the existing first mortgage on the Hilton Wilmington Riverside and to pay closing costs, and will use the balance of the proceeds to fund ongoing renovations at the hotel and for general corporate purposes. On December 2, 2016, the Company’s board of directors authorized a stock repurchase program under which the Company may purchase up to $10.0 million of its outstanding common stock, par value $0.01 per share, at prevailing prices on the open market or in privately negotiated transactions, at the discretion of management. Through December 31, 2016 the Company repurchased 481,100 shares of common stock for approximately $3.2 million and the repurchased shares have been returned to the status of authorized but unissued shares of common stock. The Company did not repurchase any shares under the stock repurchase program during the three months ended March 31, 2017. The Company used available working capital to fund purchases under the stock repurchase program and intends to complete the repurchase program prior to December 31, 2017, unless extended by the board of directors. The Company’s board of directors adopted an Employee Stock Ownership Plan (“ESOP”) as of November 29, 2016, effective January 1, 2016. The Company sponsors and maintains the ESOP and related trust for the benefit of its eligible employees. The ESOP is funded by a loan from the Company, pursuant to which the ESOP may borrow up to $5,000,000 to purchase shares of the Company’s common stock. From January 3, 2017 to February 28, 2017 the ESOP purchased 682,500 shares of common stock for approximately $4.9 million . Coincident with the execution of the loan from the Company to the ESOP, the Operating Partnership committed to fund a loan to the Company to allow the Company to loan funds to the ESOP, for the purpose as stated above. On January 30, 2017, we closed on the purchase of the commercial condominium unit of the Hyde Resort & Residences, a 400-unit condominium hotel located in the Hollywood, Florida market, for an aggregated price of approximately $4.8 million from 4111 South Ocean Drive, LLC. In connection with the closing of the transaction, the Company entered into a lease agreement for the 400-space parking garage and meeting rooms associated with the condominium hotel, agreements relating to the operation and management of the hotel condominium association and a condominium unit rental program, and a pre-opening services agreement whereby the seller paid the Company a fee of approximately $0.8 million for certain pre-opening related preparations. On February 7, 2017, we closed on the sale of the Crowne Plaza Hampton Marina to Marina Hotels, LLC for an approximate price of $5.6 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation – The consolidated financial statements of the Company presented herein include all of the accounts of Sotherly Hotels Inc., the Operating Partnership, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of the Operating Partnership presented herein include all of the accounts of Sotherly Hotels LP, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated, with the exception of the ESOP, which records a charge for salaries expense on allocated shares and their dividends. Additionally, all administrative expenses of the Company and those expenditures made by the Company on behalf of the Operating Partnership are reflected as the administrative expenses, expenditures and obligations thereto of the Operating Partnership, pursuant to the terms of the Partnership Agreement. Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at acquisition cost and allocated to land, property and equipment and identifiable intangible assets. 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 are removed from our accounts and any resulting gain or loss is included in the statements of operations. Expenditures under a renovation project which constitute additions or improvements that extend the life of the property are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 7 to 39 years for buildings and building improvements and 3 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse permanent changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are found to be less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value would be recorded and an impairment loss recognized. Assets Held For Sale – We record assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) protection limits of $250,000. Our exposure to credit loss in the event of the failure of these institutions is represented by the difference between the FDIC protection limit and the total amounts on deposit. Management monitors, on a regular basis, the financial condition of the financial institutions along with the balances there on deposit to minimize our potential risk. Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements. Accounts Receivable – Accounts receivable consists primarily of hotel guest and banqueting receivables. Ongoing evaluations of collectability are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. Inventories – Inventories, consisting primarily of food and beverages, are stated at the lower of cost or market, with cost determined on a method that approximates first-in, first-out basis. Franchise License Fees – Fees expended to obtain or renew a franchise license are amortized over the life of the license or renewal. The unamortized franchise fees as of March 31, 2017 and December 31, 2016 were $366,030 and $386,612, respectively. Amortization expense for the three month periods ended March 31, 2017 and 2016 totaled $31,452 and $15,131, respectively. Deferred Financing and Offering Costs – Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt and are reflected in mortgage loans, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in issuing equity and are reflected in prepaid expenses, inventory and other assets on the consolidated balance sheets. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations. Our amortization of deferred offering costs occurs when one of our equity offerings is complete, whereby the costs are offset against the equity funds raised in the future and included in additional paid-in capital on the consolidated balance sheets, or if the offering expires and the offering costs exceed the funds raised in the offering then the excess will be included in corporate general and administrative expenses in the consolidated statements of operations. Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the balance sheet and measured at fair value. Derivative instruments used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as an interest rate risk, are considered fair value hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For a derivative instrument designated as a cash flow hedge, the change in fair value each period is reported in accumulated other comprehensive income in stockholders’ equity and partners’ capital to the extent the hedge is effective. For a derivative instrument designated as a fair value hedge, the change in fair value each period is reported in earnings along with the change in fair value of the hedged item attributable to the risk being hedged. For a derivative instrument that does not qualify for hedge accounting or is not designated as a hedge, the change in fair value each period is reported in earnings. We use derivative instruments to add stability to interest expense and to manage our exposure to interest-rate movements. To accomplish this objective, we primarily are using an interest rate cap which acts as a cash flow hedge and is not designated as a hedge. We value our interest-rate cap at fair value, which we define as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We also have used derivative instruments in the Company’s stock to obtain more favorable terms on our financing. We do not enter into contracts to purchase or sell derivative instruments for speculative trading purposes. Fair Value Measurements – We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table represents our interest rate cap, mortgage loans and unsecured notes measured at fair value and the basis for that measurement: Level 1 Level 2 Level 3 December 31, 2016 Interest Rate Cap (1) $ — $ 33,597 $ — Mortgage loans (2) $ — $ (281,840,780 ) $ — Unsecured notes (3) $ (26,241,160 ) $ — $ — March 31, 2017 Interest Rate Cap (1) $ — $ 17,651 $ — Mortgage loans (2) $ — $ (275,447,446 ) $ — Unsecured notes (3) $ (26,312,000 ) $ — $ — (1) Interest rate cap for our loan on DoubleTree by Hilton Jacksonville Riverfront, which caps the 1-month LIBOR rate at 2.5%. (2) Mortgage loans are reflected at outstanding principal balance net of deferred financing costs on our Consolidated Balance Sheet as of March 31, 2017 and December 31, 2016. (3) Unsecured notes are recorded at outstanding principal balance on our Consolidated Balance Sheet as of March 31, 2017 and December 31, 2016. Noncontrolling Interest in Operating Partnership – Certain hotel properties were acquired, in part, by the Operating Partnership through the issuance of limited partnership units of the Operating Partnership. The noncontrolling interest in the Operating Partnership is: (i) increased or decreased by the limited partners’ pro-rata share of the Operating Partnership’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by redemption of partnership units for the Company’s common stock; and (iv) adjusted to equal the net equity of the Operating Partnership multiplied by the limited partners’ ownership percentage immediately after each issuance of units of the Operating Partnership and/or the Company’s common stock through an adjustment to additional paid-in capital. Net income or net loss is allocated to the noncontrolling interest in the Operating Partnership based on the weighted average percentage ownership throughout the period. Revenue Recognition – Revenues from operations of the hotels and condominium hotel are recognized when the services are provided. Revenues consist of room sales, food and beverage sales, and other hotel department revenues, such as rental management fees, telephone, parking, gift shop sales and rentals from restaurant tenants, rooftop leases and gift shop operators. Revenues are reported net of occupancy and other taxes collected from customers and remitted to governmental authorities. Lease Revenue – Several of our properties generate revenue from leasing commercial space adjacent to the hotel, the restaurant space within the hotel, apartment units and space on the roofs of our hotels for antennas and satellite dishes. We account for the lease income as revenue from other operating departments within the statement of operations pursuant to the terms of each lease. Lease revenue was approximately $0.5 million and $0.5 million, for the three months ended March 31, 2017 and 2016, respectively. A schedule of minimum future lease payments receivable for the remaining nine and twelve-month lease periods is as follows: For the remaining nine months ending: December 31, 2017 $ 635,133 December 31, 2018 481,823 December 31, 2019 420,926 December 31, 2020 375,290 December 31, 2021 218,013 December 31, 2022 and thereafter 635,950 Total $ 2,767,135 Income Taxes – The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally will not be subject to federal income tax. MHI TRS, our wholly owned taxable REIT subsidiary which leases our hotels from subsidiaries of the Operating Partnership, is subject to federal and state income taxes. We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. As of March 31, 2017, and December 31, 2016, deferred tax assets totaled approximately $6.8 million and $6.9 million, respectively, of which approximately $5.9 million and $6.0 million relate to net operating losses of our TRS Lessee. A valuation allowance is required for deferred tax assets if, based on all available evidence, it is “more-likely-than-not” that all or a portion of the deferred tax asset will or will not be realized due to the inability to generate sufficient taxable income in certain financial statement periods. The “more-likely-than-not” analysis means the likelihood of realization is greater than 50%, that we will or will not be able to fully utilize the deferred tax assets against future taxable income. The net amount of deferred tax assets that are recorded on the financial statements must reflect the tax benefits that are expected to be realized using these criteria. We perform this analysis by evaluating future hotel revenues and expenses accounting for certain non-recurring costs and expenses during the current and prior two fiscal years as well as anticipated changes in the lease rental payments from the TRS Lessee to subsidiaries of the Operating Partnership. We have determined that it is more-likely-than-not that we will be able to fully utilize our deferred tax assets for future tax consequences, therefore no valuation allowance is required. As of March 31, 2017 and December 31, 2016, we had no uncertain tax positions. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2010 through 2016. In addition, as of March 31, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject generally include 2004 through 2016. The Operating Partnership is generally not subject to federal and state income taxes as the unit holders of the Partnership are subject to tax on their respective shares of the Partnership’s taxable income. Stock-based Compensation – The Company’s 2004 Long Term Incentive Plan (the “2004 Plan”) and its 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permit the grant of stock options, restricted stock and performance share compensation awards to its employees for up to 350,000 and 750,000 shares of common stock, respectively. The Company believes that such awards better align the interests of its employees with those of its stockholders. Under the 2004 Plan, the Company made stock awards totaling 337,438 shares, including 255,938 shares issued to certain executives and employees and 81,500 restricted shares issued to its independent directors. Of the 255,938 shares issued to certain of our executives and employees, all have vested except 6,000 shares issued to the Chief Financial Officer upon execution of his employment contract which will vest pro rata on the next anniversary of the effective date of his employment agreement. All of the 81,500 restricted shares issued to the Company’s independent directors have vested. The 2004 Plan was terminated in 2013. Under the 2013 Plan, the Company has made stock awards totaling 121,100 shares, including 74,600 non-restricted shares to certain executives and employees and 46,500 restricted shares issued to its independent directors. All awards have vested except for 12,000 shares issued to the Company’s independent directors in February 2017, which will vest on December 31, 2017. Previously, under the 2004 Plan, and currently, under the 2013 Plan, the Company may issue a variety of performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of March 31, 2017, no performance-based stock awards have been granted. Consequently, stock-based compensation as determined under the fair-value method would be the same under the intrinsic-value method. Total compensation cost recognized under the 2013 Plan for the three months ended March 31, 2017 and 2016 was $94,140 and $196,742, respectively. The 2004 Plan was terminated in April 2013. Additionally, the Company sponsors and maintains an ESOP and related trust for the benefit of its eligible employees. We reflect Advertising – Advertising costs were $65,010 and $74,063 for the three months ended March 31, 2017 and 2016, respectively. Advertising costs are expensed as incurred. Involuntary Conversion of Assets – We record gains or losses on involuntary conversions of assets due to recovered insurance proceeds to the extent the undepreciated cost of a nonmonetary asset differs from the amount of monetary proceeds received. During the three-month period ending March 31, 2017, we recognized approximately a $1.0 million gain on involuntary conversion of assets which is reflected in the consolidated statements of operations. Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income. Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership. Use of Estimates – The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“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 from those estimates. Recent Accounting Pronouncements – In February 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-05, The FASB issued this update to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments in this update also simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses in many transactions related to: a partial sale of real estate; a transfer of a nonfinancial asset within the scope of FASB ASC Topic 845, ; a contribution of a nonfinancial asset to form a joint venture; and a transfer of a nonfinancial asset to an equity method investee. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. We will adopt this ASU as of our quarter ending March 31, 2018. We do not expect this ASU to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients” In April 2016, the FASB issued ASU No. 2016-10 , “Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing” In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Acquisition of Hotel Property
Acquisition of Hotel Property | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Hotel Property | 3. Acquisition of Hotel Property Hyde Resort & Residences. On January 30, 2017, we acquired the hotel commercial condominium unit of the Hyde Resort & Residences condominium hotel, for an aggregate price including inventory and other assets of approximately $4.8 million. The allocation of the estimated purchase price based on fair values is as follows: Hyde Resort & Residences Land and land improvements $ 500 Buildings and improvements 4,309,500 Furniture, fixtures and equipment 72,616 Investment in hotel properties 4,382,616 Accrued liabilites and other costs (866,142 ) Prepaid expenses, inventory and other assets 470,375 Net cash $ 3,986,849 The results of operations of the hotel are included in our consolidated financial statements from the date of acquisition. The total revenue and net loss related to the acquisition for the period January 30, 2017 to March 31, 2017 are approximately $0.8 million and $10,614, respectively. There is no pro forma financial information, since this is a new operation without prior historical information. |
Investment in Hotel Properties,
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate [Abstract] | |
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net | 4. Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net Investment in hotel properties, net as of March 31, 2017 and December 31, 2016 consisted of the following: March 31, 2017 December 31, 2016 Land and land improvements $ 57,990,668 $ 57,851,380 Buildings and improvements 336,005,447 336,996,876 Furniture, fixtures and equipment 51,453,590 43,458,781 445,449,705 438,307,037 Less: accumulated depreciation and impairment (89,451,954 ) (89,713,125 ) Investment in Hotel Properties, Net $ 355,997,751 $ 348,593,912 Investment in hotel properties held for sale, net as of March 31, 2017 and December 31, 2016 consisted of the following: March 31, 2017 December 31, 2016 Land and land improvements $ — $ 1,097,096 Buildings and improvements — 6,242,504 Furniture, fixtures and equipment — 2,289,008 — 9,628,608 Less: accumulated depreciation and impairment — (4,295,608 ) Investment in Hotel Properties Held for Sale, Net $ — $ 5,333,000 Investment in hotel properties held for sale, net represents the Crowne Plaza Hampton Marina property which was sold on February 7, 2017, for approximately $5.6 million. After selling costs, mortgage loan payoff and associated fees we realized an approximate gain on the sale of assets of $0.1 million, as reflected in the consolidated statements of operations. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Mortgage Loans, Net . As of March 31, 2017 and December 31, 2016, we had approximately $279.3 million and approximately $282.7 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels. Balance Outstanding as of March 31, December 31, Prepayment Maturity Amortization Interest Property 2017 2016 Penalties Date Provisions Rate Crowne Plaza Hampton Marina (1) $ - $ 2,584,633 None 11/1/2019 3 years 5.00% Crowne Plaza Hollywood Beach Resort (2) 58,702,008 58,935,818 n/a 10/1/2025 30 years 4.913% Crowne Plaza Tampa Westshore (3) 15,492,100 15,561,400 None 6/30/2019 25 years LIBOR plus 3.75 % DoubleTree by Hilton Jacksonville Riverfront (4) 19,169,500 19,291,716 Yes 7/7/2019 25 years LIBOR plus 3.50 % DoubleTree by Hilton Laurel (5) 9,279,206 9,329,005 Yes 8/5/2021 25 years 5.25% DoubleTree by Hilton Philadelphia Airport (6) 31,093,361 31,261,991 None 4/1/2019 25 years LIBOR plus 3.00 % DoubleTree by Hilton Raleigh Brownstone University (7) 14,705,181 14,773,885 n/a 8/1/2018 30 years 4.78% The Georgian Terrace (8) 45,624,025 45,826,038 n/a 6/1/2025 30 years 4.42% Hilton Savannah DeSoto (9) 30,000,000 30,000,000 Yes 7/1/2026 25 years 4.25% Hilton Wilmington Riverside (10) 30,000,000 30,000,000 Yes 1/1/2027 25 years 4.25% Sheraton Louisville Riverside (11) 11,909,748 11,977,557 Yes 12/1/2026 25 years 4.27% The Whitehall (12) 15,000,000 15,000,000 Yes 10/12/2021 18 years LIBOR plus 3.50 % Total Mortgage Principal Balance $ 280,975,129 $ 284,542,043 Deferred financing costs, net (1,915,459 ) (2,049,409 ) Unamortized premium on loan 209,484 215,655 Total Mortgage Loans, Net $ 279,269,154 $ 282,708,289 (1) As of February 7, 2017, the note is no longer outstanding due to the sale of the property. (2) With limited exception, the note may not be prepaid until June 2025. (3) The note provides initial proceeds of $15.7 million, with an additional $3.3 million available upon the satisfaction of certain conditions; bears a floating interest rate of the 30-day LIBOR plus 3.75%, subject to a floor rate of 3.75%; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. (4) The note is subject to a pre-payment penalty until July 2017. Prepayment can be made without penalty thereafter. The note provides that the mortgage can be extended until July 2020 if certain conditions have been satisfied. (5) The note is subject to a pre-payment penalty except for any pre-payments made either between April 2017 and August 2017, or from April 2021 through maturity of the note. The note provides that on January 5, 2018, the rate of interest will adjust to a rate of 3.00% per annum plus the then-current five-year U.S. Treasury rate of interest, with a floor of 5.25%. (6) The note bears a minimum interest rate of 3.50%. (7) With limited exception, the note may not be prepaid until two months before maturity. (8) With limited exception, the note may not be prepaid until February 2025. (9) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions, namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (10) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (11) The note bears a fixed interest rate of 4.27% for the first 5 years of the loan, with an option for the lender to reset the interest rate after 5 years. (12) The note was refinanced in October 2016, provides initial proceeds of $15.0 million, with an additional $5.5 million available upon the satisfaction of certain conditions; bears a floating interest rate of the 1-month LIBOR plus 3.5%, subject to a floor rate of 4.0% and is subject to prepayment penalties subject to a declining scale from 3.0% penalty on or before the first anniversary date, a 2.0% penalty during the second anniversary year and a 1.0% penalty after the third anniversary date. We were in compliance with all debt covenants, current on all loan payments and not otherwise in default under any of our mortgage loans, as of March 31, 2017. Total future mortgage debt maturities, without respect to any extension of loan maturity, as of March 31, 2017 were as follows: For the remaining nine months ending: December 31, 2017 $ 4,397,287 December 31, 2018 23,699,950 December 31, 2019 70,521,941 December 31, 2020 8,438,846 December 31, 2021 30,162,806 December 31, 2022 and thereafter 143,754,299 Total future maturities $ 280,975,129 7.0% Unsecured Notes. On November 21, 2014, the Operating Partnership issued 7.0% senior unsecured notes in the aggregate amount of $25.3 million (the “7% Notes”). The indenture requires quarterly payments of interest and matures on November 15, 2019. The 7% Notes are callable after November 15, 2017 at 101% of face value. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Ground, Building and Submerged Land Leases – We lease 2,086 square feet of commercial space next to the Hilton Savannah DeSoto for use as an office, retail or conference space, or for any related or ancillary purposes for the hotel and/or atrium space. In December 2007, we signed an amendment to the lease to include rights to the outdoor esplanade adjacent to the leased commercial space. The areas are leased under a six-year operating lease, which expired October 31, 2006 and has been renewed for the third of three optional five-year renewal periods expiring October 31, 2011, October 31, 2016 and October 31, 2021, respectively. Rent expense for this operating lease for each of the three months ended March 31, 2017 and 2016 totaled $18,245. We lease, as landlord, the entire fourteenth floor of the Savannah hotel property to The Chatham Club, Inc. under a ninety-nine year lease expiring July 31, 2086. This lease was assumed upon the purchase of the building under the terms and conditions agreed to by the previous owner of the property. No rental income is recognized under the terms of this lease as the original lump sum rent payment of $990 was received by the previous owner and not prorated over the life of the lease. We lease a parking lot adjacent to the DoubleTree by Hilton Raleigh Brownstone-University in Raleigh, North Carolina. The land is leased under a second amendment, dated April 28, 1998, to a ground lease originally dated May 25, 1966. The original lease is a 50-year operating lease, which expired August 31, 2016. We exercised a renewal option for the first of three additional ten-year periods expiring August 31, 2026, August 31, 2036, and August 31, 2046, respectively. We hold an exclusive and irrevocable option to purchase the leased land at fair market value at August 1, 2018, or at the end of any 10-year renewal period, subject to the payment of an annual fee of $9,000, and other conditions. Rent expense for the three months ended March 31, 2017 and 2016, each totaled $23,871. We lease land adjacent to the Crowne Plaza Tampa Westshore for use as parking under a five-year agreement with the Florida Department of Transportation that commenced in July 2009. In May 2014, we extended the agreement for an additional five years. The agreement expires in July 2019. The agreement requires annual payments of $2,432, plus tax, and may be renewed for an additional five years. Rent expense for the three months ended March 31, 2017 and 2016, each totaled $651. We lease certain submerged land in the Saint Johns River in front of the Crowne Plaza Jacksonville Riverfront from the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida. The submerged land was leased under a five-year operating lease requiring annual payments of $4,961, which expired September 18, 2012. A new operating lease was executed requiring annual payments of $6,020 and expires September 18, 2017. Rent expense for the three months ended March 31, 2017 and 2016, each totaled $1,505. We lease 5,216 square feet of commercial office space in Williamsburg, Virginia under an agreement, as amended, that commenced September 1, 2009 and expires August 31, 2018. Rent expense for the three months ended March 31, 2017 and 2016 totaled $22,552 and $23,871. We also lease certain furniture and equipment under financing arrangements expiring between August 2017 and March 2019. A schedule of minimum future lease payments for the following nine and twelve-month periods is as follows: For the remaining nine months ending: December 31, 2017 $ 230,376 December 31, 2018 251,411 December 31, 2019 125,055 December 31, 2020 95,482 December 31, 2021 95,482 December 31, 2022 and thereafter 445,583 Total $ 1,243,389 Employment Agreements - The Company has entered into various employment contracts with employees that could result in obligations to the Company in the event of a change in control or termination without cause. Management Agreements – As of March 31, 2017, each of our wholly-owned hotels and the rental program and condominium association of the Hyde Resort & Residences operated under a management agreement with Chesapeake Hospitality (see Note 9). The management agreements expire between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. Each of the individual hotel management agreements may be terminated earlier than the stated term upon the sale of the hotel covered by the respective management agreement, in which case we may incur early termination fees. Franchise Agreements – As of March 31, 2017, most of our hotels operated under franchise licenses from national hotel companies. Under the franchise agreements, we are required to pay a franchise fee generally between 2.5% and 5.0% of room revenues, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenues from the hotels. The franchise agreements expire between July 2017 and October 2030. On April 12, 2016 we allowed the franchise agreement on the Crowne Plaza Houston Downtown to expire. The property has been rebranded as The Whitehall. Each of our franchise agreements provides for early termination fees in the event the agreement is terminated before the stated term. Restricted Cash Reserves – Each month, we are required to escrow with the lenders on the Hilton Wilmington Riverside, the Hilton Savannah DeSoto, the DoubleTree by Hilton Raleigh Brownstone-University, the DoubleTree by Hilton Jacksonville Riverside, the Crowne Plaza Hollywood Beach Resort, and the Georgian Terrace an amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties. We are also required by several of our lenders to establish individual property improvement funds to cover the cost of replacing capital assets at our properties. Each month, those contributions equal 4.0% of gross revenues for the Hilton Wilmington Riverside, the Hilton Savannah DeSoto, DoubleTree by Hilton Raleigh Brownstone–University, the DoubleTree by Hilton Jacksonville Riverside, the Crowne Plaza Hollywood Beach Resort, The Whitehall, and the Georgian Terrace and equal 4.0% of room revenues for the DoubleTree by Hilton Philadelphia Airport. ESOP Purchase Commitment – The Company’s board of directors approved the ESOP on November 29, 2016. The ESOP is a non-contributory defined contribution plan covering all employees of the Company. The ESOP is a leveraged ESOP, meaning the contributed funds are loaned to the ESOP from the Company. The Company entered into a loan agreement with the ESOP on December 29, 2016, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock on the open market. Shares purchased by the ESOP are held in a suspense account for allocation among participants as contributions are made to the ESOP by the Company. The share allocations will be accounted at fair value at the date of allocation. As of March 31, 2017, the ESOP had purchased 682,500 shares of the Company’s common stock in the open market for approximately $4.9 million, which the ESOP borrowed from the Company pursuant to the loan agreement. As of March 31, 2017, no participant allocations have been made. Litigation –To our knowledge, we are not involved in any material litigation threatened against us. We are involved in routine litigation arising out of the ordinary course of business, all of which we expect to be covered by insurance and we believe it is not reasonably possible such matters will have a material adverse impact on our financial condition or results of operations or cash flows. |
Preferred Stock and Units
Preferred Stock and Units | 3 Months Ended |
Mar. 31, 2017 | |
Preferred Stock And Units [Abstract] | |
Preferred Stock and Units | 7. Preferred Stock and Units Preferred Stock and Units. As of March 31, 2017, and December 31, 2016, there were 1,610,000 shares, respectively, of the Preferred Stock issued and outstanding. The Company has increased its authorized shares of preferred stock to 11,000,000. On August 23, 2016, the Company issued 1,610,000 shares, $0.01 par value per share, of its 8% Series B Cumulative Redeemable Perpetual Preferred Stock for net proceeds after all expenses of approximately $37.8 million, which it contributed to the Operating Partnership for an equivalent number of preferred partnership units. Holders of the Company’s preferred stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. The Company pays cumulative cash distributions on the preferred stock at a rate of 8.00% per annum of the $25.00 liquidation preference per share. The preferred stock is not redeemable by the holders, has no maturity date and is not convertible into any other security of the Company or its affiliates. The Company is the holder of the Operating Partnership’s preferred partnership units . Preferred Unit Distributions – The Company is the holder of the Operating Partnership’s preferred partnership units, and is entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. The Operating Partnership pays cumulative cash dividends on the preferred partnership units at a rate of 8.00% per annum of the $25.00 liquidation preference per unit. For the quarters ended March 31, 2017 and 2016, the Operating Partnership declared and paid $0.50 and $0.00 per preferred unit, respectively. |
Common Stock and Units
Common Stock and Units | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Common Stock and Units | 8. Common Stock and Units Common Stock – The Company is authorized to issue up to 49,000,000 shares of common stock, $0.01 par value per share. Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Holders of the Company’s common stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. On December 2, 2016, the Company’s board of directors authorized a stock repurchase program under which the Company may purchase up to $10.0 million of its outstanding common stock, par value $0.01 per share, at prevailing prices on the open market or in privately negotiated transactions, at the discretion of management. The Company has and expects to continue to use available working capital to fund purchases under the stock repurchase program and intends to complete the repurchase program prior to December 31, 2017, unless extended by the board of directors. Through December 31, 2016 the Company repurchased 481,100 shares of common stock for approximately $3.2 million and the repurchased shares have been returned to the status of authorized but unissued shares of common stock. The Company did not repurchase any shares under the stock repurchase program during the three months ended March 31, 2017. Between January 3, 2017 and February 28, 2017, the ESOP purchased 682,500 shares of the Company’s common stock for approximately $4.9 million. All of the 682,500 ESOP shares are considered unearned ESOP shares at March 31, 2017 and are excluded from outstanding Company’s common stock on the consolidated balance sheets and the earnings per share calculations on the consolidated statements of operations. The following is a schedule of issuances, since January 1, 2016, of the Company’s common stock: On February 15, 2017, the Company was issued 12,000 units in the Operating Partnership and awarded 12,000 shares of restricted stock to its independent directors. On February 2, 2016, the Company was issued 36,250 units in the Operating Partnership and awarded an aggregate of 22,000 shares of unrestricted stock to certain executives and employees as well as 12,000 shares of restricted stock and 2,250 shares of unrestricted stock to certain of its independent directors. On February 1, 2016, two holders of units in the Operating Partnership redeemed 422,687 units for an equivalent number of shares of the Company’s common stock. As of March 31, 2017 and December 31, 2016, the Company had 13,798,051 and 14,468,551 shares of common stock outstanding, respectively. Operating Partnership Units – Holders of Operating Partnership units, other than the Company as general partner, have certain redemption rights, which enable them to cause the Operating Partnership to redeem their units in exchange for shares of the Company’s common stock on a one-for-one basis or, at the option of the Company, cash per unit equal to the average of the market price of the Company’s common stock for the 10 trading days immediately preceding the notice date of such redemption. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the limited partners or the stockholders of the Company. There were no issuances or redemptions, since January 1, 2016, of units in the Operating Partnership other than the issuances of units in the Operating Partnership to the Company described above. As of March 31, 2017 and December 31, 2016, the total number of Operating Partnership units outstanding was 16,258,691 and 16,246,691, respectively. As of March 31, 2017 and December 31, 2016, the total number of outstanding Operating Partnership units not owned by the Company was 1,778,140 and 1,778,140, respectively, with a fair market value of approximately $11.4 million and $12.1 million, respectively, based on the price per share of the common stock on such respective dates. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Chesapeake Hospitality . As of March 31, 2017, the members of Chesapeake Hospitality (a company that is majority-owned and controlled by the Company’s chairman and chief executive officer, the Company’s former chief financial officer, and two former members of the Company’s board of directors) owned 1,740,691 shares, approximately 12.0%, of the Company’s outstanding common stock as well as 870,271 Operating Partnership units. The following is a summary of the transactions between Chesapeake Hospitality and us: Accounts Receivable – At March 31, 2017 and December 31, 2016, we were due $158,680 and $0, respectively, from Chesapeake Hospitality. Management Agreements – As of March 31, 2017, each of our wholly-owned hotels and the Hyde Resort & Residences operated under various management agreements with Chesapeake Hospitality. The management agreements expire between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. Each of the individual hotel management agreements may be terminated earlier than the stated term upon the sale of the hotel covered by the respective management agreement, in which case we may incur early termination fees. We also have a master agreement with Chesapeake Hospitality that has a five-year term, but may be extended for such additional periods as long as an individual management agreement remains in effect. The base management fees for The Whitehall and the Georgian Terrace were 2.00% through 2015, increased to 2.25% in 2016, and increased to 2.50% in 2017 and for each year thereafter. The base management fee for the Crowne Plaza Hollywood Beach Resort was 2.00% from July 2015 through July 2016, increased to 2.25% in July 2016, and increases to 2.50% in July 2017 and each year thereafter. The base management fee for the Hyde Resort & Residences is 2.00% from January 2017 through January 2018, increases to 2.25% in January 2018, and increases to 2.50% in January 2019 and for each year thereafter. The base management fees for the remaining properties in the current portfolio are 2.65% through 2017 and decreases to 2.50% thereafter. For new individual hotel management agreements, Chesapeake Hospitality will receive a base management fee of 2.00% of gross revenues for the first full year from the commencement date through the anniversary date, 2.25% of gross revenues the second full year, and 2.50% of gross revenues for every year thereafter. The Company and Chesapeake Hospitality agreed to substitute the Hyde Resort & Residences for the Crowne Plaza Hampton Marina and there was no termination fee associated with the termination of the Crowne Plaza Hampton Marina management agreement. Each management agreement sets an incentive management fee equal to 10% of the amount by which gross operating profit, as defined in the management agreement, for a given year exceeds the budgeted gross operating profit for such year; provided, however, that the incentive management fee payable in respect of any such year shall not exceed 0.25% of the gross revenues of the hotel included in such calculation. Base management and administrative fees earned by Chesapeake Hospitality for our properties totaled $973,068 and $932,386 for the three months ended March 31, 2017 and 2016, respectively. In addition, estimated incentive management fees of $26,293 and $13,698 were accrued for the three months ended March 31, 2017 and 2016, respectively. Employee Medical Benefits – We purchase employee medical benefits through Maryland Hospitality, Inc. (d/b/a MHI Health), an affiliate of Chesapeake Hospitality for our employees as well as those employees that are employed by Chesapeake Hospitality that work exclusively for our hotel properties. Gross premiums for employee medical benefits paid by the Company (before offset of employee co-payments) were $1,267,936 and $1,326,154 for the three months ended March 31, 2017 and 2016, respectively. Sotherly Foundation – During 2015, the Company loaned $180,000 to the Sotherly Foundation, a non-profit organization to benefit wounded American veterans living in communities near our hotels. As of March 31, 2017, and December 31, 2016, the balance of the loan was $80,000, respectively. Loan Receivable - Affiliate – As of March 31, 2017, approximately $4.9 million was due the Operating Partnership for advances to the Company under a loan agreement dated December 29, 2016, as well as $19,926 in accrued interest. The Company used the proceeds to make advances to the ESOP to purchase shares of the Company’s common stock. Others. We employ Ashley S. Kirkland, the daughter of our Chief Executive Officer as a legal analyst and Robert E. Kirkland IV, her husband, as our compliance officer. We also employ Andrew M. Sims Jr., the son of our Chief Executive Officer, as a manager. Compensation for the three months ended March 31, 2017 and 2016 totaled $91,277 and $85,521, respectively, for the three individuals. On February 1, 2016, one current member of the Company’s board of directors redeemed 322,687 units for an equivalent number of shares of the Company’s common stock, and one previous member of the board of directors redeemed 100,000 units for an equivalent number of shares of the Company’s common stock, pursuant to the terms of the partnership agreement. During the three-month period ending March 31, 2017 and 2016, the Company reimbursed $48,859 and $28,802, respectively, to a partnership controlled by the Chief Executive Officer for business-related air travel pursuant to the Company’s travel reimbursement policy. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | 10. Retirement Plans We maintain a 401(k) plan for qualified employees which is subject to “safe harbor” provisions and which requires that we match 100.0% of the first 3.0% of employee contributions and 50.0% of the next 2.0% of employee contributions. All employer matching funds vest immediately in accordance with the “safe harbor” provision. Contributions to the plan totaled $24,238 and $29,231 for the three months ended March 31, 2017 and 2016, respectively. The Company’s board of directors adopted an Employee Stock Ownership Plan (“ESOP”) on November 29, 2016, effective January 1, 2016. The ESOP is a non-contributory defined contribution plan covering all employees of the Company. The Company sponsors and maintains the ESOP and related trust for the benefit of its eligible employees. The ESOP is a leveraged ESOP, meaning the contributed funds are loaned to the ESOP from the Company. The Company entered into a loan agreement with the ESOP on December 29, 2016, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock on the open market, which serve as collateral for the loan. As of December 31, 2016, the ESOP had not purchased any shares of the Company’s common stock and had not drawn funds under the loan agreement with the Company. Shares purchased by the ESOP are held in a suspense account for allocation among participants. As contributions are made into the ESOP by the Company they are reflected as unearned ESOP shares on the consolidated balance sheets of the Company. The share allocations are accounted for at fair value on the date of allocation and there have been no share allocations that have been committed to be released as of March 31, 2017. Between January 3, 2017 and February 28, 2017, the Company’s ESOP purchased 682,500 shares of the Company’s common stock for an approximate value of $4.9 million. The fair value of the shares held by the ESOP on March 31, 2017 and December 31, 2016, was approximately $4.6 million and $0, respectively. |
Indirect Hotel Operating Expens
Indirect Hotel Operating Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Other Income And Expenses [Abstract] | |
Indirect Hotel Operating Expenses | 11. Indirect Hotel Operating Expenses Indirect hotel operating expenses consists of the following expenses incurred by the hotels: Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) General and administrative $ 2,926,133 $ 2,723,427 Sales and marketing 3,686,055 3,511,030 Repairs and maintenance 1,711,035 1,854,619 Utilities 1,374,897 1,528,962 Franchise fees 1,038,189 1,087,921 Management fees, including incentive 999,362 946,083 Property taxes 1,413,395 1,293,355 Insurance 606,435 694,202 Information and telecommunications 433,564 419,116 Other 16,166 76,880 Total indirect hotel operating expenses $ 14,205,231 $ 14,135,595 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The components of the income tax provision (benefit) for the three months ended March 31, 2017 and 2016 are as follows: Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Current: Federal $ 5,485 $ — State 48,402 51,390 53,887 51,390 Deferred: Federal 99,358 (395,225 ) State 18,692 (92,244 ) 118,050 (487,469 ) $ 171,937 $ (436,079 ) A reconciliation of the statutory federal income tax provision (benefit) to the Company’s income tax provision (benefit) is as follows: Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Statutory federal income tax expense 1,046,484 37,330 Effect of non-taxable REIT income (941,641 ) (514,263 ) State income tax benefit 67,094 40,854 $ 171,937 $ (436,079 ) As of March 31, 2017 and December 31, 2016, we had a net deferred tax asset of approximately $6.8 million and $6.9 million, respectively, of which, approximately $5.9 million and $6.0 million, respectively, are due to accumulated net operating losses of our TRS Lessee. These loss carryforwards will begin to expire in 2028 if not utilized by such time. As of both March 31, 2017 and December 31, 2016, approximately $0.2 million of the net deferred tax asset is attributable to our share of start-up expenses related to the Crowne Plaza Hollywood Beach Resort, start-up expenses related to the opening of the Sheraton Louisville Riverside and the Crowne Plaza Tampa Westshore that were not deductible in the year incurred, but are being amortized over 15 years. The remainder of the net deferred tax asset is attributable to year-to-year timing differences including accrued, but not deductible, employee performance awards, vacation and sick pay, bad debt allowance and depreciation. We record a valuation allowance to reduce deferred tax assets to an amount that we believe is more likely than not to be realized. Because of expected future taxable income of our TRS Lessee, we have not recorded a valuation allowance to reduce our net deferred tax asset as of March 31, 2017 and December 31, 2016, respectively. We regularly evaluate the likelihood that our TRS Lessee will be able to realize its deferred tax assets and the continuing need for a valuation allowance. At March 31, 2017 and December 31, 2016, we determined, based on all available positive and negative evidence, that it is more-likely-than-not that future taxable income will be available during the carryforward periods to absorb all of the consolidated federal and state net operating loss carryforward of our TRS Lessee. A number of factors played a critical role in this determination, including: • a demonstrated track record of past profitability and utilization of past NOL carryforwards, • reasonable forecasts of future taxable income, and • anticipated changes in the lease rental payments from the TRS Lessee to subsidiaries of the Operating Partnership. At March 31, 2017 and December 31, 2016, we determined, based on all available positive and negative evidence, that it is more-likely-than-not that future taxable income will be available during the carryforward periods to absorb all of the consolidated federal and state net operating loss carryforward. |
Income Per Share and Per Unit
Income Per Share and Per Unit | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Income Per Share and Per Unit | 13. Income Per Share and Per Unit Income per Share . The limited partners’ outstanding limited partnership units in the Operating Partnership (which may be redeemed for common stock upon notice from the limited partners and following our election to redeem the units for stock rather than cash) have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income. The shares of Series B Preferred Stock are not convertible into or exchangeable for any other property or securities of the Company, except upon the occurrence of a change of control and have been excluded from the diluted earnings per share calculation as there would be no impact on the current controlling stockholders. The 682,500 non-committed, unearned ESOP shares reduce the number of issued and outstanding common shares and similarly reduce the weighted average number of common shares outstanding. The computation of basic and diluted income per share is presented below. Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Numerator Net income available to common stockholders for basic computation $ 1,851,090 $ 483,095 Denominator Weighted average number of common shares outstanding for basic computation 14,025,489 14,792,911 Basic and diluted net income per share $ 0.13 $ 0.03 Income Per Unit – The computation of basic and diluted earnings per unit is presented below. Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Numerator Net income available to common unitholders for basic computation $ 2,100,958 $ 545,874 Denominator Weighted average number of units outstanding 16,252,691 16,715,044 Basic and diluted net income per unit $ 0.13 $ 0.03 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On April 11, 2017, we paid a quarterly dividend (distribution) of $0.10 per common share (and unit) to those stockholders (and unitholders of the Operating Partnership) of record on March 15, 2017. On April 17, 2017, we paid a On April 24, 2017, we authorized payment of a quarterly dividend (distribution) of $0.105 per common share (and unit) to the stockholders (and unitholders of the Operating Partnership) of record as of June 15, 2017. The dividend (distribution) is to be paid on July 11, 2017. On April 24, 2017, we authorized payment of a quarterly dividend of $0.50 per preferred share (and unit) to the preferred stockholders (and preferred unitholders of the Operating Partnership) of record as of June 30, 2017. The dividend is to be paid on July 17, 2017. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The consolidated financial statements of the Company presented herein include all of the accounts of Sotherly Hotels Inc., the Operating Partnership, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of the Operating Partnership presented herein include all of the accounts of Sotherly Hotels LP, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated, with the exception of the ESOP, which records a charge for salaries expense on allocated shares and their dividends. Additionally, all administrative expenses of the Company and those expenditures made by the Company on behalf of the Operating Partnership are reflected as the administrative expenses, expenditures and obligations thereto of the Operating Partnership, pursuant to the terms of the Partnership Agreement. |
Investment in Hotel Properties | Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at acquisition cost and allocated to land, property and equipment and identifiable intangible assets. 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 are removed from our accounts and any resulting gain or loss is included in the statements of operations. Expenditures under a renovation project which constitute additions or improvements that extend the life of the property are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 7 to 39 years for buildings and building improvements and 3 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse permanent changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are found to be less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value would be recorded and an impairment loss recognized. |
Assets Held For Sale | Assets Held For Sale – We record assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. |
Cash and Cash Equivalents | Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) protection limits of $ 250,000. Our exposure to credit loss in the event of the failure of these institutions is represented by the difference between the FDIC protection limit and the total amounts on deposit. Management monitors, on a regular basis, the financial condition of the financial institutions along with the balances there on deposit to minimize our potential risk. |
Restricted Cash | Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements. |
Accounts Receivable | Accounts Receivable – Accounts receivable consists primarily of hotel guest and banqueting receivables. Ongoing evaluations of collectability are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. |
Inventories | Inventories – Inventories, consisting primarily of food and beverages, are stated at the lower of cost or market, with cost determined on a method that approximates first-in, first-out basis. |
Franchise License Fees | Franchise License Fees – Fees expended to obtain or renew a franchise license are amortized over the life of the license or renewal. The unamortized franchise fees as of March 31, 2017 and December 31, 2016 were $366,030 and $386,612, respectively. Amortization expense for the three month periods ended March 31, 2017 and 2016 totaled $31,452 and $15,131, respectively. |
Deferred Financing and Offering Costs | Deferred Financing and Offering Costs – Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt and are reflected in mortgage loans, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in issuing equity and are reflected in prepaid expenses, inventory and other assets on the consolidated balance sheets. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations. Our amortization of deferred offering costs occurs when one of our equity offerings is complete, whereby the costs are offset against the equity funds raised in the future and included in additional paid-in capital on the consolidated balance sheets, or if the offering expires and the offering costs exceed the funds raised in the offering then the excess will be included in corporate general and administrative expenses in the consolidated statements of operations. |
Derivative Instruments | Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the balance sheet and measured at fair value. Derivative instruments used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as an interest rate risk, are considered fair value hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For a derivative instrument designated as a cash flow hedge, the change in fair value each period is reported in accumulated other comprehensive income in stockholders’ equity and partners’ capital to the extent the hedge is effective. For a derivative instrument designated as a fair value hedge, the change in fair value each period is reported in earnings along with the change in fair value of the hedged item attributable to the risk being hedged. For a derivative instrument that does not qualify for hedge accounting or is not designated as a hedge, the change in fair value each period is reported in earnings. We use derivative instruments to add stability to interest expense and to manage our exposure to interest-rate movements. To accomplish this objective, we primarily are using an interest rate cap which acts as a cash flow hedge and is not designated as a hedge. We value our interest-rate cap at fair value, which we define as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We also have used derivative instruments in the Company’s stock to obtain more favorable terms on our financing. We do not enter into contracts to purchase or sell derivative instruments for speculative trading purposes. |
Fair Value Measurements | Fair Value Measurements – We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table represents our interest rate cap, mortgage loans and unsecured notes measured at fair value and the basis for that measurement: Level 1 Level 2 Level 3 December 31, 2016 Interest Rate Cap (1) $ — $ 33,597 $ — Mortgage loans (2) $ — $ (281,840,780 ) $ — Unsecured notes (3) $ (26,241,160 ) $ — $ — March 31, 2017 Interest Rate Cap (1) $ — $ 17,651 $ — Mortgage loans (2) $ — $ (275,447,446 ) $ — Unsecured notes (3) $ (26,312,000 ) $ — $ — (1) Interest rate cap for our loan on DoubleTree by Hilton Jacksonville Riverfront, which caps the 1-month LIBOR rate at 2.5%. (2) Mortgage loans are reflected at outstanding principal balance net of deferred financing costs on our Consolidated Balance Sheet as of March 31, 2017 and December 31, 2016. (3) Unsecured notes are recorded at outstanding principal balance on our Consolidated Balance Sheet as of March 31, 2017 and December 31, 2016. |
Noncontrolling Interest in Operating Partnership | Noncontrolling Interest in Operating Partnership – Certain hotel properties were acquired, in part, by the Operating Partnership through the issuance of limited partnership units of the Operating Partnership. The noncontrolling interest in the Operating Partnership is: (i) increased or decreased by the limited partners’ pro-rata share of the Operating Partnership’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by redemption of partnership units for the Company’s common stock; and (iv) adjusted to equal the net equity of the Operating Partnership multiplied by the limited partners’ ownership percentage immediately after each issuance of units of the Operating Partnership and/or the Company’s common stock through an adjustment to additional paid-in capital. Net income or net loss is allocated to the noncontrolling interest in the Operating Partnership based on the weighted average percentage ownership throughout the period. |
Revenue Recognition | Revenue Recognition – Revenues from operations of the hotels and condominium hotel are recognized when the services are provided. Revenues consist of room sales, food and beverage sales, and other hotel department revenues, such as rental management fees, telephone, parking, gift shop sales and rentals from restaurant tenants, rooftop leases and gift shop operators. Revenues are reported net of occupancy and other taxes collected from customers and remitted to governmental authorities. |
Lease Revenue | Lease Revenue – Several of our properties generate revenue from leasing commercial space adjacent to the hotel, the restaurant space within the hotel, apartment units and space on the roofs of our hotels for antennas and satellite dishes. We account for the lease income as revenue from other operating departments within the statement of operations pursuant to the terms of each lease. Lease revenue was approximately $ 0.5 million and $0.5 million, for the three months ended March 31, 2017 and 2016, respectively. A schedule of minimum future lease payments receivable for the remaining nine and twelve-month lease periods is as follows: For the remaining nine months ending: December 31, 2017 $ 635,133 December 31, 2018 481,823 December 31, 2019 420,926 December 31, 2020 375,290 December 31, 2021 218,013 December 31, 2022 and thereafter 635,950 Total $ 2,767,135 |
Income Taxes | Income Taxes – The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally will not be subject to federal income tax. MHI TRS, our wholly owned taxable REIT subsidiary which leases our hotels from subsidiaries of the Operating Partnership, is subject to federal and state income taxes. We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. As of March 31, 2017, and December 31, 2016, deferred tax assets totaled approximately $6.8 million and $6.9 million, respectively, of which approximately $5.9 million and $6.0 million relate to net operating losses of our TRS Lessee. A valuation allowance is required for deferred tax assets if, based on all available evidence, it is “more-likely-than-not” that all or a portion of the deferred tax asset will or will not be realized due to the inability to generate sufficient taxable income in certain financial statement periods. The “more-likely-than-not” analysis means the likelihood of realization is greater than 50%, that we will or will not be able to fully utilize the deferred tax assets against future taxable income. The net amount of deferred tax assets that are recorded on the financial statements must reflect the tax benefits that are expected to be realized using these criteria. We perform this analysis by evaluating future hotel revenues and expenses accounting for certain non-recurring costs and expenses during the current and prior two fiscal years as well as anticipated changes in the lease rental payments from the TRS Lessee to subsidiaries of the Operating Partnership. We have determined that it is more-likely-than-not that we will be able to fully utilize our deferred tax assets for future tax consequences, therefore no valuation allowance is required. As of March 31, 2017 and December 31, 2016, we had no uncertain tax positions. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of March 31, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2010 through 2016. In addition, as of March 31, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject generally include 2004 through 2016. The Operating Partnership is generally not subject to federal and state income taxes as the unit holders of the Partnership are subject to tax on their respective shares of the Partnership’s taxable income. |
Stock-Based Compensation | Stock-based Compensation – The Company’s 2004 Long Term Incentive Plan (the “2004 Plan”) and its 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permit the grant of stock options, restricted stock and performance share compensation awards to its employees for up to 350,000 and 750,000 shares of common stock, respectively. The Company believes that such awards better align the interests of its employees with those of its stockholders. Under the 2004 Plan, the Company made stock awards totaling 337,438 shares, including 255,938 shares issued to certain executives and employees and 81,500 restricted shares issued to its independent directors. Of the 255,938 shares issued to certain of our executives and employees, all have vested except 6,000 shares issued to the Chief Financial Officer upon execution of his employment contract which will vest pro rata on the next anniversary of the effective date of his employment agreement. All of the 81,500 restricted shares issued to the Company’s independent directors have vested. The 2004 Plan was terminated in 2013. Under the 2013 Plan, the Company has made stock awards totaling 121,100 shares, including 74,600 non-restricted shares to certain executives and employees and 46,500 restricted shares issued to its independent directors. All awards have vested except for 12,000 shares issued to the Company’s independent directors in February 2017, which will vest on December 31, 2017. Previously, under the 2004 Plan, and currently, under the 2013 Plan, the Company may issue a variety of performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of March 31, 2017, no performance-based stock awards have been granted. Consequently, stock-based compensation as determined under the fair-value method would be the same under the intrinsic-value method. Total compensation cost recognized under the 2013 Plan for the three months ended March 31, 2017 and 2016 was $94,140 and $196,742, respectively. The 2004 Plan was terminated in April 2013. Additionally, the Company sponsors and maintains an ESOP and related trust for the benefit of its eligible employees. We reflect |
Advertising | Advertising – Advertising costs were $ 65,010 and $74,063 for the three months ended March 31, 2017 and 2016, respectively. Advertising costs are expensed as incurred. |
Involuntary Conversion of Assets | Involuntary Conversion of Assets – We record gains or losses on involuntary conversions of assets due to recovered insurance proceeds to the extent the undepreciated cost of a nonmonetary asset differs from the amount of monetary proceeds received. During the three-month period ending March 31, 2017, we recognized approximately a $ 1.0 million gain on involuntary conversion of assets which is reflected in the consolidated statements of operations. |
Comprehensive Income | Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income. |
Segment Information | Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership. |
Use of Estimates | Use of Estimates – The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“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 from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – In February 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-05, The FASB issued this update to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments in this update also simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses in many transactions related to: a partial sale of real estate; a transfer of a nonfinancial asset within the scope of FASB ASC Topic 845, ; a contribution of a nonfinancial asset to form a joint venture; and a transfer of a nonfinancial asset to an equity method investee. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. We will adopt this ASU as of our quarter ending March 31, 2018. We do not expect this ASU to have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients” In April 2016, the FASB issued ASU No. 2016-10 , “Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing” In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Derivative Instruments and Mortgage Debt Measured at Fair Value | The following table represents our interest rate cap, mortgage loans and unsecured notes measured at fair value and the basis for that measurement: Level 1 Level 2 Level 3 December 31, 2016 Interest Rate Cap (1) $ — $ 33,597 $ — Mortgage loans (2) $ — $ (281,840,780 ) $ — Unsecured notes (3) $ (26,241,160 ) $ — $ — March 31, 2017 Interest Rate Cap (1) $ — $ 17,651 $ — Mortgage loans (2) $ — $ (275,447,446 ) $ — Unsecured notes (3) $ (26,312,000 ) $ — $ — (1) Interest rate cap for our loan on DoubleTree by Hilton Jacksonville Riverfront, which caps the 1-month LIBOR rate at 2.5%. (2) Mortgage loans are reflected at outstanding principal balance net of deferred financing costs on our Consolidated Balance Sheet as of March 31, 2017 and December 31, 2016. (3) Unsecured notes are recorded at outstanding principal balance on our Consolidated Balance Sheet as of March 31, 2017 and December 31, 2016. |
Schedule of Minimum Future Lease Payments Receivable | A schedule of minimum future lease payments receivable for the remaining nine and twelve-month lease periods is as follows: For the remaining nine months ending: December 31, 2017 $ 635,133 December 31, 2018 481,823 December 31, 2019 420,926 December 31, 2020 375,290 December 31, 2021 218,013 December 31, 2022 and thereafter 635,950 Total $ 2,767,135 |
Acquisition of Hotel Property (
Acquisition of Hotel Property (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Allocation of Estimated Purchase Price Based on Fair Values | The allocation of the estimated purchase price based on fair values is as follows: Hyde Resort & Residences Land and land improvements $ 500 Buildings and improvements 4,309,500 Furniture, fixtures and equipment 72,616 Investment in hotel properties 4,382,616 Accrued liabilites and other costs (866,142 ) Prepaid expenses, inventory and other assets 470,375 Net cash $ 3,986,849 |
Investment in Hotel Propertie25
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate [Abstract] | |
Schedule of Investment in Hotel Properties, Net | Investment in hotel properties, net as of March 31, 2017 and December 31, 2016 consisted of the following: March 31, 2017 December 31, 2016 Land and land improvements $ 57,990,668 $ 57,851,380 Buildings and improvements 336,005,447 336,996,876 Furniture, fixtures and equipment 51,453,590 43,458,781 445,449,705 438,307,037 Less: accumulated depreciation and impairment (89,451,954 ) (89,713,125 ) Investment in Hotel Properties, Net $ 355,997,751 $ 348,593,912 |
Schedule of Investment in Hotel Properties Held for Sale, Net | Investment in hotel properties held for sale, net as of March 31, 2017 and December 31, 2016 consisted of the following: March 31, 2017 December 31, 2016 Land and land improvements $ — $ 1,097,096 Buildings and improvements — 6,242,504 Furniture, fixtures and equipment — 2,289,008 — 9,628,608 Less: accumulated depreciation and impairment — (4,295,608 ) Investment in Hotel Properties Held for Sale, Net $ — $ 5,333,000 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgage Debt Obligations on Hotels | The following table sets forth our mortgage debt obligations on our hotels. Balance Outstanding as of March 31, December 31, Prepayment Maturity Amortization Interest Property 2017 2016 Penalties Date Provisions Rate Crowne Plaza Hampton Marina (1) $ - $ 2,584,633 None 11/1/2019 3 years 5.00% Crowne Plaza Hollywood Beach Resort (2) 58,702,008 58,935,818 n/a 10/1/2025 30 years 4.913% Crowne Plaza Tampa Westshore (3) 15,492,100 15,561,400 None 6/30/2019 25 years LIBOR plus 3.75 % DoubleTree by Hilton Jacksonville Riverfront (4) 19,169,500 19,291,716 Yes 7/7/2019 25 years LIBOR plus 3.50 % DoubleTree by Hilton Laurel (5) 9,279,206 9,329,005 Yes 8/5/2021 25 years 5.25% DoubleTree by Hilton Philadelphia Airport (6) 31,093,361 31,261,991 None 4/1/2019 25 years LIBOR plus 3.00 % DoubleTree by Hilton Raleigh Brownstone University (7) 14,705,181 14,773,885 n/a 8/1/2018 30 years 4.78% The Georgian Terrace (8) 45,624,025 45,826,038 n/a 6/1/2025 30 years 4.42% Hilton Savannah DeSoto (9) 30,000,000 30,000,000 Yes 7/1/2026 25 years 4.25% Hilton Wilmington Riverside (10) 30,000,000 30,000,000 Yes 1/1/2027 25 years 4.25% Sheraton Louisville Riverside (11) 11,909,748 11,977,557 Yes 12/1/2026 25 years 4.27% The Whitehall (12) 15,000,000 15,000,000 Yes 10/12/2021 18 years LIBOR plus 3.50 % Total Mortgage Principal Balance $ 280,975,129 $ 284,542,043 Deferred financing costs, net (1,915,459 ) (2,049,409 ) Unamortized premium on loan 209,484 215,655 Total Mortgage Loans, Net $ 279,269,154 $ 282,708,289 (1) As of February 7, 2017, the note is no longer outstanding due to the sale of the property. (2) With limited exception, the note may not be prepaid until June 2025. (3) The note provides initial proceeds of $15.7 million, with an additional $3.3 million available upon the satisfaction of certain conditions; bears a floating interest rate of the 30-day LIBOR plus 3.75%, subject to a floor rate of 3.75%; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. (4) The note is subject to a pre-payment penalty until July 2017. Prepayment can be made without penalty thereafter. The note provides that the mortgage can be extended until July 2020 if certain conditions have been satisfied. (5) The note is subject to a pre-payment penalty except for any pre-payments made either between April 2017 and August 2017, or from April 2021 through maturity of the note. The note provides that on January 5, 2018, the rate of interest will adjust to a rate of 3.00% per annum plus the then-current five-year U.S. Treasury rate of interest, with a floor of 5.25%. (6) The note bears a minimum interest rate of 3.50%. (7) With limited exception, the note may not be prepaid until two months before maturity. (8) With limited exception, the note may not be prepaid until February 2025. (9) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions, namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (10) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (11) The note bears a fixed interest rate of 4.27% for the first 5 years of the loan, with an option for the lender to reset the interest rate after 5 years. (12) The note was refinanced in October 2016, provides initial proceeds of $15.0 million, with an additional $5.5 million available upon the satisfaction of certain conditions; bears a floating interest rate of the 1-month LIBOR plus 3.5%, subject to a floor rate of 4.0% and is subject to prepayment penalties subject to a declining scale from 3.0% penalty on or before the first anniversary date, a 2.0% penalty during the second anniversary year and a 1.0% penalty after the third anniversary date. |
Schedule of Future Mortgage Debt Maturities | Total future mortgage debt maturities, without respect to any extension of loan maturity, as of March 31, 2017 were as follows: For the remaining nine months ending: December 31, 2017 $ 4,397,287 December 31, 2018 23,699,950 December 31, 2019 70,521,941 December 31, 2020 8,438,846 December 31, 2021 30,162,806 December 31, 2022 and thereafter 143,754,299 Total future maturities $ 280,975,129 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Minimum Future Lease Payments | A schedule of minimum future lease payments for the following nine and twelve-month periods is as follows: For the remaining nine months ending: December 31, 2017 $ 230,376 December 31, 2018 251,411 December 31, 2019 125,055 December 31, 2020 95,482 December 31, 2021 95,482 December 31, 2022 and thereafter 445,583 Total $ 1,243,389 |
Indirect Hotel Operating Expe28
Indirect Hotel Operating Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Income And Expenses [Abstract] | |
Summary of Indirect Hotel Operating Expenses | Indirect hotel operating expenses consists of the following expenses incurred by the hotels: Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) General and administrative $ 2,926,133 $ 2,723,427 Sales and marketing 3,686,055 3,511,030 Repairs and maintenance 1,711,035 1,854,619 Utilities 1,374,897 1,528,962 Franchise fees 1,038,189 1,087,921 Management fees, including incentive 999,362 946,083 Property taxes 1,413,395 1,293,355 Insurance 606,435 694,202 Information and telecommunications 433,564 419,116 Other 16,166 76,880 Total indirect hotel operating expenses $ 14,205,231 $ 14,135,595 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax (Benefit) Provision | The components of the income tax provision (benefit) for the three months ended March 31, 2017 and 2016 are as follows: Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Current: Federal $ 5,485 $ — State 48,402 51,390 53,887 51,390 Deferred: Federal 99,358 (395,225 ) State 18,692 (92,244 ) 118,050 (487,469 ) $ 171,937 $ (436,079 ) |
Reconciliation of Statutory Federal Income Tax Provision (Benefit) | A reconciliation of the statutory federal income tax provision (benefit) to the Company’s income tax provision (benefit) is as follows: Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Statutory federal income tax expense 1,046,484 37,330 Effect of non-taxable REIT income (941,641 ) (514,263 ) State income tax benefit 67,094 40,854 $ 171,937 $ (436,079 ) |
Income Per Share and Per Unit (
Income Per Share and Per Unit (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The computation of basic and diluted income per share is presented below. Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Numerator Net income available to common stockholders for basic computation $ 1,851,090 $ 483,095 Denominator Weighted average number of common shares outstanding for basic computation 14,025,489 14,792,911 Basic and diluted net income per share $ 0.13 $ 0.03 |
Computation of Basic and Diluted Earnings Per Unit | The computation of basic and diluted earnings per unit is presented below. Three Months Ended Three Months Ended March 31, 2017 March 31, 2016 (unaudited) (unaudited) Numerator Net income available to common unitholders for basic computation $ 2,100,958 $ 545,874 Denominator Weighted average number of units outstanding 16,252,691 16,715,044 Basic and diluted net income per unit $ 0.13 $ 0.03 |
Organization and Description 31
Organization and Description of Business - Additional Information (Detail) | Feb. 07, 2017USD ($) | Jan. 30, 2017USD ($)RoomParkingSpaces | Dec. 02, 2016USD ($)$ / shares | Dec. 01, 2016USD ($) | Nov. 03, 2016USD ($) | Oct. 12, 2016USD ($)mortgage | Aug. 23, 2016USD ($)shares | Jun. 30, 2016USD ($) | Jun. 27, 2016USD ($) | Mar. 21, 2016 | Feb. 28, 2017USD ($)shares | Mar. 31, 2017USD ($)HotelRoom$ / sharesshares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 29, 2016USD ($) | Sep. 30, 2016USD ($) | Jan. 01, 2016USD ($) |
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Date of incorporation | Aug. 20, 2004 | ||||||||||||||||
Investment in number of hotels | Hotel | 11 | ||||||||||||||||
Rooms in hotel | Room | 2,838 | ||||||||||||||||
Date of commencement of business | Dec. 21, 2004 | ||||||||||||||||
Number of hotels acquired before commencement of business | Hotel | 6 | ||||||||||||||||
Debt instrument maturity date | Nov. 13, 2017 | ||||||||||||||||
Mortgage loans | $ 2,600,711 | ||||||||||||||||
Mortgage loan term period | 5 years | ||||||||||||||||
Mortgage loans | $ 20,500,000 | $ 280,975,129 | $ 284,542,043 | ||||||||||||||
Floating rate of interest rate | 3.50% | ||||||||||||||||
Amortization Period | 18 years | ||||||||||||||||
Floating interest rate period | 1 month | ||||||||||||||||
Fixed interest rate | 4.00% | ||||||||||||||||
Preferred stock, shares issued | shares | 1,610,000 | 1,610,000 | |||||||||||||||
Preferred stock, dividend rate percentage | 8.00% | ||||||||||||||||
Proceeds from mortgage loans | $ 15,000,000 | ||||||||||||||||
Mortgage loan additional earn-out provision | $ 5,500,000 | ||||||||||||||||
Number of parts mortgage loan issued | mortgage | 2 | ||||||||||||||||
Repurchase of common stock | $ 3,200,000 | ||||||||||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||
Number of common stock shares repurchased | shares | 0 | 481,100 | |||||||||||||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | $ 5,000,000 | |||||||||||||||
Number of common stock, shares purchased | shares | 682,500 | 682,500 | |||||||||||||||
Purchased common stock, value | $ 4,900,000 | $ 4,900,000 | |||||||||||||||
Crowne Plaza Hampton Marina [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Proceeds from sale of assets | $ 5,600,000 | ||||||||||||||||
Commercial Condominium Unit of Hyde Resort & Residences [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Rooms in hotel | Room | 400 | ||||||||||||||||
Commercial unit purchase price | $ 4,800,000 | ||||||||||||||||
Number of parking space lease agreement entered | ParkingSpaces | 400 | ||||||||||||||||
Proceeds from pre-opening services fee | $ 800,000 | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Repurchase of common stock | $ 10,000,000 | ||||||||||||||||
Sotherly Hotels LP [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Mortgage loans | $ 2,600,711 | ||||||||||||||||
8.0% Senior Unsecured Notes [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||
Debt instrument redeemed, principal amount | $ 27,600,000 | ||||||||||||||||
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Preferred stock, shares issued | shares | 1,610,000 | ||||||||||||||||
Preferred stock, dividend rate percentage | 8.00% | ||||||||||||||||
Proceeds from sale of preferred stock | $ 37,800,000 | ||||||||||||||||
Hilton Savannah DeSoto [Member] | Mortgage Loans [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Debt instrument maturity date | Jul. 1, 2026 | ||||||||||||||||
Amortization schedule | 25 years | ||||||||||||||||
Mortgage loans | $ 30,000,000 | $ 30,000,000 | |||||||||||||||
Amortization Period | 25 years | ||||||||||||||||
Period subject to certain terms and conditions | 1 year | ||||||||||||||||
Proceeds from mortgage loans | $ 30,000,000 | ||||||||||||||||
Mortgage loan additional earn-out provision | $ 5,000,000 | ||||||||||||||||
Crowne Plaza Tampa Westshore [Member] | Mortgage Loans [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Debt instrument maturity date | Jun. 30, 2019 | ||||||||||||||||
Amortization schedule | 25 years | ||||||||||||||||
Mortgage loans | $ 15,492,100 | 15,561,400 | |||||||||||||||
Floating rate of interest rate | 3.75% | ||||||||||||||||
Floating interest rate period | 30 days | ||||||||||||||||
Fixed interest rate | 3.75% | ||||||||||||||||
Proceeds from mortgage loans | $ 15,700,000 | ||||||||||||||||
Mortgage loan additional earn-out provision | $ 3,300,000 | ||||||||||||||||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Debt instrument maturity date | Dec. 1, 2026 | Dec. 1, 2026 | |||||||||||||||
Mortgage loan term period | 5 years | ||||||||||||||||
Amortization schedule | 25 years | ||||||||||||||||
Interest rate | 4.27% | ||||||||||||||||
Mortgage loans | $ 11,909,748 | 11,977,557 | |||||||||||||||
Amortization Period | 25 years | ||||||||||||||||
Proceeds from mortgage loans | $ 12,000,000 | ||||||||||||||||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | Sotherly Hotels LP [Member] | Maximum [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Guaranteed percentage of unpaid principal balance, interest, and other amounts owed | 50.00% | ||||||||||||||||
Crowne Plaza Hampton Marina [Member] | Mortgage Loans [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Debt instrument maturity date | Nov. 1, 2019 | Nov. 1, 2019 | |||||||||||||||
Amortization schedule | 3 years | ||||||||||||||||
Interest rate | 5.00% | ||||||||||||||||
Mortgage loans | $ 0 | $ 2,584,633 | |||||||||||||||
Debt instrument, date of first required payment | Dec. 1, 2016 | ||||||||||||||||
Debt instrument periodic payment | $ 15,367 | ||||||||||||||||
MONY Life Insurance Company [Member] | Hilton Savannah DeSoto [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Debt instrument maturity date | Nov. 30, 2026 | Jul. 1, 2026 | |||||||||||||||
Mortgage loans | $ 35,000,000 | $ 35,000,000 | |||||||||||||||
Mortgage loan term period | 10 years | 10 years | |||||||||||||||
Amortization schedule | 25 years | ||||||||||||||||
Interest rate | 4.25% | ||||||||||||||||
Amortization Period | 25 years | ||||||||||||||||
Fixed interest rate | 4.25% | ||||||||||||||||
Proceeds from mortgage loans | $ 30,000,000 | ||||||||||||||||
Mortgage loan additional earn-out provision | $ 5,000,000 | ||||||||||||||||
Fifth Third Bank [Member] | Crowne Plaza Tampa Westshore [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Mortgage loan term period | 3 years | ||||||||||||||||
Mortgage loans | $ 19,000,000 | ||||||||||||||||
Floating rate of interest rate | 3.75% | ||||||||||||||||
Amortization Period | 25 years | ||||||||||||||||
Floating interest rate period | 30 days | ||||||||||||||||
Fixed interest rate | 3.75% | ||||||||||||||||
Period subject to certain terms and conditions | 2 years | ||||||||||||||||
Operating Partnership [Member] | |||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||||||
Percentage of operating partnership owned | 89.10% |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2017USD ($)Segmentshares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Federal Deposit Insurance Corporation protection limits | $ | $ 250,000 | ||
Un-amortized franchise fees | $ | 366,030 | $ 386,612 | |
Amortization expense | $ | 31,452 | $ 15,131 | |
Lease revenue | $ | 500,000 | 500,000 | |
Deferred income taxes | $ | 6,831,290 | 6,949,340 | |
Deferred tax assets related to net operating losses | $ | $ 5,900,000 | 6,000,000 | |
Minimum percentage of likelihood of realization of deferred tax assets | 50.00% | ||
Deferred tax assets valuation allowance | $ | $ 0 | ||
Uncertain tax positions | $ | 0 | $ 0 | |
Compensation cost recognized | $ | 94,140 | 196,742 | |
Advertising cost | $ | 65,010 | 74,063 | |
Gain on involuntary conversion of assets | $ | $ 1,041,815 | ||
Number of reportable segment | Segment | 1 | ||
2004 Plan [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued under plan | shares | 337,438 | ||
Termination year of stock based compensation plan | 2,013 | ||
Stock based compensation plan termination date | Apr. 30, 2013 | ||
2004 Plan [Member] | Executives and Employees [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued under plan | shares | 255,938 | ||
2004 Plan [Member] | Director [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued under plan | shares | 81,500 | ||
Stock-based Compensation , Number of Shares, Vested | shares | 81,500 | ||
2004 Plan [Member] | Chief Financial Officer [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued but not vested | shares | 6,000 | ||
2013 Plan [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued under plan | shares | 121,100 | ||
Performance-based stock awards granted | shares | 0 | ||
2013 Plan [Member] | Executives and Employees [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued under plan | shares | 74,600 | ||
2013 Plan [Member] | Director [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Shares issued under plan | shares | 46,500 | ||
Shares issued but not vested | shares | 12,000 | ||
2004 and 2013 Plan [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Compensation cost recognized | $ | $ 94,140 | $ 196,742 | |
Maximum [Member] | 2004 Plan [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted and performance stock awards permitted to grant to employees | shares | 350,000 | ||
Maximum [Member] | 2013 Plan [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Restricted and performance stock awards permitted to grant to employees | shares | 750,000 | ||
Buildings and Improvements [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 7 years | ||
Buildings and Improvements [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 39 years | ||
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 3 years | ||
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 10 years |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Derivative Instruments and Mortgage Debt Measured at Fair Value (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Level 1 [Member] | Unsecured Notes [Member] | ||
Derivatives Fair Value [Line Items] | ||
Debt instruments measured at fair value | $ (26,312,000) | $ (26,241,160) |
Level 2 [Member] | Interest Rate Cap [Member] | ||
Derivatives Fair Value [Line Items] | ||
Interest rate cap | 17,651 | 33,597 |
Level 2 [Member] | Mortgage Loans [Member] | ||
Derivatives Fair Value [Line Items] | ||
Debt instruments measured at fair value | $ (275,447,446) | $ (281,840,780) |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Derivative Instruments and Mortgage Debt Measured at Fair Value (Parenthetical) (Detail) | Mar. 31, 2017 |
1-Month LIBOR | Double Tree by Hilton Jacksonville Riverfront [Member] | |
Derivatives Fair Value [Line Items] | |
Interest rate cap for loan | 2.50% |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Schedule of Minimum Future Lease Payments Receivable (Detail) | Mar. 31, 2017USD ($) |
Leases [Abstract] | |
For the remaining nine months ending: December 31, 2017 | $ 635,133 |
December 31, 2018 | 481,823 |
December 31, 2019 | 420,926 |
December 31, 2020 | 375,290 |
December 31, 2021 | 218,013 |
December 31, 2022 and thereafter | 635,950 |
Total | $ 2,767,135 |
Acquisition of Hotel Property -
Acquisition of Hotel Property - Additional Information (Detail) - Commercial Condominium Unit of Hyde Resort & Residences [Member] - USD ($) | Jan. 30, 2017 | Mar. 31, 2017 |
Business Acquisition [Line Items] | ||
Commercial unit purchase price | $ 4,800,000 | |
Total revenue from acquisitions | $ 800,000 | |
Net income from acquisitions | $ 10,614 |
Acquisition of Hotel Property37
Acquisition of Hotel Property - Allocation of Estimated Purchase Price Based on Fair Values (Detail) - USD ($) | Jan. 30, 2017 | Mar. 31, 2017 |
Business Acquisition [Line Items] | ||
Net cash | $ 3,986,849 | |
Commercial Condominium Unit of Hyde Resort & Residences [Member] | ||
Business Acquisition [Line Items] | ||
Land and land improvements | $ 500 | |
Buildings and improvements | 4,309,500 | |
Furniture, fixtures and equipment | 72,616 | |
Investment in hotel properties | 4,382,616 | |
Accrued liabilites and other costs | (866,142) | |
Prepaid expenses, inventory and other assets | 470,375 | |
Net cash | $ 3,986,849 |
Investment in Hotel Propertie38
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net - Schedule of Investment in Hotel Properties, Net (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total Gross | $ 445,449,705 | $ 438,307,037 |
Less: accumulated depreciation and impairment | (89,451,954) | (89,713,125) |
Total Net | 355,997,751 | 348,593,912 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Gross | 57,990,668 | 57,851,380 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Gross | 336,005,447 | 336,996,876 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Gross | $ 51,453,590 | $ 43,458,781 |
Investment in Hotel Propertie39
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net - Schedule of Investment in Hotel Properties Held for Sale, Net (Detail) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment [Line Items] | |
Total Gross | $ 9,628,608 |
Less: accumulated depreciation and impairment | (4,295,608) |
Investment in Hotel Properties Held for Sale, Net | 5,333,000 |
Land and Land Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Total Gross | 1,097,096 |
Buildings and Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Total Gross | 6,242,504 |
Furniture, Fixtures and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Total Gross | $ 2,289,008 |
Investment in Hotel Propertie40
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net - Additional Information (Detail) - USD ($) | Feb. 07, 2017 | Mar. 31, 2017 |
Proceeds From Sales Of Business Affiliate And Productive Assets [Line Items] | ||
Gain on sale of assets | $ 100,407 | |
Crowne Plaza Hampton Marina [Member] | ||
Proceeds From Sales Of Business Affiliate And Productive Assets [Line Items] | ||
Proceeds from sale of assets | $ 5,600,000 | |
Gain on sale of assets | $ 100,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Mar. 21, 2016 | Nov. 21, 2014 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Mortgage loan outstanding balance | $ 279.3 | $ 282.7 | ||
Debt instrument maturity date | Nov. 13, 2017 | |||
7.0% Senior Unsecured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate on loan | 7.00% | |||
Borrowed amount | $ 25.3 | |||
Debt instrument maturity date | Nov. 15, 2019 | |||
Debt instrument callable date | Nov. 15, 2017 | |||
Notes face value | 101.00% |
Debt - Schedule of Mortgage Deb
Debt - Schedule of Mortgage Debt Obligations on Hotels (Detail) - USD ($) | Nov. 03, 2016 | Oct. 12, 2016 | Mar. 21, 2016 | Mar. 31, 2017 | Feb. 07, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 20,500,000 | $ 280,975,129 | $ 284,542,043 | |||
Deferred financing costs, net | (1,915,459) | (2,049,409) | ||||
Unamortized premium on loan | 209,484 | 215,655 | ||||
Total Mortgage Loans, Net | $ 279,269,154 | 282,708,289 | ||||
Maturity Date | Nov. 13, 2017 | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | |||||
Crowne Plaza Hampton Marina [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 0 | 2,584,633 | ||||
Prepayment Penalties | None | |||||
Maturity Date | Nov. 1, 2019 | Nov. 1, 2019 | ||||
Amortization Provisions | 3 years | |||||
Interest rate applicable to the mortgage loan | 5.00% | |||||
Crowne Plaza Hollywood Beach Resort [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 58,702,008 | 58,935,818 | ||||
Prepayment Penalties | n/a | |||||
Maturity Date | Oct. 1, 2025 | |||||
Amortization Provisions | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.913% | |||||
Crowne Plaza Tampa Westshore [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 15,492,100 | 15,561,400 | ||||
Prepayment Penalties | None | |||||
Maturity Date | Jun. 30, 2019 | |||||
Amortization Provisions | 25 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.75% | |||||
Double Tree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 19,169,500 | 19,291,716 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Jul. 7, 2019 | |||||
Amortization Provisions | 25 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | |||||
Double Tree by Hilton Laurel [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 9,279,206 | 9,329,005 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Aug. 5, 2021 | |||||
Amortization Provisions | 25 years | |||||
Interest rate applicable to the mortgage loan | 5.25% | |||||
Double Tree By Hilton Philadelphia Airport [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 31,093,361 | 31,261,991 | ||||
Prepayment Penalties | None | |||||
Maturity Date | Apr. 1, 2019 | |||||
Amortization Provisions | 25 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.00% | |||||
Doubletree By Hilton Raleigh Brownstone - University [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 14,705,181 | 14,773,885 | ||||
Prepayment Penalties | n/a | |||||
Maturity Date | Aug. 1, 2018 | |||||
Amortization Provisions | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.78% | |||||
The Georgian Terrace [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 45,624,025 | 45,826,038 | ||||
Prepayment Penalties | n/a | |||||
Maturity Date | Jun. 1, 2025 | |||||
Amortization Provisions | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.42% | |||||
Hilton Savannah DeSoto [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 30,000,000 | 30,000,000 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Jul. 1, 2026 | |||||
Amortization Provisions | 25 years | |||||
Interest rate applicable to the mortgage loan | 4.25% | |||||
Hilton Wilmington Riverside [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 30,000,000 | 30,000,000 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Jan. 1, 2027 | |||||
Amortization Provisions | 25 years | |||||
Interest rate applicable to the mortgage loan | 4.25% | |||||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 11,909,748 | 11,977,557 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Dec. 1, 2026 | Dec. 1, 2026 | ||||
Amortization Provisions | 25 years | |||||
Interest rate applicable to the mortgage loan | 4.27% | |||||
The Whitehall [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 15,000,000 | $ 15,000,000 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Oct. 12, 2021 | |||||
Amortization Provisions | 18 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% |
Debt - Schedule of Mortgage D43
Debt - Schedule of Mortgage Debt Obligations on Hotels (Parenthetical) (Detail) - USD ($) | Nov. 03, 2016 | Oct. 12, 2016 | Mar. 31, 2017 | Feb. 07, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 20,500,000 | $ 280,975,129 | $ 284,542,043 | ||
Proceeds from mortgage loans | 15,000,000 | ||||
Mortgage loan additional earn-out provision | $ 5,500,000 | ||||
Floating interest rate period | 1 month | ||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | ||||
Fixed interest rate | 4.00% | ||||
Amortization Period | 18 years | ||||
Mortgage Loans [Member] | Crowne Plaza Hampton Marina [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 0 | 2,584,633 | |||
Interest rate | 5.00% | ||||
Interest rate applicable to the mortgage loan | 5.00% | ||||
Mortgage Loans [Member] | Crowne Plaza Hollywood Beach Resort [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 58,702,008 | 58,935,818 | |||
Prepayment date before maturity | Jun. 30, 2025 | ||||
Interest rate applicable to the mortgage loan | 4.913% | ||||
Mortgage Loans [Member] | Crowne Plaza Tampa Westshore [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 15,492,100 | 15,561,400 | |||
Proceeds from mortgage loans | 15,700,000 | ||||
Mortgage loan additional earn-out provision | $ 3,300,000 | ||||
Floating interest rate period | 30 days | ||||
Excess Interest rate over LIBOR on mortgage debt | 3.75% | ||||
Fixed interest rate | 3.75% | ||||
Mortgage Loans [Member] | Double Tree by Hilton Jacksonville Riverfront [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 19,169,500 | 19,291,716 | |||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | ||||
Prepayment date before maturity in which prepayment is allowed with penalty | Jul. 31, 2017 | ||||
Extended maturity date | Jul. 31, 2020 | ||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 9,279,206 | 9,329,005 | |||
Prepayment date before maturity in which prepayment is allowed without penalty | Apr. 30, 2021 | ||||
Interest rate | 3.00% | ||||
Treasury floor rate of interest | 5.25% | ||||
Interest rate applicable to the mortgage loan | 5.25% | ||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Prepayment date before maturity in which prepayment is allowed without penalty | Apr. 30, 2017 | ||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Prepayment date before maturity in which prepayment is allowed without penalty | Aug. 31, 2017 | ||||
Mortgage Loans [Member] | Double Tree By Hilton Philadelphia Airport [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 31,093,361 | 31,261,991 | |||
Excess Interest rate over LIBOR on mortgage debt | 3.00% | ||||
Mortgage Loans [Member] | Double Tree By Hilton Philadelphia Airport [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 3.50% | ||||
Mortgage Loans [Member] | Doubletree By Hilton Raleigh Brownstone - University [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 14,705,181 | 14,773,885 | |||
Number of months for prepayment before maturity | 2 months | ||||
Interest rate applicable to the mortgage loan | 4.78% | ||||
Mortgage Loans [Member] | The Georgian Terrace [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 45,624,025 | 45,826,038 | |||
Prepayment date before maturity | Feb. 28, 2025 | ||||
Interest rate applicable to the mortgage loan | 4.42% | ||||
Mortgage Loans [Member] | Hilton Savannah DeSoto [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 30,000,000 | 30,000,000 | |||
Proceeds from mortgage loans | 30,000,000 | ||||
Mortgage loan additional earn-out provision | $ 5,000,000 | ||||
Amortization Period | 25 years | ||||
Period subject to certain terms and conditions | 1 year | ||||
Period before maturity in which prepayment is allowed with out penalty | 120 days | ||||
Interest rate applicable to the mortgage loan | 4.25% | ||||
Mortgage Loans [Member] | Hilton Wilmington Riverside [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 30,000,000 | 30,000,000 | |||
Proceeds from mortgage loans | 30,000,000 | ||||
Mortgage loan additional earn-out provision | $ 5,000,000 | ||||
Amortization Period | 25 years | ||||
Period subject to certain terms and conditions | 1 year | ||||
Period before maturity in which prepayment is allowed with out penalty | 120 days | ||||
Interest rate applicable to the mortgage loan | 4.25% | ||||
Mortgage Loans [Member] | Sheraton Louisville Riverside [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 11,909,748 | 11,977,557 | |||
Proceeds from mortgage loans | $ 12,000,000 | ||||
Interest rate | 4.27% | ||||
Amortization Period | 25 years | ||||
Interest rate applicable to the mortgage loan | 4.27% | ||||
Mortgage Loans [Member] | The Whitehall [Member] | |||||
Debt Instrument [Line Items] | |||||
Mortgage loans | $ 15,000,000 | $ 15,000,000 | |||
Proceeds from mortgage loans | 15,000,000 | ||||
Mortgage loan additional earn-out provision | $ 5,500,000 | ||||
Floating interest rate period | 1 month | ||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | ||||
Fixed interest rate | 4.00% | ||||
Mortgage Loans [Member] | The Whitehall [Member] | Prepayment Penalty Before to First Anniversary [Member] | |||||
Debt Instrument [Line Items] | |||||
Prepayment penalty percentage | 3.00% | ||||
Mortgage Loans [Member] | The Whitehall [Member] | Prepayment Penalty Second Anniversary [Member] | |||||
Debt Instrument [Line Items] | |||||
Prepayment penalty percentage | 2.00% | ||||
Mortgage Loans [Member] | The Whitehall [Member] | Prepayment Penalty After Third Anniversary | |||||
Debt Instrument [Line Items] | |||||
Prepayment penalty percentage | 1.00% |
Debt - Schedule of Future Mortg
Debt - Schedule of Future Mortgage Debt Maturities (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Oct. 12, 2016 |
Debt Disclosure [Abstract] | |||
For the remaining nine months ending: December 31, 2017 | $ 4,397,287 | ||
December 31, 2018 | 23,699,950 | ||
December 31, 2019 | 70,521,941 | ||
December 31, 2020 | 8,438,846 | ||
December 31, 2021 | 30,162,806 | ||
December 31, 2022 and thereafter | 143,754,299 | ||
Total future maturities | $ 280,975,129 | $ 284,542,043 | $ 20,500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 2 Months Ended | 3 Months Ended | |||
Feb. 28, 2017USD ($)shares | Mar. 31, 2017USD ($)ft²shares | Mar. 31, 2016USD ($) | Dec. 29, 2016USD ($) | Jan. 01, 2016USD ($) | |
Operating Leased Assets [Line Items] | |||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | $ 5,000,000 | |||
Number of common stock, shares purchased | shares | 682,500 | 682,500 | |||
Purchased common stock, value | $ 4,900,000 | $ 4,900,000 | |||
Crowne Plaza Houston Downtown [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Franchise agreement expire date | Apr. 12, 2016 | ||||
Hilton Wilmington Riverside [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | ||||
Hilton Savannah DeSoto [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | ||||
DoubleTree by Hilton Brownstone-University [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | ||||
Double Tree by Hilton Jacksonville Riverside [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | ||||
Crowne Plaza Hollywood Beach Resort [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | ||||
Whitehall [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Georgian Terrace [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | ||||
Double Tree By Hilton Philadelphia Airport [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Monthly contribution of room revenues | 4.00% | ||||
Minimum [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Franchise fees of room revenues | 2.50% | ||||
Additional fees of room revenues | 2.50% | ||||
Franchise agreement expiry date | 2017-07 | ||||
Maximum [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Franchise fees of room revenues | 5.00% | ||||
Additional fees of room revenues | 6.00% | ||||
Franchise agreement expiry date | 2030-10 | ||||
Chesapeake Hospitality [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Expiry date of master management agreement | between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. | ||||
Williamsburg Virginia [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Area of commercial space leased | ft² | 5,216 | ||||
Rent expense | $ 22,552 | $ 23,871 | |||
Commencement date of agreement | Sep. 1, 2009 | ||||
Lease renewable expiration date | Aug. 31, 2018 | ||||
Savannah Hotel Property [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Area of commercial space leased | ft² | 2,086 | ||||
Operating lease, expiring date | Oct. 31, 2006 | ||||
Duration period under renewal option second | 5 years | ||||
Expiration date one under renewal option second | Oct. 31, 2011 | ||||
Expiration date two under renewal option second | Oct. 31, 2016 | ||||
Expiration date three under renewal option second | Oct. 31, 2021 | ||||
Rent expense | $ 18,245 | 18,245 | |||
Doubletree By Hilton Raleigh Brownstone - University [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Duration of operating lease term | 50 years | ||||
Operating lease, expiring date | Aug. 31, 2016 | ||||
Duration period under renewal option second | 10 years | ||||
Expiration date one under renewal option second | Aug. 31, 2026 | ||||
Expiration date two under renewal option second | Aug. 31, 2036 | ||||
Expiration date three under renewal option second | Aug. 31, 2046 | ||||
Rent expense | $ 23,871 | 23,871 | |||
Option to purchase leased land, date | Aug. 1, 2018 | ||||
Land leased under second amendment dated | Apr. 28, 1998 | ||||
Land lease originally dated | May 25, 1966 | ||||
Purchase of leased land at fair market value subject to annual fee payment | $ 9,000 | ||||
Crowne Plaza Tampa Westshore [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Operating lease, expiring date | Jul. 31, 2019 | ||||
Rent expense | $ 651 | 651 | |||
Lease agreement | 5 years | ||||
Commencement date of agreement | Jul. 31, 2009 | ||||
Annual payment | $ 2,432 | ||||
Additional renewal of agreement | 5 years | ||||
Crowne Plaza Jacksonville Riverfront [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Operating lease, expiring date | Sep. 18, 2012 | ||||
Rent expense | $ 1,505 | $ 1,505 | |||
Lease agreement | 5 years | ||||
Annual payment | $ 4,961 | ||||
New operating lease annual payment | $ 6,020 | ||||
Lease renewable expiration date | Sep. 18, 2017 | ||||
Furniture, Fixtures and Equipment [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Financing arrangement expiration date | 2017-08 | ||||
Financing arrangement expiration date | 2019-03 | ||||
Six Year Operating Lease Property [Member] | Savannah Hotel Property [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Duration of operating lease term | 6 years | ||||
Ninety Nine Year Operating Lease Property [Member] | Savannah Hotel Property [Member] | |||||
Operating Leased Assets [Line Items] | |||||
Duration of operating lease term | 99 years | ||||
Operating lease, expiring date | Jul. 31, 2086 | ||||
Rental income recognized during period | $ 0 | ||||
Original lump sum rent payment received | $ 990 |
Commitments and Contingencies46
Commitments and Contingencies - Schedule of Minimum Future Lease Payments (Detail) | Mar. 31, 2017USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
For the remaining nine months ending: December 31, 2017 | $ 230,376 |
December 31, 2018 | 251,411 |
December 31, 2019 | 125,055 |
December 31, 2020 | 95,482 |
December 31, 2021 | 95,482 |
December 31, 2022 and thereafter | 445,583 |
Total | $ 1,243,389 |
Preferred Stock and Units - Add
Preferred Stock and Units - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Aug. 23, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Preferred Units [Line Items] | ||||
Preferred stock, shares issued | 1,610,000 | 1,610,000 | ||
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 | ||
Preferred stock, shares authorized | 11,000,000 | |||
Preferred stock, dividend rate percentage | 8.00% | |||
Preferred stock, liquidation preference per share | $ 25 | |||
Sotherly Hotels LP [Member] | ||||
Preferred Units [Line Items] | ||||
Operating partnership preferred partnership units issued | 1,610,000 | 1,610,000 | ||
Operating partnership preferred partnership units outstanding | 1,610,000 | 1,610,000 | ||
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||||
Preferred Units [Line Items] | ||||
Preferred units, dividend rate percentage | 8.00% | 8.00% | ||
Preferred units, liquidation preference per units | $ 25 | $ 25 | ||
Preferred dividend distributed | $ 0.50 | $ 0 | ||
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||
Preferred Units [Line Items] | ||||
Preferred stock, shares issued | 1,610,000 | |||
Preferred stock, par value | $ 0.01 | |||
Preferred stock, dividend rate percentage | 8.00% | |||
Proceeds from sale of preferred stock, net | $ 37.8 |
Common Stock and Units - Additi
Common Stock and Units - Additional Information (Detail) | Feb. 15, 2017shares | Dec. 02, 2016USD ($)$ / shares | Feb. 02, 2016shares | Feb. 01, 2016shares | Jan. 01, 2016shares | Feb. 28, 2017USD ($)shares | Mar. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares |
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized | 49,000,000 | 49,000,000 | ||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Voting right | Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. | |||||||
Repurchased common stock, value | $ | $ 3,200,000 | |||||||
Number of common stock shares repurchased | 0 | 481,100 | ||||||
Number of common stock, shares purchased | 682,500 | 682,500 | ||||||
Purchased common stock, value | $ | $ 4,900,000 | $ 4,900,000 | ||||||
Common stock, shares outstanding | 13,798,051 | 14,468,551 | ||||||
Common stock exchange ratio | 1 | |||||||
Redemption of units in operating partnership | 0 | |||||||
Operating Partnership common units not owned | 1,778,140 | 1,778,140 | ||||||
Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted shares issued | 12,000 | |||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 422,687 | |||||||
Common Stock [Member] | Executive Officer [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Non-restricted shares issued | 22,000 | |||||||
Common Stock [Member] | Director [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted shares issued | 12,000 | |||||||
Non-restricted shares issued | 2,250 | |||||||
Sotherly Hotels LP [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Operating Partnership common units outstanding | 16,258,691 | 16,246,691 | ||||||
Fair market value | $ | $ 11,400,000 | $ 12,100,000 | ||||||
Sotherly Hotels LP [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of issued unit in Operating Partnership | 12,000 | 36,250 | ||||||
Restricted shares issued | 12,000 | |||||||
Maximum [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Repurchased common stock, value | $ | $ 10,000,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Feb. 01, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |||||
Accounts receivable-affiliate | $ 475,537 | $ 4,175 | |||
ESOP [Member] | |||||
Related Party Transaction [Line Items] | |||||
Loan receivable outstanding | 4,900,000 | ||||
Accrued interest | $ 19,926 | ||||
Chesapeake Hospitality [Member] | |||||
Related Party Transaction [Line Items] | |||||
Company's outstanding common stock owned by members of Chesapeake Hospitality | 12.00% | ||||
Operating Partnership units owned by members of Chesapeake Hospitality | 870,271 | ||||
Company's common stock shares owned by members of Chesapeake Hospitality | 1,740,691 | ||||
Accounts receivable-affiliate | $ 158,680 | 0 | |||
Expiry date of master management agreement | between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. | ||||
Period subject to certain terms and conditions | 5 years | ||||
Agreement term | 5 years | ||||
Incentive management fee equal to increase in gross operating profit percentage | 10.00% | ||||
Maximum incentive management fee of gross revenues | 0.25% | ||||
Base management and administrative fees earned by related party | $ 973,068 | $ 932,386 | |||
Incentive management fees earned by related party | 26,293 | 13,698 | |||
Employee medical benefits paid | 1,267,936 | 1,326,154 | |||
Chesapeake Hospitality [Member] | Crowne Plaza Hampton Marina [Member] | |||||
Related Party Transaction [Line Items] | |||||
Termination fee | $ 0 | ||||
Chesapeake Hospitality [Member] | Fiscal Year 2017 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.65% | ||||
Chesapeake Hospitality [Member] | Fiscal Year 2017 and Thereafter [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Chesapeake Hospitality [Member] | Individual Hotel Management Agreements [Member] | |||||
Related Party Transaction [Line Items] | |||||
Management fee of gross revenues for first full fiscal year | 2.00% | ||||
Management fee of gross revenues for second full fiscal year | 2.25% | ||||
Management fee of gross revenues for every year thereafter | 2.50% | ||||
Chesapeake Hospitality [Member] | Crowne Plaza Hollywood Beach Resort [Member] | July 2015 through July 2016 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.00% | ||||
Chesapeake Hospitality [Member] | Crowne Plaza Hollywood Beach Resort [Member] | July 2016 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.25% | ||||
Chesapeake Hospitality [Member] | Crowne Plaza Hollywood Beach Resort [Member] | July 2017 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Chesapeake Hospitality [Member] | Crowne Plaza Hollywood Beach Resort [Member] | July 2017 and Thereafter [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2015 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.00% | ||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2016 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.25% | ||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2017 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2017 and Thereafter [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2017 through January 2018 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.00% | ||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2018 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.25% | ||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2019 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2019 and Thereafter [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of management fee due | 2.50% | ||||
Sotherly Foundation [Member] | |||||
Related Party Transaction [Line Items] | |||||
Amount loaned to related party | $ 180,000 | ||||
Loan receivable outstanding | $ 80,000 | $ 80,000 | |||
Daughter of Chief Executive Officer and Her Husband [Member] | |||||
Related Party Transaction [Line Items] | |||||
Total compensation for related parties | 91,277 | 85,521 | |||
Director [Member] | |||||
Related Party Transaction [Line Items] | |||||
Conversion of units in Operating Partnership to shares of common stock, shares | 322,687 | ||||
Previous Director [Member] | |||||
Related Party Transaction [Line Items] | |||||
Conversion of units in Operating Partnership to shares of common stock, shares | 100,000 | ||||
Partnership controlled by Chief Executive Officer [Member] | |||||
Related Party Transaction [Line Items] | |||||
Business-related air travel expense reimbursed to partnership | $ 48,859 | $ 28,802 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) | 2 Months Ended | 3 Months Ended | ||||
Feb. 28, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 29, 2016 | Jan. 01, 2016 | |
Compensation And Retirement Disclosure [Abstract] | ||||||
Employer contribution for first 3% of employee contributions | 100.00% | |||||
Employer contribution for next 2% of employee contributions | 50.00% | |||||
Percentage of first specified employee contributions | 3.00% | |||||
Percentage of next specified employee contributions | 2.00% | |||||
Contribution for retirement plan | $ 24,238 | $ 29,231 | ||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | $ 5,000,000 | ||||
Number of common stock, shares purchased | 682,500 | 682,500 | ||||
Purchased common stock, value | $ 4,900,000 | $ 4,900,000 | ||||
Fair value of shares held by ESOP | $ 4,600,000 | $ 0 |
Indirect Hotel Operating Expe51
Indirect Hotel Operating Expenses - Summary of Indirect Hotel Operating Expenses (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | $ 14,205,231 | $ 14,135,595 |
General and Administrative [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 2,926,133 | 2,723,427 |
Sales and Marketing [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 3,686,055 | 3,511,030 |
Repairs and Maintenance [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 1,711,035 | 1,854,619 |
Utilities [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 1,374,897 | 1,528,962 |
Franchise Fees [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 1,038,189 | 1,087,921 |
Management Fees, Including Incentive [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 999,362 | 946,083 |
Property Taxes [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 1,413,395 | 1,293,355 |
Insurance [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 606,435 | 694,202 |
Information and Telecommunications [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | 433,564 | 419,116 |
Other [Member] | ||
Component Of Operating Cost And Expense [Line Items] | ||
Total indirect hotel operating expenses | $ 16,166 | $ 76,880 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax (Benefit) Provision (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Current: | ||
Federal | $ 5,485 | |
State | 48,402 | $ 51,390 |
Total | 53,887 | 51,390 |
Deferred: | ||
Federal | 99,358 | (395,225) |
State | 18,692 | (92,244) |
Total | 118,050 | (487,469) |
Income tax benefit | $ 171,937 | $ (436,079) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Provision (Benefit) (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Statutory federal income tax expense | $ 1,046,484 | $ 37,330 |
Effect of non-taxable REIT income | (941,641) | (514,263) |
State income tax benefit | 67,094 | 40,854 |
Income tax benefit | $ 171,937 | $ (436,079) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Line Items] | ||
Deferred tax asset | $ 6,831,290 | $ 6,949,340 |
Accumulated net operating losses | 5,900,000 | 6,000,000 |
Start-up expense related to company | $ 200,000 | 200,000 |
Amortized period | 15 years | |
Loss carryforwards, expired | 2,028 | |
TRS Lessee [Member] | ||
Income Taxes [Line Items] | ||
Accumulated net operating losses | $ 5,900,000 | $ 6,000,000 |
Income Per Share and Per Unit -
Income Per Share and Per Unit - Additional Information (Detail) | Mar. 31, 2017shares |
Earnings Per Share [Abstract] | |
Number of non committed, unearned ESOP shares | 682,500 |
Income Per Share and Per Unit56
Income Per Share and Per Unit - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator | ||
Net income available to common stockholders for basic computation | $ 1,851,090 | $ 483,095 |
Denominator | ||
Weighted average number of common shares outstanding for basic computation | 14,025,489 | 14,792,911 |
Basic and diluted net income per share | $ 0.13 | $ 0.03 |
Income Per Share and Per Unit57
Income Per Share and Per Unit - Computation of Basic and Diluted Earnings Per Unit (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||
Net income available to common unitholders for basic computation | $ 1,851,090 | $ 483,095 |
Basic and diluted | $ 0.13 | $ 0.03 |
Sotherly Hotels LP [Member] | ||
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||
Net income available to common unitholders for basic computation | $ 2,100,958 | $ 545,874 |
Weighted average number of units outstanding | 16,252,691 | 16,715,044 |
Basic and diluted | $ 0.13 | $ 0.03 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - $ / shares | Apr. 24, 2017 | Apr. 17, 2017 | Apr. 11, 2017 |
Subsequent Event [Line Items] | |||
Dividend paid | $ 0.10 | ||
Dividend record date | Jun. 15, 2017 | Mar. 15, 2017 | |
Preferred dividend paid | $ 0.50 | ||
Dividend distributed | $ 0.105 | ||
Dividend payment date | Jul. 11, 2017 | ||
Preferred dividend distributed | $ 0.50 | ||
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | |||
Subsequent Event [Line Items] | |||
Dividend record date | Jun. 30, 2017 | Mar. 31, 2017 | |
Dividend payment date | Jul. 17, 2017 |