Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 03, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
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 | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 14,121,081 | |
Sotherly Hotels LP [Member] | ||
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
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 ($) | Jun. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Investment in hotel properties, net | $ 434,285,458 | $ 357,799,512 |
Cash and cash equivalents | 28,435,806 | 29,777,845 |
Restricted cash | 5,301,033 | 3,651,197 |
Accounts receivable, net | 10,972,446 | 5,587,077 |
Accounts receivable - affiliate | 426,041 | 394,026 |
Prepaid expenses, inventory and other assets | 6,693,982 | 7,292,565 |
Favorable lease assets, net | 2,655,069 | |
Deferred income taxes | 3,929,188 | 5,451,118 |
TOTAL ASSETS | 492,699,023 | 409,953,340 |
LIABILITIES | ||
Mortgage loans, net | 354,529,454 | 297,318,816 |
Unsecured notes, net | 23,635,174 | |
Accounts payable and accrued liabilities | 17,277,577 | 13,813,623 |
Advance deposits | 1,861,704 | 1,572,388 |
Dividends and distributions payable | 3,302,095 | 3,073,483 |
TOTAL LIABILITIES | 400,606,004 | 315,778,310 |
Commitments and contingencies (See Note 6) | ||
Sotherly Hotels Inc. stockholders’ equity | ||
Common stock, par value $0.01, 49,000,000 shares authorized, 14,121,081 shares and 14,078,831 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 141,211 | 140,788 |
Additional paid-in capital | 146,368,293 | 146,249,339 |
Unearned ESOP shares | (4,511,269) | (4,633,112) |
Distributions in excess of retained earnings | (50,811,546) | (48,765,860) |
Total Sotherly Hotels Inc. stockholders’ equity | 91,215,789 | 93,020,255 |
Noncontrolling interest | 877,230 | 1,154,775 |
TOTAL EQUITY | 92,093,019 | 94,175,030 |
TOTAL LIABILITIES AND EQUITY | 492,699,023 | 409,953,340 |
Sotherly Hotels LP [Member] | ||
ASSETS | ||
Investment in hotel properties, net | 434,285,458 | 357,799,512 |
Cash and cash equivalents | 28,435,806 | 29,777,845 |
Restricted cash | 5,301,033 | 3,651,197 |
Accounts receivable, net | 10,972,446 | 5,587,077 |
Accounts receivable - affiliate | 426,041 | 394,026 |
Loan receivable - affiliate | 4,556,062 | 4,650,969 |
Prepaid expenses, inventory and other assets | 6,693,982 | 7,292,565 |
Favorable lease assets, net | 2,655,069 | |
Deferred income taxes | 3,929,188 | 5,451,118 |
TOTAL ASSETS | 497,255,085 | 414,604,309 |
LIABILITIES | ||
Mortgage loans, net | 354,529,454 | 297,318,816 |
Unsecured notes, net | 23,635,174 | |
Accounts payable and accrued liabilities | 17,277,577 | 13,813,623 |
Advance deposits | 1,861,704 | 1,572,388 |
Dividends and distributions payable | 3,352,750 | 3,119,027 |
TOTAL LIABILITIES | 400,656,659 | 315,823,854 |
Commitments and contingencies (See Note 6) | ||
PARTNERS’ CAPITAL | ||
General Partner: 158,993 units and 158,570 units issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 591,835 | 586,725 |
Limited Partners: 15,740,228 units and 15,698,401 units issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 27,751,400 | 29,938,539 |
TOTAL PARTNERS’ CAPITAL | 96,598,426 | 98,780,455 |
Sotherly Hotels Inc. stockholders’ equity | ||
TOTAL LIABILITIES AND EQUITY | 497,255,085 | 414,604,309 |
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
PARTNERS’ CAPITAL | ||
Preferred units, $0.01 par value, 11,000,000 units authorized; | 37,766,531 | 37,766,531 |
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
PARTNERS’ CAPITAL | ||
Preferred units, $0.01 par value, 11,000,000 units authorized; | 30,488,660 | 30,488,660 |
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Sotherly Hotels Inc. stockholders’ equity | ||
Preferred stock, $0.01 par value, 11,000,000 shares authorized; | 16,100 | 16,100 |
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Sotherly Hotels Inc. stockholders’ equity | ||
Preferred stock, $0.01 par value, 11,000,000 shares authorized; | $ 13,000 | $ 13,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Preferred stock, shares authorized | 11,000,000 | 11,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 49,000,000 | 49,000,000 |
Common stock, shares issued | 14,121,081 | 14,078,831 |
Common stock, shares outstanding | 14,121,081 | 14,078,831 |
Sotherly Hotels LP [Member] | ||
General Partner, units issued | 158,993 | 158,570 |
General Partner, units outstanding | 158,993 | 158,570 |
Limited Partner, units issued | 15,740,228 | 15,698,401 |
Limited Partner, units outstanding | 15,740,228 | 15,698,401 |
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred units, par value | $ 0.01 | $ 0.01 |
Preferred units, authorized | 11,000,000 | 11,000,000 |
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 |
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred units, par value | $ 0.01 | $ 0.01 |
Preferred units, authorized | 11,000,000 | 11,000,000 |
Preferred units, dividend rate percentage | 7.875% | 7.875% |
Preferred units, liquidation preference per units | $ 25 | $ 25 |
Preferred units, issued | 1,300,000 | 1,300,000 |
Preferred units, outstanding | 1,300,000 | 1,300,000 |
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 11,000,000 | 11,000,000 |
Preferred stock, dividend rate percentage | 8.00% | 8.00% |
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 |
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 11,000,000 | 11,000,000 |
Preferred stock, dividend rate percentage | 7.875% | 7.875% |
Preferred stock, liquidation preference per share | $ 25 | $ 25 |
Preferred stock, shares issued | 1,300,000 | 1,300,000 |
Preferred stock, shares outstanding | 1,300,000 | 1,300,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
REVENUE | ||||
Total revenue | $ 51,553,527 | $ 40,642,632 | $ 93,289,083 | $ 79,337,518 |
Hotel operating expenses | ||||
Total hotel operating expenses | 35,170,080 | 29,124,075 | 65,027,120 | 56,340,078 |
Depreciation and amortization | 5,601,940 | 4,219,712 | 11,236,130 | 8,280,809 |
Loss on disposal of assets | 51,507 | 3,739 | 51,507 | |
Corporate general and administrative | 1,503,549 | 1,834,930 | 3,049,849 | 3,547,012 |
Total operating expenses | 42,275,569 | 35,230,224 | 79,316,838 | 68,219,406 |
NET OPERATING INCOME | 9,277,958 | 5,412,408 | 13,972,245 | 11,118,112 |
Other income (expense) | ||||
Interest expense | (5,087,482) | (3,874,076) | (9,264,501) | (7,687,793) |
Interest income | 66,505 | 13,294 | 148,209 | 72,925 |
Loss on early extinguishment of debt | (228,087) | (228,087) | ||
Unrealized gain (loss) on hedging activities | 5,798 | (11,261) | 18,528 | (27,206) |
Gain on sale of assets | 100,407 | |||
Gain on involuntary conversion of assets | 27,824 | 0 | 898,565 | 1,041,815 |
Net income before income taxes | 4,290,603 | 1,312,278 | 5,773,046 | 4,390,173 |
Income tax provision | (1,323,014) | (196,483) | (1,628,969) | (368,420) |
Net income | 2,967,589 | 1,115,795 | 4,144,077 | 4,021,753 |
Less: Net income attributable to noncontrolling interest | (170,331) | (33,869) | (140,318) | (263,811) |
Net income attributable to the Company | 2,797,258 | 1,081,926 | 4,003,759 | 3,757,942 |
Distributions to preferred stockholders | (1,444,844) | (805,000) | (2,889,688) | (1,610,000) |
Net income available to common stockholders | $ 1,352,414 | $ 276,926 | $ 1,114,071 | $ 2,147,942 |
Net income per share attributable to common stockholders/operating partner unit | ||||
Basic | $ 0.10 | $ 0.02 | $ 0.08 | $ 0.15 |
Diluted | $ 0.10 | $ 0.02 | $ 0.08 | $ 0.15 |
Weighted average number of common shares/operating partner units outstanding | ||||
Basic | 13,488,526 | 13,813,168 | 13,480,529 | 13,898,910 |
Diluted | 13,489,475 | 13,815,035 | 13,486,140 | 13,908,359 |
Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | $ 51,553,527 | $ 40,642,632 | $ 93,289,083 | $ 79,337,518 |
Hotel operating expenses | ||||
Total hotel operating expenses | 35,170,080 | 29,124,075 | 65,027,120 | 56,340,078 |
Depreciation and amortization | 5,601,940 | 4,219,712 | 11,236,130 | 8,280,809 |
Loss on disposal of assets | 51,507 | 3,739 | 51,507 | |
Corporate general and administrative | 1,503,549 | 1,834,930 | 3,049,849 | 3,547,012 |
Total operating expenses | 42,275,569 | 35,230,224 | 79,316,838 | 68,219,406 |
NET OPERATING INCOME | 9,277,958 | 5,412,408 | 13,972,245 | 11,118,112 |
Other income (expense) | ||||
Interest expense | (5,087,482) | (3,874,076) | (9,264,501) | (7,687,793) |
Interest income | 66,505 | 13,294 | 148,209 | 72,925 |
Loss on early extinguishment of debt | (228,087) | (228,087) | ||
Unrealized gain (loss) on hedging activities | 5,798 | (11,261) | 18,528 | (27,206) |
Gain on sale of assets | 100,407 | |||
Gain on involuntary conversion of assets | 27,824 | 898,565 | 1,041,815 | |
Net income before income taxes | 4,290,603 | 1,312,278 | 5,773,046 | 4,390,173 |
Income tax provision | (1,323,014) | (196,483) | (1,628,969) | (368,420) |
Net income | 2,967,589 | 1,115,795 | 4,144,077 | 4,021,753 |
Distributions to preferred unit holder | (1,444,844) | (805,000) | (2,889,688) | (1,610,000) |
Net income (loss) available to operating partnership unit holders | $ 1,522,745 | $ 310,795 | $ 1,254,389 | $ 2,411,753 |
Net income per share attributable to common stockholders/operating partner unit | ||||
Basic and diluted | $ 0.10 | $ 0.02 | $ 0.08 | $ 0.15 |
Weighted average number of common shares/operating partner units outstanding | ||||
Basic and diluted | 15,899,221 | 16,258,691 | 15,895,885 | 16,255,708 |
Rooms Department [Member] | ||||
REVENUE | ||||
Total revenue | $ 35,330,676 | $ 28,906,872 | $ 63,616,121 | $ 56,273,506 |
Hotel operating expenses | ||||
Total hotel operating expenses | 8,176,164 | 6,743,788 | 14,876,545 | 13,426,067 |
Rooms Department [Member] | Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | 35,330,676 | 28,906,872 | 63,616,121 | 56,273,506 |
Hotel operating expenses | ||||
Total hotel operating expenses | 8,176,164 | 6,743,788 | 14,876,545 | 13,426,067 |
Food and Beverage Department [Member] | ||||
REVENUE | ||||
Total revenue | 11,080,568 | 8,583,358 | 19,432,551 | 16,907,117 |
Hotel operating expenses | ||||
Total hotel operating expenses | 7,673,049 | 6,151,495 | 14,068,125 | 11,879,968 |
Food and Beverage Department [Member] | Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | 11,080,568 | 8,583,358 | 19,432,551 | 16,907,117 |
Hotel operating expenses | ||||
Total hotel operating expenses | 7,673,049 | 6,151,495 | 14,068,125 | 11,879,968 |
Other Operating Departments [Member] | ||||
REVENUE | ||||
Total revenue | 5,142,283 | 3,152,402 | 10,240,411 | 6,156,895 |
Hotel operating expenses | ||||
Total hotel operating expenses | 1,680,582 | 623,530 | 3,208,909 | 1,223,550 |
Other Operating Departments [Member] | Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | 5,142,283 | 3,152,402 | 10,240,411 | 6,156,895 |
Hotel operating expenses | ||||
Total hotel operating expenses | 1,680,582 | 623,530 | 3,208,909 | 1,223,550 |
Indirect [Member] | ||||
Hotel operating expenses | ||||
Total hotel operating expenses | 17,640,285 | 15,605,262 | 32,873,541 | 29,810,493 |
Indirect [Member] | Sotherly Hotels LP [Member] | ||||
Hotel operating expenses | ||||
Total hotel operating expenses | $ 17,640,285 | $ 15,605,262 | $ 32,873,541 | $ 29,810,493 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - 6 months ended Jun. 30, 2018 - USD ($) | Total | 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, 2017 | $ 94,175,030 | $ 29,100 | $ 140,788 | $ 146,249,339 | $ (4,633,112) | $ (48,765,860) | $ 1,154,775 |
Balances, shares, beginning at Dec. 31, 2017 | 2,910,000 | 14,078,831 | |||||
Net income | 4,144,077 | 4,003,759 | 140,318 | ||||
Issuance of unrestricted common stock awards | 13,477 | $ 23 | 13,454 | ||||
Issuance of unrestricted common stock awards, shares | 2,250 | ||||||
Issuance of restricted common stock awards | 89,850 | $ 400 | 89,450 | ||||
Issuance of restricted common stock awards, shares | 40,000 | ||||||
Amortization of ESOP shares | 121,843 | 121,843 | |||||
Amortization of restricted stock award | 16,050 | 16,050 | |||||
Preferred stock dividends declared | (2,889,688) | (2,889,688) | |||||
Common stockholders' dividends and distributions declared | (3,577,620) | (3,159,757) | (417,863) | ||||
Balances, ending at Jun. 30, 2018 | $ 92,093,019 | $ 29,100 | $ 141,211 | $ 146,368,293 | $ (4,511,269) | $ (50,811,546) | $ 877,230 |
Balances, shares, ending at Jun. 30, 2018 | 2,910,000 | 14,121,081 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 4,144,077 | $ 4,021,753 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 11,236,130 | 8,280,809 |
Amortization of deferred financing costs | 462,469 | 414,366 |
Amortization of mortgage premium | (12,341) | (12,341) |
Gain on involuntary conversion of assets | (898,565) | (1,041,815) |
Unrealized (gain) loss on derivative instrument | (18,528) | 27,206 |
Loss/(gain) on sale or disposal of assets | 3,739 | (48,900) |
Loss on early extinguishment of debt | 228,087 | |
Share / Unit - based compensation | 241,221 | 217,086 |
Changes in assets and liabilities: | ||
Accounts receivable | (4,415,667) | 840,630 |
Prepaid expenses, inventory and other assets | 1,014,182 | (1,377,186) |
Deferred income taxes | 1,521,929 | 257,996 |
Accounts payable and other accrued liabilities | 2,911,180 | 1,438,743 |
Advance deposits | 67,091 | (555,560) |
Accounts receivable - affiliate | (32,015) | (559,730) |
Net cash provided by operating activities | 16,224,902 | 12,131,144 |
Cash flows from investing activities: | ||
Acquisitions of hotel properties | (79,732,716) | (3,986,849) |
Improvements and additions to hotel properties | (10,563,930) | (12,480,207) |
Proceeds from the sale of hotel property | 5,434,856 | |
Proceeds from involuntary conversion | 222,553 | 1,041,815 |
Proceeds from the sale or disposal of assets | 3,355 | |
Net cash used in investing activities | (90,074,093) | (9,987,030) |
Cash flows from financing activities: | ||
Proceeds of mortgage debt | 65,300,000 | 35,500,000 |
Proceeds of unsecured debt | 25,000,000 | |
Settlement or repurchase of common stock / units | (1,103,130) | |
Payments on mortgage loans | (7,707,048) | (23,647,602) |
Payments of deferred financing costs | (2,197,268) | (585,004) |
Funding of ESOP stock purchase | (4,874,758) | |
Dividends and distributions paid | (3,349,008) | (3,130,094) |
Preferred dividends paid | (2,889,688) | (1,610,000) |
Net cash provided by financing activities | 74,156,988 | 549,412 |
Net increase in cash, cash equivalents and restricted cash | 307,797 | 2,693,526 |
Cash, cash equivalents and restricted cash at the beginning of the period | 33,429,042 | 36,362,919 |
Cash, cash equivalents and restricted cash at the end of the period | 33,736,839 | 39,056,445 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 8,769,755 | 3,513,312 |
Cash paid during the period for income taxes | 280,552 | 81,361 |
Non-cash investing and financing activities: | ||
Change in proceeds of involuntary conversion in accounts receivable | 676,013 | |
Change in amount of improvements to hotel property in accounts payable and accrued liabilities | 91,556 | 1,141,553 |
Sotherly Hotels LP [Member] | ||
Cash flows from operating activities: | ||
Net income | 4,144,077 | 4,021,753 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 11,236,130 | 8,280,809 |
Amortization of deferred financing costs | 462,469 | 414,366 |
Amortization of mortgage premium | (12,341) | (12,341) |
Gain on involuntary conversion of assets | (898,565) | (1,041,815) |
Unrealized (gain) loss on derivative instrument | (18,528) | 27,206 |
Loss/(gain) on sale or disposal of assets | 3,739 | (48,900) |
Loss on early extinguishment of debt | 228,087 | |
Share / Unit - based compensation | 299,898 | 217,086 |
Changes in assets and liabilities: | ||
Accounts receivable | (4,415,667) | 840,630 |
Prepaid expenses, inventory and other assets | 1,014,182 | (1,377,186) |
Deferred income taxes | 1,521,929 | 257,996 |
Accounts payable and other accrued liabilities | 2,911,180 | 1,438,743 |
Advance deposits | 67,091 | (555,560) |
Accounts receivable - affiliate | (32,015) | (559,730) |
Net cash provided by operating activities | 16,283,579 | 12,131,144 |
Cash flows from investing activities: | ||
Acquisitions of hotel properties | (79,732,716) | (3,986,849) |
Improvements and additions to hotel properties | (10,563,930) | (12,480,207) |
Proceeds from the sale of hotel property | 5,434,856 | |
ESOP loan advances | (4,874,758) | |
ESOP loan payments received | 94,908 | |
Proceeds from involuntary conversion | 222,553 | 1,041,815 |
Proceeds from the sale or disposal of assets | 3,355 | |
Net cash used in investing activities | (89,979,185) | (14,861,788) |
Cash flows from financing activities: | ||
Proceeds of mortgage debt | 65,300,000 | 35,500,000 |
Proceeds of unsecured debt | 25,000,000 | |
Settlement or repurchase of common stock / units | (1,103,130) | |
Payments on mortgage loans | (7,707,048) | (23,647,602) |
Payments of deferred financing costs | (2,197,268) | (585,004) |
Dividends and distributions paid | (3,502,593) | (3,130,094) |
Preferred dividends paid | (2,889,688) | (1,610,000) |
Net cash provided by financing activities | 74,003,403 | 5,424,170 |
Net increase in cash, cash equivalents and restricted cash | 307,797 | 2,693,526 |
Cash, cash equivalents and restricted cash at the beginning of the period | 33,429,042 | 36,362,919 |
Cash, cash equivalents and restricted cash at the end of the period | 33,736,839 | 39,056,445 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 8,769,755 | 3,513,312 |
Cash paid during the period for income taxes | 280,552 | 81,361 |
Non-cash investing and financing activities: | ||
Change in proceeds of involuntary conversion in accounts receivable | 676,013 | |
Change in amount of improvements to hotel property in accounts payable and accrued liabilities | $ 91,556 | $ 1,141,553 |
Consolidated Statement of Chan7
Consolidated Statement of Changes in Partners' Capital - 6 months ended Jun. 30, 2018 - 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] | Sotherly Hotels LP [Member]Preferred Units [Member]Series B Preferred Units [Member] | Sotherly Hotels LP [Member]Preferred Units [Member]Series C Preferred Units [Member] |
Balances, beginning at Dec. 31, 2017 | $ 98,780,455 | $ 586,725 | $ 29,938,539 | $ 37,766,531 | $ 30,488,660 | ||
Balances, units, beginning at Dec. 31, 2017 | 158,570 | 15,698,401 | 2,910,000 | ||||
Issuance of common partnership units | 103,328 | $ 1,033 | $ 102,295 | ||||
Issuance of common partnership units, number of units | 423 | 41,827 | |||||
Amortization of restricted units award | $ 16,050 | 16,050 | $ 16,050 | ||||
Unit based compensation | 180,521 | 180,521 | |||||
Preferred units distributions declared | (2,889,688) | (2,889,688) | |||||
Partnership units distributions declared | (3,736,317) | $ (37,364) | (3,698,953) | ||||
Net income | $ 4,144,077 | 4,144,077 | 41,441 | 1,212,948 | 2,889,688 | ||
Balances, ending at Jun. 30, 2018 | $ 96,598,426 | $ 591,835 | $ 27,751,400 | $ 37,766,531 | $ 30,488,660 | ||
Balances, units, ending at Jun. 30, 2018 | 158,993 | 15,740,228 | 2,910,000 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2018 | |
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 twelve hotel properties comprising 3,156 rooms, and the hotel commercial condominium unit of the Hyde Resort & Residences condominium hotel. The Company owns hotels that operate under well-known brands such as DoubleTree by Hilton, Tapestry Collection by Hilton, Crowne Plaza, Sheraton and Hyatt, as well as independent hotels. 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”), which at June 30, 2018, was approximately 88.8% owned by the Company. 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, through its subsidiaries, leases the hotels to direct and indirect subsidiaries of MHI Hospitality TRS Holding, Inc. (collectively, “MHI TRS”), which is a wholly-owned subsidiary of the Operating Partnership. MHI TRS then engages eligible independent hotel management companies, including MHI Hotels Services, LLC, which does business as Chesapeake Hospitality (“Chesapeake Hospitality”) and Highgate Hotels, L.P. (“Highgate Hotels”), to operate the hotels under management contracts. 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 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, we 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 us 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 a price of $5.6 million. On June 1, 2017, we entered into an agreement to purchase the commercial unit of the planned Hyde Beach House Resort & Residences, a condominium hotel under development in Hollywood, Florida, for a price of $5.1 million from 4000 South Ocean Property Owner, LLLP. In connection with the agreement, we also entered into a pre-opening services agreement whereby the seller has agreed to pay us approximately $0.8 million in connection with certain pre-opening activities to be undertaken prior to the closing. We have agreed to purchase inventories at closing consistent with the management and operation of the hotel and the related condominium association for an additional amount and has further agreed to enter into a lease agreement for the parking garage and poolside cabanas associated with the hotel; and to enter into a management agreement relating to the operation and management of the hotel’s condominium association. We anticipate that the closing of the transaction and the execution of related agreements will take place in the second quarter of 2019, once construction of the hotel has been substantially completed. The closing of the transaction is subject to various closing conditions as described in the purchase agreement. On June 29, 2017, we entered into a promissory note and other loan documents to secure a $35.5 million mortgage on the DoubleTree by Hilton Jacksonville Riverfront with Wells Fargo Bank, N.A. Pursuant to the loan documents, the loan has a maturity date of July 11, 2024, bears a fixed interest rate of 4.88%, amortizes on a 30-year schedule, and is subject to a prepayment premium following a prepayment lockout period. We used a portion of the proceeds to repay the existing first mortgage on the DoubleTree by Hilton Jacksonville Riverfront, to pay closing costs and for general corporate purposes. On October 11, 2017, we closed a sale and issuance of 1,200,000 shares of its newly authorized 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock (the “Series C Preferred Stock”), for net proceeds after all estimated expenses of approximately $28.0 million. On October 17, 2017, the Company closed a sale and issuance of an additional 100,000 shares of its Series C Preferred Stock, for net proceeds of approximately $2.5 million, pursuant to the underwriters’ partial exercise of an option granted by the Company to purchase additional shares. The Company contributed the net proceeds from the offering to its Operating Partnership for an equivalent number of Series C Cumulative Redeemable Perpetual Preferred Units (the “Series C Preferred Units”). We used the net proceeds to redeem in full the Operating Partnership’s 7.0% senior unsecured notes (the “7% Notes”) and for working capital. On November 15, 2017, the Operating Partnership redeemed the entire $25.3 million principal amount of the 7% Notes, at a redemption price equal to 101% of the principal amount of the 7% Notes, plus any accrued and unpaid interest to, but not including, the redemption date. On February 1, 2018, we received proceeds of $5.0 million on the Hilton Wilmington Riverside mortgage loan after meeting certain requirements, per the mortgage documents. On February 12, 2018, the Company and the Operating Partnership closed on a sale and issuance by the Operating Partnership of an aggregate $25.0 million of the 7.25% senior unsecured notes due 2021 (the “7.25% Notes”), unconditionally guaranteed by the Company, for net proceeds after all estimated expenses of approximately $23.3 million. The Operating Partnership used the net proceeds from this offering, together with existing cash on hand and $57.0 million of asset-level mortgage indebtedness, to finance the acquisition of the Hyatt Centric Arlington hotel and for working capital. On February 26, 2018, we entered into a First Amendment to Loan Agreement, Amended and Restated Promissory Note, and other related documents with International Bank of Commerce to amend the terms of the mortgage loan on The Whitehall hotel located in Houston, TX. Pursuant to the amended loan documents, payments of principal and interest on a 25-year amortization schedule have begun and the maturity date was extended until February 26, 2023. On March 1, 2018, we acquired the 318-room Hyatt Centric Arlington hotel located in Arlington, Virginia for an aggregate purchase price of $79.8 million, including seller credits (the “Arlington Acquisition”). Per the Financial Accounting Standards Board (“FASB”) we have considered this acquisition to be an asset acquisition and not a business combination, applying the screen test, as discussed in the Accounting Standards Update 2017-01 – Business Combinations – Clarifying the Definition of a Business (Topic 805). Concurrently with the closing, we entered into a franchise agreement with an affiliate of Hyatt Hotels Corporation for the hotel to continue operating as the Hyatt Centric Arlington, and a management agreement with Highgate Hotels for the management of the hotel. The management agreement: (i) has an initial term of three years commencing March 1, 2018; (ii) provides for a base management fee equal to 2.50% of gross revenues; and (iii) On March 1, 2018, we entered into a loan agreement, a first and second promissory note (“Note A” and “Note B”, respectively), and On May 10, 2018, we reduced the Note B loan by approximately $4.0 million to remain in compliance with our loan covenants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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. 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 net realizable value, 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 June 30, 2018 and December 31, 2017 were $501,734 and $ 532,070 , respectively. Amortization expense for the three-month periods ended June 30, 2018 and 2017, totaled $13,304 and $ 29,494 , respectively, and for the six-month periods ended June 30, 2018 and 2017, totaled $30,336 and $60,946, respectively . Favorable Lease Assets, Net – Favorable lease assets are recorded on non-market contracts assumed as part of the acquisition of certain hotels. We review the terms of agreements assumed in conjunction with the purchase of a hotel to determine if the terms are favorable or unfavorable compared to an estimated market agreement at the acquisition date. Favorable lease assets are recorded at the acquisition date and amortized using straight-line method over the term of the remaining agreement. Amortization expense for each of the three and six-month periods ended June 30, 2018 totaled $126,432. 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. Deferred offering costs are netted against our equity offerings when the offering 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 currently use 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 assets and liabilities measured at fair value and the basis for that measurement (our interest rate cap is the only asset or liability measured at fair value on a recurring basis and there were no non-recurring asset and liability fair value measurements as of June 30, 2018 and December 31, 2017, respectively): Level 1 Level 2 Level 3 December 31, 2017 Interest Rate Cap (1) $ — $ 5,213 $ — Mortgage loans (2) $ — $ (292,368,370 ) $ — June 30, 2018 Interest Rate Cap (1) $ — $ 23,741 $ — Mortgage loans (2) $ — $ (347,839,825 ) $ — Unsecured notes (3) $ (25,800,000 ) $ — $ — (1) Interest rate cap, 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 Sheets as of June 30, 2018 and December 31, 2017. (3) Unsecured notes are recorded at outstanding principal balance, net of deferred financing costs on our Consolidated Balance Sheets as of June 30, 2018. 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; telephone, parking, gift shop sales, rentals from restaurant tenants, rooftop leases, fees earned on the management of the condominium rental program at the Hyde Resort & Residences and insurance proceeds of business interruption coverage. Revenues are reported net of occupancy and other taxes collected from customers and remitted to governmental authorities. Refer to “New Accounting Pronouncements - ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ,” below for further discussion of revenue recognition . 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 $0.4 million, for each of the three months ended June 30, 2018 and 2017, respectively, and approximately $0.9 million for each of the six months ended June 30, 2018 and 2017, respectively . A schedule of minimum future lease payments receivable for the remaining six and twelve-month lease periods is as follows: For the remaining six months ending: December 31, 2018 $ 755,705 December 31, 2019 961,982 December 31, 2020 956,021 December 31, 2021 892,694 December 31, 2022 774,835 December 31, 2023 and thereafter 4,266,893 Total $ 8,608,130 Variable Interest Entities – The Operating Partnership is a variable interest entity. The Company’s only significant asset is its investment in the Operating Partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership and its subsidiaries. All of the Company’s debt is an obligation of the Operating Partnership and its subsidiaries. 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 June 30, 2018 and December 31, 2017, deferred tax assets totaled approximately $3.9 million and $5.5 million, respectively, of which approximately $3.3 million and $4.9 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 June 30, 2018 and December 31, 2017, 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 June 30, 2018, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2010 through 2017. In addition, as of June 30, 2018, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject include the years 2009 and 2014 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, unrestricted 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. All of the 255,938 shares issued to certain of our executives and employees have vested. 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 163,350 shares, including 77,600 non-restricted shares to certain executives and employees and 85,750 restricted shares issued to its independent directors. All awards have vested except for 25,000 shares issued to one employee, which will vest over 5 years and 15,000 shares issued to the Company’s independent directors in February 2018, which will vest by December 31, 2018 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 June 30, 2018, no performance-based stock awards have been granted. Total compensation cost recognized under the 2004 Plan and the 2013 Plan for the three months ended June 30, 2018 and 2017 was $8,025 and $4,980 , and for the six months ended June 30, 2018 and 2017 was $119,378 and $99,120, respectively Additionally, the Company sponsors and maintains an Employee Stock Ownership Plan (“ESOP”) and related trust for the benefit of its eligible employees. We reflect Advertising – Advertising costs were $147,804 and $ 85,094 for the three months ended June 30, 2018 and 2017, respectively and were $246,117 and $150,104 for the six months ended June 30, 2018 and 2017, 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 periods ending June 30, 2018 and 2017, we recognized $27,824 and $0, respectively, and during the six-month periods ending June 30, 2018 and 2017, we recognized approximately $0.9 million and $1.0 million, respectively, in 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. Reclassifications - Certain reclassifications have been made to the prior period’s financial statements to conform to the current year presentation. We have adopted ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash, whereby the restricted cash balances are reflected in the total Cash, Cash Equivalents and Restricted Cash for both current and prior year presentation. We have also reclassified gain (loss) on disposal of assets in the prior period’s consolidated statements of operations, to separate disposals related to changes in estimated useful lives of assets, from assets which were disposed of by sale in the respective periods. 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. New Accounting Pronouncements – In August 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-12, , which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and simplifies the application of hedge accounting. This ASU will be effective for the first annual period beginning after December 15, 2018, including interim periods within those periods. Early adoption is permitted. We adopted this ASU on January 1, 2018 and aside from minor presentation changes in our disclosure on derivative and hedging activities it did not have a material effect on our consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). Nonmonetary Transactions In January 2017, the FASB issued ASU 2017-01, Business Combinations – Clarifying the Definition of a Business (Topic 805). 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 (Topic 606) Revenue from Contracts with Customers (Topic 606) In April 2016, the FASB issued ASU No. 2016-10 , Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing (Topic 606) Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) |
Acquisition of Hotel Properties
Acquisition of Hotel Properties | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations And Or Asset Acquisitions [Abstract] | |
Acquisition of Hotel Properties | 3. Acquisition of Hotel Properties Hyatt Centric Arlington . On March 1, 2018, we acquired the Hyatt Centric Arlington hotel, for a total fair value of consideration transferred including inventory and other assets of approximately $79.7 million (after amendment of the initial purchase price of $81.0 million). We considered this acquisition to be an asset acquisition as opposed to a business combination, applying the screen test, as discussed in the Accounting Standards Update 2017-01 – Business Combinations – Clarifying the Definition of a Business (Topic 805). Hyde Resort & Residences. On January 30, 2017, we acquired the hotel commercial condominium unit of the Hyde Resort & Residences condominium hotel, for a total fair value of consideration transferred including inventory and other assets of approximately $4.8 million. The allocations of the respective purchase prices are based on fair values are as follows: Hyatt Centric Arlington Hyde Resort & Residences Land and land improvements $ 190,916 $ 500 Buildings and improvements 70,369,046 4,309,500 Furniture, fixtures and equipment 6,229,888 72,616 Intangible assets 3,054,812 — Investment in hotel properties 79,844,662 4,382,616 Accrued liabilities and other costs (111,946 ) (866,142 ) Prepaid expenses, inventory and other assets — 470,375 Net cash $ 79,732,716 $ 3,986,849 The results of operations of the hotels are included in our consolidated financial statements from the date of acquisition. The total revenue and net income related to the Hyatt Centric Arlington acquisition for the period March 1, 2018 to June 30, 2018 are approximately $8.6 million and $2.1 million, respectively. The total revenue and net income related to the Hyde Resort & Residences acquisition for the period January 1, 2018 to June 30, 2018 are approximately $3.8 million and $0.4 million, respectively and for the period January 30, 2017 to June 30, 2017 are approximately $1.6 million and $0.3 million, respectively. |
Investment in Hotel Properties,
Investment in Hotel Properties, Net | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate [Abstract] | |
Investment in Hotel Properties, Net | 4. Investment in Hotel Properties, Net Investment in hotel properties, net as of June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Land and land improvements $ 60,474,303 $ 59,504,625 Buildings and improvements 420,757,649 348,532,577 Furniture, fixtures and equipment 57,505,372 48,467,956 538,737,324 456,505,158 Less: accumulated depreciation and impairment (104,451,866 ) (98,705,646 ) Investment in Hotel Properties, Net $ 434,285,458 $ 357,799,512 The Crowne Plaza Hampton Marina property, 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 for the period ending June 30, 2017. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Mortgage Loans, Net . As of June 30, 2018 and December 31, 2017, we had approximately $354.5 million and approximately $ 297.3 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels. Balance Outstanding as of June 30, December 31, Prepayment Maturity Amortization Interest Property 2018 2017 Penalties Date Provisions Rate Crowne Plaza Tampa Westshore (1) $ 18,445,600 $ 15,284,200 None 6/30/2019 (1) LIBOR plus 3.75 % The DeSoto (2) 34,239,496 34,645,929 Yes 7/1/2026 25 years 4.25% DoubleTree by Hilton Jacksonville Riverfront (3) 35,034,982 35,294,741 Yes 7/11/2024 30 years 4.88% DoubleTree by Hilton Laurel (4) 8,993,770 9,132,558 Yes 8/5/2021 25 years 5.25% DoubleTree by Hilton Philadelphia Airport (5) 30,060,602 30,432,260 None 4/1/2019 25 years LIBOR plus 3.00 % DoubleTree by Hilton Raleigh Brownstone University (6) 14,361,098 14,503,925 n/a 8/1/2018 30 years 4.78% DoubleTree Resort by Hilton Hollywood Beach (7) 57,538,334 58,023,567 n/a 10/1/2025 30 years 4.913% Georgian Terrace (8) 44,614,206 45,032,662 n/a 6/1/2025 30 years 4.42% Hotel Ballast Wilmington, Tapestry Collection by Hilton (9) 34,640,256 30,000,000 Yes 1/1/2027 25 years 4.25% Hyatt Centric Arlington - Note A (10) 49,685,400 — None 3/1/2021 (10) LIBOR plus 3.00 % Hyatt Centric Arlington - Note B (11) 2,575,000 — None 3/1/2019 (11) LIBOR plus 5.00 % Sheraton Louisville Riverside (12) 11,559,647 11,701,930 Yes 12/1/2026 25 years 4.27% The Whitehall (13) 14,896,332 15,000,000 Yes 2/26/2023 25 years LIBOR plus 3.50 % Total Mortgage Principal Balance $ 356,644,723 $ 299,051,772 Deferred financing costs, net (2,293,902 ) (1,923,928 ) Unamortized premium on loan 178,633 190,972 Total Mortgage Loans, Net $ 354,529,454 $ 297,318,816 (1) 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 1-month LIBOR plus 3.75% subject to a floor rate of 3.75%; with monthly principal payments of $23,100; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. On April 5, 2018, we drew down an additional $3.3 million of loan proceeds in accordance with the terms of the note. (2) 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. (3) The note may not be prepaid until August 2019, after which it is subject to a pre-payment penalty until March 2024. Prepayment can be made without penalty thereafter. (4) 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. (5) The note bears a minimum interest rate of 3.50%. (6) With limited exception, the note may not be prepaid until two months before maturity. (7) With limited exception, the note may not be prepaid until June 2025. (8) With limited exception, the note may not be prepaid until February 2025. (9) The note provided initial proceeds of $30.0 million and additional proceeds of $5.0 million which were received following the substantial completion of the renovation project in February 2018; 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 has a term of 3 years, with two 1-year extension options, each of which are subject to certain criteria. The note requires monthly principal payments of $78,650. (11) The note has a term of 1 year, with two 1-year extension options, each of which are subject to certain criteria. The note requires monthly principal payments of $100,000 during the initial 1-year term, $150,000 during the first 1- year extended term, and $250,000 during the second 1-year extended term, with interest payments due monthly on the outstanding principal amount during all three terms. On May 10, 2018, we reduced Note B by approximately $4.0 million. (12) 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. (13) The note was amended in February 2018 to extend the maturity date until February 26, 2023. The amended note has an initial principal balance of $15.0 million, with no additional proceeds available; 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. As of June 30, 2018, 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 previously disclosed, we reduced Note B to the Hyatt Centric Arlington mortgage loan by approximately $ 4.0 million on May 10, 2018 in order to remain in compliance with the loan covenants. Total future mortgage debt maturities, without respect to any extension of loan maturity, as of June 30, 2018 were as follows: For the remaining six months ending: December 31, 2018 $ 50,157,159 December 31, 2019 27,018,765 December 31, 2020 7,255,127 December 31, 2021 70,448,242 December 31, 2022 5,047,909 December 31, 2023 and thereafter 196,717,521 Total future maturities $ 356,644,723 7.25% Unsecured Notes. On February 12. 2018, the Operating Partnership issued its 7.25% Notes in the aggregate amount of $25.0 million, unconditionally guaranteed by the Company. The indenture requires quarterly payments of interest and matures on February 15, 2021. The 7.25% Notes are callable after February 15, 2019 at 101% of face value. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
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 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 and six months ended June 30, 2018 and 2017 totaled $18,245 and $36,491 , respectively . We lease, as landlord, the entire fourteenth floor of The DeSoto 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 leased a portion of the 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 June 30, 2018 and 2017, totaled $27,866 and $ 23,871 We lease land adjacent to the Crowne Plaza Tampa Westshore for use as parking under a five-year renewable 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 each of the three and six months ended June 30, 2018 and 2017, totaled $651 and $1,301, respectively. 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 each of the three months ended June 30, 2018 and 2017 totaled $22,552, and for each of the six months ended June 30, 2018 and 2017, totaled $45,104. We lease the parking garage adjacent to the Hyde Resort & Residences in Hollywood Beach, Florida, along with meeting and office spaces. The 20-year operating lease requires monthly payments of $20,000, which expires in February 2037. Rent expense for each of the three months ended June 30, 2018 and 2017, totaled $60,000 and for the six months ended June 30, 2018 and 2017, totaled $120,000 and $80,000, respectively. We lease the land underlying all of the The ground lease requires us to make rental payments of $50,000 per year in base rent and percentage rent equal to 3.5% of gross room revenue in excess of certain thresholds, as defined in the ground lease agreement. The initial term of the ground lease expires in 2025 and may be extended by us for five additional renewal periods of 10 years each. We also lease certain furniture and equipment under financing arrangements expiring between August 2018 and August 2026. A schedule of minimum future lease payments for the following nine and twelve-month periods is as follows: For the remaining six months ending: December 31, 2018 $ 297,744 December 31, 2019 484,075 December 31, 2020 364,163 December 31, 2021 354,639 December 31, 2022 351,464 December 31, 2023 and thereafter 3,920,165 Total $ 5,772,250 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 June 30, 2018, the Hyatt Centric Arlington hotel operated under a management agreement with Highgate Hotels L.P. The management agreement has an initial term of three years expiring March 1, 2021. As of June 30, 2018, the eleven remaining 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 June 30, 2018, nine 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 3.0% 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 June 2019 and March 2038. 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 Hotel Ballast, The DeSoto, the DoubleTree by Hilton Raleigh Brownstone-University, the DoubleTree by Hilton Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, 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 Hotel Ballast, The DeSoto, the DoubleTree by Hilton Raleigh Brownstone–University, the DoubleTree by Hilton Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, The Whitehall, and the Georgian Terrace and equal 4.0% of room revenues for the DoubleTree by Hilton Philadelphia Airport. ESOP Loan Commitment – The Company’s board of directors approved the ESOP on November 29, 2016, which was adopted by the Company in December 2016 and effective January 1, 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. Under the loan agreement, the aggregate principal amount outstanding at any time may not exceed $5.0 million and the ESOP may borrow additional funds up to that limit in the future, until December 29, 2036. Litigation –To our knowledge, no material litigation has been 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 | 6 Months Ended |
Jun. 30, 2018 | |
Preferred Stock And Units [Abstract] | |
Preferred Stock and Units | 7. Preferred Stock and Units Preferred Stock - The Company is authorized to issue up to 11,000,000 shares of preferred stock. As of June 30, 2018 and December 31, 2017, there were 1,610,000 shares and 1,610,000 shares, respectively, of the Series B Cumulative Redeemable Perpetual Preferred Stock (the “Series B Preferred Stock”) issued and outstanding. As of June 30, 2018 and December 31, 2017, there were 1,300,000 shares and 1,300,000 shares, respectively, of the Series C Preferred Stock issued and outstanding . In October 2017, the Company issued 1,300,000 shares of Series C Preferred Stock, for net proceeds after all estimated expenses of approximately $30.5 million. The Company contributed the net proceeds from the offering to its Operating Partnership for an equivalent number of Series C Preferred Units. Holders of the Company’s Series C 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 Series C Preferred Stock at a rate of 7.875% per annum of the $25.00 liquidation preference per share. The Series C 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. On August 23, 2016, the Company issued 1,610,000 shares of its Series B 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 Series B 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 at a rate of 8.00% per annum of the $25.00 liquidation preference per share. The is not redeemable by the holders, has no maturity date and is not convertible into any other security of the Company or its affiliates. Preferred Units - The Company is the holder of the Operating Partnership’s preferred partnership units, and is entitled to receive distributions when authorized by the general partner of the Operating Partnership out of assets legally available for the payment of distributions. In October 2017, the Operating Partnership issued 1,300,000 units of 7.875% Series C Preferred Units, for net proceeds after all estimated expenses of approximately $30.5 million. The Operating Partnership used the net proceeds to redeem in full the Operating Partnership’s 7% Notes and for working capital. On August 23, 2016, the Operating Partnership issued 1,610,000 units, $0.01 par value per unit, of its 8% Series B Cumulative Redeemable Perpetual Preferred Units (the “Series B Preferred Units”) for net proceeds after all expenses of approximately $37.8 million. The Operating Partnership used the net proceeds to redeem in full the Operating Partnership’s 8.0% senior unsecured notes and for working capital. 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 Series B Preferred Units and pays cumulative cash dividends on the preferred partnership units at a rate of 7.875% per annum of the $25.00 liquidation preference per unit for the Series C Preferred Units. For each of the quarters ended June 30, 2018 and 2017, the Operating Partnership has declared and has paid $0.50 per preferred unit for the Series B Preferred Units for the Series C Preferred Units |
Common Stock and Units
Common Stock and Units | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018, unless extended by the board of directors. Through December 31, 2017 the Company repurchased 882,820 shares of common stock for approximately $5.9 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 and six months ended June 30, 2018. For the three and six months ended June 30, 2017 , the ESOP purchased 682,500 shares of the Company’s common stock for approximately $4.9 million. The following is a schedule of issuances, since January 1, 2017, of the Company’s common stock and related units of the Operating Partnership: On February 5, 2018, the Company was issued 17,250 units in the Operating Partnership and awarded 15,000 shares of restricted stock and 2,250 of unrestricted stock to its independent directors. On January 1, 2018, the Company was issued 25,000 units in the Operating Partnership and awarded 25,000 shares of restricted stock to one of its employees. 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. As of June 30, 2018 and December 31, 2017, the Company had 14,121,081 and 14,078,831 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. Since January 1, 2017, there have been no issuances or redemptions, of units in the Operating Partnership other than the issuances of units in the Operating Partnership to the Company described above. As of June 30, 2018 and December 31, 2017, the total number of Operating Partnership units outstanding was 15,899,221 and 15,856,971 As of June 30, 2018 and December 31, 2017, 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 $12.4 million and $11.5 million, respectively, based on the price per share of the common stock on such respective dates. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Chesapeake Hospitality . As of June 30, 2018, the members of Chesapeake Hospitality (a company that is majority-owned and controlled by the Company’s chairman and chief executive officer, and two former members of the Company’s board of directors) owned 1,481,833 shares, approximately 10.5%, of the Company’s outstanding common stock as well as 652,326 Operating Partnership units. The following is a summary of the transactions between Chesapeake Hospitality and us: Accounts Receivable – At June 30, 2018 and December 31, 2017, we were due $170,627 and $ 113,669 , respectively, from Chesapeake Hospitality. Management Agreements – As of June 30, 2018, all of our wholly-owned hotels (with the exception of the Hyatt Centric Arlington hotel) and the Hyde Resort & Residences operated under various management agreements with Chesapeake Hospitality. On December 15, 2014, we entered into a master agreement and a series of individual hotel management agreements that became effective on January 1, 2015. The master agreement 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 fee for the Whitehall and the Georgian Terrace remained at 2.00% through 2015, increased to 2.25% in 2016 and increased to 2.50% thereafter. The base management fees for the remaining properties in the current portfolio was 2.65% through 2017 and decreased 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 10.0% 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 $1,119,177 and $ 1,089,464 and $2,216,899 and $2,062,532 for the six months ended June 30, 2018 and 2017, respectively. and $86,406 and $28,117 for the six months ended June 30, 2018 and 2017, 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 $1,407,782 and $ 1,345,837 for the three months ended June 30, 2018 and 2017, respectively and $2,911,607 and $2,673,778 for the six months ended June 30, 2018 and 2017, respectively . Workers’ Compensation Insurance – Pursuant to our management agreements with Chesapeake Hospitality, we pay the premiums for workers’ compensation insurance under a self-insured policy owned by Chesapeake Hospitality or its affiliates, and which covers those employees of Chesapeake Hospitality that work exclusively for the properties managed by Chesapeake Hospitality. For the six months ended June 30, 2018 and 2017, we paid approximately $0.1 million and $0, respectively, in premiums for the portion of the plan covering those employees that work exclusively for our properties under our management agreements with Chesapeake Hospitality. 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 June 30, 2018, and December 31, 2017, the balance of the loan was each $40,000, respectively. Loan Receivable - Affiliate – As of June 30, 2018 and December 31, 2017, approximately $4.6 million and $4.7 million, respectively, was due to the Operating Partnership for advances to the Company under a loan agreement dated December 29, 2016. 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 June 30, 2018 and 2017 totaled $96,035 and $ 88,334 , respectively, and for the six months ended June 30, 2018 and 2017 totaled approximately $194,577 and $179,642, respectively, for all three individuals. During the three-month period ending June 30, 2018 and 2017, the Company reimbursed $36,304 and $ 57,148 a nd during the six-month period ending June 30, 2018 and 2017, the Company reimbursed $60,356 and $106,006, respectively, |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jun. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | 10. Retirement Plans 401(k) Plan - 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 $22,141 and $ 21,618 for the three months ended June 30, 2018 and 2017, respectively, and $49,039 and $45,856 for the six months ended June 30, 2018 and 2017, respectively . Employee Stock Ownership Plan - The Company adopted an Employee Stock Ownership Plan in December 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 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. Between January 3, 2017 and February 28, 2017, the Company’s ESOP purchased 682,500 shares of the Company’s common stock of an aggregate cost of $4.9 million. 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 for at fair value at the date of allocation. As of June 30, 2018, 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. A total of 50,891 and 16,984 shares with a fair value of $348,173 and $121,305 were allocated or committed to be released from the suspense account and recognized as compensation cost during the six months ended June 30, 2018 and 2017, respectively. The remaining 631,609 unallocated shares have an approximate fair value of $4.4 million, as of June 30, 2018. At June 30, 2018, the ESOP held a total of 36,315 allocated shares, 14,576 committed-to-be-released shares and 631,609 suspense shares. Dividends on allocated and unallocated shares are used to pay down the ESOP loan from the Operating Partnership. The share allocations are accounted for at fair value on the date of allocation as follows: June 30, 2018 December 31, 2017 Number of Shares Fair Value Number of Shares Fair Value Allocated shares 36,315 $ 246,580 9,473 $ 64,320 Committed to be released shares 14,576 101,593 24,359 157,118 Total Allocated and Committed-to-be-Released 50,891 $ 348,173 33,832 $ 221,438 Unallocated shares 631,609 4,402,315 648,668 4,183,908 Total ESOP Shares 682,500 $ 4,750,488 682,500 $ 4,405,346 |
Indirect Hotel Operating Expens
Indirect Hotel Operating Expenses | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Sales and marketing $ 4,303,516 $ 3,463,272 $ 8,030,938 $ 7,149,327 General and administrative 3,897,618 3,668,424 7,340,076 6,594,556 Repairs and maintenance 1,967,457 1,657,927 3,768,599 3,368,963 Utilities 1,583,655 1,451,410 2,985,633 2,826,307 Property taxes 1,625,503 1,565,806 3,162,877 2,979,200 Management fees, including incentive 1,388,995 1,091,288 2,504,854 2,090,649 Franchise fees 1,261,787 1,134,886 2,185,311 2,173,075 Insurance 733,507 619,023 1,368,176 1,225,459 Information and telecommunications 420,460 397,570 802,065 831,134 Other 457,787 555,656 725,012 571,823 Total indirect hotel operating expenses $ 17,640,285 $ 15,605,262 $ 32,873,541 $ 29,810,493 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The components of the income tax provision for the three and six months ended June 30, 2018 and 2017 are as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Current: Federal $ — $ 4,699 $ — $ 10,184 State 61,347 51,838 107,040 100,240 61,347 56,537 107,040 110,424 Deferred: Federal 997,600 118,061 1,204,619 217,419 State 264,067 21,885 317,310 40,577 1,261,667 139,946 1,521,929 257,996 $ 1,323,014 $ 196,483 $ 1,628,969 $ 368,420 A reconciliation of the statutory federal income tax provision (benefit) to the Company’s income tax provision is as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Statutory federal income tax provision (benefit) $ 901,026 $ 446,175 $ 1,212,339 $ 1,492,659 Effect of non-taxable REIT income (loss) 96,574 (323,416 ) (7,720 ) (1,265,057 ) State income tax provision (benefit) 325,414 73,724 424,350 140,818 $ 1,323,014 $ 196,483 $ 1,628,969 $ 368,420 As of June 30, 2018 and December 31, 2017, we had a net deferred tax asset of approximately $3.9 million and $5.5 million, respectively, of which, approximately $3.4 million and $4.9 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 June 30, 2018 and December 31, 2017, the remainder of the deferred tax asset is attributable to year-to-year timing differences of approximately $0.6 million and $0.6 million, respectively, for accrued, but not deductible, employee performance awards, vacation and sick pay, bad debt allowance and depreciation. At the end of the 2017 fiscal year, there was a one-time loss effect resulting from a change in the federal income tax rate, due to the recently enacted tax reform legislation, informally referred to as the Tax Cuts and Jobs Act, on the net deferred tax assets which resulted in lowering deferred tax assets in the amount of approximately $2.7 million. 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 June 30, 2018 and December 31, 2017, 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 June 30, 2018 and December 31, 2017, 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. |
Income (Loss) Per Share and Per
Income (Loss) Per Share and Per Unit | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Income (Loss) Per Share and Per Unit | 13. Income (Loss) Per Share and Per Unit Income (Loss) 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 partner 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 (loss). The shares of the Series B Preferred Stock and Series C 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 631,609 non-committed, unearned ESOP shares are treated as reducing the number of issued and outstanding common shares and similarly reducing the weighted average number of common shares outstanding. The allocated and committed to be released shares have been included in the weighted average diluted earnings per share calculation, and the amount of compensation for allocated shares is reflected in net income. There are no ESOP units, therefore there is no dilution on the calculation of earnings per unit. The computation of basic and diluted net income per share is presented below. Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income available to common stockholders for basic and diluted computation $ 1,352,414 $ 276,926 $ 1,114,071 $ 2,147,942 Denominator Weighted average number of common shares outstanding 14,137,929 14,480,551 14,134,594 14,477,568 Weighted average number of Unearned ESOP Shares (649,403 ) (667,383 ) (654,065 ) (578,658 ) Total weighted average number of common shares outstanding for basic computation 13,488,526 13,813,168 13,480,529 13,898,910 Basic net income per share $ 0.10 $ 0.02 $ 0.08 $ 0.15 Weighted average number of common shares outstanding 14,138,878 14,482,418 14,140,205 14,487,017 Weighted average number of Unearned ESOP Shares (649,403 ) (667,383 ) (654,065 ) (578,658 ) Total weighted average number of common shares outstanding for diluted computation 13,489,475 13,815,035 13,486,140 13,908,359 Diluted net income per share $ 0.10 $ 0.02 $ 0.08 $ 0.15 Income Per Unit – The computation of basic and diluted net income per unit is presented below. Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income available to common unitholders for basic computation $ 1,522,745 $ 310,795 $ 1,254,389 $ 2,411,753 Denominator Weighted average number of units outstanding 15,899,221 16,258,691 15,895,885 16,255,708 Basic and diluted net income per unit $ 0.10 $ 0.02 $ 0.08 $ 0.15 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On July 2, 2018, we purchased a portion of the parking lot adjacent to the DoubleTree by Hilton Raleigh Brownstone-University for an aggregate purchase price of $3.5 million. On July 11, 2018, we paid a quarterly dividend (distribution) of $0.12 per common share (and unit) to those stockholders (and unitholders of the Operating Partnership) of record on June 15, 2018. On July 16, 2018, we paid a quarterly distribution of $0.50 per share (and unit) of Series B Preferred Stock (and Series B Preferred Units) to holders of the Series B Preferred Stock (and Series B Preferred Units) of record as of June 29, 2018. On July 16, 2018, we paid a quarterly distribution of $0.4921875 per share (and unit) of Series C Preferred Stock (and Series C Preferred Units) to holders of the Series C Preferred Stock (and Series C Preferred Units) of record as of June 29, 2018. On July 23, 2018, we authorized payment of a quarterly dividend (distribution) of $0.125 per common share (and unit) to the stockholders (and unitholders of the Operating Partnership) of record as of September 14, 2018. The dividend (distribution) is to be paid on October 11, 2018. On July 23, 2018, we authorized payment of a quarterly distribution of $0.50 per share (and unit) of Series B Preferred Stock (and Series B Preferred Units) to holders of the Series B Preferred Stock (and Series B Preferred Units) of record as of September 28, 2018. The dividend is to be paid on October 15, 2018. On July 23, 2018, we authorized payment of a quarterly distribution of $0.4921875 per share (and unit) of Series C Preferred Stock (and Series C Preferred Units) to holders of the Series C Preferred Stock (and Series C Preferred Units) of record as of September 28, 2018. The dividend is to be paid on October 15, 2018. On July 27, 2018, we entered into a promissory note and other loan documents to secure an $18.3 million mortgage on the DoubleTree by Hilton Raleigh Brownstone-University with MetLife Commercial Mortgage Originator, LLC. The mortgage has an initial principal balance of $18.3 million, with an additional $5.2 million available upon the satisfaction of certain conditions. The mortgage has an initial term of 4 years with a 1-year extension, and bears a floating rate of interest equal to the 1-month LIBOR rate plus 4.00%, with an interest rate cap of 7.25%. The mortgage requires monthly interest-only payments and, following a 12-month lockout, can be prepaid with a penalty during its second year and without penalty thereafter. We used a portion of the proceeds to repay the existing first mortgage on the DoubleTree by Hilton Raleigh Brownstone-University hotel and to pay closing costs, and intend to use the balance of the proceeds for general corporate purposes. On July 31, 2018, we entered into a second amendment to loan and security agreement; an amended, restated and consolidated mortgage loan note; and other related documents with its existing lender, TD Bank, N.A., to amend the terms of its mortgage loan on the DoubleTree by Hilton Philadelphia Airport hotel. Concurrent with the loan modification, we also entered into a 5-year swap agreement with The Toronto-Dominion Bank. Pursuant to the amended loan documents: (i) the principal balance of the loan was increased from approximately $30.0 million to $42.2 million; (ii) the loan’s maturity date was extended to July 31, 2023; (iii) the loan bears a floating interest rate equal to the 1-month LIBOR rate plus 2.27% (the “Loan Rate”); (iv) the loan amortizes on a 30-year schedule with payments of principal and interest beginning immediately; (v) the loan can be prepaid without penalty; and (vi) the loan will no longer be fully guaranteed by the Operating Partnership, but the Operating Partnership has guaranteed certain standard “bad boy” carveouts. Pursuant to the swap agreement: (i) the Loan Rate has been swapped for a fixed interest rate of 5.237%; notional amounts of the swap approximate the declining balance of the loan; and (iii) we are responsible for any potential termination fees associated with early termination of the swap agreement. We used a portion of the proceeds to repay in full the existing Note B to the mortgage loan on our Hyatt Centric Arlington hotel and to pay closing costs associated with the amendment, and will use the balance of the proceeds for general corporate purposes. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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. 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 net realizable value, 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 June 30, 2018 and December 31, 2017 were $501,734 and $ 532,070 , respectively. Amortization expense for the three-month periods ended June 30, 2018 and 2017, totaled $13,304 and $ 29,494 , respectively, and for the six-month periods ended June 30, 2018 and 2017, totaled $30,336 and $60,946, respectively . |
Favorable Lease Assets, Net | Favorable Lease Assets, Net – Favorable lease assets are recorded on non-market contracts assumed as part of the acquisition of certain hotels. We review the terms of agreements assumed in conjunction with the purchase of a hotel to determine if the terms are favorable or unfavorable compared to an estimated market agreement at the acquisition date. Favorable lease assets are recorded at the acquisition date and amortized using straight-line method over the term of the remaining agreement. Amortization expense for each of the three and six-month periods ended June 30, 2018 totaled $126,432. |
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. Deferred offering costs are netted against our equity offerings when the offering 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 currently use 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 assets and liabilities measured at fair value and the basis for that measurement (our interest rate cap is the only asset or liability measured at fair value on a recurring basis and there were no non-recurring asset and liability fair value measurements as of June 30, 2018 and December 31, 2017, respectively): Level 1 Level 2 Level 3 December 31, 2017 Interest Rate Cap (1) $ — $ 5,213 $ — Mortgage loans (2) $ — $ (292,368,370 ) $ — June 30, 2018 Interest Rate Cap (1) $ — $ 23,741 $ — Mortgage loans (2) $ — $ (347,839,825 ) $ — Unsecured notes (3) $ (25,800,000 ) $ — $ — (1) Interest rate cap, 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 Sheets as of June 30, 2018 and December 31, 2017. (3) Unsecured notes are recorded at outstanding principal balance, net of deferred financing costs on our Consolidated Balance Sheets as of June 30, 2018. |
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; telephone, parking, gift shop sales, rentals from restaurant tenants, rooftop leases, fees earned on the management of the condominium rental program at the Hyde Resort & Residences and insurance proceeds of business interruption coverage. Revenues are reported net of occupancy and other taxes collected from customers and remitted to governmental authorities. Refer to “New Accounting Pronouncements - ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ,” below for further discussion of revenue recognition . |
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 $ 0.4 million, for each of the three months ended June 30, 2018 and 2017, respectively, and approximately $0.9 million for each of the six months ended June 30, 2018 and 2017, respectively . A schedule of minimum future lease payments receivable for the remaining six and twelve-month lease periods is as follows: For the remaining six months ending: December 31, 2018 $ 755,705 December 31, 2019 961,982 December 31, 2020 956,021 December 31, 2021 892,694 December 31, 2022 774,835 December 31, 2023 and thereafter 4,266,893 Total $ 8,608,130 |
Variable Interest Entities | Variable Interest Entities – The Operating Partnership is a variable interest entity. The Company’s only significant asset is its investment in the Operating Partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership and its subsidiaries. All of the Company’s debt is an obligation of the Operating Partnership and its subsidiaries. |
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 June 30, 2018 and December 31, 2017, deferred tax assets totaled approximately $3.9 million and $5.5 million, respectively, of which approximately $3.3 million and $4.9 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 June 30, 2018 and December 31, 2017, 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 June 30, 2018, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2010 through 2017. In addition, as of June 30, 2018, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject include the years 2009 and 2014 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, unrestricted 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. All of the 255,938 shares issued to certain of our executives and employees have vested. 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 163,350 shares, including 77,600 non-restricted shares to certain executives and employees and 85,750 restricted shares issued to its independent directors. All awards have vested except for 25,000 shares issued to one employee, which will vest over 5 years and 15,000 shares issued to the Company’s independent directors in February 2018, which will vest by December 31, 2018 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 June 30, 2018, no performance-based stock awards have been granted. Total compensation cost recognized under the 2004 Plan and the 2013 Plan for the three months ended June 30, 2018 and 2017 was $8,025 and $4,980 , and for the six months ended June 30, 2018 and 2017 was $119,378 and $99,120, respectively Additionally, the Company sponsors and maintains an Employee Stock Ownership Plan (“ESOP”) and related trust for the benefit of its eligible employees. We reflect |
Advertising | Advertising – Advertising costs were $ 147,804 and $ 85,094 for the three months ended June 30, 2018 and 2017, respectively and were $246,117 and $150,104 for the six months ended June 30, 2018 and 2017, 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 periods ending June 30, 2018 and 2017, we recognized $27,824 and $0, respectively, and during the six-month periods ending June 30, 2018 and 2017, we recognized approximately $0.9 million and $1.0 million, respectively, in 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. |
Reclassifications | Reclassifications - Certain reclassifications have been made to the prior period’s financial statements to conform to the current year presentation. We have adopted ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash, whereby the restricted cash balances are reflected in the total Cash, Cash Equivalents and Restricted Cash for both current and prior year presentation. We have also reclassified gain (loss) on disposal of assets in the prior period’s consolidated statements of operations, to separate disposals related to changes in estimated useful lives of assets, from assets which were disposed of by sale in the respective periods. |
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. |
New Accounting Pronouncements | New Accounting Pronouncements – In August 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-12, , which improves the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and simplifies the application of hedge accounting. This ASU will be effective for the first annual period beginning after December 15, 2018, including interim periods within those periods. Early adoption is permitted. We adopted this ASU on January 1, 2018 and aside from minor presentation changes in our disclosure on derivative and hedging activities it did not have a material effect on our consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). Nonmonetary Transactions In January 2017, the FASB issued ASU 2017-01, Business Combinations – Clarifying the Definition of a Business (Topic 805). 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 (Topic 606) Revenue from Contracts with Customers (Topic 606) In April 2016, the FASB issued ASU No. 2016-10 , Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing (Topic 606) Revenue from Contracts with Customers (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Recurring Assets and Liabilities Measured at Fair Value | The following table represents our assets and liabilities measured at fair value and the basis for that measurement (our interest rate cap is the only asset or liability measured at fair value on a recurring basis and there were no non-recurring asset and liability fair value measurements as of June 30, 2018 and December 31, 2017, respectively): Level 1 Level 2 Level 3 December 31, 2017 Interest Rate Cap (1) $ — $ 5,213 $ — Mortgage loans (2) $ — $ (292,368,370 ) $ — June 30, 2018 Interest Rate Cap (1) $ — $ 23,741 $ — Mortgage loans (2) $ — $ (347,839,825 ) $ — Unsecured notes (3) $ (25,800,000 ) $ — $ — (1) Interest rate cap, 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 Sheets as of June 30, 2018 and December 31, 2017. (3) Unsecured notes are recorded at outstanding principal balance, net of deferred financing costs on our Consolidated Balance Sheets as of June 30, 2018. |
Schedule of Minimum Future Lease Payments Receivable | A schedule of minimum future lease payments receivable for the remaining six and twelve-month lease periods is as follows: For the remaining six months ending: December 31, 2018 $ 755,705 December 31, 2019 961,982 December 31, 2020 956,021 December 31, 2021 892,694 December 31, 2022 774,835 December 31, 2023 and thereafter 4,266,893 Total $ 8,608,130 |
Acquisition of Hotel Properti24
Acquisition of Hotel Properties (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations And Or Asset Acquisitions [Abstract] | |
Allocation of Purchase Price Based on Fair Values | The allocations of the respective purchase prices are based on fair values are as follows: Hyatt Centric Arlington Hyde Resort & Residences Land and land improvements $ 190,916 $ 500 Buildings and improvements 70,369,046 4,309,500 Furniture, fixtures and equipment 6,229,888 72,616 Intangible assets 3,054,812 — Investment in hotel properties 79,844,662 4,382,616 Accrued liabilities and other costs (111,946 ) (866,142 ) Prepaid expenses, inventory and other assets — 470,375 Net cash $ 79,732,716 $ 3,986,849 |
Investment in Hotel Propertie25
Investment in Hotel Properties, Net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate [Abstract] | |
Schedule of Investment in Hotel Properties, Net | Investment in hotel properties, net as of June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 Land and land improvements $ 60,474,303 $ 59,504,625 Buildings and improvements 420,757,649 348,532,577 Furniture, fixtures and equipment 57,505,372 48,467,956 538,737,324 456,505,158 Less: accumulated depreciation and impairment (104,451,866 ) (98,705,646 ) Investment in Hotel Properties, Net $ 434,285,458 $ 357,799,512 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, December 31, Prepayment Maturity Amortization Interest Property 2018 2017 Penalties Date Provisions Rate Crowne Plaza Tampa Westshore (1) $ 18,445,600 $ 15,284,200 None 6/30/2019 (1) LIBOR plus 3.75 % The DeSoto (2) 34,239,496 34,645,929 Yes 7/1/2026 25 years 4.25% DoubleTree by Hilton Jacksonville Riverfront (3) 35,034,982 35,294,741 Yes 7/11/2024 30 years 4.88% DoubleTree by Hilton Laurel (4) 8,993,770 9,132,558 Yes 8/5/2021 25 years 5.25% DoubleTree by Hilton Philadelphia Airport (5) 30,060,602 30,432,260 None 4/1/2019 25 years LIBOR plus 3.00 % DoubleTree by Hilton Raleigh Brownstone University (6) 14,361,098 14,503,925 n/a 8/1/2018 30 years 4.78% DoubleTree Resort by Hilton Hollywood Beach (7) 57,538,334 58,023,567 n/a 10/1/2025 30 years 4.913% Georgian Terrace (8) 44,614,206 45,032,662 n/a 6/1/2025 30 years 4.42% Hotel Ballast Wilmington, Tapestry Collection by Hilton (9) 34,640,256 30,000,000 Yes 1/1/2027 25 years 4.25% Hyatt Centric Arlington - Note A (10) 49,685,400 — None 3/1/2021 (10) LIBOR plus 3.00 % Hyatt Centric Arlington - Note B (11) 2,575,000 — None 3/1/2019 (11) LIBOR plus 5.00 % Sheraton Louisville Riverside (12) 11,559,647 11,701,930 Yes 12/1/2026 25 years 4.27% The Whitehall (13) 14,896,332 15,000,000 Yes 2/26/2023 25 years LIBOR plus 3.50 % Total Mortgage Principal Balance $ 356,644,723 $ 299,051,772 Deferred financing costs, net (2,293,902 ) (1,923,928 ) Unamortized premium on loan 178,633 190,972 Total Mortgage Loans, Net $ 354,529,454 $ 297,318,816 (1) 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 1-month LIBOR plus 3.75% subject to a floor rate of 3.75%; with monthly principal payments of $23,100; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. On April 5, 2018, we drew down an additional $3.3 million of loan proceeds in accordance with the terms of the note. (2) 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. (3) The note may not be prepaid until August 2019, after which it is subject to a pre-payment penalty until March 2024. Prepayment can be made without penalty thereafter. (4) 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. (5) The note bears a minimum interest rate of 3.50%. (6) With limited exception, the note may not be prepaid until two months before maturity. (7) With limited exception, the note may not be prepaid until June 2025. (8) With limited exception, the note may not be prepaid until February 2025. (9) The note provided initial proceeds of $30.0 million and additional proceeds of $5.0 million which were received following the substantial completion of the renovation project in February 2018; 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 has a term of 3 years, with two 1-year extension options, each of which are subject to certain criteria. The note requires monthly principal payments of $78,650. (11) The note has a term of 1 year, with two 1-year extension options, each of which are subject to certain criteria. The note requires monthly principal payments of $100,000 during the initial 1-year term, $150,000 during the first 1- year extended term, and $250,000 during the second 1-year extended term, with interest payments due monthly on the outstanding principal amount during all three terms. On May 10, 2018, we reduced Note B by approximately $4.0 million. (12) 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. (13) The note was amended in February 2018 to extend the maturity date until February 26, 2023. The amended note has an initial principal balance of $15.0 million, with no additional proceeds available; 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 June 30, 2018 were as follows: For the remaining six months ending: December 31, 2018 $ 50,157,159 December 31, 2019 27,018,765 December 31, 2020 7,255,127 December 31, 2021 70,448,242 December 31, 2022 5,047,909 December 31, 2023 and thereafter 196,717,521 Total future maturities $ 356,644,723 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 six months ending: December 31, 2018 $ 297,744 December 31, 2019 484,075 December 31, 2020 364,163 December 31, 2021 354,639 December 31, 2022 351,464 December 31, 2023 and thereafter 3,920,165 Total $ 5,772,250 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Shares Allocations are Accounted For Fair Value on The Date of Allocations | The share allocations are accounted for at fair value on the date of allocation as follows: June 30, 2018 December 31, 2017 Number of Shares Fair Value Number of Shares Fair Value Allocated shares 36,315 $ 246,580 9,473 $ 64,320 Committed to be released shares 14,576 101,593 24,359 157,118 Total Allocated and Committed-to-be-Released 50,891 $ 348,173 33,832 $ 221,438 Unallocated shares 631,609 4,402,315 648,668 4,183,908 Total ESOP Shares 682,500 $ 4,750,488 682,500 $ 4,405,346 |
Indirect Hotel Operating Expe29
Indirect Hotel Operating Expenses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Sales and marketing $ 4,303,516 $ 3,463,272 $ 8,030,938 $ 7,149,327 General and administrative 3,897,618 3,668,424 7,340,076 6,594,556 Repairs and maintenance 1,967,457 1,657,927 3,768,599 3,368,963 Utilities 1,583,655 1,451,410 2,985,633 2,826,307 Property taxes 1,625,503 1,565,806 3,162,877 2,979,200 Management fees, including incentive 1,388,995 1,091,288 2,504,854 2,090,649 Franchise fees 1,261,787 1,134,886 2,185,311 2,173,075 Insurance 733,507 619,023 1,368,176 1,225,459 Information and telecommunications 420,460 397,570 802,065 831,134 Other 457,787 555,656 725,012 571,823 Total indirect hotel operating expenses $ 17,640,285 $ 15,605,262 $ 32,873,541 $ 29,810,493 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Provision | The components of the income tax provision for the three and six months ended June 30, 2018 and 2017 are as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Current: Federal $ — $ 4,699 $ — $ 10,184 State 61,347 51,838 107,040 100,240 61,347 56,537 107,040 110,424 Deferred: Federal 997,600 118,061 1,204,619 217,419 State 264,067 21,885 317,310 40,577 1,261,667 139,946 1,521,929 257,996 $ 1,323,014 $ 196,483 $ 1,628,969 $ 368,420 |
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 is as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Statutory federal income tax provision (benefit) $ 901,026 $ 446,175 $ 1,212,339 $ 1,492,659 Effect of non-taxable REIT income (loss) 96,574 (323,416 ) (7,720 ) (1,265,057 ) State income tax provision (benefit) 325,414 73,724 424,350 140,818 $ 1,323,014 $ 196,483 $ 1,628,969 $ 368,420 |
Income (Loss) Per Share and P31
Income (Loss) Per Share and Per Unit (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The computation of basic and diluted net income per share is presented below. Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income available to common stockholders for basic and diluted computation $ 1,352,414 $ 276,926 $ 1,114,071 $ 2,147,942 Denominator Weighted average number of common shares outstanding 14,137,929 14,480,551 14,134,594 14,477,568 Weighted average number of Unearned ESOP Shares (649,403 ) (667,383 ) (654,065 ) (578,658 ) Total weighted average number of common shares outstanding for basic computation 13,488,526 13,813,168 13,480,529 13,898,910 Basic net income per share $ 0.10 $ 0.02 $ 0.08 $ 0.15 Weighted average number of common shares outstanding 14,138,878 14,482,418 14,140,205 14,487,017 Weighted average number of Unearned ESOP Shares (649,403 ) (667,383 ) (654,065 ) (578,658 ) Total weighted average number of common shares outstanding for diluted computation 13,489,475 13,815,035 13,486,140 13,908,359 Diluted net income per share $ 0.10 $ 0.02 $ 0.08 $ 0.15 |
Computation of Basic and Diluted Net Income Per Unit | The computation of basic and diluted net income per unit is presented below. Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income available to common unitholders for basic computation $ 1,522,745 $ 310,795 $ 1,254,389 $ 2,411,753 Denominator Weighted average number of units outstanding 15,899,221 16,258,691 15,895,885 16,255,708 Basic and diluted net income per unit $ 0.10 $ 0.02 $ 0.08 $ 0.15 |
Organization and Description 32
Organization and Description of Business - Additional Information (Detail) | Mar. 01, 2018USD ($)RoomRenewalPeriod | Feb. 26, 2018 | Feb. 12, 2018USD ($) | Feb. 01, 2018USD ($) | Nov. 15, 2017USD ($) | Oct. 17, 2017USD ($)shares | Oct. 11, 2017USD ($)shares | Jun. 29, 2017USD ($) | Jun. 01, 2017USD ($) | Feb. 07, 2017USD ($) | Jan. 30, 2017USD ($)RoomParkingSpaces | Jun. 30, 2018USD ($)HotelRoom | May 10, 2018USD ($) | Dec. 31, 2017USD ($) |
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Date of incorporation | Aug. 20, 2004 | |||||||||||||
Investment in number of hotels | Hotel | 12 | |||||||||||||
Rooms in hotel | Room | 3,156 | |||||||||||||
Date of commencement of business | Dec. 21, 2004 | |||||||||||||
Number of hotels acquired before commencement of business | Hotel | 6 | |||||||||||||
Mortgage loans | $ 356,644,723 | $ 299,051,772 | ||||||||||||
Proceeds from sale and issuance of unsecured notes | 25,000,000 | |||||||||||||
7.0% Senior Unsecured Notes [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Debt instrument redeemed date | Nov. 15, 2017 | |||||||||||||
Debt instrument redeemed, principal amount | $ 25,300,000 | |||||||||||||
Percentage of redemption price equal to principal amount | 101.00% | |||||||||||||
Interest rate | 7.00% | |||||||||||||
7.25% Senior Unsecured Notes due 2021 [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Interest rate | 7.25% | |||||||||||||
Proceeds from sale and issuance of unsecured notes | $ 25,000,000 | |||||||||||||
Proceeds from unsecured notes net of estimated expenses | 23,300,000 | |||||||||||||
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Preferred stock, shares sale and issuance | shares | 100,000 | 1,200,000 | ||||||||||||
Preferred stock, dividend rate percentage | 7.875% | |||||||||||||
Proceeds from sale of preferred stock | $ 2,500,000 | $ 28,000,000 | ||||||||||||
Double Tree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Mortgage loans | $ 35,034,982 | 35,294,741 | ||||||||||||
Debt instrument maturity date | Jul. 11, 2024 | |||||||||||||
Amortization Period | 30 years | |||||||||||||
Double Tree by Hilton Jacksonville Riverfront [Member] | Wells Fargo Bank, N.A [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Mortgage loans | $ 35,500,000 | |||||||||||||
Debt instrument maturity date | Jul. 11, 2024 | |||||||||||||
Fixed interest rate | 4.88% | |||||||||||||
Amortization Period | 30 years | |||||||||||||
Hilton Wilmington Riverside [Member] | Mortgage Loans [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Amortization Period | 25 years | |||||||||||||
Additional proceeds on mortgage loan | $ 5,000,000 | |||||||||||||
The Whitehall [Member] | Mortgage Loans [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Mortgage loans | $ 14,896,332 | $ 15,000,000 | ||||||||||||
Debt instrument maturity date | Feb. 26, 2023 | |||||||||||||
Fixed interest rate | 4.00% | |||||||||||||
Amortization Period | 25 years | 25 years | ||||||||||||
Extended maturity date | Feb. 26, 2023 | Feb. 26, 2023 | ||||||||||||
Floating rate of interest rate | 3.50% | |||||||||||||
Crowne Plaza Hampton Marina [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Proceeds from sale of assets | $ 5,600,000 | |||||||||||||
Commercial 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 | |||||||||||||
Commercial Unit of Planned Hyde Beach House Resort & Residences [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Commercial unit purchase price | $ 5,100,000 | |||||||||||||
Pre-opening services fee receivable | $ 800,000 | |||||||||||||
Hyatt Centric Arlington [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Rooms in hotel | Room | 318 | |||||||||||||
Commercial unit purchase price | $ 79,800,000 | |||||||||||||
Mortgage loans | $ 57,000,000 | |||||||||||||
Hyatt Centric Arlington [Member] | Management Agreement with Highgate Hotels L.P. [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Intial term of agreement | 3 years | |||||||||||||
Agreement commencement date | Mar. 1, 2018 | |||||||||||||
Base management fee of gross revenues | 2.50% | |||||||||||||
Incentive management fee equal to increase in gross operating profit percentage | 10.00% | |||||||||||||
Maximum incentive management fee of gross revenues | 0.50% | |||||||||||||
Hyatt Centric Arlington [Member] | Franchise Agreement with Affiliate of Hyatt Hotels Corporation Operating as Hyatt Centric Arlington [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Rental payments per year in base rent under ground lease | $ 50,000 | |||||||||||||
Ground lease percentage rent on gross rooms revenues in excess of thresholds | 3.50% | |||||||||||||
Initial term of ground lease expires year | 2,025 | |||||||||||||
Number of additional renewal periods extended under ground lease | RenewalPeriod | 5 | |||||||||||||
Duration period under ground lease for each renewal periods extended | 10 years | |||||||||||||
Hyatt Centric Arlington [Member] | First Promissory Note (“Note A”) [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Mortgage loans | $ 50,000,000 | |||||||||||||
Debt instrument maturity term | 3 years | |||||||||||||
Extended maturity period | two 1-year | |||||||||||||
Monthly principal payments | $ 78,650 | |||||||||||||
Hyatt Centric Arlington [Member] | First Promissory Note (“Note A”) [Member] | LIBOR [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Floating rate of interest rate | 3.00% | |||||||||||||
Hyatt Centric Arlington [Member] | Second Promissory Note (“Note B”) [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Mortgage loans | $ 7,000,000 | $ 4,000,000 | ||||||||||||
Debt instrument maturity term | 1 year | |||||||||||||
Extended maturity period | two 1-year | |||||||||||||
Hyatt Centric Arlington [Member] | Second Promissory Note (“Note B”) [Member] | Initial 1-Year Term [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Monthly principal payments | $ 100,000 | |||||||||||||
Hyatt Centric Arlington [Member] | Second Promissory Note (“Note B”) [Member] | First 1-Year Extended Term [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Monthly principal payments | 150,000 | |||||||||||||
Hyatt Centric Arlington [Member] | Second Promissory Note (“Note B”) [Member] | Second 1-Year Extended Term [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Monthly principal payments | $ 250,000 | |||||||||||||
Hyatt Centric Arlington [Member] | Second Promissory Note (“Note B”) [Member] | LIBOR [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Floating rate of interest rate | 5.00% | |||||||||||||
Hyatt Centric Arlington [Member] | 7.25% Senior Unsecured Notes due 2021 [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Interest rate | 7.25% | |||||||||||||
Operating Partnership [Member] | ||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||
Percentage of operating partnership owned | 88.80% |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Segmentshares | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Federal Deposit Insurance Corporation protection limits | $ 250,000 | $ 250,000 | |||
Un-amortized franchise fees | 501,734 | 501,734 | $ 532,070 | ||
Amortization expense | 13,304 | $ 29,494 | 30,336 | $ 60,946 | |
Amortization expense on favorable lease assets, net | 126,432 | 126,432 | |||
Deferred income taxes | 3,929,188 | 3,929,188 | 5,451,118 | ||
Deferred tax assets related to net operating losses | 3,300,000 | $ 3,300,000 | 4,900,000 | ||
Minimum percentage of likelihood of realization of deferred tax assets | 50.00% | ||||
Deferred tax assets valuation allowance | 0 | $ 0 | |||
Uncertain tax positions | 0 | 0 | $ 0 | ||
Compensation cost recognized | 241,221 | 217,086 | |||
Advertising cost | 147,804 | 85,094 | 246,117 | 150,104 | |
Gain on involuntary conversion of assets | 27,824 | 0 | $ 898,565 | 1,041,815 | |
Number of reportable segment | Segment | 1 | ||||
Director [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued but not vested | shares | 15,000 | ||||
Shares award vesting date | Dec. 31, 2018 | ||||
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 | ||||
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 | ||||
2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 163,350 | ||||
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 | 77,600 | ||||
2013 Plan [Member] | Director [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 85,750 | ||||
2013 Plan [Member] | One Employee [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued but not vested | shares | 25,000 | ||||
Stock award vesting period | 5 years | ||||
2004 and 2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Compensation cost recognized | 8,025 | 4,980 | $ 119,378 | 99,120 | |
Other Operating Departments [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Lease revenue | $ 400,000 | $ 400,000 | $ 900,000 | $ 900,000 | |
Maximum [Member] | 2004 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted, unrestricted and performance stock awards permitted to grant to employees | shares | 350,000 | 350,000 | |||
Maximum [Member] | 2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted, unrestricted and performance stock awards permitted to grant to employees | shares | 750,000 | 750,000 | |||
Buildings and Building Improvements [Member] | Minimum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 7 years | ||||
Buildings and Building 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 Accoun34
Summary of Significant Accounting Policies - Schedule of Recurring Assets and Liabilities Measured at Fair Value (Detail) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Level 1 [Member] | Unsecured Notes [Member] | ||
Derivatives Fair Value [Line Items] | ||
Debt instruments measured at fair value | $ (25,800,000) | |
Level 2 [Member] | Interest Rate Cap [Member] | ||
Derivatives Fair Value [Line Items] | ||
Interest rate cap | 23,741 | $ 5,213 |
Level 2 [Member] | Mortgage Loans [Member] | ||
Derivatives Fair Value [Line Items] | ||
Debt instruments measured at fair value | $ (347,839,825) | $ (292,368,370) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Schedule of Recurring Assets and Liabilities Measured at Fair Value (Parenthetical) (Detail) | Jun. 30, 2018 | Dec. 31, 2017 |
1-Month LIBOR | ||
Derivatives Fair Value [Line Items] | ||
Interest rate cap for loan | 2.50% | 2.50% |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Minimum Future Lease Payments Receivable (Detail) | Jun. 30, 2018USD ($) |
Leases [Abstract] | |
For the remaining six months ending: December 31, 2018 | $ 755,705 |
December 31, 2019 | 961,982 |
December 31, 2020 | 956,021 |
December 31, 2021 | 892,694 |
December 31, 2022 | 774,835 |
December 31, 2023 and thereafter | 4,266,893 |
Total | $ 8,608,130 |
Acquisition of Hotel Properti37
Acquisition of Hotel Properties - Additional Information (Detail) - USD ($) $ in Millions | Mar. 01, 2018 | Jan. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 |
Hyatt Centric Arlington [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair value of consideration | $ 79.7 | ||||
Initial purchase price | 81 | ||||
Commercial unit purchase price | $ 79.8 | ||||
Total revenue from acquisitions | $ 8.6 | ||||
Net income (loss) from acquisitions | $ 2.1 | ||||
Commercial Condominium Unit of Hyde Resort & Residences [Member] | |||||
Business Acquisition [Line Items] | |||||
Commercial unit purchase price | $ 4.8 | ||||
Total revenue from acquisitions | $ 1.6 | $ 3.8 | |||
Net income (loss) from acquisitions | $ 0.3 | $ 0.4 |
Acquisition of Hotel Properti38
Acquisition of Hotel Properties - Allocation of Purchase Price Based on Fair Values (Detail) - USD ($) | Mar. 01, 2018 | Jan. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | ||||
Net cash | $ 79,732,716 | $ 3,986,849 | ||
Hyatt Centric Arlington [Member] | ||||
Business Acquisition [Line Items] | ||||
Land and land improvements | $ 190,916 | |||
Buildings and improvements | 70,369,046 | |||
Furniture, fixtures and equipment | 6,229,888 | |||
Intangible assets | 3,054,812 | |||
Investment in hotel properties | 79,844,662 | |||
Accrued liabilities and other costs | (111,946) | |||
Net cash | $ 79,732,716 | |||
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 liabilities and other costs | (866,142) | |||
Prepaid expenses, inventory and other assets | 470,375 | |||
Net cash | $ 3,986,849 |
Investment in Hotel Propertie39
Investment in Hotel Properties, Net - Schedule of Investment in Hotel Properties, Net (Detail) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | $ 538,737,324 | $ 456,505,158 |
Less: accumulated depreciation and impairment | (104,451,866) | (98,705,646) |
Investment in Hotel Properties, Net | 434,285,458 | 357,799,512 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | 60,474,303 | 59,504,625 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | 420,757,649 | 348,532,577 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | $ 57,505,372 | $ 48,467,956 |
Investment in Hotel Propertie40
Investment in Hotel Properties, Net - Additional Information (Detail) - USD ($) | Feb. 07, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Proceeds From Sales Of Business Affiliate And Productive Assets [Line Items] | ||||
Gain (loss) on sale/disposal of assets | $ (51,507) | $ (3,739) | $ (51,507) | |
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 (loss) on sale/disposal of assets | $ 100,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Feb. 12, 2018 | Jun. 30, 2018 | May 10, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Mortgage loan outstanding balance | $ 354.5 | $ 297.3 | ||
7.25% Unsecured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate on loan | 7.25% | |||
Borrowed amount | $ 25 | |||
Debt instrument maturity date | Feb. 15, 2021 | |||
Debt instrument callable date | Feb. 15, 2019 | |||
Notes face value | 101.00% | |||
Hyatt Centric Arlington - Note B [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage loan outstanding balance | $ 4 |
Debt - Schedule of Mortgage Deb
Debt - Schedule of Mortgage Debt Obligations on Hotels (Detail) - USD ($) | Feb. 26, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||
Mortgage loans | $ 356,644,723 | $ 299,051,772 | |
Deferred financing costs, net | (2,293,902) | (1,923,928) | |
Unamortized premium on loan | 178,633 | 190,972 | |
Total Mortgage Loans, Net | 354,529,454 | 297,318,816 | |
Crowne Plaza Tampa Westshore [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 18,445,600 | 15,284,200 | |
Prepayment Penalties | None | ||
Maturity Date | Jun. 30, 2019 | ||
Interest rate applicable to the mortgage loan | 3.75% | ||
The DeSoto [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 34,239,496 | 34,645,929 | |
Prepayment Penalties | Yes | ||
Maturity Date | Jul. 1, 2026 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 4.25% | ||
Double Tree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 35,034,982 | 35,294,741 | |
Prepayment Penalties | Yes | ||
Maturity Date | Jul. 11, 2024 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 4.88% | ||
Double Tree by Hilton Laurel [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 8,993,770 | 9,132,558 | |
Prepayment Penalties | Yes | ||
Maturity Date | Aug. 5, 2021 | ||
Amortization Provisions, Term | 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 | $ 30,060,602 | 30,432,260 | |
Prepayment Penalties | None | ||
Maturity Date | Apr. 1, 2019 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 3.00% | ||
Doubletree By Hilton Raleigh Brownstone - University [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 14,361,098 | 14,503,925 | |
Prepayment Penalties | n/a | ||
Maturity Date | Aug. 1, 2018 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 4.78% | ||
DoubleTree Resort by Hilton Hollywood Beach [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 57,538,334 | 58,023,567 | |
Prepayment Penalties | n/a | ||
Maturity Date | Oct. 1, 2025 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 4.913% | ||
Georgian Terrace [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 44,614,206 | 45,032,662 | |
Prepayment Penalties | n/a | ||
Maturity Date | Jun. 1, 2025 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 4.42% | ||
Hotel Ballast Wilmington,Tapestry Collection by Hilton [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 34,640,256 | 30,000,000 | |
Prepayment Penalties | Yes | ||
Maturity Date | Jan. 1, 2027 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 4.25% | ||
Hyatt Centric Arlington - Note A [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 49,685,400 | ||
Prepayment Penalties | None | ||
Maturity Date | Mar. 1, 2021 | ||
Interest rate applicable to the mortgage loan | 3.00% | ||
Hyatt Centric Arlington - Note B [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 2,575,000 | ||
Prepayment Penalties | None | ||
Maturity Date | Mar. 1, 2019 | ||
Interest rate applicable to the mortgage loan | 5.00% | ||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 11,559,647 | 11,701,930 | |
Prepayment Penalties | Yes | ||
Maturity Date | Dec. 1, 2026 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 4.27% | ||
The Whitehall [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 14,896,332 | $ 15,000,000 | |
Prepayment Penalties | Yes | ||
Maturity Date | Feb. 26, 2023 | ||
Amortization Provisions, Term | 25 years | 25 years | |
Interest rate applicable to the mortgage loan | 3.50% |
Debt - Schedule of Mortgage D43
Debt - Schedule of Mortgage Debt Obligations on Hotels (Parenthetical) (Detail) - USD ($) | Apr. 05, 2018 | Feb. 26, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | May 10, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||
Proceeds of mortgage debt | $ 65,300,000 | $ 35,500,000 | ||||
Mortgage loan outstanding balance | 354,500,000 | $ 297,300,000 | ||||
Hyatt Centric Arlington - Note B [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loan outstanding balance | $ 4,000,000 | |||||
Mortgage Loans [Member] | Crowne Plaza Tampa Westshore [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds of mortgage debt | $ 3,300,000 | 15,700,000 | ||||
Mortgage loan additional earn-out provision | $ 3,300,000 | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.75% | |||||
Fixed interest rate | 3.75% | |||||
Debt instrument periodic payment | $ 23,100 | |||||
Interest rate applicable to the mortgage loan | 3.75% | |||||
Mortgage Loans [Member] | Double Tree by Hilton Jacksonville Riverfront [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization Period | 30 years | |||||
Prepayment date before maturity in which prepayment is allowed with penalty | Mar. 31, 2024 | |||||
Interest rate applicable to the mortgage loan | 4.88% | |||||
Mortgage Loans [Member] | Double Tree by Hilton Jacksonville Riverfront [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment date | Aug. 31, 2019 | |||||
Mortgage Loans [Member] | The DeSoto [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds of mortgage debt | $ 30,000,000 | |||||
Additional proceeds from mortgage loans | $ 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] | Double Tree by Hilton Laurel [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization Period | 25 years | |||||
Prepayment date before maturity in which prepayment is allowed without penalty | Apr. 30, 2021 | |||||
Interest rate applicable to the mortgage loan | 5.25% | |||||
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 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 Philadelphia Airport [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization Period | 25 years | |||||
Interest rate applicable to the mortgage loan | 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] | ||||||
Amortization Period | 30 years | |||||
Number of months for prepayment before maturity | 2 months | |||||
Interest rate applicable to the mortgage loan | 4.78% | |||||
Mortgage Loans [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization Period | 30 years | |||||
Prepayment date before maturity | Jun. 30, 2025 | |||||
Interest rate applicable to the mortgage loan | 4.913% | |||||
Mortgage Loans [Member] | Georgian Terrace [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization Period | 30 years | |||||
Prepayment date before maturity | Feb. 28, 2025 | |||||
Interest rate applicable to the mortgage loan | 4.42% | |||||
Mortgage Loans [Member] | Hilton Wilmington Riverside [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds of mortgage debt | $ 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 | |||||
Mortgage Loans [Member] | Hyatt Centric Arlington - Note A [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument periodic payment | $ 78,650 | |||||
Debt instrument maturity term | 3 years | |||||
Interest rate applicable to the mortgage loan | 3.00% | |||||
Mortgage Loans [Member] | Hyatt Centric Arlington - Note B [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument maturity term | 1 year | |||||
Mortgage loan outstanding balance | $ 4,000,000 | |||||
Interest rate applicable to the mortgage loan | 5.00% | |||||
Mortgage Loans [Member] | Hyatt Centric Arlington - Note B [Member] | Initial 1-Year Term [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument periodic payment | $ 100,000 | |||||
Mortgage Loans [Member] | Hyatt Centric Arlington - Note B [Member] | First 1-Year Extended Term [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument periodic payment | 150,000 | |||||
Mortgage Loans [Member] | Hyatt Centric Arlington - Note B [Member] | Second 1-Year Extended Term [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument periodic payment | 250,000 | |||||
Mortgage Loans [Member] | The Whitehall [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds of mortgage debt | 15,000,000 | |||||
Mortgage loan additional earn-out provision | $ 0 | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | |||||
Fixed interest rate | 4.00% | |||||
Amortization Period | 25 years | 25 years | ||||
Interest rate applicable to the mortgage loan | 3.50% | |||||
Extended maturity date | Feb. 26, 2023 | Feb. 26, 2023 | ||||
Floating interest rate period | 1 month | |||||
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% | |||||
Mortgage Loans [Member] | Sheraton Louisville Riverside [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization Period | 25 years | |||||
Interest rate applicable to the mortgage loan | 4.27% |
Debt - Schedule of Future Mortg
Debt - Schedule of Future Mortgage Debt Maturities (Detail) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
For the remaining six months ending: December 31, 2018 | $ 50,157,159 | |
December 31, 2019 | 27,018,765 | |
December 31, 2020 | 7,255,127 | |
December 31, 2021 | 70,448,242 | |
December 31, 2022 | 5,047,909 | |
December 31, 2023 and thereafter | 196,717,521 | |
Total future maturities | $ 356,644,723 | $ 299,051,772 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 01, 2018USD ($)RenewalPeriod | Jun. 30, 2018USD ($)Hotel | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)ft²Hotel | Jun. 30, 2017USD ($) | Dec. 29, 2016USD ($) |
Operating Leased Assets [Line Items] | ||||||
Number of hotels under franchise license | Hotel | 9 | |||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | |||||
Hotel Ballast [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 | |||||
The 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 | |||||
DoubleTree Resort by Hilton Hollywood Beach [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 | 3.00% | |||||
Additional fees of room revenues | 2.50% | |||||
Franchise agreement expiry date | 2019-06 | |||||
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 | 2038-03 | |||||
Maximum [Member] | ESOP [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Borrowed amount | $ 5,000,000 | |||||
Highgate Hotels L.P [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Intial terms of master management agreements | 3 years | |||||
Master management agreement expiration date | Mar. 1, 2021 | |||||
Chesapeake Hospitality [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of wholly-owned hotels operated under master management agreement | Hotel | 11 | 11 | ||||
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. | |||||
Hyatt Centric Arlington [Member] | Franchise Agreement with Affiliate of Hyatt Hotels Corporation Operating as Hyatt Centric Arlington [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Rent expense | $ 190,634 | $ 255,229 | ||||
Rental payments per year in base rent under ground lease | $ 50,000 | |||||
Ground lease percentage rent on gross rooms revenues in excess of thresholds | 3.50% | |||||
Initial term of ground lease expires year | 2,025 | |||||
Number of additional renewal periods extended under ground lease | RenewalPeriod | 5 | |||||
Duration period under ground lease for each renewal periods extended | 10 years | |||||
Williamsburg Virginia [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Area of commercial space leased | ft² | 5,216 | |||||
Rent expense | 22,552 | $ 22,552 | $ 45,104 | $ 45,104 | ||
Commencement date of agreement | Sep. 1, 2009 | |||||
Lease renewable expiration date | Aug. 31, 2018 | |||||
Hyde Resort and Residences in Hollywood Beach, Florida [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating lease, expiring date | Feb. 28, 2037 | |||||
Rent expense | 60,000 | 60,000 | $ 120,000 | 80,000 | ||
Lease agreement | 20 years | |||||
Operating lease monthly payments | $ 20,000 | |||||
The DeSoto 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 | $ 36,491 | 36,491 | ||
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 | 27,866 | 23,871 | $ 54,400 | 47,741 | ||
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 | $ 1,301 | $ 1,301 | ||
Lease agreement | 5 years | |||||
Commencement date of agreement | Jul. 31, 2009 | |||||
Annual payment | $ 2,432 | |||||
Additional renewal of agreement | 5 years | 5 years | ||||
Furniture, Fixtures and Equipment [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Financing arrangement expiration date | 2018-08 | |||||
Financing arrangement expiration date | 2026-08 | |||||
Six Year Operating Lease Property [Member] | The DeSoto Hotel Property [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Duration of operating lease term | 6 years | |||||
Ninety Nine Year Operating Lease Property [Member] | The DeSoto 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) | Jun. 30, 2018USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
For the remaining six months ending: December 31, 2018 | $ 297,744 |
December 31, 2019 | 484,075 |
December 31, 2020 | 364,163 |
December 31, 2021 | 354,639 |
December 31, 2022 | 351,464 |
December 31, 2023 and thereafter | 3,920,165 |
Total | $ 5,772,250 |
Preferred Stock and Units - Add
Preferred Stock and Units - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Aug. 23, 2016 | Oct. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Nov. 15, 2017 |
Preferred Units [Line Items] | |||||||
Preferred stock, shares authorized | 11,000,000 | 11,000,000 | 11,000,000 | ||||
7.0% Senior Unsecured Notes [Member] | |||||||
Preferred Units [Line Items] | |||||||
Interest rate on loan | 7.00% | ||||||
Sotherly Hotels LP [Member] | 7.0% Senior Unsecured Notes [Member] | |||||||
Preferred Units [Line Items] | |||||||
Interest rate on loan | 7.00% | ||||||
Sotherly Hotels LP [Member] | 8.0% Senior Unsecured Notes [Member] | |||||||
Preferred Units [Line Items] | |||||||
Interest rate on loan | 8.00% | ||||||
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Units [Member] | |||||||
Preferred Units [Line Items] | |||||||
Operating partnership preferred partnership units issued | 1,300,000 | ||||||
Preferred units, dividend rate percentage | 7.875% | 7.875% | 7.875% | ||||
Proceeds from sale of preferred units, net | $ 30.5 | ||||||
Preferred units, liquidation preference per units | $ 25 | $ 25 | $ 25 | ||||
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | |||||||
Preferred Units [Line Items] | |||||||
Operating partnership preferred partnership units issued | 1,610,000 | ||||||
Preferred units, dividend rate percentage | 8.00% | 8.00% | 8.00% | ||||
Proceeds from sale of preferred units, net | $ 37.8 | ||||||
Preferred units, par value | $ 0.01 | ||||||
Preferred units, liquidation preference per units | $ 25 | 25 | $ 25 | $ 25 | |||
Preferred dividend distributed | 0.50 | $ 0.50 | |||||
Sotherly Hotels LP [Member] | 7.825% Series C Cumulative Redeemable Perpetual Preferred Units [Member] | |||||||
Preferred Units [Line Items] | |||||||
Preferred units, dividend rate percentage | 7.875% | ||||||
Preferred units, liquidation preference per units | 25 | $ 25 | |||||
Preferred dividend distributed | $ 0.4922 | $ 0 | |||||
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | |||||||
Preferred Units [Line Items] | |||||||
Preferred stock, shares authorized | 11,000,000 | 11,000,000 | 11,000,000 | ||||
Preferred stock, shares issued | 1,610,000 | 1,610,000 | 1,610,000 | 1,610,000 | |||
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 | 1,610,000 | ||||
Proceeds from sale of preferred stock, net | $ 37.8 | ||||||
Preferred stock, dividend rate percentage | 8.00% | 8.00% | |||||
Preferred stock, liquidation preference per share | $ 25 | $ 25 | $ 25 | ||||
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | |||||||
Preferred Units [Line Items] | |||||||
Preferred stock, shares authorized | 11,000,000 | 11,000,000 | 11,000,000 | ||||
Preferred stock, shares issued | 1,300,000 | 1,300,000 | 1,300,000 | 1,300,000 | |||
Preferred stock, shares outstanding | 1,300,000 | 1,300,000 | 1,300,000 | ||||
Proceeds from sale of preferred stock, net | $ 30.5 | ||||||
Preferred stock, dividend rate percentage | 7.875% | 7.875% | |||||
Preferred stock, liquidation preference per share | $ 25 | $ 25 | $ 25 |
Common Stock and Units - Additi
Common Stock and Units - Additional Information (Detail) | Feb. 05, 2018shares | Jan. 01, 2018shares | Feb. 15, 2017shares | Dec. 02, 2016USD ($)$ / shares | Feb. 28, 2017USD ($)shares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)shares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($)shares | Dec. 31, 2017USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares |
Class of Stock [Line Items] | |||||||||||
Common stock, shares authorized | 49,000,000 | 49,000,000 | 49,000,000 | 49,000,000 | |||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 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 | $ | $ 5,900,000 | ||||||||||
Number of common stock shares repurchased | 0 | 0 | 882,820 | ||||||||
Number of common stock, shares purchased | 682,500 | 682,500 | 682,500 | ||||||||
Purchased common stock, value | $ | $ 4,900,000 | $ 4,900,000 | $ 4,900,000 | ||||||||
Common stock, shares outstanding | 14,121,081 | 14,121,081 | 14,078,831 | 14,121,081 | |||||||
Common stock exchange ratio | 1 | 1 | 1 | ||||||||
Redemption of units in operating partnership | 0 | ||||||||||
Operating Partnership common units not owned | 1,778,140 | 1,778,140 | 1,778,140 | 1,778,140 | |||||||
Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Restricted shares issued | 40,000 | ||||||||||
Sotherly Hotels LP [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Operating Partnership common units outstanding | 15,899,221 | 15,899,221 | 15,856,971 | 15,899,221 | |||||||
Fair market value | $ | $ 12,400,000 | $ 12,400,000 | $ 11,500,000 | $ 12,400,000 | |||||||
Sotherly Hotels LP [Member] | Common Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Number of issued unit in Operating Partnership | 17,250 | 25,000 | 12,000 | ||||||||
Restricted shares issued | 15,000 | 25,000 | 12,000 | ||||||||
Non-restricted shares issued | 2,250 | ||||||||||
Maximum [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Repurchased common stock, value | $ | $ 10,000,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)Membersshares | Jun. 30, 2017USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | ||||||
Accounts receivable-affiliate | $ 426,041 | $ 426,041 | $ 394,026 | |||
ESOP [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Loan receivable outstanding | $ 4,600,000 | $ 4,600,000 | 4,700,000 | |||
Chesapeake Hospitality [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Number of former members | Members | 2 | |||||
Company's outstanding common stock owned by members of Chesapeake Hospitality | 10.50% | 10.50% | ||||
Operating Partnership units owned by members of Chesapeake Hospitality | shares | 652,326 | 652,326 | ||||
Company's common stock shares owned by members of Chesapeake Hospitality | shares | 1,481,833 | 1,481,833 | ||||
Accounts receivable-affiliate | $ 170,627 | $ 170,627 | 113,669 | |||
Agreement term | 5 years | |||||
Incentive management fee equal to increase in gross operating profit percentage | 10.00% | 10.00% | ||||
Maximum incentive management fee of gross revenues | 0.25% | 0.25% | ||||
Base management and administrative fees earned by related party | $ 1,119,177 | $ 1,089,464 | $ 2,216,899 | $ 2,062,532 | ||
Incentive management fees earned by related party | 64,009 | 1,824 | 86,406 | 28,117 | ||
Employee medical benefits paid | $ 1,407,782 | 1,345,837 | 2,911,607 | 2,673,778 | ||
Workers' compensation insurance premium paid | 100,000 | 0 | ||||
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% | 2.65% | ||||
Chesapeake Hospitality [Member] | Fiscal Year 2017 and Thereafter [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of management fee due | 2.50% | 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% | 2.00% | ||||
Management fee of gross revenues for second full fiscal year | 2.25% | 2.25% | ||||
Management fee of gross revenues for every year thereafter | 2.50% | 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% | 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% | 2.25% | ||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year Thereafter [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of management fee due | 2.50% | 2.50% | ||||
Sotherly Foundation [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Amount loaned to related party | $ 180,000 | |||||
Loan receivable outstanding | $ 40,000 | $ 40,000 | $ 40,000 | |||
Immediate Family Members of Chief Executive Officer [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Total compensation for related parties | 96,035 | 88,334 | 194,577 | 179,642 | ||
Partnership controlled by Chief Executive Officer [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Business-related air travel expense reimbursed to partnership | $ 36,304 | $ 57,148 | $ 60,356 | $ 106,006 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) | 2 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 28, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 29, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||
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 | $ 22,141 | $ 21,618 | $ 49,039 | $ 45,856 | |||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | ||||||
Number of common stock, shares purchased | 682,500 | 682,500 | 682,500 | ||||
Purchased common stock, value | $ 4,900,000 | $ 4,900,000 | $ 4,900,000 | ||||
Total number of ESOP shares | 50,891 | 16,984 | |||||
Fair value of ESOP released from suspense account and recognized compensation cost | $ 348,173 | $ 121,305 | |||||
Number of non committed, unearned ESOP shares | 631,609 | 631,609 | 648,668 | ||||
Fair value of unallocated ESOP shares | $ 4,402,315 | $ 4,402,315 | $ 4,183,908 | ||||
Number of ESOP shares allocated | 36,315 | 36,315 | 9,473 | ||||
Number of ESOP shares committed to be released | 14,576 | 14,576 | 24,359 | ||||
ESOP [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Number of common stock, shares purchased | 682,500 | ||||||
Purchased common stock, value | $ 4,900,000 |
Retirement Plans - Summary of S
Retirement Plans - Summary of Shares Allocations are Accounted For Fair Value on The Date of Allocations (Detail) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Compensation And Retirement Disclosure [Abstract] | ||
Number of ESOP shares allocated | 36,315 | 9,473 |
Number of ESOP shares committed to be released | 14,576 | 24,359 |
Total number of ESOP allocated and committed-to-be-released | 50,891 | 33,832 |
Number of non committed, unearned ESOP shares | 631,609 | 648,668 |
Total number of ESOP shares | 682,500 | 682,500 |
Fair value of ESOP allocated shares | $ 246,580 | $ 64,320 |
Fair value of ESOP Committed-to-be released shares | 101,593 | 157,118 |
Total fair value of ESOP allocated and committed-to-be-released | 348,173 | 221,438 |
Fair value of ESOP unallocated shares | 4,402,315 | 4,183,908 |
Total fair value of ESOP shares | $ 4,750,488 | $ 4,405,346 |
Indirect Hotel Operating Expe52
Indirect Hotel Operating Expenses - Summary of Indirect Hotel Operating Expenses (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | $ 17,640,285 | $ 15,605,262 | $ 32,873,541 | $ 29,810,493 |
Sales and Marketing [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 4,303,516 | 3,463,272 | 8,030,938 | 7,149,327 |
General and Administrative [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 3,897,618 | 3,668,424 | 7,340,076 | 6,594,556 |
Repairs and Maintenance [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,967,457 | 1,657,927 | 3,768,599 | 3,368,963 |
Utilities [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,583,655 | 1,451,410 | 2,985,633 | 2,826,307 |
Property Taxes [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,625,503 | 1,565,806 | 3,162,877 | 2,979,200 |
Management Fees, Including Incentive [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,388,995 | 1,091,288 | 2,504,854 | 2,090,649 |
Franchise Fees [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,261,787 | 1,134,886 | 2,185,311 | 2,173,075 |
Insurance [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 733,507 | 619,023 | 1,368,176 | 1,225,459 |
Information and Telecommunications [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 420,460 | 397,570 | 802,065 | 831,134 |
Other [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | $ 457,787 | $ 555,656 | $ 725,012 | $ 571,823 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Current: | ||||
Federal | $ 4,699 | $ 10,184 | ||
State | $ 61,347 | 51,838 | $ 107,040 | 100,240 |
Total | 61,347 | 56,537 | 107,040 | 110,424 |
Deferred: | ||||
Federal | 997,600 | 118,061 | 1,204,619 | 217,419 |
State | 264,067 | 21,885 | 317,310 | 40,577 |
Total | 1,261,667 | 139,946 | 1,521,929 | 257,996 |
Income tax provision | $ 1,323,014 | $ 196,483 | $ 1,628,969 | $ 368,420 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Provision (Benefit) (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Statutory federal income tax provision (benefit) | $ 901,026 | $ 446,175 | $ 1,212,339 | $ 1,492,659 |
Effect of non-taxable REIT income (loss) | 96,574 | (323,416) | (7,720) | (1,265,057) |
State income tax provision (benefit) | 325,414 | 73,724 | 424,350 | 140,818 |
Income tax provision | $ 1,323,014 | $ 196,483 | $ 1,628,969 | $ 368,420 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | ||
Deferred tax asset | $ 3,929,188 | $ 5,451,118 |
Accumulated net operating losses | 3,300,000 | 4,900,000 |
Deferred tax asset nondeductible accrued expenses | $ 600,000 | 600,000 |
Loss carryforwards, expired | 2,028 | |
Reduction in deferred tax assets due to change in federal income tax rate | $ 2,700,000 | |
TRS Lessee [Member] | ||
Income Taxes [Line Items] | ||
Accumulated net operating losses | $ 3,400,000 | $ 4,900,000 |
Income (Loss) Per Share and P56
Income (Loss) Per Share and Per Unit - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Earnings Per Share [Line Items] | |||||
Number of non-committed, unearned ESOP shares | 631,609 | 631,609 | 648,668 | ||
Number of ESOP units | 14,138,878 | 14,482,418 | 14,140,205 | 14,487,017 | |
ESOP [Member] | |||||
Earnings Per Share [Line Items] | |||||
Number of ESOP units | 0 |
Income (Loss) Per Share and P57
Income (Loss) Per Share and Per Unit - Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator | ||||
Net income available to common stockholders for basic and diluted computation | $ 1,352,414 | $ 276,926 | $ 1,114,071 | $ 2,147,942 |
Denominator | ||||
Weighted average number of common shares outstanding | 14,137,929 | 14,480,551 | 14,134,594 | 14,477,568 |
Weighted average number of Unearned ESOP Shares | (649,403) | (667,383) | (654,065) | (578,658) |
Total weighted average number of common shares outstanding for basic computation | 13,488,526 | 13,813,168 | 13,480,529 | 13,898,910 |
Basic net income per share | $ 0.10 | $ 0.02 | $ 0.08 | $ 0.15 |
Weighted average number of common shares outstanding | 14,138,878 | 14,482,418 | 14,140,205 | 14,487,017 |
Weighted average number of Unearned ESOP Shares | (649,403) | (667,383) | (654,065) | (578,658) |
Total weighted average number of common shares outstanding for diluted computation | 13,489,475 | 13,815,035 | 13,486,140 | 13,908,359 |
Diluted net income per share | $ 0.10 | $ 0.02 | $ 0.08 | $ 0.15 |
Income (Loss) Per Share and P58
Income (Loss) Per Share and Per Unit - Computation of Basic and Diluted Net Income Per Unit (Detail) - Sotherly Hotels LP [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||||
Net income available to common unitholders for basic computation | $ 1,522,745 | $ 310,795 | $ 1,254,389 | $ 2,411,753 |
Weighted average number of units outstanding | 15,899,221 | 16,258,691 | 15,895,885 | 16,255,708 |
Earnings per unit attributable to operating partnership unitholders- basic and diluted | $ 0.10 | $ 0.02 | $ 0.08 | $ 0.15 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jul. 31, 2018 | Jul. 27, 2018 | Jul. 23, 2018 | Jul. 16, 2018 | Jul. 11, 2018 | Jun. 30, 2018 | Jul. 30, 2018 | Jul. 02, 2018 | Dec. 31, 2017 |
1-Month LIBOR | |||||||||
Subsequent Event [Line Items] | |||||||||
Interest rate cap for loan | 2.50% | 2.50% | |||||||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Dividend paid | $ 0.12 | ||||||||
Dividend record date | Sep. 14, 2018 | Jun. 15, 2018 | |||||||
Dividend distributed | $ 0.125 | ||||||||
Dividend payment date | Oct. 11, 2018 | ||||||||
Subsequent Event [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Dividend record date | Sep. 28, 2018 | Jun. 29, 2018 | |||||||
Preferred dividend paid | $ 0.4921875 | ||||||||
Dividend payment date | Oct. 15, 2018 | ||||||||
Preferred dividend distributed | $ 0.4921875 | ||||||||
Subsequent Event [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Dividend record date | Sep. 28, 2018 | Jun. 29, 2018 | |||||||
Preferred dividend paid | $ 0.50 | ||||||||
Dividend payment date | Oct. 15, 2018 | ||||||||
Preferred dividend distributed | $ 0.50 | ||||||||
Doubletree By Hilton Raleigh Brownstone - University [Member] | MetLife Commercial Mortgage Originator, LLC [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument prepayment penalty description | The mortgage requires monthly interest-only payments and, following a 12-month lockout, can be prepaid with a penalty during its second year and without penalty thereafter. | ||||||||
Doubletree By Hilton Raleigh Brownstone - University [Member] | Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate purchase price | $ 3.5 | ||||||||
Doubletree By Hilton Raleigh Brownstone - University [Member] | Subsequent Event [Member] | MetLife Commercial Mortgage Originator, LLC [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Mortgage loans | $ 18.3 | ||||||||
Mortgage loan additional earn-out provision | $ 5.2 | ||||||||
Debt instrument maturity term | 4 years | ||||||||
Extended maturity period | 1-year | ||||||||
Debt instrument prepayment lockout period | 12 months | ||||||||
Doubletree By Hilton Raleigh Brownstone - University [Member] | Subsequent Event [Member] | 1-Month LIBOR | MetLife Commercial Mortgage Originator, LLC [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Excess Interest rate over LIBOR on mortgage debt | 4.00% | ||||||||
Interest rate cap for loan | 7.25% | ||||||||
Double Tree By Hilton Philadelphia Airport [Member] | TD Bank [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt instrument, description | Pursuant to the amended loan documents: (i) the principal balance of the loan was increased from approximately $30.0 million to $42.2 million; (ii) the loan’s maturity date was extended to July 31, 2023; (iii) the loan bears a floating interest rate equal to the 1-month LIBOR rate plus 2.27% (the “Loan Rate”); (iv) the loan amortizes on a 30-year schedule with payments of principal and interest beginning immediately; (v) the loan can be prepaid without penalty; and (vi) the loan will no longer be fully guaranteed by the Operating Partnership, but the Operating Partnership has guaranteed certain standard “bad boy” carveouts. Pursuant to the swap agreement: (i) the Loan Rate has been swapped for a fixed interest rate of 5.237%; notional amounts of the swap approximate the declining balance of the loan; and (iii) we are responsible for any potential termination fees associated with early termination of the swap agreement. | ||||||||
Double Tree By Hilton Philadelphia Airport [Member] | Subsequent Event [Member] | TD Bank [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Mortgage loans | $ 42.2 | $ 30 | |||||||
Swap agreement term | 5 years | ||||||||
Debt instrument maturity date | Jul. 31, 2023 | ||||||||
Amortization Period | 30 years | ||||||||
Loan rate swapped for fixed interest rate | 5.237% | ||||||||
Double Tree By Hilton Philadelphia Airport [Member] | Subsequent Event [Member] | 1-Month LIBOR | TD Bank [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Excess Interest rate over LIBOR on mortgage debt | 2.27% |