Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Quarterly Report | true | |
Entity Registrant Name | SOTHERLY HOTELS INC. | |
Entity Central Index Key | 0001301236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | MD | |
Entity File Number | 001-32379 | |
Entity Tax Identification Number | 20-1531029 | |
Entity Address, Address Line One | 306 South Henry Street, Suite 100 | |
Entity Address, City or Town | Williamsburg | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23185 | |
City Area Code | 757 | |
Local Phone Number | 229-5648 | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 19,696,805 | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Title of each class | Common Stock, $0.01 par value | |
Trading Symbol | SOHO | |
Name of each exchange on which registered | NASDAQ | |
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Document Information [Line Items] | ||
Title of each class | 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | |
Trading Symbol | SOHOB | |
Name of each exchange on which registered | NASDAQ | |
7.875% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Document Information [Line Items] | ||
Title of each class | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | |
Trading Symbol | SOHOO | |
Name of each exchange on which registered | NASDAQ | |
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Document Information [Line Items] | ||
Title of each class | 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | |
Trading Symbol | SOHON | |
Name of each exchange on which registered | NASDAQ | |
Sotherly Hotels LP [Member] | ||
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Quarterly Report | true | |
Entity Registrant Name | SOTHERLY HOTELS LP | |
Entity Central Index Key | 0001301236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-36091 | |
Entity Tax Identification Number | 20-1965427 | |
Entity Address, Address Line One | 306 South Henry Street, Suite 100 | |
Entity Address, City or Town | Williamsburg | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23185 | |
City Area Code | 757 | |
Local Phone Number | 229-5648 | |
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Investment in hotel properties, net | $ 357,027,422 | $ 365,070,725 |
Cash and cash equivalents | 19,198,625 | 21,918,680 |
Restricted cash | 10,205,947 | 5,422,950 |
Accounts receivable, net | 4,776,701 | 5,844,904 |
Prepaid expenses, inventory and other assets | 9,553,741 | 8,311,862 |
TOTAL ASSETS | 400,762,436 | 406,569,121 |
LIABILITIES | ||
Mortgage loans, net | 317,633,743 | 320,482,103 |
Unsecured notes, net | 1,722,700 | 2,545,975 |
Accounts payable and accrued liabilities | 25,957,518 | 25,704,835 |
Advance deposits | 2,872,457 | 2,233,013 |
Dividends and distributions payable | 2,088,160 | 4,082,472 |
TOTAL LIABILITIES | 350,274,578 | 355,048,398 |
Commitments and contingencies (See Note 5) | ||
Sotherly Hotels Inc. stockholders’ equity | ||
Common stock, par value $0.01, 69,000,000 shares authorized, 19,696,805 shares issued and outstanding at September 30, 2023 and 18,951,525 shares issued and outstanding at December 31, 2022. | 196,968 | 189,515 |
Additional paid-in capital | 176,304,184 | 175,611,370 |
Unearned ESOP shares | (2,464,231) | (2,601,134) |
Distributions in excess of retained earnings | (122,338,042) | (120,985,183) |
Total Sotherly Hotels Inc. stockholders’ equity | 51,738,612 | 52,254,301 |
Noncontrolling interest | (1,250,754) | (733,578) |
TOTAL EQUITY | 50,487,858 | 51,520,723 |
TOTAL LIABILITIES AND EQUITY | 400,762,436 | 406,569,121 |
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: | 13,461 | 13,461 |
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Sotherly Hotels Inc. stockholders’ equity | ||
Preferred stock, $0.01 par value, 11,000,000 shares authorized: | 11,631 | 11,631 |
8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Sotherly Hotels Inc. stockholders’ equity | ||
Preferred stock, $0.01 par value, 11,000,000 shares authorized: | 14,641 | 14,641 |
Sotherly Hotels LP [Member] | ||
ASSETS | ||
Investment in hotel properties, net | 357,027,422 | 365,070,725 |
Cash and cash equivalents | 19,198,625 | 21,918,680 |
Restricted cash | 10,205,947 | 5,422,950 |
Accounts receivable, net | 4,776,701 | 5,844,904 |
Loan receivable - affiliate | 2,519,566 | 2,650,526 |
Prepaid expenses, inventory and other assets | 9,553,741 | 8,311,862 |
TOTAL ASSETS | 403,282,002 | 409,219,647 |
LIABILITIES | ||
Mortgage loans, net | 317,633,743 | 320,482,103 |
Unsecured notes, net | 1,722,700 | 2,545,975 |
Accounts payable and accrued liabilities | 25,957,518 | 25,704,835 |
Advance deposits | 2,872,457 | 2,233,013 |
Dividends and distributions payable | 2,088,160 | 4,082,472 |
TOTAL LIABILITIES | 350,274,578 | 355,048,398 |
Commitments and contingencies (See Note 5) | ||
PARTNERS' CAPITAL | ||
General Partner: 205,220 units and 197,767 units issued and outstanding as of September 30, 2023 and December 31, 2022, respectively. | (117,659) | (106,022) |
Limited Partners: 19,855,771 units and 19,578,946 units issued and outstanding as of September 30, 2023 and December 31, 2022, respectively. | (40,295,682) | (39,143,494) |
TOTAL PARTNERS' CAPITAL | 53,007,424 | 54,171,249 |
Sotherly Hotels Inc. stockholders’ equity | ||
TOTAL LIABILITIES AND EQUITY | 403,282,002 | 409,219,647 |
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
PARTNERS' CAPITAL | ||
Preferred units, 11,000,000 units authorized; | 31,571,778 | 31,571,778 |
Sotherly Hotels LP [Member] | 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
PARTNERS' CAPITAL | ||
Preferred units, 11,000,000 units authorized; | 27,504,901 | 27,504,901 |
Sotherly Hotels LP [Member] | 8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
PARTNERS' CAPITAL | ||
Preferred units, 11,000,000 units authorized; | $ 34,344,086 | $ 34,344,086 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Preferred stock, shares authorized | 11,000,000 | 11,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 69,000,000 | 69,000,000 |
Common stock, shares issued | 19,696,805 | 18,951,525 |
Common stock, shares outstanding | 19,696,805 | 18,951,525 |
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, shares issued | 1,346,110 | 1,346,110 |
Preferred stock, shares outstanding | 1,346,110 | 1,346,110 |
Preferred stock, aggregate liquidation preference | $ 40,940,681 | $ 40,940,681 |
8.25% Series D 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 | 8.25% | 8.25% |
Preferred stock, shares issued | 1,163,100 | 1,163,100 |
Preferred stock, shares outstanding | 1,163,100 | 1,163,100 |
Preferred stock, aggregate liquidation preference | $ 35,674,458 | $ 35,674,458 |
8.0% Series B Cumulative Redeemable Perpetual Preferred Units [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% | 8% |
Preferred stock, shares issued | 1,464,100 | 1,464,100 |
Preferred stock, shares outstanding | 1,464,100 | 1,464,100 |
Preferred stock, aggregate liquidation preference | $ 44,655,050 | $ 44,655,050 |
Sotherly Hotels LP [Member] | ||
General Partner, units issued | 205,220 | 197,767 |
General Partner, units outstanding | 205,220 | 197,767 |
Limited Partner, units issued | 19,855,771 | 19,578,946 |
Limited Partner, units outstanding | 19,855,771 | 19,578,946 |
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Preferred units, authorized | 11,000,000 | 11,000,000 |
Preferred units, dividend rate percentage | 7.875% | 7.875% |
Preferred units, issued | 1,346,110 | 1,346,110 |
Preferred units, outstanding | 1,346,110 | 1,346,110 |
Preferred units, aggregate liquidation preference | $ 40,940,681 | $ 40,940,681 |
Sotherly Hotels LP [Member] | 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Preferred units, authorized | 11,000,000 | 11,000,000 |
Preferred units, dividend rate percentage | 8.25% | 8.25% |
Preferred units, issued | 1,163,100 | 1,163,100 |
Preferred units, outstanding | 1,163,100 | 1,163,100 |
Preferred units, aggregate liquidation preference | $ 35,674,458 | $ 35,674,458 |
Sotherly Hotels LP [Member] | 8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred units, authorized | 11,000,000 | 11,000,000 |
Preferred units, dividend rate percentage | 8% | 8% |
Preferred units, issued | 1,464,100 | 1,464,100 |
Preferred units, outstanding | 1,464,100 | 1,464,100 |
Preferred units, aggregate liquidation preference | $ 44,655,050 | $ 44,655,050 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUE | ||||
Total revenue | $ 39,181,363 | $ 39,212,695 | $ 131,689,974 | $ 124,735,557 |
Hotel operating expenses | ||||
Total hotel operating expenses | 31,614,656 | 29,389,932 | 97,202,033 | 90,166,480 |
Depreciation and amortization | 4,715,019 | 4,704,806 | 14,056,523 | 13,889,621 |
(Gain) loss on disposal of assets | (4,700) | 1,215 | (4,700) | 491,828 |
Corporate general and administrative | 1,688,535 | 1,827,746 | 5,458,340 | 4,774,139 |
Total operating expenses | 38,013,510 | 35,923,699 | 116,712,196 | 109,322,068 |
NET OPERATING INCOME | 1,167,853 | 3,288,996 | 14,977,778 | 15,413,489 |
Other income (expense) | ||||
Interest expense | (4,466,630) | (4,224,387) | (12,868,595) | (15,280,531) |
Interest income | 222,878 | 40,581 | 592,315 | 92,515 |
Loss on early extinguishment of debt | (5,944,881) | |||
Unrealized gain (loss) on hedging activities | 103,946 | 1,457,552 | (51,686) | 2,992,311 |
PPP loan forgiveness | 275,494 | |||
Gain on sale of hotel properties | 30,053,977 | |||
Gain on involuntary conversion of assets | 551,729 | 1,422,295 | 1,331,374 | 1,473,842 |
Net (loss) income before income taxes | (2,420,224) | 1,985,037 | 4,256,680 | 28,800,722 |
Income tax benefit (provision) | 354,398 | (12,474) | 322,679 | (33,744) |
Net (loss) income | (2,065,826) | 1,972,563 | 4,579,359 | 28,766,978 |
Add: Net loss (income) attributable to noncontrolling interest | 156,558 | 51,094 | 50,720 | (1,317,225) |
Net (loss) income attributable to the Company | (1,909,268) | 2,023,657 | 4,630,079 | 27,449,753 |
Undeclared distributions to preferred stockholders | (1,994,313) | (1,813,820) | (5,982,938) | (5,639,906) |
(Loss) gain on extinguishment of preferred stock | (97,157) | 64,518 | ||
Net (loss) income attributable to common stockholders | $ (3,903,581) | $ 112,680 | $ (1,352,859) | $ 21,874,365 |
Net (loss) income per share attributable to common stockholders:/general and limited partner unit: | ||||
Basic | $ (0.2) | $ 0.01 | $ (0.08) | $ 1.24 |
Diluted | $ (0.2) | $ 0.01 | $ (0.08) | $ 1.2 |
Weighted average number of common shares/general and limited partner units outstanding | ||||
Basic | 18,906,851 | 18,045,365 | 18,742,219 | 17,598,153 |
Diluted | 18,906,851 | 18,559,666 | 18,742,219 | 18,209,766 |
Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | $ 39,181,363 | $ 39,212,695 | $ 131,689,974 | $ 124,735,557 |
Hotel operating expenses | ||||
Total hotel operating expenses | 31,614,656 | 29,389,932 | 97,202,033 | 90,166,480 |
Depreciation and amortization | 4,715,019 | 4,704,806 | 14,056,523 | 13,889,621 |
(Gain) loss on disposal of assets | (4,700) | 1,215 | (4,700) | 491,828 |
Corporate general and administrative | 1,688,535 | 1,827,746 | 5,458,340 | 4,774,139 |
Total operating expenses | 38,013,510 | 35,923,699 | 116,712,196 | 109,322,068 |
NET OPERATING INCOME | 1,167,853 | 3,288,996 | 14,977,778 | 15,413,489 |
Other income (expense) | ||||
Interest expense | (4,466,630) | (4,224,387) | (12,868,595) | (15,280,531) |
Interest income | 222,878 | 40,581 | 592,315 | 92,515 |
Loss on early extinguishment of debt | (5,944,881) | |||
Unrealized gain (loss) on hedging activities | 103,946 | 1,457,552 | (51,686) | 2,992,311 |
PPP loan forgiveness | 275,494 | |||
Gain on sale of hotel properties | 30,053,977 | |||
Gain on involuntary conversion of assets | 551,729 | 1,422,295 | 1,331,374 | 1,473,842 |
Net (loss) income before income taxes | (2,420,224) | 1,985,037 | 4,256,680 | 28,800,722 |
Income tax benefit (provision) | 354,398 | (12,474) | 322,679 | (33,744) |
Net (loss) income | (2,065,826) | 1,972,563 | 4,579,359 | 28,766,978 |
Undeclared distributions to preferred unit holders | (1,994,313) | (1,813,820) | (5,982,938) | (5,639,906) |
Undeclared distributions to preferred stockholders | (1,994,313) | (1,813,820) | (5,982,938) | (5,639,906) |
(Loss) gain on extinguishment of preferred stock | (97,157) | 64,518 | ||
Net (loss) income attributable to general and limited partnership unit holders | $ (4,060,139) | $ 61,586 | $ (1,403,579) | $ 23,191,590 |
Net (loss) income per share attributable to common stockholders:/general and limited partner unit: | ||||
Basic | $ (0.2) | $ (0.07) | $ 1.21 | |
Diluted | $ (0.2) | $ (0.07) | $ 1.2 | |
Weighted average number of common shares/general and limited partner units outstanding | ||||
Basic | 19,810,991 | 19,501,310 | 19,807,797 | 19,116,224 |
Diluted | 19,810,991 | 19,604,222 | 19,807,797 | 19,307,832 |
Rooms Department [Member] | ||||
REVENUE | ||||
Total revenue | $ 26,260,586 | $ 26,110,030 | $ 87,915,797 | $ 83,509,003 |
Hotel operating expenses | ||||
Total hotel operating expenses | 6,437,081 | 6,539,306 | 19,866,515 | 19,694,649 |
Rooms Department [Member] | Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | 26,260,586 | 26,110,030 | 87,915,797 | 83,509,003 |
Hotel operating expenses | ||||
Total hotel operating expenses | 6,437,081 | 6,539,306 | 19,866,515 | 19,694,649 |
Food and Beverage Department [Member] | ||||
REVENUE | ||||
Total revenue | 7,522,753 | 6,816,327 | 25,772,453 | 20,146,373 |
Hotel operating expenses | ||||
Total hotel operating expenses | 5,607,350 | 4,731,787 | 17,933,777 | 13,868,567 |
Food and Beverage Department [Member] | Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | 7,522,753 | 6,816,327 | 25,772,453 | 20,146,373 |
Hotel operating expenses | ||||
Total hotel operating expenses | 5,607,350 | 4,731,787 | 17,933,777 | 13,868,567 |
Other Operating Departments [Member] | ||||
REVENUE | ||||
Total revenue | 5,398,024 | 6,286,338 | 18,001,724 | 21,080,181 |
Hotel operating expenses | ||||
Total hotel operating expenses | 2,198,058 | 2,386,901 | 6,819,661 | 7,470,380 |
Other Operating Departments [Member] | Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Total revenue | 5,398,024 | 6,286,338 | 18,001,724 | 21,080,181 |
Hotel operating expenses | ||||
Total hotel operating expenses | 2,198,058 | 2,386,901 | 6,819,661 | 7,470,380 |
Indirect [Member] | ||||
Hotel operating expenses | ||||
Total hotel operating expenses | 17,372,167 | 15,731,938 | 52,582,080 | 49,132,884 |
Indirect [Member] | Sotherly Hotels LP [Member] | ||||
Hotel operating expenses | ||||
Total hotel operating expenses | $ 17,372,167 | $ 15,731,938 | $ 52,582,080 | $ 49,132,884 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Total | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Unearned ESOP Shares [Member] | Distributions in Excess of Retained Earnings [Member] | Distributions in Excess of Retained Earnings [Member] Series B Preferred Stock [Member] | Distributions in Excess of Retained Earnings [Member] Series C Preferred Stock [Member] | Distributions in Excess of Retained Earnings [Member] Series D Preferred Stock [Member] | Noncontrolling Interest [Member] |
Balances, beginning at Dec. 31, 2021 | $ 40,596 | $ 174,410 | $ 177,651,954 | $ (3,083,398) | $ (153,521,704) | $ (4,758,928) | |||||||
Balances, shares, beginning at Dec. 31, 2021 | 16,502,930 | 4,059,610 | 17,441,058 | ||||||||||
Net income (loss) | $ (810,944) | (649,323) | (161,621) | ||||||||||
Issuance of common stock | $ 357,512 | $ 1,752 | 355,760 | ||||||||||
Issuance of common stock, shares | 175,268 | ||||||||||||
Issuance of restricted common stock awards | $ 151 | 30,149 | |||||||||||
Issuance of restricted common stock awards, shares | 30,300 | 15,000 | |||||||||||
Amortization of ESOP shares | $ 14,156 | (36,391) | 50,547 | ||||||||||
Amortization of restricted stock awards | $ 18,195 | 18,195 | |||||||||||
Extinguishment of preferred stock | $ (225) | $ 2,178 | 9,222 | ||||||||||
Extinguishment of preferred stock, shares | 11,175 | (22,500) | 217,775 | ||||||||||
Balances, ending at Mar. 31, 2022 | $ 40,371 | $ 178,491 | 178,028,889 | (3,032,851) | (154,171,027) | (4,920,549) | |||||||
Balances, shares, ending at Mar. 31, 2022 | 16,123,324 | 4,037,110 | 17,849,101 | ||||||||||
Balances, beginning at Dec. 31, 2021 | $ 40,596 | $ 174,410 | 177,651,954 | (3,083,398) | (153,521,704) | (4,758,928) | |||||||
Balances, shares, beginning at Dec. 31, 2021 | 16,502,930 | 4,059,610 | 17,441,058 | ||||||||||
Net income (loss) | $ 28,766,978 | ||||||||||||
Balances, ending at Sep. 30, 2022 | $ 46,211,630 | $ 39,733 | $ 187,337 | 177,567,019 | (2,931,762) | (126,071,951) | (2,578,746) | ||||||
Balances, shares, ending at Sep. 30, 2022 | 3,973,310 | 18,733,680 | |||||||||||
Balances, beginning at Mar. 31, 2022 | $ 40,371 | $ 178,491 | 178,028,889 | (3,032,851) | (154,171,027) | (4,920,549) | |||||||
Balances, shares, beginning at Mar. 31, 2022 | 16,123,324 | 4,037,110 | 17,849,101 | ||||||||||
Net income (loss) | $ 27,605,359 | 26,075,419 | 1,529,940 | ||||||||||
Issuance of common stock | 64,376 | $ 374 | 64,002 | ||||||||||
Issuance of common stock, shares | 37,428 | ||||||||||||
Conversion of units in Operating Partnership to shares of common stock | $ 500 | (318,286) | 317,786 | ||||||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 50,000 | ||||||||||||
Amortization of ESOP shares | 19,954 | (30,590) | 50,544 | ||||||||||
Amortization of restricted stock awards | 18,195 | 18,195 | |||||||||||
Extinguishment of preferred stock | 241,226 | $ (276) | $ 2,702 | (13,601) | 252,401 | ||||||||
Extinguishment of preferred stock, shares | (27,600) | 270,144 | |||||||||||
Balances, ending at Jun. 30, 2022 | 44,072,434 | $ 40,095 | $ 182,067 | 177,748,609 | (2,982,307) | (127,843,207) | (3,072,823) | ||||||
Balances, shares, ending at Jun. 30, 2022 | 4,009,510 | 18,206,673 | |||||||||||
Net income (loss) | 1,972,563 | 2,023,657 | (51,094) | ||||||||||
Issuance of common stock | 346,498 | $ 1,674 | 344,824 | ||||||||||
Issuance of common stock, shares | 167,390 | ||||||||||||
Conversion of units in Operating Partnership to shares of common stock | $ 407 | (545,578) | 545,171 | ||||||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 40,687 | ||||||||||||
Amortization of ESOP shares | 8,564 | (41,981) | 50,545 | ||||||||||
Amortization of restricted stock awards | 18,195 | 18,195 | |||||||||||
Extinguishment of preferred stock | (206,624) | $ (362) | $ 3,189 | 42,950 | (252,401) | ||||||||
Extinguishment of preferred stock, shares | (36,200) | 318,930 | |||||||||||
Balances, ending at Sep. 30, 2022 | 46,211,630 | $ 39,733 | $ 187,337 | 177,567,019 | (2,931,762) | (126,071,951) | (2,578,746) | ||||||
Balances, shares, ending at Sep. 30, 2022 | 3,973,310 | 18,733,680 | |||||||||||
Balances, beginning at Dec. 31, 2022 | 51,520,723 | $ 39,733 | $ 189,515 | 175,611,370 | (2,601,134) | (120,985,183) | (733,578) | ||||||
Balances, shares, beginning at Dec. 31, 2022 | 3,973,310 | 18,951,525 | |||||||||||
Net income (loss) | 1,387,514 | 1,412,474 | (24,960) | ||||||||||
Issuance of common stock | 121,485 | $ 643 | 120,842 | ||||||||||
Issuance of common stock, shares | 64,278 | ||||||||||||
Issuance of restricted common stock awards | 103,901 | $ 2,200 | 101,701 | ||||||||||
Issuance of restricted common stock awards, shares | 220,000 | ||||||||||||
Amortization of ESOP shares | 12,195 | (33,439) | 45,634 | ||||||||||
Amortization of restricted stock awards | 22,883 | 22,883 | |||||||||||
Balances, ending at Mar. 31, 2023 | 53,168,701 | $ 39,733 | $ 192,358 | 175,823,357 | (2,555,500) | (119,572,709) | (758,538) | ||||||
Balances, shares, ending at Mar. 31, 2023 | 3,973,310 | 19,235,803 | |||||||||||
Balances, beginning at Dec. 31, 2022 | 51,520,723 | $ 39,733 | $ 189,515 | 175,611,370 | (2,601,134) | (120,985,183) | (733,578) | ||||||
Balances, shares, beginning at Dec. 31, 2022 | 3,973,310 | 18,951,525 | |||||||||||
Net income (loss) | 4,579,359 | ||||||||||||
Balances, ending at Sep. 30, 2023 | 50,487,858 | $ 39,733 | $ 196,968 | 176,304,184 | (2,464,231) | (122,338,042) | (1,250,754) | ||||||
Balances, shares, ending at Sep. 30, 2023 | 3,973,310 | 19,696,805 | |||||||||||
Balances, beginning at Mar. 31, 2023 | 53,168,701 | $ 39,733 | $ 192,358 | 175,823,357 | (2,555,500) | (119,572,709) | (758,538) | ||||||
Balances, shares, beginning at Mar. 31, 2023 | 3,973,310 | 19,235,803 | |||||||||||
Net income (loss) | 5,257,670 | 5,126,872 | 130,798 | ||||||||||
Conversion of units in Operating Partnership to shares of common stock | $ 750 | (426,049) | 426,799 | ||||||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 75,000 | ||||||||||||
Preferred stock dividend declared | $ (1,464,100) | $ (1,325,078) | $ (1,199,447) | $ (1,464,100) | $ (1,325,078) | $ (1,199,447) | |||||||
Amortization of ESOP shares | 12,717 | (32,916) | 45,633 | ||||||||||
Amortization of restricted stock awards | 41,771 | 41,771 | |||||||||||
Balances, ending at Jun. 30, 2023 | 54,492,234 | $ 39,733 | $ 193,108 | 176,258,261 | (2,509,867) | (118,434,462) | (1,054,539) | ||||||
Balances, shares, ending at Jun. 30, 2023 | 3,973,310 | 19,310,803 | |||||||||||
Net income (loss) | (2,065,826) | (1,909,268) | (156,558) | ||||||||||
Conversion of units in Operating Partnership to shares of common stock | $ 3,860 | 35,797 | (39,657) | ||||||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 386,002 | ||||||||||||
Preferred stock dividend declared | $ (732,050) | $ (662,539) | $ (599,723) | $ (732,050) | $ (662,539) | $ (599,723) | |||||||
Amortization of ESOP shares | 13,992 | (31,644) | 45,636 | ||||||||||
Amortization of restricted stock awards | 41,770 | 41,770 | |||||||||||
Balances, ending at Sep. 30, 2023 | $ 50,487,858 | $ 39,733 | $ 196,968 | $ 176,304,184 | $ (2,464,231) | $ (122,338,042) | $ (1,250,754) | ||||||
Balances, shares, ending at Sep. 30, 2023 | 3,973,310 | 19,696,805 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | |
Series B Preferred Stock [Member] | ||
Preferred stock dividends declared per share | $ 0.5 | $ 0.5 |
Series C Preferred Stock [Member] | ||
Preferred stock dividends declared per share | 0.492188 | 0.492188 |
Series D Preferred Stock [Member] | ||
Preferred stock dividends declared per share | $ 0.515625 | $ 0.515625 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net Income | $ 4,579,359 | $ 28,766,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 14,056,523 | 13,889,621 |
Amortization of deferred financing costs | 448,467 | 923,777 |
Amortization of mortgage premium | (18,511) | (18,511) |
Gain on involuntary conversion of assets | (1,331,374) | (1,473,842) |
Unrealized (gain) loss on hedging activities | 51,686 | (2,992,311) |
Loss on early extinguishment of debt | 5,944,881 | |
PPP loan forgiveness | (275,494) | |
Gain on disposal of assets | (4,700) | (30,053,977) |
Loss on disposal of assets | 491,828 | |
ESOP and stock / unit - based compensation | 370,714 | 895,945 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,086,903 | 764,318 |
Prepaid expenses, inventory and other assets | (1,350,705) | (580,056) |
Accounts payable and other accrued liabilities | 236,206 | (12,876,519) |
Advance deposits | 639,444 | 525,840 |
Net cash provided by operating activities | 18,488,518 | 4,207,972 |
Cash flows from investing activities: | ||
Proceeds from sale of hotel properties | 52,403,981 | |
Improvements and additions to hotel properties | (6,069,672) | (4,809,289) |
Proceeds from involuntary conversion | 1,312,675 | 1,677,444 |
Proceeds from sale of assets | 141,952 | 32,932 |
Net cash (used in) provided by investing activities | (4,615,045) | 49,305,068 |
Cash flows from financing activities: | ||
Proceeds from mortgage loans | 2,715,833 | 7,777,475 |
Payments on mortgage loans | (5,580,239) | (36,548,807) |
Payments on secured notes | (20,000,000) | |
Payments on unsecured notes | (554,965) | (55,689) |
Payments of deferred financing costs | (413,909) | (246,714) |
Preferred dividends paid | (7,977,251) | |
Net cash used in financing activities | (11,810,531) | (49,073,735) |
Net increase in cash, cash equivalents and restricted cash | 2,062,942 | 4,439,305 |
Cash, cash equivalents and restricted cash at the beginning of the period | 27,341,630 | 25,578,537 |
Cash, cash equivalents and restricted cash at the end of the period | 29,404,572 | 30,017,842 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 12,619,680 | 20,046,224 |
Cash paid during the period for income taxes | 614,231 | 39,908 |
Non-cash investing and financing activities: | ||
Change in amount of improvements to hotel property in accounts payable and accrued liabilities | 8,684 | 959,859 |
Sotherly Hotels LP [Member] | ||
Cash flows from operating activities: | ||
Net Income | 4,579,359 | 28,766,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 14,056,523 | 13,889,621 |
Amortization of deferred financing costs | 448,467 | 923,777 |
Amortization of mortgage premium | (18,511) | (18,511) |
Gain on involuntary conversion of assets | (1,331,374) | (1,473,842) |
Unrealized (gain) loss on hedging activities | 51,686 | (2,992,311) |
Loss on early extinguishment of debt | 5,944,881 | |
PPP loan forgiveness | (275,494) | |
Gain on disposal of assets | (4,700) | (30,053,977) |
Loss on disposal of assets | 491,828 | |
ESOP and stock / unit - based compensation | 239,754 | 751,223 |
Changes in assets and liabilities: | ||
Accounts receivable | 1,086,903 | 764,318 |
Prepaid expenses, inventory and other assets | (1,350,705) | (580,056) |
Accounts payable and other accrued liabilities | 236,206 | (12,876,519) |
Advance deposits | 639,444 | 525,840 |
Net cash provided by operating activities | 18,357,558 | 4,063,250 |
Cash flows from investing activities: | ||
Proceeds from sale of hotel properties | 52,403,981 | |
Improvements and additions to hotel properties | (6,069,672) | (4,809,289) |
ESOP loan payments received | 130,960 | 144,722 |
Proceeds from involuntary conversion | 1,312,675 | 1,677,444 |
Proceeds from sale of assets | 141,952 | 32,932 |
Net cash (used in) provided by investing activities | (4,484,085) | 49,449,790 |
Cash flows from financing activities: | ||
Proceeds from mortgage loans | 2,715,833 | 7,777,475 |
Payments on mortgage loans | (5,580,239) | (36,548,807) |
Payments on secured notes | (20,000,000) | |
Payments on unsecured notes | (554,965) | (55,689) |
Payments of deferred financing costs | (413,909) | (246,714) |
Preferred dividends paid | (7,977,251) | |
Net cash used in financing activities | (11,810,531) | (49,073,735) |
Net increase in cash, cash equivalents and restricted cash | 2,062,942 | 4,439,305 |
Cash, cash equivalents and restricted cash at the beginning of the period | 27,341,630 | 25,578,537 |
Cash, cash equivalents and restricted cash at the end of the period | 29,404,572 | 30,017,842 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 12,678,642 | 19,942,876 |
Cash paid during the period for income taxes | 614,231 | 39,908 |
Non-cash investing and financing activities: | ||
Change in amount of improvements to hotel property in accounts payable and accrued liabilities | $ 8,684 | $ 959,859 |
Consolidated Statements of Ch_3
Consolidated Statements of Changes in Partners' Capital - 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] | Sotherly Hotels LP [Member] Preferred Units [Member] Series D Preferred Units [Member] |
Balances, beginning at Dec. 31, 2021 | $ 19,660,102 | $ (469,805) | $ (75,315,469) | $ 35,420,784 | $ 32,474,760 | $ 27,549,832 | ||
Balances, units, beginning at Dec. 31, 2021 | 185,748 | 18,389,030 | 4,059,610 | |||||
Amortization of restricted unit awards | $ 18,195 | 18,195 | $ 182 | $ 18,013 | ||||
Unit based compensation | 345,421 | $ 2,227 | $ 343,194 | |||||
Unit based compensation, number of units | 1,903 | 188,365 | ||||||
Extinguishment of preferred units | 11,177 | $ 5,389 | $ 533,548 | $ (302,602) | (225,159) | |||
Extinguishment of preferred units, shares | 11,175 | 2,178 | 215,597 | (22,500) | ||||
Net income (loss) | $ (810,944) | (810,944) | $ (8,109) | $ (802,835) | ||||
Balances, ending at Mar. 31, 2022 | 19,223,950 | $ (470,116) | $ (75,223,549) | $ 35,118,182 | 32,249,601 | 27,549,832 | ||
Balances, units, ending at Mar. 31, 2022 | 189,829 | 18,792,992 | 4,037,110 | |||||
Balances, beginning at Dec. 31, 2021 | 19,660,102 | $ (469,805) | $ (75,315,469) | $ 35,420,784 | 32,474,760 | 27,549,832 | ||
Balances, units, beginning at Dec. 31, 2021 | 185,748 | 18,389,030 | 4,059,610 | |||||
Net income (loss) | 28,766,978 | 28,766,978 | ||||||
Balances, ending at Sep. 30, 2022 | 49,224,080 | $ (155,361) | $ (44,041,324) | $ 34,344,086 | 31,571,779 | 27,504,900 | ||
Balances, units, ending at Sep. 30, 2022 | 196,094 | 19,413,229 | 3,973,310 | |||||
Balances, beginning at Mar. 31, 2022 | 19,223,950 | $ (470,116) | $ (75,223,549) | $ 35,118,182 | 32,249,601 | 27,549,832 | ||
Balances, units, beginning at Mar. 31, 2022 | 189,829 | 18,792,992 | 4,037,110 | |||||
Amortization of restricted unit awards | 18,195 | 18,195 | $ 182 | $ 18,013 | ||||
Unit based compensation | 39,096 | $ 391 | $ 38,705 | |||||
Unit based compensation, number of units | 374 | 37,054 | ||||||
Extinguishment of preferred units | 241,226 | 230,048 | $ 5,633 | $ 871,778 | $ (211,117) | (436,246) | ||
Extinguishment of preferred units, shares | 2,701 | 267,443 | (27,600) | |||||
Net income (loss) | 27,605,359 | 27,605,359 | $ 276,054 | $ 27,329,305 | ||||
Balances, ending at Jun. 30, 2022 | 47,116,648 | $ (187,856) | $ (46,965,748) | $ 34,907,065 | 31,813,355 | 27,549,832 | ||
Balances, units, ending at Jun. 30, 2022 | 192,904 | 19,097,489 | 4,009,510 | |||||
Amortization of restricted unit awards | 18,195 | 18,195 | $ 182 | $ 18,013 | ||||
Unit based compensation | 312,121 | 3,121 | 309,000 | |||||
Extinguishment of preferred units | (206,624) | (195,447) | $ 9,467 | $ 644,573 | $ (562,979) | (241,576) | (44,932) | |
Extinguishment of preferred units, shares | 3,190 | 315,740 | (36,200) | |||||
Net income (loss) | 1,972,563 | 1,972,563 | $ 19,725 | $ 1,952,838 | ||||
Balances, ending at Sep. 30, 2022 | 49,224,080 | $ (155,361) | $ (44,041,324) | 34,344,086 | 31,571,779 | 27,504,900 | ||
Balances, units, ending at Sep. 30, 2022 | 196,094 | 19,413,229 | 3,973,310 | |||||
Balances, beginning at Dec. 31, 2022 | 54,171,249 | $ (106,022) | $ (39,143,494) | $ 34,344,086 | 31,571,778 | 27,504,901 | ||
Balances, units, beginning at Dec. 31, 2022 | 197,767 | 19,578,946 | 3,973,310 | |||||
Amortization of restricted unit awards | 22,883 | 22,883 | $ 229 | $ 22,654 | ||||
Unit based compensation | 185,637 | $ 1,857 | $ 183,780 | |||||
Unit based compensation, number of units | 2,843 | 281,435 | ||||||
Net income (loss) | 1,387,514 | 1,387,514 | $ 13,875 | $ 1,373,639 | ||||
Balances, ending at Mar. 31, 2023 | 55,767,283 | $ (90,061) | $ (37,563,421) | $ 34,344,086 | 31,571,778 | 27,504,901 | ||
Balances, units, ending at Mar. 31, 2023 | 200,610 | 19,860,381 | 3,973,310 | |||||
Balances, beginning at Dec. 31, 2022 | 54,171,249 | $ (106,022) | $ (39,143,494) | $ 34,344,086 | 31,571,778 | 27,504,901 | ||
Balances, units, beginning at Dec. 31, 2022 | 197,767 | 19,578,946 | 3,973,310 | |||||
Net income (loss) | 4,579,359 | 4,579,359 | ||||||
Balances, ending at Sep. 30, 2023 | 53,007,424 | $ (117,659) | $ (40,295,682) | $ 34,344,086 | 31,571,778 | 27,504,901 | ||
Balances, units, ending at Sep. 30, 2023 | 205,220 | 19,855,771 | 3,973,310 | |||||
Balances, beginning at Mar. 31, 2023 | 55,767,283 | $ (90,061) | $ (37,563,421) | $ 34,344,086 | 31,571,778 | 27,504,901 | ||
Balances, units, beginning at Mar. 31, 2023 | 200,610 | 19,860,381 | 3,973,310 | |||||
Amortization of restricted unit awards | 41,771 | 41,770 | $ 417 | $ 41,353 | ||||
Preferred distributions paid | (3,988,625) | (39,886) | (3,948,739) | |||||
Unit based compensation | (27,022) | (270) | (26,752) | |||||
Net income (loss) | 5,257,670 | 5,257,670 | 52,577 | 5,205,093 | ||||
Balances, ending at Jun. 30, 2023 | 57,051,076 | $ (77,223) | $ (36,292,466) | $ 34,344,086 | 31,571,778 | 27,504,901 | ||
Balances, units, ending at Jun. 30, 2023 | 200,610 | 19,860,381 | 3,973,310 | |||||
Amortization of restricted unit awards | 41,770 | 41,770 | $ 418 | $ 41,352 | ||||
Preferred distributions paid | (1,994,312) | (19,943) | (1,974,369) | |||||
Unit based compensation | (25,284) | $ (253) | (25,031) | |||||
Conversion of units in operating partnership to shares of common stock | (4,610) | |||||||
Conversion of units in operating partnership to shares of common stock, number of units | 4,610 | |||||||
Net income (loss) | $ (2,065,826) | (2,065,826) | $ (20,658) | (2,045,168) | ||||
Balances, ending at Sep. 30, 2023 | $ 53,007,424 | $ (117,659) | $ (40,295,682) | $ 34,344,086 | $ 31,571,778 | $ 27,504,901 | ||
Balances, units, ending at Sep. 30, 2023 | 205,220 | 19,855,771 | 3,973,310 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
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 . The Company historically has 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, as of September 30, 2023 , consisted of investments in ten hotel properties, comprising 2,786 rooms and two hotel commercial condominium units and their associated rental programs. Seven of our hotels operated under the Hilton, DoubleTree, and Hyatt brands, and three are 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”). Pursuant to the terms of the Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) of the Operating Partnership, the Company, as general partner, is not entitled to compensation for its services to the Operating Partnership. The Company, as general partner, conducts substantially all of its operations through the Operating Partnership and the Company’s administrative expenses are the obligations of the Operating Partnership. Additionally, the Company is entitled to reimbursement for any expenditure incurred by it on the Operating Partnership’s behalf. For the Company to qualify as a REIT, it cannot operate hotels. Therefore, the Operating Partnership, which at September 30, 2023 was approximately 98.2 % owned by the Company, and its subsidiaries, lease its hotels to direct and indirect subsidiaries of MHI Hospitality TRS Holding, Inc., MHI Hospitality TRS, LLC and certain of its subsidiaries (collectively, “MHI TRS Entities”), each of which is a wholly-owned subsidiary of the Operating Partnership. The MHI TRS Entities have engaged Our Town Hospitality, LLC (“Our Town”), an eligible independent management company, to operate the hotels under management contracts. MHI Hospitality TRS Holding, Inc. (“MHI TRS”) is treated as a taxable REIT subsidiary for federal income tax purposes. All references in these “Notes to Consolidated Financial Statements” to “we”, “us”, “our” and “Sotherly” refer to the Company, its Operating Partnership and its subsidiaries and predecessors, collectively, unless the context otherwise requires or where otherwise indicated. Overview of Significant Transactions Significant transactions occurring during the current period and prior fiscal year include the following: On February 10, 2022, Louisville Hotel Associates, LLC, a Delaware limited liability company and an affiliate of the Company, closed on the sale of the Sheraton Louisville Riverside hotel located in Jeffersonville, Indiana to Riverside Hotel, LLC, an Indiana limited liability company, for a purchase price of $ 11.5 million, including the assumption by the buyer of the mortgage loan on the hotel. On June 10, 2022, the Company closed the sale of the DoubleTree by Hilton Raleigh-Brownstone University hotel. The Company used approximately $ 18.6 million of the net cash proceeds from the sale of the hotel to repay the existing mortgage on the property and approximately $ 19.8 million of the net cash proceeds to repay a portion of the secured notes (the “Secured Notes ” ) with KWHP SOHO, LLC and MIG SOHO, LLC (together, the “Investors”) as required by the terms of the Secured Notes. The Company used the remaining net cash proceeds for general corporate purposes. Of the proceeds paid to the investors from the sale of the hotel, approximately $ 13.3 million was applied toward principal, approximately $ 6.3 million was applied toward the exit fee owed under the Secured Notes, and approximately $ 0.2 million was applied toward accrued interest. Additionally, the terms of the Secured Notes allowed for the release of a portion of the interest reserves in the amount of approximately $ 1.6 million, of which approximately $ 1.1 million was applied toward principal and approximately $ 0.5 million was applied toward the exit fee. On June 28, 2022, affiliates of the Company entered into amended loan documents to modify the existing mortgage loan on the Hotel Alba Tampa with the existing lender, Fifth Third Bank. Pursuant to the amended loan documents, the amended mortgage loan: (i) has an increased principal balance of $ 25.0 million; (ii) includes an extended maturity date of June 30, 2025 , which may be further extended for two additional periods of one year each, subject to certain conditions; (iii) bears a floating interest rate of SOFR plus 2.75 %, subject to a floor rate of 2.75 %; (iv) amortizes on a 25-year schedule requiring monthly payments of interest plus principal of $ 40,600 ; and (v) is guaranteed by the Operating Partnership up to $ 12.5 million, with the guaranty reducing to $ 6.25 million upon the successful achievement of certain performance milestones. On June 29, 2022, the Company used the proceeds from the refinance of the Hotel Alba Tampa, along with approximately $ 0.2 million of cash on hand as well as the balance of the interest reserve under the Secured Notes of approximately $ 0.5 million, to satisfy and pay in full the Secured Notes. The Investors received approximately $ 8.3 million in satisfaction of the Secured Notes, of which approximately $ 5.6 million was applied toward principal, approximately $ 2.6 million was applied toward the exit fee owed under the Secured Notes, and approximately $ 0.02 million was applied toward accrued interest. Concurrent with the cancellation of the Secured Notes, the following agreements were also terminated in accordance with their terms: (i) Note Purchase Agreement; (ii) Pledge and Security Agreement; (iii) Board Observer Agreement; and (iv) other related ancillary agreements. From March 24, 2022 through August 24, 2022, the Company entered into various privately-negotiated share exchange agreements with holders of its Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, in reliance on Section 3(a)(9) of the Securities Act. Pursuant to those share exchange agreements, the Company has exchanged an aggregate of 806,849 shares of its common stock for 45,900 shares of the Series B Preferred Stock, 38,500 shares of the Series C Preferred Stock, and 1,900 shares of the Series D Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those shares of Series B Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock. The common stock was issued in reliance on the exemption from registration set forth in Section 3(a)(9) of the Securities Act, as amended, for securities exchanged by an issuer with an existing security holder in a transaction where no commission or other remuneration was be paid or given directly or indirectly for soliciting such an exchange . On February 26, 2023, the Company entered into amended loan documents to modify the mortgage loan on The Whitehall hotel located in Houston, TX with the lender, International Bank of Commerce. The amendment (i) extends the maturity date to February 26, 2028 ; (ii) maintains a floating interest rate of New York Prime Rate plus 1.25 %; and (iii) subjects the interest rate to a floor rate of 7.50 %. The mortgage loan continues to be guaranteed by the Operating Partnership. The amendment also required us to establish a real estate tax reserve as well as a debt service reserve that approximates the aggregate amount of one year's debt service, which was initially established at approximately $ 1.5 million. On March 14, 2023, the Company entered into amended loan documents to modify the mortgage loan on the DoubleTree by Hilton Philadelphia Airport with the lender, TD Bank, N.A. The amendment provided a waiver for non-compliance with financial covenants for the periods ended September 30 and December 31, 2022, modified the reference rate replacing 1-month LIBOR with SOFR and required us to establish a debt service coverage reserve of $ 0.3 million. On May 4, 2023, affiliates of the Compa ny entered into loan documents to secure a $ 10.0 million mortgage loan on the DoubleTree by Hilton Laurel hotel located in Laurel, MD with Citi Real Estate Funding Inc. Pursuant to the loan documents, the mortgage loan: (i) has a principal balance of $ 10.0 million; (ii) has a maturity date of May 6, 2028 ; (iii) carries a fixed interest rate of 7.35 %; (iv) requires payments of interest only; (v) cannot be prepaid until the last 4 months of the loan term; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
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. 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. Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at fair value on the acquisition date and allocated to land, property and equipment and identifiable intangible assets. If substantially all the fair value of the gross assets acquired are concentrated in a single identifiable asset, the asset is not considered a business. When we conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired asset. We capitalize the costs of significant additions and improvements that materially upgrade, increase the value of or extend the useful life of the property. These costs may include refurbishment, renovation, and remodeling expenditures, as well as certain direct internal costs related to construction projects. 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. 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. The Company assesses the carrying value of its investments in hotel properties 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 exceeds 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. The Company recognized no impairment losses for the three and nine months ended September 30, 2023 or 2022. Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows, mortgage servicing and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements. As of As of September 30, 2023 September 30, 2022 Cash and cash equivalents $ 19,198,625 $ 23,011,471 Restricted cash 10,205,947 7,006,371 Cash, cash equivalents and restricted cash at the end of the period $ 29,404,572 $ 30,017,842 Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) and National Credit Union Administration (the “NCUA”) 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 or NCUA 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. Accounts Receivable – Accounts receivable consists primarily of hotel guest and banqueting receivables. With ongoing evaluations of our trade receivables, credit customers' risk assessment and limiting credit to only a few larger companies or organizations, our potential for expected credit losses is insignificant. Our revenue is mainly based on cash or credit card sales as of the date of service, with limited trade receivables. 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 September 30, 2023 and December 31, 2022 were $ 207,047 and $ 241,038 , respectively. Amortization expense for the three and nine-month periods ended September 30, 2023 and 2022 , totaled $ 11,059 and $ 12,282 and $ 33,991 and $ 36,570 , respectively. Deferred Financing 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 and unsecured notes, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in advance of 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. Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the consolidated balance sheets 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 interest rate swaps which act as cash flow hedges and are not designated as hedges. We value our interest rate swaps 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 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 swaps are the only assets or liabilities measured at fair value on a recurring basis, there were no non-recurring assets or liabilities for fair value measurements as of September 30, 2023 and December 31, 2022, respectively): Level 1 Level 2 Level 3 December 31, 2022 Interest rate swaps (1) $ — $ 1,308,503 $ — Mortgage loans (2) $ — $ ( 306,300,855 ) $ — September 30, 2023 Interest rate swap (1) $ — $ 1,308,038 $ — Mortgage loans (2) $ — $ ( 303,808,970 ) $ — (1) Interest rate swaps, one of which swaps the loan rate for a fixed interest rate of 5.237 % for the DoubleTree by Hilton Philadelphia Airport mortgage and is valued only at December 31, 2022 , and the other which swaps the loan rate for a fixed rate of approximately 5.576 % for the Hotel Alba Tampa mortgage and is valued at September 30, 2023 and December 31, 2022 . Notional amounts of the swaps approximate the declining balance of the loan . (2) Mortgage loans, net had a carrying value on our Consolidated Balance Sheets of $ 317,633,743 and $ 320,482,103 as of September 30, 2023 and December 31, 2022 , respectively. 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 consists of amounts derived from hotel operations, including the sales of rooms, food and beverage, and other ancillary services. Room revenue is recognized over a customer’s hotel stay. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the point in time or over the time period that goods or services are provided to the customer. Some contracts for rooms or food and beverage services require an upfront deposit which is recorded as advanced deposits (or contract liabilities) shown on our consolidated balance sheets and recognized once the performance obligations are satisfied. Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the gross commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. With respect to the hotel condominium rental programs that the Company operates at the Hyde Resort and Hyde Beach House, the Company has determined that it is an agent and recognizes revenue based on its share of revenue earned under the rental agency agreement. Certain of the Company’s hotels have retail spaces, restaurants or other spaces which the Company leases to third parties. Lease revenue is recognized on a straight-line basis over the life of the lease and included in other operating revenues in the Company’s consolidated statements of operations. The Company collects sales, use, occupancy and similar taxes at its hotels which are presented on a net basis on the consolidated statements of operations. 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 consolidated statements of operations pursuant to the terms of each lease. Lease revenue was approximately $ 0.3 million and $ 0.2 million, for the three months ended September 30, 2023 and 2022, respectively, and for the nine months ended September 30, 2023 and 2022, totaled approximately $ 0.8 million and $ 0.9 million, respectively. A schedule of minimum future lease payments receivable for the remaining three and twelve-month periods is as follows: For the remaining three months ending December 31, 2023 $ 202,519 December 31, 2024 805,327 December 31, 2025 1,297,801 December 31, 2026 715,115 December 31, 2027 703,515 December 31, 2028 and thereafter 9,321,103 Total $ 13,045,380 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. 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 either 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. As of September 30, 2023 , we have determined that it is more-likely-than-not that we will not be able to fully utilize our deferred tax assets for future tax consequences, therefore a 100 % valuation allowance is required. As of September 30, 2023 and December 31, 2022 , deferred tax assets each totaled $ 0 , respectively. As of September 30, 2023 and December 31, 2022 , 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 September 30, 2023, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2014 through 2022. In addition, as of September 30, 2023, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject, because of open NOL carryforwards, generally include 2014 through 2022. 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 2022 Long-Term Incentive Plan (the “2022 Plan”), which the Company’s stockholders approved in April 2022, permits the grant of stock options, restricted stock, unrestricted stock and service/performance share compensation awards to its employees and directors for up to 2,000,000 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its stockholders. Under the 2022 Plan, the Company may issue a variety of service or 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 September 30, 2023 , 451,668 service-based stock awards have been granted, including 272,668 unrestricted shares and 179,000 restricted shares issued to certain executives and its independent directors. Total compensation cost recognized under the 2022 Plan for the three months ended September 30, 2023 and 2022 was $ 18,887 and $ 0 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 263,161 and $ 0 , respectively. The Company’s 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permits the grant of stock options, restricted stock, unrestricted stock and service or performance share compensation awards to its employees and directors for up to 750,000 shares of common stock. All future awards will be made under the 2022 Plan. As of September 30, 2023 , under the 2013 Plan, the Company has made cumulative service-based stock awards totaling 745,160 shares, including 700,160 unrestricted shares and 45,000 restricted shares issued to certain executives and employees and to its independent directors. All awards have vested except for 45,000 shares issued to certain employees, which will vest over the next two years. The remaining 4,840 shares have been deregistered. Under the 2013 Plan, the Company was able to 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 September 30, 2023, no performance-based stock awards have been granted. Total compensation cost recognized under the 2013 Plan for the three months ended September 30, 2023 and 2022 was $ 22,883 and $ 364,692 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 68,648 and $ 853,271 , 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 unearned ESOP shares as a reduction of stockholders’ equity. Dividends on unearned ESOP shares, when paid, are considered a compensation expense. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they are committed to be released. For the three months ended September 30, 2023 and 2022 , the ESOP compensation cost was $ 13,992 and $ 13,871 , and for the nine months ended September 30, 2023 and 2022 the ESOP compensation cost was $ 38,905 and $ 42,674 , respectively. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements. Advertising – Advertising costs, including internet advertising, were $ 644,111 , and $ 559,981 for the three months ended September 30, 2023 and 2022 and were $ 2,039,089 and $ 1,717,399 for the nine months ended September 30, 2023 and 2022 , 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. The gain on involuntary conversion of assets is reflected in the consolidated statements of operations. Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income. Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership. Use of Estimates – The preparation of the financial statements in conformity with U.S. 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments -Credit Losses (Topic 326), which replaced the existing "incurred loss" approach with an "expected loss" model for financial instruments measured at amortized cost. For trade and other receivables, the forward-looking "expected loss" model will generally result in the earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments -Credit Losses, which clarified that operating lease receivables accounted for under ASC 842 are not in the scope of ASU 2016-13. With the adoption of this standard on January 1, 2023, we have determined there is no significant impact on the Company's consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The option expedients and exceptions contained within this update, in general, only apply to contract amendments and modifications entered into prior to January 1, 2023. The provisions of this update will most likely affect our financial reporting process relating to modifications of contracts with lenders and the hedging contracts associated with each respective modified borrowing contract. In general, the provision of the update would benefit us by allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 740 to be accounted for as a non-substantial modification and not be considered debt extinguishment. As of December 31, 2022, we have not entered into any contract modification as it directly relates to reference rate reform, with the exception of a modification to the mortgages on The Whitehall in Houston, Texas, which changed the reference rate from LIBOR to the New York Prime Rate, and on Hotel Alba Tampa, Tapestry Collection in Tampa, Florida, which changed the reference rate from LIBOR to SOFR. On March 14, 2023, the Company modified the floating-rate mortgage on the DoubleTree by Hilton Philadelphia Airport to change the reference rate from 1-month LIBOR to SOFR. The Company anticipates no additional loan modifications will be required. With the adoption of this standard on January 1, 2023, we have determined there is no significant impact on the Company's consolidated financial statements. |
Investment in Hotel Properties,
Investment in Hotel Properties, Net | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Investment in Hotel Properties, Net | 3. Investment in Hotel Properties, Net Investment in hotel properties, net as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, 2023 December 31, 2022 Land and land improvements $ 61,078,390 $ 60,934,859 Buildings and improvements 416,813,251 412,717,919 Right of use assets 4,850,671 5,199,845 Furniture, fixtures and equipment 51,500,684 51,292,107 534,242,996 530,144,730 Less: accumulated depreciation and impairment ( 177,215,574 ) ( 165,074,005 ) Investment in Hotel Properties, Net $ 357,027,422 $ 365,070,725 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt Mortgage Loans, Net . As of September 30, 2023 and December 31, 2022 , we had approximately $ 317.6 million and approximately $ 320.5 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels. Balance Outstanding as of September 30, December 31, Prepayment Maturity Amortization Interest Property 2023 2022 Penalties Date Provisions Rate The DeSoto (1) $ 30,495,324 $ 31,219,022 Yes 7/1/2026 25 years 4.25 % DoubleTree by Hilton Jacksonville (2) 31,920,568 32,416,570 Yes 7/11/2024 30 years 4.88 % DoubleTree by Hilton Laurel (3) 10,000,000 7,412,107 (3) 5/6/2028 (3) 7.35 % DoubleTree by Hilton Philadelphia Airport (4) 38,915,488 39,413,672 None 10/31/2023 30 years SOFR plus 2.27 % DoubleTree Resort by Hilton Hollywood (5) 51,803,264 52,724,475 (5) 10/1/2025 30 years 4.913 % Georgian Terrace (6) 39,715,153 40,492,622 (6) 6/1/2025 30 years 4.42 % Hotel Alba Tampa, Tapestry Collection by Hilton (7) 24,391,000 24,756,400 None 6/30/2025 (7) SOFR plus 2.75 % Hotel Ballast Wilmington, Tapestry Collection by (8) 30,995,244 31,699,775 Yes 1/1/2027 25 years 4.25 % Hyatt Centric Arlington (9) 46,730,206 47,534,606 Yes 10/1/2028 30 years 5.25 % The Whitehall (10) $ 14,064,662 14,226,067 None 2/26/2028 25 years PRIME plus 1.25 % Total Mortgage Principal Balance $ 319,030,909 $ 321,895,316 Deferred financing costs, net ( 1,446,221 ) ( 1,480,779 ) Unamortized premium on loan 49,055 67,566 Total Mortgage Loans, Net $ 317,633,743 $ 320,482,103 (1) The note amortizes on a 25 -year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (2) The note is subject to a pre-payment penalty until March 2024 . Prepayment can be made without penalty thereafter. (3) The note requires payments of interest only and cannot be prepaid until the last 4 months of the loan term. (4) The note bears a floating interest rate of SOFR plus 2.27 %. On August 13, 2018, we entered into a swap agreement to fix the rate at 5.237 % through July 31, 2023 . Notional amounts under the swap agreement approximated the declining balance of the loan. Effective October 29, 2023, we entered into a loan amendment to extend the maturity date to December 29, 2023 and to increase the interest rate to SOFR plus 3.50 %. (5) With limited exception, the note may not be prepaid prior to June 2025 . (6) With limited exception, the note may not be prepaid prior to February 2025 . (7) The note bears a floating interest rate of SOFR plus 2.75 % subject to a floor rate of 2.75 %; with monthly principal payments of $ 40,600 ; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. On July 11, 2022, we entered into a swap agreement to fix the rate at 5.576 %. The swap agreement reflects notional amounts approximate to the declining balance of the loan and we are responsible for any potential termination fees associated with early termination of the swap agreement. (8) The note amortizes on a 25 -year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (9) Following a 5 -year lockout, the note can be prepaid with penalty in years 6 - 10 and without penalty during the final 4 months of the term. (10) The note bears a floating interest rate of New York Prime Rate plus 1.25 %, with a floor of 7.50 %. As of September 30, 2023, we were in compliance with all debt covenants, current on all loan payments and not otherwise in default under any of our mortgage loans, with the exception of a covenant default under the mortgage on the DoubleTree by Hilton Philadelphia Airport. At September 30, 2023, we failed to meet the financial covenants under the mortgage agreement. On October 29, 2023, we amended the mortgage agreement to extend the maturity date for 60 days from October 31, 2023 to December 29, 2023. We anticipate a further modification of the loan agreement to include a waiver of non-compliance with the financial covenants as well as other terms and conditions, including a further extension of the maturity date. Additionally, the mortgage on the DoubleTree by Hilton Jacksonville Riverfront matures in July 2024. We intend to refinance that mortgage at the expected level of its indebtedness prior to maturity. Total future mortgage debt maturities for the remaining three and twelve-month periods, without respect to any extension of loan maturity or loan modification after September 30, 2023, were as follows: For the remaining three months ended December 31, 2023 $ 40,624,873 December 31, 2024 38,069,572 December 31, 2025 116,058,765 December 31, 2026 58,588,970 December 31, 2027 1,757,220 December 31, 2028 and thereafter 63,931,509 Total future maturities $ 319,030,909 PPP Loans . The Operating Partnership and certain of its subsidiaries have received PPP Loans administered by the U.S. Small Business Administration pursuant to the CARES Act. Each PPP Loan had an initial term of two years , with the ability extend the loan to five years , if not forgiven, and carries an interest rate of 1.00 %. Equal payments of principal and interest begin no later than 10 months following origination of the loan and are amortized over the remaining term of the loan. Pursuant to the terms of the CARES Act, the proceeds of each PPP Loan may be used for payroll costs, mortgage interest, rent or utility costs. The promissory note for each PPP Loan contains customary events of default relating to, among other things, payment defaults and breach of representations and warranties or of provisions of the relevant promissory note. Under the terms of the CARES Act, each borrower can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds in accordance with the terms of the CARES Act. No assurance is provided that any borrower will obtain forgiveness under any relevant PPP Loan in whole or in part. On April 16, 2020, our Operating Partnership entered into a promissory note with Village Bank in connection with a PPP Loan and received proceeds of $ 333,500 . As of September 30, 2023, an application for full forgiveness has been filed and is still pending. On April 28, 2020, we entered into a promissory note and received proceeds of $ 9,432,900 under a PPP Loan from Fifth Third Bank, National Association. On December 9, 2022, the Company was notified it had received principal forgiveness in the amount of approximately $ 4.6 million and is required to make monthly payments of $ 56,809 through July 1, 2025 to extinguish the loan. On May 6, 2020, we entered into a second promissory note with Fifth Third Bank, National Association and received proceeds of $ 952,700 under a PPP Loan. On February 3, 2023, the Company was notified it had received principal forgiveness in the amount of approximately $ 268,309 and is required to make monthly payments of $ 13,402 through May 6, 2025 to extinguish the loan. At September 30, 2023 , the PPP loans had a cumulative balance of approximately $ 1.7 million. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Ground, Building, Parking and 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 fourth of five optional five-year renewal periods expiring October 31, 2026 . Rent expense for this operating lease for the three months ended September 30, 2023 and 2022, each totaled $ 20,983 , and for the nine months ended September 30, 2023 and 2022 , each totaled $ 62,949 . 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 lease land adjacent to the Hotel Alba Tampa 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 . We signed a new agreement in April 2019, which commenced in July 2019 , goes for five years and can be renewed for an additional five years. The new agreement expires in July 2024 , requires annual payments of $ 2,432 , plus tax, and may be renewed for an additional five years . Rent expense for the three months ended September 30, 2023 and 2022 , each totaled $ 651 , and for the nine months ended September 30, 2023 and 2022 totaled $ 1,952 and $ 1,958 . We lease approximately 8,500 square feet of commercial office space in Williamsburg, Virginia under an agreement with a ten-year term beginning January 1, 2020 . The initial annual rent under the agreement was $ 218,875 , with the rent for each successive annual period increasing by 3.0 % over the prior annual period’s rent. The annual rent will be offset by a tenant improvement allowance of $ 200,000 , to be applied against one-half of each monthly rent payment until such time as the tenant improvement allowance is exhausted. Rent expense for the three months ended September 30, 2023 and 2022 each totaled $ 55,902 , and for the nine months ended September 30, 2023 and 2022 each totaled $ 167,706 . We lease the land underlying all of the Hyatt Centric Arlington hotel pursuant to a ground lease. 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 for five additional renewal periods of 10 years each. The first renewal has been elected and the current maturity is 2035. Rent expense for the three months ended September 30, 2023 and 2022 , was $ 152,231 and $ 128,415 , respectively, and for the nine months ended September 30, 2023 and 2022 , totaled $ 493,724 and $ 364,123 respectively. We lease the parking garage and poolside cabanas associated with the Hyde Beach House. The parking and cabana lease requires us to make rental payments of $ 270,100 per year with increases of 5 % every five years and has an initial term that expires in 2034 and which may be extended for four additional renewal periods of 5 years each . Rent expense for the three months ended September 30, 2023 and 2022, each totaled $ 67,750 , and for the nine months ended September 30, 2023 and 2022, each totaled $ 203,250 . We also lease certain storage facilities, furniture and equipment under agreements expiring between December 2023 and June 2026 . A schedule of minimum future lease payments for the following three and twelve-month periods is as follows: For the remaining three months ended December 31, 2023 $ 170,299 December 31, 2024 686,820 December 31, 2025 696,536 December 31, 2026 690,843 December 31, 2027 347,540 December 31, 2028 and thereafter 13,539,483 Total $ 16,131,521 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 September 30, 2023 , our ten wholly-owned hotels, and our two condo-hotel rental programs, operated under management agreements with Our Town (see Note 8). The management agreements expire on March 31, 2035 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 September 30, 2023 , seven of our hotels operate 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 3.0 % and 4.0 % of gross revenues from the hotels. The franchise agreements currently in force expire between October 2024 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 Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, the Hyatt Centric Arlington and the Georgian Terrace an amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties . Several of our lenders also required us 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 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 and the Hyatt Centric Arlington. We are also required by some lenders to have a debt service reserve that approximates the aggregate amount of one year's debt service, which was initially established at approximately $ 1.5 million, in 2022. 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 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. At September 30, 2023 , the balance on the loan was approximately $ 2.5 million, leaving capacity for additional borrowing of approximately $ 2.5 million under the commitment. Litigation –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 | 9 Months Ended |
Sep. 30, 2023 | |
Preferred Stock And Units [Abstract] | |
Preferred Stock and Units | 6. Preferred Stock and Units Preferred Stock - The Company is authorized to issue up to 11,000,000 shares of preferred stock. The following table sets forth our Cumulative Redeemable Perpetual Preferred Stock by series: Per Number of Shares Quarterly Annum Liquidation Issued and Outstanding as of Distributions Preferred Stock - Series Rate Preference September 30, 2023 December 31, 2022 Per Share Series B Preferred Stock 8.000 % $ 25.00 1,464,100 1,464,100 $ 0.500000 Series C Preferred Stock 7.875 % $ 25.00 1,346,110 1,346,110 $ 0.492188 Series D Preferred Stock 8.250 % $ 25.00 1,163,100 1,163,100 $ 0.515625 The Company is obligated to pay cumulative cash distributions on the preferred stock at rates in the above table per annum of the $ 25.00 liquidation preference per share. Holders of the Company’s preferred stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. The 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 January 24, 2023, the Company announced its intention to resume quarterly payments of dividends on its preferred stock. Accordingly, the Company paid previously declared preferred dividends, in the amount of approximately $ 2.0 million, on March 15, 2023. The Company also declared preferred dividends in April 2023, and paid approximately $ 2.0 million on June 13, 2023. On May 30, 2023, the Company declared a "catch-up" dividend and paid approximately $ 2.0 million on July 14, 2023. On July 31, 2023, the Company declared preferred dividends in the amount of approximately $ 2.0 million that were paid on September 15, 2023. The total undeclared and unpaid cash dividends due on the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock through September 30, 2023 , are $ 8,052,550 , $ 7,287,931 and $ 6,596,958 , respectively. Undeclared preferred cumulative dividends are reported on the statements of operations but are not considered payable until declared. As of September 30, 2023 , the undeclared cumulative preferred dividends were approximately $ 21.9 million. 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. The following table sets forth our Cumulative Redeemable Perpetual Preferred Units by series: Per Number of Units Quarterly Annum Liquidation Issued and Outstanding as of Distributions Preferred Units - Series Rate Preference September 30, 2023 December 31, 2022 Per Unit Series B Preferred Units 8.000 % $ 25.00 1,464,100 1,464,100 $ 0.500000 Series C Preferred Units 7.875 % $ 25.00 1,346,110 1,346,110 $ 0.492188 Series D Preferred Units 8.250 % $ 25.00 1,163,100 1,163,100 $ 0.515625 The Operating Partnership pays cumulative cash distributions on the preferred units at rates in the above table per annum of the $ 25.00 liquidation preference per unit. The Company, which is the holder of the Operating Partnership’s preferred units, is entitled to receive distributions when authorized by the Operating Partnership’s general partner out of assets legally available for the payment of distributions. The preferred units are not redeemable by the holder, have no maturity date and are not convertible into any other security of the Operating Partnership or its affiliates. The total undeclared and unpaid cash dividends due on the Series B Preferred Units, Series C Preferred Units and Series D Preferred Units through September 30, 2023, is $ 8,052,550 , $ 7,287,931 and $ 6,596,958 , respectively. Undeclared preferred cumulative dividends are reported on the statements of operations but are not considered payable until declared. As of September 30, 2023 , the undeclared cumulative preferred dividends were approximately $ 21.9 million. |
Common Stock and Units
Common Stock and Units | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Common Stock and Units | 7. Common Stock and Units Common Stock – As of September 30, 2023 , the Company was authorized to issue up to 69,000,000 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. The following is a schedule of issuances, since January 1, 2022, of the Company’s common stock and related partnership units of the Operating Partnership: On January 21, 2022 and February 15, 2022, the Company was issued 175,268 partnership units in the Operating Partnership and awarded an equivalent number of shares of unrestricted stock to its employees. On January 21, 2022, the Company was issued 15,000 partnership units in the Operating Partnership and awarded an equivalent number of shares of restricted stock to its independent directors. On March 24, 2022, we entered into a privately-negotiated share exchange agreement. Pursuant to the share exchange agreement, the Company agreed to exchange 7,000 shares of the Company’s Series B Preferred Stock and 3,000 shares of the Company’s Series C Preferred Stock, together with all of the rights to receive accrued and unpaid dividends on those preferred shares, for 96,900 shares of the Company’s common stock. We closed the transaction and issued the common stock on March 25, 2022. On March 31, 2022, we entered into a privately-negotiated share exchange agreement. Pursuant to the share exchange agreement, the Company agreed to exchange 5,900 shares of the Company’s Series B Preferred Stock and 6,600 shares of the Company’s Series C Preferred Stock, together with all of the rights to receive accrued and unpaid dividends on those preferred shares, for 120,875 shares of the Company’s common stock. We closed the transaction and issued the common stock on March 31, 2022. On April 11, 2022, we entered into a privately-negotiated share exchange agreement. Pursuant to the share exchange agreement, the Company agreed to exchange 4,000 shares of the Company's Series B Preferred Stock and 8,000 shares of the Company's Series C Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those preferred shares, for 116,640 shares of the Company's common stock. We closed the transaction and issued the common stock on April 12, 2022. On April 19, 2022, we entered into a privately-negotiated share exchange agreement. Pursuant to the share exchange agreement, the Company agreed to exchange 5,000 shares of the Company's Series B Preferred Stock and 10,600 shares of the Company's Series C Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those preferred shares, for 153,504 shares of the Company's common stock. We closed the transaction and issued the common stock on April 19, 2022. On May 19, 2022, one holder of partnership units in the Operating Partnership converted 50,000 units for an equivalent number of shares in the Company’s common stock. On May 23, 2022, the Company was issued 37,428 partnership units in the Operating Partnership and awarded an equivalent number of shares of unrestricted stock to its employees. On July 1, 2022, one holder of partnership units in the Operating Partnership converted 40,687 units for an equivalent number of shares in the Company’s common stock. On July 21, 2022, the Company was issued 167,390 partnership units in the Operating Partnership and awarded an equivalent number of shares of unrestricted stock to its employees. On August 18, 2022, we entered into a privately-negotiated share exchange agreement. Pursuant to the share exchange agreement, the Company agreed to exchange 11,000 shares of the Company's Series B Preferred Stock, 7,100 shares of the Company's Series C Preferred Stock, and 1,900 shares of the Company's Series D Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those preferred shares, for 178,800 shares of the Company's common stock. We closed the transaction and issued the common stock on August 18, 2022. On August 23, 2022, we entered into a privately-negotiated share exchange agreement. Pursuant to the share exchange agreement, the Company agreed to exchange 13,000 shares of the Company's Series B Preferred Stock and 3,200 shares of the Company's Series C Preferred Stock, together with all of the holder’s rights to receive accrued and unpaid dividends on those preferred shares, for 140,130 shares of the Company's common stock. We closed the transaction and issued the common stock on August 24, 2022. On November 1, 2022, one holder of partnership units in the Operating Partnership converted 217,845 units for an equivalent number of shares in the Company’s common stock. On January 12, 2023, the Company issued 15,000 restricted shares of common stock to its independent directors and 64,278 vested shares of common stock to its independent directors and one officer. 205,000 restricted shares of common stock to certain its officers and employees pursuant to their employment agreements. On April 28, 2023, one holder of partnership units in the Operating Partnership converted 75,000 units for an equivalent number of shares in the Company's stock. On August 18, 2023, one holder of partnership units in the Operating Partnership converted 252,903 units for an equivalent number of shares in the Company's stock. On August 30, 2023, one holder of partnership units in the Operating Partnership converted 133,099 units for an equivalent number of shares in the Company's stock. As of September 30, 2023 and December 31, 2022 , the Company had 19,696,805 and 18,951,525 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, 2022, there have been no issuances or redemptions, of partnership units in the Operating Partnership other than the issuances of partnership units in the Operating Partnership to the Company described above. In connection with the exchange agreements described in this section, an equivalent number of preferred units held by the Company were exchanged for partnership units in the Operating Partnership. As of September 30, 2023 and December 31, 2022 , the total number of Operating Partnership units outstanding was 20,060,991 and 19,776,713 , respectively. As of September 30, 2023 and December 31, 2022 , the total number of outstanding Operating Partnership units not owned by the Company was 364,186 and 825,188 , respectively, with a fair market value of approximately $ 0.6 million and $ 1.5 million, respectively, based on the price per share of the common stock on such respective dates. As of September 30, 2023 , there were unpaid common dividends and distributions to holders of record as of March 13, 2020, in the amount of approximately $ 2.1 million. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. Related Party Transactions Our Town Hospitality. Our Town is currently the management company for each of our ten wholly-owned hotels, as well as the manager of our rental programs at the Hyde Resort & Residences and the Hyde Beach House Resort & Residences. As of September 30, 2023, an affiliate of Andrew M. Sims, our Chairman, an affiliate of David R. Folsom, our President and Chief Executive Officer, and Andrew M. Sims Jr., our Vice President - Operations & Investor Relations, beneficially owned approximately 71.0 %, 7.0 %, and 15.0 % , respectively, of the total outstanding ownership interests of Our Town. Mr. Sims, Mr. Folsom, and Mr. Sims Jr. serve as directors of Our Town. The following is a summary of the transactions between Our Town and us: Accounts Receivable – At September 30, 2023 and December 31, 2022, we were due approximately $ 0.3 million and $ 0.3 million, respectively, from Our Town. Accounts Payable – At September 30, 2023 and December 31, 2022 , we owed Our Town approximately $ 0.8 million and $ 1.3 million, respectively. Management Agreements – On September 6, 2019, the Company entered into a master agreement with Our Town related to the management of certain of our hotels, as amended on December 13, 2019 (as amended, the “OTH Master Agreement”). On December 13, 2019, and subsequent dates we entered into a series of individual hotel management agreements for the management of our hotels. The hotel management agreements for each of our ten wholly-owned hotels and the two rental programs are referred to as, individually an “OTH Hotel Management Agreement” and, together the “OTH Hotel Management Agreements”. The term of the OTH Hotel Management Agreements extends through March 31, 2035, and may be extended for two periods of five years each. The OTH Master Agreement provides for an adjustment to the fees payable by us under the OTH Hotel Management Agreements in the event the net operating income of Our Town falls below $ 250,000 for any calendar year beginning on or after January 1, 2021. The OTH Master Agreement expires on March 31, 2035 but shall be extended beyond 2035 for such additional periods as an OTH Hotel Management Agreement remains in effect. The base management fees for each hotel under management with Our Town is 2.50 %. For any new individual hotel management agreements, Our Town 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. Base management fees earned by Our Town for our properties each totaled approximately $ 1.0 million, for the three months ended September 30, 2023 and 2022 , respectively, and were approximately $ 3.4 million and $ 3.1 million for the nine months ended September 30, 2023 and 2022, respectively. Each OTH Hotel Management Agreement sets an incentive management fee equal to 10.0 % of the amount by which gross operating profit, as defined in the relevant 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. Incentive management fees earned for the three months ended September 30, 2023 and 2022 , were $( 31,088 ) and $( 42,656 ), respectively and for the nine months ended September 30, 2023 and 2022 , were approximately $ 186,855 and $ 272,017 , respectively. Each OTH Hotel Management Agreement provides for the payment of a termination fee upon the sale of the hotel equal to the lesser of the management fee paid with respect to the prior twelve months or the management fees paid for the number of months prior to the closing date of the hotel sale equal to the number of months remaining on the current term of the management agreement. In 2022, we paid Our Town approximately $ 0.3 million in termination fees triggered by the sale of the Sheraton Louisville Riverside and the DoubleTree by Hilton Raleigh Brownstone – University. Sublease – On December 13, 2019, we entered into a sublease agreement with Our Town pursuant to which Our Town subleases 2,245 square feet of office space from Sotherly for a period of 5 years, with a 5 -year renewal subject to approval by Sotherly, on terms and conditions similar to the terms of the prime lease entered into by Sotherly and the third-party owner of the property. Lease payments due to the Company were $ 334,473 and $ 235,352 , as of September 30, 2023 and September 30, 2022, respectively. Employee Medical Benefits – We purchase employee medical coverage for eligible employees that are employed by Our Town and who work exclusively for our properties and elect to participate in Our Town’s self-insured plan. Gross premiums for employee medical benefits paid by the Company (before offset of employee co-payments) were approximately $ 0.9 million and $ 0.8 million for the three months ended September 30, 2023 and 2022, respectively, and for the nine months ended September 30, 2023 and 2022 , were approximately $ 2.3 million and $ 2.6 million, respectively. Others. We employed Ashley S. Kirkland, the daughter of our Chairman, as Corporate Counsel and Compliance Officer until her departure in January 2022 and continue to employ Robert E. Kirkland IV, her husband, as our General Counsel. We also employ Andrew M. Sims Jr., the son of our Chairman, as Vice President – Operations & Investor Relations. Total compensation for all three individuals, including salary and benefits, for the three months ended September 30, 2023 and 2022 , were $ 134,289 and $ 125,935 , respectively, and for the nine months ended September 30, 2023 and 2022 , were $ 470,494 and $ 379,898 , respectively. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plans | 9. Retirement Plans 401(k) Plan - We maintain a 401(k) plan for qualified employees which is subject to “safe harbor” provisions. Those provisions include a matching employer contribution consisting of 100.0 % of the first 3.0 % of employee contributions and 50.0 % of the next 2.0 % of employee contributions. In addition, all employer matching funds vest immediately. Contributions to the plan totaled $ 16,048 and $ 16,500 , for the three months ended September 30, 2023 and 2022, and for the nine months ended September 30, 2023 and 2022 , totaled $ 73,596 and $ 68,143 , respectively. Employee Stock Ownership Plan - The Company adopted an Employee Stock Ownership Plan in December 2016, effective January 1, 2016, which 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, and February 28, 2017, the Company’s ESOP had purchased 682,500 shares of the Company’s common stock in the open market at a cost of approximately $ 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 are accounted for at fair value at the date of allocation. A total of 314,202 shares with a fair value of $ 531,002 remained allocated or committed to be released from the suspense account, as of September 30, 2023 . We recognized as compensation cost $ 38,905 and $ 42,674 during the nine months ended September 30, 2023 and 2022 , respectively. The remaining 345,010 unallocated shares have an approximate fair value of $ 583,066 , as of September 30, 2023. As of September 30, 2023 , the ESOP held a total of 295,035 allocated shares, 19,167 committed-to-be-released shares and 345,010 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: September 30, 2023 December 31, 2022 Number of Shares Fair Value Number of Shares Fair Value Allocated shares 295,035 $ 498,610 301,646 $ 545,979 Committed to be released shares 19,167 32,392 — — Total Allocated and Committed-to-be-Released 314,202 $ 531,002 301,646 $ 545,979 Unallocated shares 345,010 583,066 364,177 659,160 Total ESOP Shares 659,212 $ 1,114,068 665,823 $ 1,205,139 |
Indirect Hotel Operating Expens
Indirect Hotel Operating Expenses | 9 Months Ended |
Sep. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Indirect Hotel Operating Expenses | 10. Indirect Hotel Operating Expenses Indirect hotel operating expenses consists of the following expenses incurred by the hotels: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Sales and marketing $ 3,815,349 $ 3,729,867 $ 12,323,121 $ 11,390,258 General and administrative 3,638,354 3,396,247 11,010,177 10,186,922 Repairs and maintenance 2,164,003 2,057,298 6,486,094 6,519,845 Utilities 1,691,931 1,566,216 4,425,479 4,308,465 Property taxes 1,436,742 939,951 3,739,381 3,973,027 Management fees, including incentive 973,848 949,926 3,584,723 3,327,267 Franchise fees 972,610 960,246 3,290,490 3,126,021 Insurance 1,511,222 1,128,090 4,174,603 3,121,241 Information and telecommunications 931,573 809,593 2,799,923 2,598,399 Other 236,535 194,504 748,089 581,439 Total indirect hotel operating expenses $ 17,372,167 $ 15,731,938 $ 52,582,080 $ 49,132,884 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The components of the income tax provision for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Current: Federal $ — $ — $ — $ — State ( 354,398 ) 12,474 ( 322,679 ) 33,744 ( 354,398 ) 12,474 ( 322,679 ) 33,744 Deferred: Federal ( 1,153,452 ) ( 544,356 ) ( 1,055,628 ) ( 572,014 ) State ( 261,180 ) ( 62,819 ) ( 115,711 ) ( 82,652 ) Subtotals ( 1,414,632 ) ( 607,175 ) ( 1,171,339 ) ( 654,666 ) Change in deferred tax valuation allowance 1,414,632 607,175 1,171,339 654,666 — — — — Income tax (benefit) provision $ ( 354,398 ) $ 12,474 $ ( 322,679 ) $ 33,744 Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Statutory federal income tax provision (benefit) $ ( 508,247 ) $ 416,858 $ 893,903 $ 6,048,152 Federal tax impact of REIT election ( 421,693 ) ( 825,994 ) ( 1,264,579 ) ( 6,315,568 ) Statutory federal income tax (benefit) provision at TRS ( 929,940 ) ( 409,136 ) ( 370,676 ) ( 267,416 ) Federal impact of PPP loan forgiveness — — ( 56,470 ) — State income tax benefit, net of federal provision (benefit) ( 839,090 ) ( 185,564 ) ( 1,066,872 ) ( 353,506 ) Change in valuation allowance 1,414,632 607,174 1,171,339 654,666 Income tax (benefit) provision $ ( 354,398 ) $ 12,474 $ ( 322,679 ) $ 33,744 |
Income Per Share and Per Unit
Income Per Share and Per Unit | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Income Per Share and Per Unit | 12. 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 or loss would also be added back to net income or loss. The shares of the Series B Preferred Stock, Series C Preferred Stock and Series D 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 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 unallocated ESOP shares have been excluded in the weighted average for the basic and diluted earnings per share computation. The computation of basic net income (loss) per share is presented below: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net (loss) income $ ( 2,065,826 ) $ 1,972,563 $ 4,579,359 $ 28,766,978 Less: Net loss (income) allocated to participating share awards 28,008 ( 6,597 ) ( 58,032 ) ( 94,522 ) Net loss (income) attributable to non-controlling interest 156,558 51,094 50,720 ( 1,317,225 ) Undeclared distributions to preferred stockholders ( 1,994,313 ) ( 1,813,820 ) ( 5,982,938 ) ( 5,639,906 ) Gain on extinguishment of preferred stock — ( 97,157 ) — 64,518 Net (loss) income attributable to common stockholders for EPS computation $ ( 3,875,573 ) $ 106,083 $ ( 1,410,891 ) $ 21,779,843 Denominator Weighted average number common shares outstanding for basic EPS computation 18,906,851 18,045,365 18,742,219 17,598,153 Effect of dilutive participating securities: Unvested restricted shares — (1) 65,000 — (1) 63,901 Stock compensation awards unissued — (1) 37,912 — (1) 129,002 Unearned ESOP shares — (1) 411,389 — (1) 418,710 Weighted average number common and common equivalent shares outstanding for diluted EPS computation 18,906,851 18,559,666 18,742,219 18,209,766 Basic net (loss) income per common share: Undistributed (loss) income $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.24 Total basic $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.24 Diluted net (loss) income per common share: Undistributed (loss) income $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.20 Total diluted $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.20 (1) Anti-dilutive, therefore not included. The accounting for unvested share-based payment awards included in the calculation of earnings per share changed. Share-based awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are now participating securities and included in the computation of both basic and diluted earnings per share. Our grants of restricted stock awards to our employees and directors are considered participating securities, and we have prepared our earnings per share calculations to include outstanding unvested restricted stock awards in the basic and diluted weighted average shares outstanding calculation. Income (Loss) Per Unit – The computation of basic net income (loss) per unit is presented below: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net (loss) income $ ( 2,065,826 ) $ 1,972,563 $ 4,579,359 $ 28,766,978 Less: Net loss (income) allocated to participating unit awards 28,008 ( 6,597 ) ( 58,032 ) ( 94,522 ) Undeclared distributions to preferred unitholders ( 1,994,313 ) ( 1,813,820 ) ( 5,982,938 ) ( 5,639,906 ) Gain on extinguishment of preferred units — ( 97,157 ) — 64,518 Net (loss) income attributable to unitholders for EPU computation $ ( 4,032,131 ) $ 54,989 $ ( 1,461,611 ) $ 23,097,068 Denominator Weighted average number of units outstanding for basic EPU computation 19,810,991 19,501,310 19,807,797 19,116,224 Effect of dilutive participating securities: Unvested restricted units — (1) 65,000 — (1) 62,606 Unit compensation awards unissued — (1) 37,912 — (1) 129,002 Weighted average number of equivalent units outstanding for diluted EPU computation 19,810,991 19,604,222 19,807,797 19,307,832 Basic net (loss) income per unit: Undistributed (loss) income $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.21 Total basic $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.21 Diluted net (loss) income per unit: Undistributed (loss) income $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.20 Total diluted $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.20 (1) Anti-dilutive, therefore not included. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On October 30, 2023, 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 November 30, 2023, to be paid on December 15, 2023. On October 30, 2023, 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 November 30, 2023, to be paid on December 15, 2023. On October 30, 2023, we authorized payment of a quarterly distribution of $ 0.515625 per share (and unit) of Series D Preferred Stock (and Series D Preferred Units) to holders of the Series D Preferred Stock (and Series D Preferred Units) of record as of November 30, 2023, to be paid on December 15, 2023. Effective as of October 29, 202 3, we entered into a loan amendment to extend the maturity date on the existing mortgage on the DoubleTree by Hilton Philadelphia Airport hotel with the existing lender, TD Bank, N.A. Pursuant to the loan amendment: (i) the maturity date was extended to December 29, 2023 and (ii) the interest rate was increased to SOFR plus 3.50 %. Concurrent with the execution of the loan amendment, the Company also received a waiver of non-compliance with financial covenants for the period ended June 30, 2023, conditioned upon the increase in a reserve account maintained by the lender of $ 450,000 , which the Company made. The loan continues to be guaranteed by the Operating Partnership. We are in negotiations with the lender to further modify and extend the mortgage loan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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. |
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. |
Investment in Hotel Properties | Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at fair value on the acquisition date and allocated to land, property and equipment and identifiable intangible assets. If substantially all the fair value of the gross assets acquired are concentrated in a single identifiable asset, the asset is not considered a business. When we conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired asset. We capitalize the costs of significant additions and improvements that materially upgrade, increase the value of or extend the useful life of the property. These costs may include refurbishment, renovation, and remodeling expenditures, as well as certain direct internal costs related to construction projects. 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. 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. The Company assesses the carrying value of its investments in hotel properties 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 exceeds 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. The Company recognized no impairment losses for the three and nine months ended September 30, 2023 or 2022. |
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. |
Restricted Cash | Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows, mortgage servicing and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements. As of As of September 30, 2023 September 30, 2022 Cash and cash equivalents $ 19,198,625 $ 23,011,471 Restricted cash 10,205,947 7,006,371 Cash, cash equivalents and restricted cash at the end of the period $ 29,404,572 $ 30,017,842 |
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”) and National Credit Union Administration (the “NCUA”) 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 or NCUA 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. |
Accounts Receivable | Accounts Receivable – Accounts receivable consists primarily of hotel guest and banqueting receivables. With ongoing evaluations of our trade receivables, credit customers' risk assessment and limiting credit to only a few larger companies or organizations, our potential for expected credit losses is insignificant. Our revenue is mainly based on cash or credit card sales as of the date of service, with limited trade receivables. 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 September 30, 2023 and December 31, 2022 were $ 207,047 and $ 241,038 , respectively. Amortization expense for the three and nine-month periods ended September 30, 2023 and 2022 , totaled $ 11,059 and $ 12,282 and $ 33,991 and $ 36,570 , respectively. |
Deferred Financing Costs | Deferred Financing 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 and unsecured notes, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in advance of 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. |
Derivative Instruments | Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the consolidated balance sheets 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 interest rate swaps which act as cash flow hedges and are not designated as hedges. We value our interest rate swaps 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 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 swaps are the only assets or liabilities measured at fair value on a recurring basis, there were no non-recurring assets or liabilities for fair value measurements as of September 30, 2023 and December 31, 2022, respectively): Level 1 Level 2 Level 3 December 31, 2022 Interest rate swaps (1) $ — $ 1,308,503 $ — Mortgage loans (2) $ — $ ( 306,300,855 ) $ — September 30, 2023 Interest rate swap (1) $ — $ 1,308,038 $ — Mortgage loans (2) $ — $ ( 303,808,970 ) $ — (1) Interest rate swaps, one of which swaps the loan rate for a fixed interest rate of 5.237 % for the DoubleTree by Hilton Philadelphia Airport mortgage and is valued only at December 31, 2022 , and the other which swaps the loan rate for a fixed rate of approximately 5.576 % for the Hotel Alba Tampa mortgage and is valued at September 30, 2023 and December 31, 2022 . Notional amounts of the swaps approximate the declining balance of the loan . (2) Mortgage loans, net had a carrying value on our Consolidated Balance Sheets of $ 317,633,743 and $ 320,482,103 as of September 30, 2023 and December 31, 2022 , respectively. |
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 – Revenue consists of amounts derived from hotel operations, including the sales of rooms, food and beverage, and other ancillary services. Room revenue is recognized over a customer’s hotel stay. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the point in time or over the time period that goods or services are provided to the customer. Some contracts for rooms or food and beverage services require an upfront deposit which is recorded as advanced deposits (or contract liabilities) shown on our consolidated balance sheets and recognized once the performance obligations are satisfied. Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the gross commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. With respect to the hotel condominium rental programs that the Company operates at the Hyde Resort and Hyde Beach House, the Company has determined that it is an agent and recognizes revenue based on its share of revenue earned under the rental agency agreement. Certain of the Company’s hotels have retail spaces, restaurants or other spaces which the Company leases to third parties. Lease revenue is recognized on a straight-line basis over the life of the lease and included in other operating revenues in the Company’s consolidated statements of operations. The Company collects sales, use, occupancy and similar taxes at its hotels which are presented on a net basis on the consolidated statements of operations. |
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 consolidated statements of operations pursuant to the terms of each lease. Lease revenue was approximately $ 0.3 million and $ 0.2 million, for the three months ended September 30, 2023 and 2022, respectively, and for the nine months ended September 30, 2023 and 2022, totaled approximately $ 0.8 million and $ 0.9 million, respectively. A schedule of minimum future lease payments receivable for the remaining three and twelve-month periods is as follows: For the remaining three months ending December 31, 2023 $ 202,519 December 31, 2024 805,327 December 31, 2025 1,297,801 December 31, 2026 715,115 December 31, 2027 703,515 December 31, 2028 and thereafter 9,321,103 Total $ 13,045,380 |
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. 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 either 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. As of September 30, 2023 , we have determined that it is more-likely-than-not that we will not be able to fully utilize our deferred tax assets for future tax consequences, therefore a 100 % valuation allowance is required. As of September 30, 2023 and December 31, 2022 , deferred tax assets each totaled $ 0 , respectively. As of September 30, 2023 and December 31, 2022 , 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 September 30, 2023, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2014 through 2022. In addition, as of September 30, 2023, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject, because of open NOL carryforwards, generally include 2014 through 2022. 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 2022 Long-Term Incentive Plan (the “2022 Plan”), which the Company’s stockholders approved in April 2022, permits the grant of stock options, restricted stock, unrestricted stock and service/performance share compensation awards to its employees and directors for up to 2,000,000 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its stockholders. Under the 2022 Plan, the Company may issue a variety of service or 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 September 30, 2023 , 451,668 service-based stock awards have been granted, including 272,668 unrestricted shares and 179,000 restricted shares issued to certain executives and its independent directors. Total compensation cost recognized under the 2022 Plan for the three months ended September 30, 2023 and 2022 was $ 18,887 and $ 0 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 263,161 and $ 0 , respectively. The Company’s 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permits the grant of stock options, restricted stock, unrestricted stock and service or performance share compensation awards to its employees and directors for up to 750,000 shares of common stock. All future awards will be made under the 2022 Plan. As of September 30, 2023 , under the 2013 Plan, the Company has made cumulative service-based stock awards totaling 745,160 shares, including 700,160 unrestricted shares and 45,000 restricted shares issued to certain executives and employees and to its independent directors. All awards have vested except for 45,000 shares issued to certain employees, which will vest over the next two years. The remaining 4,840 shares have been deregistered. Under the 2013 Plan, the Company was able to 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 September 30, 2023, no performance-based stock awards have been granted. Total compensation cost recognized under the 2013 Plan for the three months ended September 30, 2023 and 2022 was $ 22,883 and $ 364,692 , respectively, and for the nine months ended September 30, 2023 and 2022 was $ 68,648 and $ 853,271 , 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 unearned ESOP shares as a reduction of stockholders’ equity. Dividends on unearned ESOP shares, when paid, are considered a compensation expense. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they are committed to be released. For the three months ended September 30, 2023 and 2022 , the ESOP compensation cost was $ 13,992 and $ 13,871 , and for the nine months ended September 30, 2023 and 2022 the ESOP compensation cost was $ 38,905 and $ 42,674 , respectively. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements. |
Advertising | Advertising – Advertising costs, including internet advertising, were $ 644,111 , and $ 559,981 for the three months ended September 30, 2023 and 2022 and were $ 2,039,089 and $ 1,717,399 for the nine months ended September 30, 2023 and 2022 , 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. The gain on involuntary conversion of assets is reflected in the consolidated statements of operations. |
Comprehensive Income | Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income. |
Segment Information | Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership. |
Use of Estimates | Use of Estimates – The preparation of the financial statements in conformity with U.S. 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments -Credit Losses (Topic 326), which replaced the existing "incurred loss" approach with an "expected loss" model for financial instruments measured at amortized cost. For trade and other receivables, the forward-looking "expected loss" model will generally result in the earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments -Credit Losses, which clarified that operating lease receivables accounted for under ASC 842 are not in the scope of ASU 2016-13. With the adoption of this standard on January 1, 2023, we have determined there is no significant impact on the Company's consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform – Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the existing guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The option expedients and exceptions contained within this update, in general, only apply to contract amendments and modifications entered into prior to January 1, 2023. The provisions of this update will most likely affect our financial reporting process relating to modifications of contracts with lenders and the hedging contracts associated with each respective modified borrowing contract. In general, the provision of the update would benefit us by allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 740 to be accounted for as a non-substantial modification and not be considered debt extinguishment. As of December 31, 2022, we have not entered into any contract modification as it directly relates to reference rate reform, with the exception of a modification to the mortgages on The Whitehall in Houston, Texas, which changed the reference rate from LIBOR to the New York Prime Rate, and on Hotel Alba Tampa, Tapestry Collection in Tampa, Florida, which changed the reference rate from LIBOR to SOFR. On March 14, 2023, the Company modified the floating-rate mortgage on the DoubleTree by Hilton Philadelphia Airport to change the reference rate from 1-month LIBOR to SOFR. The Company anticipates no additional loan modifications will be required. With the adoption of this standard on January 1, 2023, we have determined there is no significant impact on the Company's consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | As of As of September 30, 2023 September 30, 2022 Cash and cash equivalents $ 19,198,625 $ 23,011,471 Restricted cash 10,205,947 7,006,371 Cash, cash equivalents and restricted cash at the end of the period $ 29,404,572 $ 30,017,842 |
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 swaps are the only assets or liabilities measured at fair value on a recurring basis, there were no non-recurring assets or liabilities for fair value measurements as of September 30, 2023 and December 31, 2022, respectively): Level 1 Level 2 Level 3 December 31, 2022 Interest rate swaps (1) $ — $ 1,308,503 $ — Mortgage loans (2) $ — $ ( 306,300,855 ) $ — September 30, 2023 Interest rate swap (1) $ — $ 1,308,038 $ — Mortgage loans (2) $ — $ ( 303,808,970 ) $ — (1) Interest rate swaps, one of which swaps the loan rate for a fixed interest rate of 5.237 % for the DoubleTree by Hilton Philadelphia Airport mortgage and is valued only at December 31, 2022 , and the other which swaps the loan rate for a fixed rate of approximately 5.576 % for the Hotel Alba Tampa mortgage and is valued at September 30, 2023 and December 31, 2022 . Notional amounts of the swaps approximate the declining balance of the loan . (2) Mortgage loans, net had a carrying value on our Consolidated Balance Sheets of $ 317,633,743 and $ 320,482,103 as of September 30, 2023 and December 31, 2022 , respectively. |
Schedule of Minimum Future Lease Payments Receivable | A schedule of minimum future lease payments receivable for the remaining three and twelve-month periods is as follows: For the remaining three months ending December 31, 2023 $ 202,519 December 31, 2024 805,327 December 31, 2025 1,297,801 December 31, 2026 715,115 December 31, 2027 703,515 December 31, 2028 and thereafter 9,321,103 Total $ 13,045,380 |
Investment in Hotel Propertie_2
Investment in Hotel Properties, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Investment in Hotel Properties, Net | Investment in hotel properties, net as of September 30, 2023 and December 31, 2022 consisted of the following: September 30, 2023 December 31, 2022 Land and land improvements $ 61,078,390 $ 60,934,859 Buildings and improvements 416,813,251 412,717,919 Right of use assets 4,850,671 5,199,845 Furniture, fixtures and equipment 51,500,684 51,292,107 534,242,996 530,144,730 Less: accumulated depreciation and impairment ( 177,215,574 ) ( 165,074,005 ) Investment in Hotel Properties, Net $ 357,027,422 $ 365,070,725 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, December 31, Prepayment Maturity Amortization Interest Property 2023 2022 Penalties Date Provisions Rate The DeSoto (1) $ 30,495,324 $ 31,219,022 Yes 7/1/2026 25 years 4.25 % DoubleTree by Hilton Jacksonville (2) 31,920,568 32,416,570 Yes 7/11/2024 30 years 4.88 % DoubleTree by Hilton Laurel (3) 10,000,000 7,412,107 (3) 5/6/2028 (3) 7.35 % DoubleTree by Hilton Philadelphia Airport (4) 38,915,488 39,413,672 None 10/31/2023 30 years SOFR plus 2.27 % DoubleTree Resort by Hilton Hollywood (5) 51,803,264 52,724,475 (5) 10/1/2025 30 years 4.913 % Georgian Terrace (6) 39,715,153 40,492,622 (6) 6/1/2025 30 years 4.42 % Hotel Alba Tampa, Tapestry Collection by Hilton (7) 24,391,000 24,756,400 None 6/30/2025 (7) SOFR plus 2.75 % Hotel Ballast Wilmington, Tapestry Collection by (8) 30,995,244 31,699,775 Yes 1/1/2027 25 years 4.25 % Hyatt Centric Arlington (9) 46,730,206 47,534,606 Yes 10/1/2028 30 years 5.25 % The Whitehall (10) $ 14,064,662 14,226,067 None 2/26/2028 25 years PRIME plus 1.25 % Total Mortgage Principal Balance $ 319,030,909 $ 321,895,316 Deferred financing costs, net ( 1,446,221 ) ( 1,480,779 ) Unamortized premium on loan 49,055 67,566 Total Mortgage Loans, Net $ 317,633,743 $ 320,482,103 (1) The note amortizes on a 25 -year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (2) The note is subject to a pre-payment penalty until March 2024 . Prepayment can be made without penalty thereafter. (3) The note requires payments of interest only and cannot be prepaid until the last 4 months of the loan term. (4) The note bears a floating interest rate of SOFR plus 2.27 %. On August 13, 2018, we entered into a swap agreement to fix the rate at 5.237 % through July 31, 2023 . Notional amounts under the swap agreement approximated the declining balance of the loan. Effective October 29, 2023, we entered into a loan amendment to extend the maturity date to December 29, 2023 and to increase the interest rate to SOFR plus 3.50 %. (5) With limited exception, the note may not be prepaid prior to June 2025 . (6) With limited exception, the note may not be prepaid prior to February 2025 . (7) The note bears a floating interest rate of SOFR plus 2.75 % subject to a floor rate of 2.75 %; with monthly principal payments of $ 40,600 ; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. On July 11, 2022, we entered into a swap agreement to fix the rate at 5.576 %. The swap agreement reflects notional amounts approximate to the declining balance of the loan and we are responsible for any potential termination fees associated with early termination of the swap agreement. (8) The note amortizes on a 25 -year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (9) Following a 5 -year lockout, the note can be prepaid with penalty in years 6 - 10 and without penalty during the final 4 months of the term. (10) The note bears a floating interest rate of New York Prime Rate plus 1.25 %, with a floor of 7.50 %. |
Schedule of Future Mortgage Debt Maturities | Total future mortgage debt maturities for the remaining three and twelve-month periods, without respect to any extension of loan maturity or loan modification after September 30, 2023, were as follows: For the remaining three months ended December 31, 2023 $ 40,624,873 December 31, 2024 38,069,572 December 31, 2025 116,058,765 December 31, 2026 58,588,970 December 31, 2027 1,757,220 December 31, 2028 and thereafter 63,931,509 Total future maturities $ 319,030,909 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Future Lease Payments | A schedule of minimum future lease payments for the following three and twelve-month periods is as follows: For the remaining three months ended December 31, 2023 $ 170,299 December 31, 2024 686,820 December 31, 2025 696,536 December 31, 2026 690,843 December 31, 2027 347,540 December 31, 2028 and thereafter 13,539,483 Total $ 16,131,521 |
Preferred Stock and Units (Tabl
Preferred Stock and Units (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Preferred Stock And Units [Abstract] | |
Schedule of Series of Cumulative Redeemable Perpetual Preferred Stock | The following table sets forth our Cumulative Redeemable Perpetual Preferred Stock by series: Per Number of Shares Quarterly Annum Liquidation Issued and Outstanding as of Distributions Preferred Stock - Series Rate Preference September 30, 2023 December 31, 2022 Per Share Series B Preferred Stock 8.000 % $ 25.00 1,464,100 1,464,100 $ 0.500000 Series C Preferred Stock 7.875 % $ 25.00 1,346,110 1,346,110 $ 0.492188 Series D Preferred Stock 8.250 % $ 25.00 1,163,100 1,163,100 $ 0.515625 |
Schedule of Series of Cumulative Redeemable Perpetual Preferred Units | The following table sets forth our Cumulative Redeemable Perpetual Preferred Units by series: Per Number of Units Quarterly Annum Liquidation Issued and Outstanding as of Distributions Preferred Units - Series Rate Preference September 30, 2023 December 31, 2022 Per Unit Series B Preferred Units 8.000 % $ 25.00 1,464,100 1,464,100 $ 0.500000 Series C Preferred Units 7.875 % $ 25.00 1,346,110 1,346,110 $ 0.492188 Series D Preferred Units 8.250 % $ 25.00 1,163,100 1,163,100 $ 0.515625 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [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: September 30, 2023 December 31, 2022 Number of Shares Fair Value Number of Shares Fair Value Allocated shares 295,035 $ 498,610 301,646 $ 545,979 Committed to be released shares 19,167 32,392 — — Total Allocated and Committed-to-be-Released 314,202 $ 531,002 301,646 $ 545,979 Unallocated shares 345,010 583,066 364,177 659,160 Total ESOP Shares 659,212 $ 1,114,068 665,823 $ 1,205,139 |
Indirect Hotel Operating Expe_2
Indirect Hotel Operating Expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Sales and marketing $ 3,815,349 $ 3,729,867 $ 12,323,121 $ 11,390,258 General and administrative 3,638,354 3,396,247 11,010,177 10,186,922 Repairs and maintenance 2,164,003 2,057,298 6,486,094 6,519,845 Utilities 1,691,931 1,566,216 4,425,479 4,308,465 Property taxes 1,436,742 939,951 3,739,381 3,973,027 Management fees, including incentive 973,848 949,926 3,584,723 3,327,267 Franchise fees 972,610 960,246 3,290,490 3,126,021 Insurance 1,511,222 1,128,090 4,174,603 3,121,241 Information and telecommunications 931,573 809,593 2,799,923 2,598,399 Other 236,535 194,504 748,089 581,439 Total indirect hotel operating expenses $ 17,372,167 $ 15,731,938 $ 52,582,080 $ 49,132,884 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Provision | The components of the income tax provision for the three and nine months ended September 30, 2023 and 2022 are as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Current: Federal $ — $ — $ — $ — State ( 354,398 ) 12,474 ( 322,679 ) 33,744 ( 354,398 ) 12,474 ( 322,679 ) 33,744 Deferred: Federal ( 1,153,452 ) ( 544,356 ) ( 1,055,628 ) ( 572,014 ) State ( 261,180 ) ( 62,819 ) ( 115,711 ) ( 82,652 ) Subtotals ( 1,414,632 ) ( 607,175 ) ( 1,171,339 ) ( 654,666 ) Change in deferred tax valuation allowance 1,414,632 607,175 1,171,339 654,666 — — — — Income tax (benefit) provision $ ( 354,398 ) $ 12,474 $ ( 322,679 ) $ 33,744 |
Reconciliation of Statutory Federal Income Tax Provision (Benefit) | Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Statutory federal income tax provision (benefit) $ ( 508,247 ) $ 416,858 $ 893,903 $ 6,048,152 Federal tax impact of REIT election ( 421,693 ) ( 825,994 ) ( 1,264,579 ) ( 6,315,568 ) Statutory federal income tax (benefit) provision at TRS ( 929,940 ) ( 409,136 ) ( 370,676 ) ( 267,416 ) Federal impact of PPP loan forgiveness — — ( 56,470 ) — State income tax benefit, net of federal provision (benefit) ( 839,090 ) ( 185,564 ) ( 1,066,872 ) ( 353,506 ) Change in valuation allowance 1,414,632 607,174 1,171,339 654,666 Income tax (benefit) provision $ ( 354,398 ) $ 12,474 $ ( 322,679 ) $ 33,744 |
Income Per Share and Per Unit (
Income Per Share and Per Unit (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic Net Income Per Share | The computation of basic net income (loss) per share is presented below: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net (loss) income $ ( 2,065,826 ) $ 1,972,563 $ 4,579,359 $ 28,766,978 Less: Net loss (income) allocated to participating share awards 28,008 ( 6,597 ) ( 58,032 ) ( 94,522 ) Net loss (income) attributable to non-controlling interest 156,558 51,094 50,720 ( 1,317,225 ) Undeclared distributions to preferred stockholders ( 1,994,313 ) ( 1,813,820 ) ( 5,982,938 ) ( 5,639,906 ) Gain on extinguishment of preferred stock — ( 97,157 ) — 64,518 Net (loss) income attributable to common stockholders for EPS computation $ ( 3,875,573 ) $ 106,083 $ ( 1,410,891 ) $ 21,779,843 Denominator Weighted average number common shares outstanding for basic EPS computation 18,906,851 18,045,365 18,742,219 17,598,153 Effect of dilutive participating securities: Unvested restricted shares — (1) 65,000 — (1) 63,901 Stock compensation awards unissued — (1) 37,912 — (1) 129,002 Unearned ESOP shares — (1) 411,389 — (1) 418,710 Weighted average number common and common equivalent shares outstanding for diluted EPS computation 18,906,851 18,559,666 18,742,219 18,209,766 Basic net (loss) income per common share: Undistributed (loss) income $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.24 Total basic $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.24 Diluted net (loss) income per common share: Undistributed (loss) income $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.20 Total diluted $ ( 0.20 ) $ 0.01 $ ( 0.08 ) $ 1.20 (1) Anti-dilutive, therefore not included. |
Computation of Basic Net Income Per Unit | (Loss) Per Unit – The computation of basic net income (loss) per unit is presented below: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net (loss) income $ ( 2,065,826 ) $ 1,972,563 $ 4,579,359 $ 28,766,978 Less: Net loss (income) allocated to participating unit awards 28,008 ( 6,597 ) ( 58,032 ) ( 94,522 ) Undeclared distributions to preferred unitholders ( 1,994,313 ) ( 1,813,820 ) ( 5,982,938 ) ( 5,639,906 ) Gain on extinguishment of preferred units — ( 97,157 ) — 64,518 Net (loss) income attributable to unitholders for EPU computation $ ( 4,032,131 ) $ 54,989 $ ( 1,461,611 ) $ 23,097,068 Denominator Weighted average number of units outstanding for basic EPU computation 19,810,991 19,501,310 19,807,797 19,116,224 Effect of dilutive participating securities: Unvested restricted units — (1) 65,000 — (1) 62,606 Unit compensation awards unissued — (1) 37,912 — (1) 129,002 Weighted average number of equivalent units outstanding for diluted EPU computation 19,810,991 19,604,222 19,807,797 19,307,832 Basic net (loss) income per unit: Undistributed (loss) income $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.21 Total basic $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.21 Diluted net (loss) income per unit: Undistributed (loss) income $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.20 Total diluted $ ( 0.20 ) $ - $ ( 0.07 ) $ 1.20 (1) Anti-dilutive, therefore not included. |
Organization and Description _2
Organization and Description of Business - Additional Information (Detail) | 3 Months Ended | 5 Months Ended | 9 Months Ended | ||||||||||
May 04, 2023 USD ($) | Mar. 14, 2023 USD ($) | Feb. 26, 2023 USD ($) | Jun. 29, 2022 USD ($) | Jun. 28, 2022 USD ($) | Jun. 10, 2022 USD ($) | Mar. 31, 2023 shares | Sep. 30, 2022 shares | Jun. 30, 2022 shares | Mar. 31, 2022 shares | Aug. 24, 2022 shares | Sep. 30, 2023 USD ($) Hotel Room | Feb. 10, 2022 USD ($) | |
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Date of incorporation | Aug. 20, 2004 | ||||||||||||
Rooms in hotel | Room | 2,786 | ||||||||||||
Number of independent hotels | Hotel | 3 | ||||||||||||
Date of commencement of business | Dec. 21, 2004 | ||||||||||||
Number of hotels acquired before commencement of business | Hotel | 6 | ||||||||||||
Interest reserves | $ 1,600,000 | ||||||||||||
Double Tree by Hilton Laurel [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Mortgage Loan Related to Property Sales | $ 10,000,000 | ||||||||||||
Mortgage loans of principal balance | $ 10,000,000 | ||||||||||||
Maturity date of mortgage loan | May 06, 2028 | ||||||||||||
Interest rate of mortgage loan | 7.35% | ||||||||||||
DoubleTree by Hilton Philadelphia Airport [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Debt service coverage reserve | $ 300,000 | ||||||||||||
Mortgage Loans [Member] | The Whitehall [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Extended maturity date | Feb. 26, 2028 | ||||||||||||
Excess Interest rate on mortgage debt | 1.25% | ||||||||||||
Fixed interest rate | 7.50% | ||||||||||||
Amortization Period | 25 years | ||||||||||||
Real estate tax reserve and debt service reserve | $ 1,500,000 | ||||||||||||
Interest rate of mortgage loan | 1.25% | ||||||||||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Interest rate of mortgage loan | 7.35% | ||||||||||||
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Amortization Period | 30 years | ||||||||||||
Interest rate of mortgage loan | 2.27% | ||||||||||||
Series B Preferred Stock [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Issuance of common stock, shares | shares | 45,900 | ||||||||||||
Series C Preferred Stock [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Issuance of common stock, shares | shares | 38,500 | ||||||||||||
Series D Preferred Stock [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Issuance of common stock, shares | shares | 1,900 | ||||||||||||
Secured Notes [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Exit fee | $ 2,600,000 | ||||||||||||
Accrued interest paid | 20,000 | ||||||||||||
Interest reserves | 500,000 | $ 1,100,000 | |||||||||||
Payment of secured notes with cash in hand | 200,000 | ||||||||||||
Payment to investors | 8,300,000 | ||||||||||||
Principal payments | $ 5,600,000 | ||||||||||||
Double Tree by Hilton Raleigh Brownstone University Hotel [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Proceeds from sale of hotel property | $ 18,600,000 | ||||||||||||
Net proceeds from from sale of hotel property | 19,800,000 | ||||||||||||
Principal payment of preferred stock | 13,300,000 | ||||||||||||
Accrued interest paid | 200,000 | ||||||||||||
Double Tree by Hilton Raleigh Brownstone University Hotel [Member] | Secured Notes [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Exit fee | $ 6,300,000 | ||||||||||||
Exit fee [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Interest reserves | $ 500,000 | ||||||||||||
Sheraton Louisville Riverside [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Proceeds from sale of hotel property | $ 11,500,000 | ||||||||||||
Common Stock [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Issuance of common stock, shares | shares | 64,278 | 167,390 | 37,428 | 175,268 | 806,849 | ||||||||
Note Modification Agreement [Member] | Mortgage Loans [Member] | SOFR [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Excess Interest rate on mortgage debt | 2.75% | ||||||||||||
Note Modification Agreement [Member] | Mortgage Loans [Member] | Hotel Alba Tampa [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Extended maturity date | Jun. 30, 2025 | ||||||||||||
Extended maturity period | 2 years | ||||||||||||
Increased principal balance | $ 25,000,000 | ||||||||||||
Fixed interest rate | 2.75% | ||||||||||||
Amortization Period | 25 years | ||||||||||||
Amortization monthly payments of interest plus principal | $ 40,600 | ||||||||||||
Operating Partnership guaranteed | 12,500,000 | ||||||||||||
Change in guaranty due to performance milestones | $ 6,250,000 | ||||||||||||
Operating Partnership [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Percentage of operating partnership owned | 98.20% | ||||||||||||
Commercial Unit of Hyde Resort & Residences and Hyde Beach House Resort & Residences [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Investment in number of hotels | Hotel | 2 | ||||||||||||
Hilton, DoubleTree and Hyatt Brands [Member] | |||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||||||||||||
Number of hotels | Hotel | 7 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Segment shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Impairment of hotel properties | $ 0 | $ 0 | $ 0 | $ 0 | |
Federal Deposit Insurance Corporation protection limits | 250,000 | 250,000 | |||
Un-amortized franchise fees | 207,047 | 207,047 | $ 241,038 | ||
Amortization expense | 11,059 | 33,991 | 12,282 | 36,570 | |
Deferred income taxes | $ 0 | $ 0 | 0 | ||
Minimum percentage of likelihood of realization of deferred tax assets | 50% | ||||
Deferred tax assets valuation allowance percent | 100% | 100% | |||
Uncertain tax positions | $ 0 | $ 0 | 0 | ||
Compensation cost recognized | 370,714 | 895,945 | |||
Advertising cost | 644,111 | 559,981 | $ 2,039,089 | 1,717,399 | |
Number of reportable segment | Segment | 1 | ||||
Mortgage loans, net | 317,633,743 | $ 317,633,743 | $ 320,482,103 | ||
ESOP [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Compensation cost recognized | $ 13,992 | 13,871 | $ 38,905 | 42,674 | |
2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 745,160 | ||||
Unrestricted shares issued under plan | shares | 700,160 | ||||
Number of shares deregistered | shares | 4,840 | 4,840 | |||
Compensation cost recognized | $ 22,883 | 364,692 | $ 68,648 | 853,271 | |
2013 Plan [Member] | Executives Employees and Independent Directors [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Unrestricted shares issued under plan | shares | 45,000 | ||||
2013 Plan [Member] | Executives [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued but not vested | shares | 45,000 | ||||
2022 Long Term Incentive Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Unrestricted shares issued under plan | shares | 272,668 | ||||
Compensation cost recognized | 18,887 | 0 | $ 263,161 | 0 | |
Service based stock awards granted | shares | 451,668 | ||||
2022 Long Term Incentive Plan [Member] | Employees and Directors [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 2,000,000 | ||||
2022 Long Term Incentive Plan [Member] | Executives Employees and Independent Directors [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Unrestricted shares issued under plan | shares | 179,000 | ||||
Other Operating Departments [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Lease revenue | $ 300,000 | $ 200,000 | $ 800,000 | $ 900,000 | |
Maximum [Member] | 2013 Plan [Member] | Employees and Directors [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted, unrestricted and performance stock awards permitted to grant to employees and directors | 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 | 7 years | |||
Buildings and Building Improvements [Member] | Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 39 years | 39 years | |||
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 3 years | 3 years | |||
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 10 years | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |||
Cash and cash equivalents | $ 19,198,625 | $ 21,918,680 | $ 23,011,471 |
Restricted cash | 10,205,947 | 7,006,371 | |
Cash, cash equivalents and restricted cash at the end of the period | $ 29,404,572 | $ 30,017,842 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Recurring Assets and Liabilities Measured at Fair Value (Detail) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | |
Derivatives Fair Value [Line Items] | |||
Investment in hotel properties, net | $ 357,027,422 | $ 365,070,725 | |
Level 2 [Member] | Interest Rate Swaps [Member] | |||
Derivatives Fair Value [Line Items] | |||
Interest rate cap | [1] | 1,308,038 | 1,308,503 |
Level 2 [Member] | Mortgage Loans [Member] | |||
Derivatives Fair Value [Line Items] | |||
Debt instruments measured at fair value | [2] | $ (303,808,970) | $ (306,300,855) |
[1] Interest rate swaps, one of which swaps the loan rate for a fixed interest rate of 5.237 % for the DoubleTree by Hilton Philadelphia Airport mortgage and is valued only at December 31, 2022 , and the other which swaps the loan rate for a fixed rate of approximately 5.576 % for the Hotel Alba Tampa mortgage and is valued at September 30, 2023 and December 31, 2022 . Notional amounts of the swaps approximate the declining balance of the loan Mortgage loans, net had a carrying value on our Consolidated Balance Sheets of $ 317,633,743 and $ 320,482,103 as of September 30, 2023 and December 31, 2022 , respectively. |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Recurring Assets and Liabilities Measured at Fair Value (Parenthetical) (Detail) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Derivatives Fair Value [Line Items] | ||
Mortgage loans, net | $ 317,633,743 | $ 320,482,103 |
DoubleTree by Hilton Philadelphia Airport [Member] | ||
Derivatives Fair Value [Line Items] | ||
Loan rate swapped for fixed interest rate | 5.237% | |
Hotel Alba Tampa [Member] | ||
Derivatives Fair Value [Line Items] | ||
Loan rate swapped for fixed interest rate | 5.576% | 5.576% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Minimum Future Lease Payments Receivable (Detail) | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
For the remaining three months ending December 31, 2023 | $ 202,519 |
December 31, 2024 | 805,327 |
December 31, 2025 | 1,297,801 |
December 31, 2026 | 715,115 |
December 31, 2027 | 703,515 |
December 31, 2028 and thereafter | 9,321,103 |
Total | $ 13,045,380 |
Investment in Hotel Propertie_3
Investment in Hotel Properties, Net - Schedule of Investment in Hotel Properties, Net (Detail) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | $ 534,242,996 | $ 530,144,730 |
Less: accumulated depreciation and impairment | (177,215,574) | (165,074,005) |
Investment in Hotel Properties, Net | 357,027,422 | 365,070,725 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | 61,078,390 | 60,934,859 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | 416,813,251 | 412,717,919 |
Right of Use Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | 4,850,671 | 5,199,845 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment in Hotel Properties, Gross | $ 51,500,684 | $ 51,292,107 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 9 Months Ended | |||||||
Feb. 03, 2023 | Dec. 09, 2022 | Jun. 10, 2022 | May 06, 2020 | Apr. 28, 2020 | Apr. 16, 2020 | Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||||
Mortgage loan outstanding balance | $ 317,600,000 | $ 320,500,000 | ||||||
Double Tree By Hilton Raleigh Brownstone University Raleigh North Carolina [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Net proceeds from from sale of hotel property | $ 19,800,000 | |||||||
Promissory Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Paycheck protection program loan term | 2 years | |||||||
Paycheck protection program extension loan term | 5 years | |||||||
Paycheck protection program loan interest rate | 1% | |||||||
Paycheck protection program loan repayment terms | Equal payments of principal and interest begin no later than 10 months following origination of the loan and are amortized over the remaining term of the loan. | |||||||
Paycheck protection program loan amount | $ 1,700,000 | |||||||
Paycheck protection program loan forgiveness monthly payments to extinguish loan | $ 13,402 | $ 56,809 | ||||||
Paycheck protection program loan forgiveness amount received | $ 268,309 | $ 4,600,000 | ||||||
Promissory Note [Member] | Fifth Third Bank [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Paycheck protection program loan amount | $ 952,700 | $ 9,432,900 | ||||||
Promissory Note [Member] | Operating Partnership [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Paycheck protection program loan amount | $ 333,500 |
Debt - Schedule of Mortgage Deb
Debt - Schedule of Mortgage Debt Obligations on Hotels (Detail) - USD ($) | 9 Months Ended | ||
May 04, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Mortgage loans | $ 319,030,909 | $ 321,895,316 | |
Deferred financing costs, net | (1,446,221) | (1,480,779) | |
Unamortized premium on loan | 49,055 | 67,566 | |
Total Mortgage Loans, Net | 317,633,743 | 320,482,103 | |
The DeSoto [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 30,495,324 | 31,219,022 | |
Prepayment Penalties | Yes | ||
Maturity Date | Jul. 01, 2026 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 4.25% | ||
DoubleTree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 31,920,568 | 32,416,570 | |
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] | |||
Debt Instrument [Line Items] | |||
Interest rate applicable to the mortgage loan | 7.35% | ||
Double Tree by Hilton Laurel [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 10,000,000 | 7,412,107 | |
Maturity Date | May 06, 2028 | ||
Interest rate applicable to the mortgage loan | 7.35% | ||
DoubleTree by Hilton Philadelphia Airport [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 38,915,488 | 39,413,672 | |
Prepayment Penalties | None | ||
Maturity Date | Oct. 31, 2023 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 2.27% | ||
DoubleTree Resort by Hilton Hollywood Beach [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 51,803,264 | 52,724,475 | |
Maturity Date | Oct. 01, 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 | $ 39,715,153 | 40,492,622 | |
Maturity Date | Jun. 01, 2025 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 4.42% | ||
Hotel Alba Tampa, Tapestry Collection by Hilton [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 24,391,000 | 24,756,400 | |
Prepayment Penalties | None | ||
Maturity Date | Jun. 30, 2025 | ||
Interest rate applicable to the mortgage loan | 2.75% | ||
Hotel Ballast Wilmington,Tapestry Collection by Hilton [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 30,995,244 | 31,699,775 | |
Prepayment Penalties | Yes | ||
Maturity Date | Jan. 01, 2027 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 4.25% | ||
Hyatt Centric Arlington [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 46,730,206 | 47,534,606 | |
Prepayment Penalties | Yes | ||
Maturity Date | Oct. 01, 2028 | ||
Amortization Provisions, Term | 30 years | ||
Interest rate applicable to the mortgage loan | 5.25% | ||
The Whitehall [Member] | Mortgage Loans [Member] | |||
Debt Instrument [Line Items] | |||
Mortgage loans | $ 14,064,662 | $ 14,226,067 | |
Prepayment Penalties | None | ||
Maturity Date | Feb. 26, 2028 | ||
Amortization Provisions, Term | 25 years | ||
Interest rate applicable to the mortgage loan | 1.25% |
Debt - Schedule of Mortgage D_2
Debt - Schedule of Mortgage Debt Obligations on Hotels (Parenthetical) (Detail) - USD ($) | 9 Months Ended | ||||
Oct. 29, 2023 | Feb. 26, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 11, 2022 | |
Debt Instrument [Line Items] | |||||
Principal amount of mortgage loan | $ 319,030,909 | $ 321,895,316 | |||
DoubleTree by Hilton Philadelphia Airport [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan rate swapped for fixed interest rate | 5.237% | ||||
fixed interest rate | 5.237% | ||||
Mortgage Loans [Member] | The DeSoto [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 25 years | ||||
Interest-only payment period | 1 year | ||||
Period before maturity in which prepayment is allowed with out penalty | 120 days | ||||
Principal amount of mortgage loan | $ 30,495,324 | $ 31,219,022 | |||
Maturity Date | Jul. 01, 2026 | ||||
Mortgage Loans [Member] | DoubleTree by Hilton Jacksonville Riverfront [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 30 years | ||||
Prepayment date before maturity in which prepayment is allowed with penalty | 2024-03 | ||||
Principal amount of mortgage loan | $ 31,920,568 | 32,416,570 | |||
Maturity Date | Jul. 11, 2024 | ||||
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 30 years | ||||
Principal amount of mortgage loan | $ 38,915,488 | 39,413,672 | |||
Maturity Date | Oct. 31, 2023 | ||||
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member] | Subsequent Events [Member] | |||||
Debt Instrument [Line Items] | |||||
Extended maturity date | Dec. 29, 2023 | ||||
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member] | SOFR [Member] | |||||
Debt Instrument [Line Items] | |||||
Excess Interest rate on mortgage debt | 2.27% | ||||
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member] | SOFR [Member] | Subsequent Events [Member] | |||||
Debt Instrument [Line Items] | |||||
Excess Interest rate on mortgage debt | 3.50% | ||||
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member] | Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan rate swapped for fixed interest rate | 5.237% | ||||
Maturity Date | Jul. 31, 2023 | ||||
fixed interest rate | 5.237% | ||||
Mortgage Loans [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 30 years | ||||
Principal amount of mortgage loan | $ 51,803,264 | 52,724,475 | |||
Prepayment date before maturity | 2025-06 | ||||
Maturity Date | Oct. 01, 2025 | ||||
Mortgage Loans [Member] | Georgian Terrace [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 30 years | ||||
Principal amount of mortgage loan | $ 39,715,153 | 40,492,622 | |||
Prepayment date before maturity | 2025-02 | ||||
Maturity Date | Jun. 01, 2025 | ||||
Mortgage Loans [Member] | Hotel Alba Tampa, Tapestry Collection by Hilton [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount of mortgage loan | $ 24,391,000 | 24,756,400 | |||
Loan rate swapped for fixed interest rate | 2.75% | ||||
Maturity Date | Jun. 30, 2025 | ||||
Debt instrument periodic payment | $ 40,600 | ||||
fixed interest rate | 2.75% | ||||
Mortgage Loans [Member] | Hotel Alba Tampa, Tapestry Collection by Hilton [Member] | SOFR [Member] | |||||
Debt Instrument [Line Items] | |||||
Excess Interest rate on mortgage debt | 2.75% | ||||
Mortgage Loans [Member] | Hotel Alba Tampa, Tapestry Collection by Hilton [Member] | Swap [Member] | |||||
Debt Instrument [Line Items] | |||||
Loan rate swapped for fixed interest rate | 5.576% | ||||
fixed interest rate | 5.576% | ||||
Mortgage Loans [Member] | Hotel Ballast Wilmington,Tapestry Collection by Hilton [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 25 years | ||||
Interest-only payment period | 1 year | ||||
Period before maturity in which prepayment is allowed with out penalty | 120 days | ||||
Principal amount of mortgage loan | $ 30,995,244 | 31,699,775 | |||
Maturity Date | Jan. 01, 2027 | ||||
Mortgage Loans [Member] | Hyatt Centric Arlington [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 30 years | ||||
Principal amount of mortgage loan | $ 46,730,206 | 47,534,606 | |||
Debt instrument prepayment lockout period | 5 years | ||||
Maturity Date | Oct. 01, 2028 | ||||
Debt instrument prepayment without penalty period during final term | 4 months | ||||
Mortgage Loans [Member] | Hyatt Centric Arlington [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument prepayment penalty period | 6 years | ||||
Mortgage Loans [Member] | Hyatt Centric Arlington [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument prepayment penalty period | 10 years | ||||
Mortgage Loans [Member] | The Whitehall [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization Period | 25 years | ||||
Principal amount of mortgage loan | $ 14,064,662 | $ 14,226,067 | |||
Extended maturity date | Feb. 26, 2028 | ||||
Excess Interest rate on mortgage debt | 1.25% | ||||
Maturity Date | Feb. 26, 2028 | ||||
Mortgage Loans [Member] | The Whitehall [Member] | LIBOR [Member] | |||||
Debt Instrument [Line Items] | |||||
Excess Interest rate on mortgage debt | 1.25% | ||||
Loan rate swapped for fixed interest rate | 7.50% | ||||
fixed interest rate | 7.50% |
Debt - Schedule of Future Mortg
Debt - Schedule of Future Mortgage Debt Maturities (Detail) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
For the remaining three months ended December 31, 2023 | $ 40,624,873 | |
December 31, 2024 | 38,069,572 | |
December 31, 2025 | 116,058,765 | |
December 31, 2026 | 58,588,970 | |
December 31, 2027 | 1,757,220 | |
December 31, 2028 and thereafter | 63,931,509 | |
Total future maturities | $ 319,030,909 | $ 321,895,316 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 26, 2019 USD ($) RenewalPeriod | Mar. 01, 2018 USD ($) RenewalPeriod | Dec. 31, 2019 USD ($) ft² | Apr. 30, 2019 | May 31, 2014 | Sep. 30, 2023 USD ($) Hotel | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) ft² Hotel | Sep. 30, 2022 USD ($) | Dec. 29, 2016 USD ($) | |
Operating Leased Assets [Line Items] | ||||||||||
Lease agreement | 5 years | |||||||||
Number of hotels operate under franchise licenses | Hotel | 7 | |||||||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | |||||||||
Balance on the ESOP loan commitment | $ 2,500,000 | |||||||||
Leaving capacity for additional Borrowing on the ESOP loan commitment | $ 2,500,000 | |||||||||
Debt service reserve | $ 1,500,000 | |||||||||
Hotel Ballast [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Monthly contribution of room revenues | 4% | |||||||||
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% | |||||||||
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% | |||||||||
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% | |||||||||
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% | |||||||||
Georgian Terrace [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Monthly contribution of room revenues | 4% | |||||||||
Restricted cash reserve | amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||||||
DoubleTree by Hilton Philadelphia Airport [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Monthly contribution of room revenues | 4% | |||||||||
Minimum [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Franchise fees of room revenues | 3% | |||||||||
Additional fees of gross revenues from the hotels | 3% | |||||||||
Franchise agreement expiry date | 2024-10 | |||||||||
Maximum [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Franchise fees of room revenues | 5% | |||||||||
Additional fees of gross revenues from the hotels | 4% | |||||||||
Franchise agreement expiry date | 2038-03 | |||||||||
Maximum [Member] | ESOP [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Borrowed amount | $ 5,000,000 | |||||||||
Chesapeake Hospitality [Member] | Individual Hotel Management Agreements [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Number of wholly-owned hotels operated under master management agreement | Hotel | 10 | 10 | ||||||||
Expiry date of master management agreement | on March 31, 2035 and may be extended for up to two additional periods of five years each, subject to the approval of both parties. | |||||||||
Master management agreement expiration date | Mar. 31, 2035 | |||||||||
Hyatt Centric Arlington [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Monthly contribution of room revenues | 4% | |||||||||
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 | $ 152,231 | $ 128,415 | $ 493,724 | 364,123 | ||||||
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 | 2025 | |||||||||
Number of additional renewal periods extended under ground lease | RenewalPeriod | 5 | |||||||||
Duration period under ground lease for each renewal periods extended | 10 years | |||||||||
Hyde Beach House [Member] | Management Agreement for Parking Garage and Poolside [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Rent expense | 67,750 | 67,750 | $ 203,250 | 203,250 | ||||||
Lessee, operating lease, option to extend | initial term that expires in 2034 and which may be extended for four additional renewal periods of 5 years each | |||||||||
Lessee, operating lease, existence of option to extend [true false] | true | |||||||||
Annual payment | $ 270,100 | |||||||||
Rental payments, Percentage of increases per year | 5% | |||||||||
Rental payments, Percentage of increases, Term | every five years | |||||||||
Lessee, operating lease expiration year | 2034 | |||||||||
Number of additional renewal periods | RenewalPeriod | 4 | |||||||||
Additional renewal of agreement | 5 years | |||||||||
Williamsburg Virginia [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Area of commercial space leased | ft² | 8,500 | |||||||||
Rent expense | $ 218,875 | 55,902 | 55,902 | $ 167,706 | 167,706 | |||||
Lease, agreement term | 10 years | |||||||||
Lease rent increase each successive period percentage | 3% | |||||||||
Tenant improvement allowance | $ 200,000 | |||||||||
Commencement date of agreement | Jan. 01, 2020 | |||||||||
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 three under renewal option second | Oct. 31, 2026 | |||||||||
Rent expense | 20,983 | 20,983 | $ 62,949 | 62,949 | ||||||
Hotel Alba Tampa [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Rent expense | $ 651 | $ 651 | $ 1,952 | $ 1,958 | ||||||
Lease agreement | 5 years | 5 years | ||||||||
Commencement date of agreement | 2019-07 | 2009-07 | ||||||||
Lessee, operating lease, option to extend | In May 2014, we extended the agreement for an additional five years. We signed a new agreement in April 2019, which commenced in July 2019, goes for five years and can be renewed for an additional five years. The new agreement expires in July 2024, | |||||||||
Lessee, operating lease, existence of option to extend [true false] | true | true | ||||||||
Operating lease, expiring date | 2024-07 | |||||||||
Annual payment | $ 2,432 | |||||||||
Additional renewal of agreement | 5 years | 5 years | 5 years | 5 years | ||||||
Furniture, Fixtures and Equipment [Member] | ||||||||||
Operating Leased Assets [Line Items] | ||||||||||
Financing arrangement expiration date | 2023-12 | |||||||||
Financing arrangement expiration date | 2026-06 | |||||||||
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 Contingencies_2
Commitments and Contingencies - Schedule of Minimum Future Lease Payments (Detail) | Sep. 30, 2023 USD ($) |
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |
For the remaining three months ended December 31, 2023 | $ 170,299 |
December 31, 2024 | 686,820 |
December 31, 2025 | 696,536 |
December 31, 2026 | 690,843 |
December 31, 2027 | 347,540 |
December 31, 2028 and thereafter | 13,539,483 |
Total | $ 16,131,521 |
Preferred Stock and Units - Add
Preferred Stock and Units - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 15, 2023 | Jul. 14, 2023 | Jun. 13, 2023 | Mar. 15, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Preferred Units [Line Items] | ||||||||
Preferred stock, shares authorized | 11,000,000 | 11,000,000 | 11,000,000 | |||||
Preferred stock, liquidation preference per share | $ 25 | $ 25 | $ 25 | |||||
Preferred dividends paid | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | $ 7,977,251 | |||
Preferred stock amount of undeclared and cumulative preferred dividends | 21,900,000 | |||||||
Preferred stock amount of undeclared and cumulative preferred dividends | $ 21,900,000 | |||||||
Sotherly Hotels LP [Member] | ||||||||
Preferred Units [Line Items] | ||||||||
Preferred stock, liquidation preference per share | $ 25 | $ 25 | $ 25 | |||||
Preferred dividends paid | $ 7,977,251 | |||||||
Special dividend declared | $ 1,994,312 | $ 3,988,625 | ||||||
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||||
Preferred Units [Line Items] | ||||||||
Preferred stock, liquidation preference per share | $ 25 | $ 25 | ||||||
Total undeclared and unpaid cash dividends | $ 8,052,550 | |||||||
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, liquidation preference per share | $ 25 | $ 25 | ||||||
Total undeclared and unpaid cash dividends | $ 7,287,931 | |||||||
8.25% Series D 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, liquidation preference per share | $ 25 | $ 25 | ||||||
Total undeclared and unpaid cash dividends | $ 6,596,958 | |||||||
8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||||||||
Preferred Units [Line Items] | ||||||||
Preferred stock, shares authorized | 11,000,000 | 11,000,000 | 11,000,000 | |||||
Total undeclared and unpaid cash dividends | $ 8,052,550 | |||||||
7.875% Series C Cumulative Redeemable Perpetual Preferred Units [Member] | ||||||||
Preferred Units [Line Items] | ||||||||
Total undeclared and unpaid cash dividends | 7,287,931 | |||||||
8.25% Series D Cumulative Redeemable Perpetual Preferred Units [Member] | ||||||||
Preferred Units [Line Items] | ||||||||
Total undeclared and unpaid cash dividends | $ 6,596,958 |
Preferred Stock and Units - Sch
Preferred Stock and Units - Schedule of Series of Cumulative Redeemable Perpetual Preferred Stock (Detail) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Class Of Stock [Line Items] | ||
Preferred Stock, Liquidation Preference | $ 25 | $ 25 |
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Class Of Stock [Line Items] | ||
Preferred Stock, Per Annum Rate | 8% | |
Preferred Stock, Liquidation Preference | $ 25 | |
Preferred Stock, Number of Shares Issued | 1,464,100 | 1,464,100 |
Preferred Stock, Number of Shares Outstanding | 1,464,100 | 1,464,100 |
Preferred Stock, Quarterly Distributions Per Share | $ 0.500000 | |
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Class Of Stock [Line Items] | ||
Preferred Stock, Per Annum Rate | 7.875% | 7.875% |
Preferred Stock, Liquidation Preference | $ 25 | |
Preferred Stock, Number of Shares Issued | 1,346,110 | 1,346,110 |
Preferred Stock, Number of Shares Outstanding | 1,346,110 | 1,346,110 |
Preferred Stock, Quarterly Distributions Per Share | $ 0.492188 | |
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Class Of Stock [Line Items] | ||
Preferred Stock, Per Annum Rate | 8.25% | 8.25% |
Preferred Stock, Liquidation Preference | $ 25 | |
Preferred Stock, Number of Shares Issued | 1,163,100 | 1,163,100 |
Preferred Stock, Number of Shares Outstanding | 1,163,100 | 1,163,100 |
Preferred Stock, Quarterly Distributions Per Share | $ 0.515625 |
Preferred Stock and Units - S_2
Preferred Stock and Units - Schedule of Series of Cumulative Redeemable Perpetual Preferred Units (Detail) - Sotherly Hotels LP [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred Units [Line Items] | ||
Preferred Units, Per Annum Rate | 8% | |
Preferred Units, Liquidation Preference | $ 25 | |
Preferred Units, Number of Units Issued | 1,464,100 | 1,464,100 |
Preferred Units, Number of Units Outstanding | 1,464,100 | 1,464,100 |
Preferred Units, Quarterly Distributions Per Unit | $ 0.500000 | |
7.875% Series C Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred Units [Line Items] | ||
Preferred Units, Per Annum Rate | 7.875% | |
Preferred Units, Liquidation Preference | $ 25 | |
Preferred Units, Number of Units Issued | 1,346,110 | 1,346,110 |
Preferred Units, Number of Units Outstanding | 1,346,110 | 1,346,110 |
Preferred Units, Quarterly Distributions Per Unit | $ 0.492188 | |
8.25% Series D Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred Units [Line Items] | ||
Preferred Units, Per Annum Rate | 8.25% | |
Preferred Units, Liquidation Preference | $ 25 | |
Preferred Units, Number of Units Issued | 1,163,100 | 1,163,100 |
Preferred Units, Number of Units Outstanding | 1,163,100 | 1,163,100 |
Preferred Units, Quarterly Distributions Per Unit | $ 0.515625 |
Common Stock and Units - Additi
Common Stock and Units - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Aug. 30, 2023 shares | Aug. 18, 2023 shares | Apr. 28, 2023 shares | Jan. 23, 2023 shares | Jan. 12, 2023 shares | Nov. 01, 2022 shares | Aug. 23, 2022 shares | Aug. 18, 2022 shares | Jul. 01, 2022 shares | May 19, 2022 shares | Apr. 19, 2022 shares | Apr. 11, 2022 shares | Mar. 31, 2022 shares | Mar. 24, 2022 shares | Jan. 21, 2022 shares | Mar. 31, 2023 shares | Sep. 30, 2022 shares | Jun. 30, 2022 shares | Mar. 31, 2022 shares | Aug. 24, 2022 shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) | Dec. 16, 2021 shares | Dec. 31, 2022 USD ($) $ / shares shares | Jul. 21, 2022 shares | May 23, 2022 shares | Feb. 15, 2022 shares | |
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Common stock, shares authorized | 69,000,000 | 69,000,000 | |||||||||||||||||||||||||
Common stock, par value | $ / shares | $ 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. | ||||||||||||||||||||||||||
Common stock, shares outstanding | 19,696,805 | 18,951,525 | |||||||||||||||||||||||||
Common stock exchange ratio | 1 | ||||||||||||||||||||||||||
Redemption of units in operating partnership | 0 | ||||||||||||||||||||||||||
Conversion of units in operating partnership to shares of common stock, number of units | 133,099 | 252,903 | 75,000 | 217,845 | 40,687 | 50,000 | |||||||||||||||||||||
Operating Partnership common units outstanding | 20,060,991 | 19,776,713 | |||||||||||||||||||||||||
Operating Partnership common units not owned | 364,186 | 825,188 | |||||||||||||||||||||||||
Unpaid common dividends and distributions amount to holders | $ | $ 2.1 | ||||||||||||||||||||||||||
Restricted shares issued | 30,300 | ||||||||||||||||||||||||||
Debt service reserve | $ | $ 1.5 | ||||||||||||||||||||||||||
Series B Preferred Stock | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 45,900 | ||||||||||||||||||||||||||
Series C Preferred Stock | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 38,500 | ||||||||||||||||||||||||||
Series D Preferred Stock | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 1,900 | ||||||||||||||||||||||||||
Privately Negotiated Share Exchange Agreement [Member] | Series B Preferred Stock | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 13,000 | 11,000 | 5,000 | 4,000 | 5,900 | 7,000 | |||||||||||||||||||||
Privately Negotiated Share Exchange Agreement [Member] | Series C Preferred Stock | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 3,200 | 7,100 | 10,600 | 8,000 | 6,600 | 3,000 | |||||||||||||||||||||
Privately Negotiated Share Exchange Agreement [Member] | Series D Preferred Stock | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 1,900 | ||||||||||||||||||||||||||
Sotherly Hotels LP [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Fair market value | $ | $ 0.6 | $ 1.5 | |||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Unrestricted shares issued | 175,268 | 167,390 | 37,428 | 175,268 | |||||||||||||||||||||||
Issuance of common stock, shares | 64,278 | 167,390 | 37,428 | 175,268 | 806,849 | ||||||||||||||||||||||
Restricted shares issued | 220,000 | 15,000 | |||||||||||||||||||||||||
Common Stock [Member] | Director [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Restricted shares issued | 15,000 | ||||||||||||||||||||||||||
Common Stock [Member] | Directors, Officers, and Employees [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Restricted shares issued | 205,000 | ||||||||||||||||||||||||||
Issuance of unrestricted shares | 64,278 | ||||||||||||||||||||||||||
Common Stock [Member] | Privately Negotiated Share Exchange Agreement [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Issuance of common stock, shares | 140,130 | 178,800 | 153,504 | 116,640 | 120,875 | 96,900 | |||||||||||||||||||||
Common Stock [Member] | Sotherly Hotels LP [Member] | |||||||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||||||
Number of issued unit in Operating Partnership | 15,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||||
Dec. 13, 2019 ft² Resort | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||||
Net operating income | $ 1,167,853 | $ 3,288,996 | $ 14,977,778 | $ 15,413,489 | |||
Accounts receivable - affiliate | 4,776,701 | 4,776,701 | $ 5,844,904 | ||||
Our Town Hospitality [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Accounts receivable - affiliate | 300,000 | 300,000 | 300,000 | ||||
Accounts payable - affiliate | $ 800,000 | $ 800,000 | 1,300,000 | ||||
Our Town Hospitality [Member] | Master Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Number of rental programs | Resort | 2 | ||||||
Andrew M. Sims [Member] | Our Town Hospitality [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of total outstanding ownership interests | 71% | 71% | |||||
David R. Folsom [Member] | Our Town Hospitality [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of total outstanding ownership interests | 7% | 7% | |||||
Andrew M. Sims Jr [Member] | Our Town Hospitality [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of total outstanding ownership interests | 15% | 15% | |||||
Our Town Hospitality [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Area of office space subleased | ft² | 2,245 | ||||||
Sublease term | 5 years | ||||||
Additional renewal of agreement | 5 years | ||||||
Lessee, operating lease, existence of option to extend [true false] | true | ||||||
Lease payments due | $ 334,473 | 235,352 | |||||
Employee medical benefits paid | $ 900,000 | 800,000 | 2,300,000 | 2,600,000 | |||
Our Town Hospitality [Member] | Master Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Base management fees earned by related party | $ 1,000,000 | 1,000,000 | 3,400,000 | 3,100,000 | |||
Our Town Hospitality [Member] | OTH Master Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Net operating income | $ 250,000 | ||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Management fee of gross revenues for first full fiscal year | 2% | 2% | |||||
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% | |||||
Incentive management fee equal to increase in gross operating profit percentage | 10% | ||||||
Maximum incentive management fee of gross revenues | 0.25% | ||||||
Incentive management fees expense by related party | $ (31,088) | (42,656) | $ 186,855 | 272,017 | |||
Termination fees due | $ 300,000 | ||||||
Immediate Family Members of Chairman [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Total compensation for related parties | $ 134,289 | $ 125,935 | $ 470,494 | $ 379,898 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 29, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Employer contribution for first 3% of employee contributions | 100% | |||||
Employer contribution for next 2% of employee contributions | 50% | |||||
Percentage of first specified employee contributions | 3% | |||||
Percentage of next specified employee contributions | 2% | |||||
Contribution for retirement plan | $ 16,048 | $ 16,500 | $ 73,596 | $ 68,143 | ||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | |||||
Total number of ESOP shares | 314,202 | |||||
Fair value of ESOP released from suspense account and recognized compensation cost | $ 531,002 | |||||
Compensation cost recognized | $ 38,905 | $ 42,674 | ||||
Number of non committed, unearned ESOP shares | 345,010 | 345,010 | 364,177 | |||
Fair value of unallocated ESOP shares | $ 583,066 | $ 583,066 | $ 659,160 | |||
Number of ESOP shares allocated | 295,035 | 295,035 | 301,646 | |||
Number of ESOP shares committed to be released | 19,167 | 19,167 | ||||
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 ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Retirement Benefits [Abstract] | ||
Number of ESOP shares allocated | 295,035 | 301,646 |
Number of ESOP shares committed to be released | 19,167 | |
Total number of ESOP allocated and committed-to-be-released | 314,202 | 301,646 |
Number of non committed, unearned ESOP shares | 345,010 | 364,177 |
Total number of ESOP Shares | 659,212 | 665,823 |
Fair value of ESOP allocated shares | $ 498,610 | $ 545,979 |
Fair value of ESOP Committed-to-be released shares | 32,392 | |
Total fair value of ESOP allocated and committed-to-be-released | 531,002 | 545,979 |
Fair value of ESOP unallocated shares | 583,066 | 659,160 |
Total fair value of ESOP Shares | $ 1,114,068 | $ 1,205,139 |
Indirect Hotel Operating Expe_3
Indirect Hotel Operating Expenses - Summary of Indirect Hotel Operating Expenses (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | $ 17,372,167 | $ 15,731,938 | $ 52,582,080 | $ 49,132,884 |
Sales and Marketing [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 3,815,349 | 3,729,867 | 12,323,121 | 11,390,258 |
General and Administrative [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 3,638,354 | 3,396,247 | 11,010,177 | 10,186,922 |
Repairs and Maintenance [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 2,164,003 | 2,057,298 | 6,486,094 | 6,519,845 |
Utilities [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,691,931 | 1,566,216 | 4,425,479 | 4,308,465 |
Property Taxes [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,436,742 | 939,951 | 3,739,381 | 3,973,027 |
Management Fees, Including Incentive [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 973,848 | 949,926 | 3,584,723 | 3,327,267 |
Franchise Fees [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 972,610 | 960,246 | 3,290,490 | 3,126,021 |
Insurance [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,511,222 | 1,128,090 | 4,174,603 | 3,121,241 |
Information and Telecommunications [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 931,573 | 809,593 | 2,799,923 | 2,598,399 |
Other [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | $ 236,535 | $ 194,504 | $ 748,089 | $ 581,439 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Current: | ||||
State | $ (354,398) | $ 12,474 | $ (322,679) | $ 33,744 |
Total | (354,398) | 12,474 | (322,679) | 33,744 |
Deferred: | ||||
Federal | (1,153,452) | (544,356) | (1,055,628) | (572,014) |
State | (261,180) | (62,819) | (115,711) | (82,652) |
Subtotals | (1,414,632) | (607,175) | (1,171,339) | (654,666) |
Change in deferred tax valuation allowance | (1,414,632) | 607,175 | (1,171,339) | 654,666 |
Income tax (benefit) provision | $ (354,398) | $ 12,474 | $ (322,679) | $ 33,744 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Provision (Benefit) (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Statutory federal income tax provision | $ (508,247) | $ 416,858 | $ 893,903 | $ 6,048,152 |
Federal tax impact of REIT election | (421,693) | (825,994) | (1,264,579) | (6,315,568) |
Federal impact of PPP loan forgiveness | (56,470) | |||
State income tax provision (benefit), net of federal provision (benefit) | (839,090) | (185,564) | (1,066,872) | (353,506) |
Change in valuation allowance | 1,414,632 | 607,174 | 1,171,339 | 654,666 |
Income tax (benefit) provision | (354,398) | 12,474 | (322,679) | 33,744 |
TRS [Member] | ||||
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Statutory federal income tax provision | $ (929,940) | $ 409,136 | $ 370,676 | $ 267,416 |
Income Per Share and Per Unit -
Income Per Share and Per Unit - Computation of Basic Net Income Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||||||
Net (loss) income | $ (2,065,826) | $ 5,257,670 | $ 1,387,514 | $ 1,972,563 | $ 27,605,359 | $ (810,944) | $ 4,579,359 | $ 28,766,978 |
Less: Net loss (income) allocated to participating share awards | 28,008 | (6,597) | (58,032) | (94,522) | ||||
Net loss (income) attributable to non-controlling interest | 156,558 | 51,094 | 50,720 | (1,317,225) | ||||
Undeclared distributions to preferred stockholders | (1,994,313) | (1,813,820) | (5,982,938) | (5,639,906) | ||||
Gain on extinguishment of preferred stock | (97,157) | 64,518 | ||||||
Net (loss) income attributable to common stockholders for EPS computation | $ (3,875,573) | $ 106,083 | $ (1,410,891) | $ 21,779,843 | ||||
Denominator | ||||||||
Weighted average number common shares outstanding for basic EPS computation | 18,906,851 | 18,045,365 | 18,742,219 | 17,598,153 | ||||
Weighted average number common and common equivalent shares outstanding for diluted EPS computation | 18,906,851 | 18,559,666 | 18,742,219 | 18,209,766 | ||||
Basic net (loss) income per common share: | ||||||||
Undistributed (loss) income | $ (0.2) | $ 0.01 | $ (0.08) | $ 1.24 | ||||
Total basic | (0.2) | 0.01 | (0.08) | 1.24 | ||||
Diluted net (loss) income per common share: | ||||||||
Undistributed (loss) income | (0.2) | 0.01 | (0.08) | 1.2 | ||||
Total diluted | $ (0.2) | $ 0.01 | $ (0.08) | $ 1.2 | ||||
Unvested Restricted Shares [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 65,000 | 63,901 | ||||||
Stock Compensation Awards Unissued [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 37,912 | 129,002 | ||||||
Unearned ESOP Shares [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 411,389 | 418,710 |
Income Per Share and Per Unit_2
Income Per Share and Per Unit - Computation of Basic Net Income Per Unit (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||||||
Net (loss) income | $ (2,065,826) | $ 5,257,670 | $ 1,387,514 | $ 1,972,563 | $ 27,605,359 | $ (810,944) | $ 4,579,359 | $ 28,766,978 |
Undeclared distributions to preferred stockholders | $ (1,994,313) | (1,813,820) | $ (5,982,938) | (5,639,906) | ||||
Gain on extinguishment of preferred units | $ (97,157) | $ 64,518 | ||||||
Basic net (loss) income per unit: | ||||||||
Undistributed (loss) income | $ (0.2) | $ 0.01 | $ (0.08) | $ 1.24 | ||||
Diluted net (loss) income per unit: | ||||||||
Undistributed (loss) income | $ (0.2) | $ 0.01 | $ (0.08) | $ 1.2 | ||||
Unvested Restricted Units [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 65,000 | 63,901 | ||||||
Unit Compensation Awards Unissued [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 37,912 | 129,002 | ||||||
Sotherly Hotels LP [Member] | ||||||||
Numerator | ||||||||
Net (loss) income | $ (2,065,826) | $ 5,257,670 | $ 1,387,514 | $ 1,972,563 | $ 27,605,359 | $ (810,944) | $ 4,579,359 | $ 28,766,978 |
Less: Net loss (income) allocated to participating unit awards | 28,008 | (6,597) | (58,032) | (94,522) | ||||
Undeclared distributions to preferred stockholders | (1,994,313) | (1,813,820) | (5,982,938) | (5,639,906) | ||||
Gain on extinguishment of preferred units | (97,157) | 64,518 | ||||||
Net (loss) income attributable to unitholders for EPU computation | $ (4,032,131) | $ 54,989 | $ (1,461,611) | $ 23,097,068 | ||||
Denominator | ||||||||
Weighted average number of units outstanding for basic EPU computation | 19,810,991 | 19,501,310 | 19,807,797 | 19,116,224 | ||||
Weighted average number of equivalent units outstanding for diluted EPU computation | 19,810,991 | 19,604,222 | 19,807,797 | 19,307,832 | ||||
Basic net (loss) income per unit: | ||||||||
Undistributed (loss) income | $ (0.2) | $ (0.07) | $ 1.21 | |||||
Total basic | (0.2) | (0.07) | 1.21 | |||||
Diluted net (loss) income per unit: | ||||||||
Undistributed (loss) income | (0.2) | (0.07) | 1.2 | |||||
Total diluted | $ (0.2) | $ (0.07) | $ 1.2 | |||||
Sotherly Hotels LP [Member] | Unvested Restricted Units [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 65,000 | 62,606 | ||||||
Sotherly Hotels LP [Member] | Unit Compensation Awards Unissued [Member] | ||||||||
Denominator | ||||||||
Effect of dilutive participating securities | 37,912 | 129,002 |
Subsequent Events- Additional I
Subsequent Events- Additional Information (Detail) - Subsequent Events [Member] - USD ($) | Oct. 30, 2023 | Oct. 29, 2023 |
Mortgage Loans [Member] | SOFR [Member] | ||
Subsequent Event [Line Items] | ||
Excess Interest rate on mortgage debt | 3.50% | |
Series B Preferred Stock [Member] | ||
Subsequent Event [Line Items] | ||
Dividend paid per share | $ 0.5 | |
Series C Preferred Stock [Member] | ||
Subsequent Event [Line Items] | ||
Dividend paid per share | 0.4921875 | |
Series D Preferred Stock [Member] | ||
Subsequent Event [Line Items] | ||
Dividend paid per share | $ 0.515625 | |
Double Tree by Hilton Philadelphia Airport Hotel | Mortgage Loans [Member] | ||
Subsequent Event [Line Items] | ||
Extended maturity date | Dec. 29, 2023 | |
Reserve account carrying amount | $ 450,000 |