Document and Entity Information
Document and Entity Information - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2020 | Aug. 11, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | LIGHTSTONE VALUE PLUS REAL ESTATE INVESTMENT TRUST II INC | |
Entity Central Index Key | 0001436975 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17.4 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Investment property: | ||
Land and improvements | $ 36,684 | $ 36,662 |
Building and improvements | 203,540 | 200,362 |
Furniture and fixtures | 35,744 | 32,861 |
Construction in progress | 98 | 4,612 |
Gross investment property | 276,066 | 274,497 |
Less accumulated depreciation | (45,894) | (40,545) |
Net investment property | 230,172 | 233,952 |
Investments in unconsolidated affiliated entities | 16,047 | 16,394 |
Cash and cash equivalents | 18,117 | 21,242 |
Marketable securities, available for sale | 6,517 | 8,890 |
Restricted cash | 3,921 | 8,974 |
Accounts receivable and other assets | 3,374 | 3,903 |
Total Assets | 278,148 | 293,355 |
Liabilities and Stockholders' Equity | ||
Accounts payable and other accrued expenses | 7,093 | 8,160 |
Margin loan | 2,710 | 4,744 |
Mortgages payable, net | 136,290 | 136,177 |
Notes payable | 3,343 | 0 |
Due to related party | 630 | 587 |
Distributions payable | 0 | 3,065 |
Total liabilities | 150,066 | 152,733 |
Commitments and contingencies | ||
Company's stockholders' equity: | ||
Preferred shares, $0.01 par value, 10.0 million shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 100.0 million shares authorized, 17.4 million and 17.5 million shares issued and outstanding, respectively | 174 | 175 |
Additional paid-in-capital | 147,100 | 147,924 |
Accumulated other comprehensive (loss)/income | (136) | 172 |
Accumulated deficit | (30,843) | (19,863) |
Total Company stockholders' equity | 116,295 | 128,408 |
Noncontrolling interests | 11,787 | 12,214 |
Total Stockholders' Equity | 128,082 | 140,622 |
Total Liabilities and Stockholders' Equity | $ 278,148 | $ 293,355 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized | 10 | 10 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100 | 100 |
Common stock, shares issued | 17.4 | 17.5 |
Common stock, shares outstanding | 17.4 | 17.5 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenues | $ 3,596 | $ 20,921 | $ 16,841 | $ 38,685 |
Expenses: | ||||
Property operating expenses | 4,148 | 13,087 | 14,136 | 25,220 |
Real estate taxes | 889 | 906 | 1,771 | 1,873 |
General and administrative costs | 1,182 | 1,098 | 2,388 | 2,411 |
Depreciation and amortization | 2,716 | 2,829 | 5,361 | 5,816 |
Total operating expenses | 8,935 | 17,920 | 23,656 | 35,320 |
Operating (loss)/income | (5,339) | 3,001 | (6,815) | 3,365 |
Interest and dividend income | 126 | 139 | 269 | 283 |
Interest expense | (1,576) | (2,324) | (3,393) | (4,764) |
Loss on sale of marketable securities, available for sale | 0 | 0 | (245) | 0 |
Earnings from investments in unconsolidated affiliated entities | (482) | 157 | (998) | (157) |
Other expense, net | 15 | 82 | 1 | 48 |
Net (loss)/income | (7,256) | 1,055 | (11,181) | (1,225) |
Less: net loss/(income) attributable to noncontrolling interests | 127 | (42) | 201 | (17) |
Net (loss)/income applicable to Company's common shares | $ (7,129) | $ 1,013 | $ (10,980) | $ (1,242) |
Net (loss)/income per Company's common share, basic and diluted | $ (0.41) | $ 0.06 | $ (0.63) | $ (0.07) |
Weighted average number of common shares outstanding, basic and diluted | 17,430 | 17,713 | 17,437 | 17,756 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net (loss)/income | $ (7,256) | $ 1,055 | $ (11,181) | $ (1,225) |
Other comprehensive income/(loss): | ||||
Holding gain/(loss) on marketable securities, available for sale | 612 | 246 | (553) | 771 |
Reclassification adjustment for loss included in net loss | 0 | 0 | 245 | 0 |
Other comprehensive income/(loss): | 612 | 246 | (308) | 771 |
Comprehensive (loss)/income | (6,644) | 1,301 | (11,489) | (454) |
Less: Comprehensive (loss)/income attributable to noncontrolling interests | 127 | (42) | 201 | (17) |
Comprehensive (loss)/income attributable to the Company's common shares | $ (6,517) | $ 1,259 | $ (11,288) | $ (471) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Surplus/(Deficit) | Noncontrolling Interests | Total | |
BALANCE at Dec. 31, 2018 | $ 179 | $ 151,538 | $ (817) | $ (13,277) | $ 13,466 | $ 151,089 | |
BALANCE (in shares) at Dec. 31, 2018 | 17,874,000 | ||||||
Net (loss)/income | $ 0 | 0 | 0 | (1,242) | 17 | (1,225) | |
Other comprehensive income (loss) | 0 | 0 | 771 | 0 | 0 | 771 | |
Distributions declared (a) | [1] | 0 | 0 | 0 | (6,157) | 0 | (6,157) |
Contributions of noncontrolling interests | 0 | 0 | 0 | 0 | 57 | 57 | |
Distributions to noncontrolling interests | 0 | 0 | 0 | 0 | (716) | (716) | |
Redemption and cancellation of shares | $ (2) | (1,813) | 0 | 0 | 0 | (1,815) | |
Redemption and cancellation of shares (in shares) | (182,000) | ||||||
BALANCE at Jun. 30, 2019 | $ 177 | 149,725 | (46) | (20,676) | 12,824 | 142,004 | |
BALANCE (in shares) at Jun. 30, 2019 | 17,692,000 | ||||||
BALANCE at Mar. 31, 2019 | $ 178 | 150,624 | (292) | (18,601) | 13,160 | 145,069 | |
BALANCE (in shares) at Mar. 31, 2019 | 17,782,000 | ||||||
Net (loss)/income | 1,013 | 42 | 1,055 | ||||
Other comprehensive income (loss) | 246 | 246 | |||||
Distributions declared (a) | (3,088) | (3,088) | |||||
Contributions of noncontrolling interests | $ 0 | 0 | 0 | 0 | 24 | 24 | |
Distributions to noncontrolling interests | (402) | (402) | |||||
Redemption and cancellation of shares | $ (1) | (899) | 0 | 0 | 0 | (900) | |
Redemption and cancellation of shares (in shares) | (90,000) | ||||||
BALANCE at Jun. 30, 2019 | $ 177 | 149,725 | (46) | (20,676) | 12,824 | 142,004 | |
BALANCE (in shares) at Jun. 30, 2019 | 17,692,000 | ||||||
BALANCE at Dec. 31, 2019 | $ 175 | 147,924 | 172 | (19,863) | 12,214 | $ 140,622 | |
BALANCE (in shares) at Dec. 31, 2019 | 17,512 | ||||||
Net (loss)/income | (10,980) | (201) | $ (11,181) | ||||
Other comprehensive income (loss) | (308) | (308) | |||||
Contributions of noncontrolling interests | 101 | 101 | |||||
Distributions to noncontrolling interests | (327) | (327) | |||||
Redemption and cancellation of shares | (1) | (824) | $ (825) | ||||
Redemption and cancellation of shares (in shares) | (82) | ||||||
BALANCE at Jun. 30, 2020 | 174 | 147,100 | (136) | (30,843) | 11,787 | $ 128,082 | |
BALANCE (in shares) at Jun. 30, 2020 | 17,430 | ||||||
BALANCE at Mar. 31, 2020 | 174 | 147,100 | (748) | (23,714) | 11,858 | $ 134,670 | |
BALANCE (in shares) at Mar. 31, 2020 | 17,430 | ||||||
Net (loss)/income | (7,129) | (127) | $ (7,256) | ||||
Other comprehensive income (loss) | 612 | 612 | |||||
Contributions of noncontrolling interests | 56 | 56 | |||||
BALANCE at Jun. 30, 2020 | $ 174 | $ 147,100 | $ (136) | $ (30,843) | $ 11,787 | $ 128,082 | |
BALANCE (in shares) at Jun. 30, 2020 | 17,430 | ||||||
[1] | (a) Distributions per share were $0.175. |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||
Distribution, amount per share | $ 0.175 | $ 0.175 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (11,181) | $ (1,225) |
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities: | ||
Depreciation and amortization | 5,361 | 5,816 |
Amortization of deferred financing costs | 205 | 206 |
Loss on sale of marketable securities, available for sale | 245 | |
Earnings from investments in unconsolidated affiliated entities | 998 | 157 |
Other non-cash adjustments | 172 | (54) |
Changes in assets and liabilities: | ||
Decrease/(increase) in accounts receivable and other assets | 345 | (1,229) |
Increase in accounts payable and other accrued expenses | 270 | 1,150 |
Increase in due to related party | 43 | 135 |
Net cash (used in)/provided by operating activities | (3,542) | 4,956 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of investment property | (2,905) | (4,676) |
Proceeds from disposition of investment property | 12,955 | |
Proceeds from the sale of marketable debt securities | 1,820 | |
Investments in unconsolidated affiliated entities | (821) | (58) |
Distributions from unconsolidated affiliated entities | 169 | 304 |
Net cash (used in)/provided by investing activities | (1,737) | 8,525 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on mortgages payable | (92) | (8,258) |
Payment on margin loan, net | (2,034) | (152) |
Proceeds from notes payable | 3,343 | |
Redemption and cancellation of common shares | (825) | (1,815) |
Distributions to noncontrolling interests | (327) | (716) |
Contributions of noncontrolling interests | 101 | 57 |
Distributions to common stockholders | (3,065) | (6,223) |
Net cash used in financing activities | (2,899) | (17,107) |
Net change in cash, cash equivalents and restricted cash | (8,178) | (3,626) |
Cash, cash equivalents and restricted cash, beginning of year | 30,216 | 30,660 |
Cash, cash equivalents and restricted cash, end of period | 22,038 | 27,034 |
Supplemental cash flow information for the periods indicated is as follows: | ||
Cash paid for interest | 1,901 | 4,638 |
Distributions declared but not paid | 3,088 | |
Holding loss/gain on marketable securities, available for sale | 308 | 771 |
Investment property acquired but not paid | 39 | 316 |
The following is a summary of the Company's cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the periods presented: | ||
Cash and cash equivalents | 18,117 | 24,214 |
Restricted cash | 3,921 | 2,820 |
Total cash, cash equivalents and restricted cash | $ 22,038 | $ 27,034 |
Business and Structure
Business and Structure | 6 Months Ended |
Jun. 30, 2020 | |
Business and Structure | |
Business and Structure | 1. Business and Structure Lightstone Value Plus Real Estate Investment Trust II, Inc. (‘‘Lightstone REIT II’’), is a Maryland corporation, formed on April 28, 2008, which elected to qualify as a real estate investment trust (‘‘REIT’’) for U.S. federal income tax purposes beginning with the taxable year ended December 31, 2009. Lightstone REIT II is structured as an umbrella partnership REIT, or UPREIT, and substantially all of its current and future business will be conducted through Lightstone Value Plus REIT II LP, a Delaware limited partnership (the ‘‘Operating Partnership’’). As of June 30, 2020, Lightstone REIT II held an approximately 99% general partnership interest in the Operating Partnership’s common units. Lightstone REIT II and the Operating Partnership and its subsidiaries are collectively referred to as the ‘‘Company’’ and the use of ‘‘we,’’ ‘‘our,’’ ‘‘us’’ or similar pronouns refers to Lightstone REIT II, its Operating Partnership or the Company as required by the context in which such pronoun is used. The Company has and will continue to seek to acquire a diverse portfolio of real estate assets and real estate-related investments, including hotels, other commercial and/or residential properties, primarily located in the United States. All such properties may be acquired and operated by the Company alone or jointly with another party. The Company may also originate or acquire mortgage loans secured by real estate. Although the Company expects that most of its investments will be of these types, it may invest in whatever types of real estate-related investments that it believes are in its best interests. The Company currently has one operating segment. As of June 30, 2020, we (i) majority owned and consolidated the operating results and financial condition of 14 limited service hotels containing a total of 1,802 rooms, (ii) held an unconsolidated 48.6% membership interest in Brownmill, LLC (“Brownmill”), an affiliated entity that owns two retail properties, and (iii) held an unconsolidated 50.0% membership interest in LVP LIC Hotel JV LLC (the “Hilton Garden Inn Joint Venture”), an affiliated real estate entity that owns and operates a 183-room limited service hotel located in Long Island City, New York (the “Hilton Garden Inn – Long Island City”). The Company accounts for its membership interests in Brownmill and the Hilton Garden Inn Joint Venture under the equity method of accounting. As of June 30, 2020, seven of our consolidated limited service hotels are held in a joint venture (the “Joint Venture”) formed between us and Lightstone Value Plus Real Estate Investment Trust, Inc. (“Lightstone I”), a related party REIT also sponsored by The Lightstone Group, LLC. The Company and Lightstone I have 97.5% and 2.5% membership interests in the Joint Venture, respectively. Additionally, as of June 30, 2020, certain of our consolidated hotels also have ownership interests held by unrelated minority owners. The membership interests of Lightstone I and the unrelated minority owners are accounted for as noncontrolling interests. The Company’s advisor is Lightstone Value Plus REIT II LLC (the “Advisor”), which is majority owned by David Lichtenstein. On May 20, 2008, the Advisor contributed $2 to the Operating Partnership in exchange for 200 limited partner common units in the Operating Partnership. The Advisor also owns 20,000 shares of the Company’s common stock (“Common Shares”) which were issued on May 20, 2008 for $200, or $10.00 per share. Mr. Lichtenstein also is a majority owner of the equity interests of the Lightstone Group, LLC. The Lightstone Group, LLC served as the Company’s sponsor (the ‘‘Sponsor’’) during its initial public offering (the “Offering”) and follow-on offering (the “Follow-on Offering”, and collectively, “the Offerings”), which terminated on August 15, 2012 and September 27, 2014, respectively. The Advisor, together with the Company’s board of directors (the “Board of Directors”), is primarily responsible for making investment decisions on behalf of the Company and managing its day-to-day operations. Through his ownership and control of the Lightstone Group, LLC, Mr. Lichtenstein is the indirect owner and manager of Lightstone SLP II LLC, a Delaware limited liability company (the “Associate General Partner”), which has subordinated profits interests in the Operating Partnership which were acquired for aggregate consideration of $17.7 million in connection with the Company’s Offerings. Mr. Lichtenstein also acts as the Company’s Chairman and Chief Executive Officer. As a result, he exerts influence over but does not control Lightstone REIT II or the Operating Partnership. The Company does not have any employees. The Advisor receives compensation and fees for services related to the investment and management of the Company’s assets. The Company’s Advisor has certain affiliates which may manage the properties the Company acquires. However, the Company also contracts with other unaffiliated third-party property managers, principally for the management of its hospitality properties. The Company’s Common Shares are not currently listed on a national securities exchange. The Company may seek to list its Common Shares for trading on a national securities exchange only if a majority of its independent directors believe listing would be in the best interest of its stockholders. The Company does not intend to list its shares at this time. The Company does not anticipate that there would be any market for its Common Shares until they are listed for trading. In the event the Company does not obtain listing prior to September 27, 2024, which is the tenth anniversary of the termination of its Follow-On Offering, its charter requires that the Board of Directors must either (i) seek stockholder approval of an extension or amendment of this listing deadline; or (ii) seek stockholder approval to adopt a plan of liquidation of the corporation. Noncontrolling Interests Limited Partner On May 20, 2008, the Advisor contributed $2 to the Operating Partnership in exchange for 200 limited partner common units in the Operating Partnership. The Advisor has the right to convert limited partner common units into cash or, at the Company’s option, an equal number of Common Shares. Associate General Partner In connection with the Company’s Offerings, which concluded on September 27, 2014, the Associate General Partner contributed (i) cash of approximately $12.9 million and (ii) equity interests totaling 48.6% in Brownmill, which were valued at $4.8 million, to the Operating Partnership in exchange for 177.0 Subordinated Profits Interests in the Operating Partnership with an aggregate value of $17.7 million. As the indirect majority owner of the Associate General Partner, Mr. Lichtenstein is the beneficial owner of a 99% interest in such Subordinated Profits Interests and thus receives an indirect benefit from any distributions made in respect thereof. These Subordinated Profits Interests may entitle the Associate General Partner to a portion of any regular and liquidation distributions that the Company makes to its stockholders, but only after its stockholders have received a stated preferred return. Other Noncontrolling Interests in Consolidated Subsidiaries Other noncontrolling interests consist of the (i) membership interest in the Joint Venture held by Lightstone I and (ii) membership interests held by minority owners in certain of the Company’s hotels. The Advisor and its affiliates and Associate General Partner are related parties of the Company. Certain of these entities are entitled to compensation and fees for services related to the investment, management and disposition of the Company’s assets during its acquisition, operational and liquidation stages. The compensation levels during the Company's acquisition and operational stages are based on the cost of acquired properties/investments and the annual revenue earned from such properties/investments, and other such fees and reimbursements as outlined in each of the respective agreements. See Note 8 for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Lightstone REIT II and its Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of June 30, 2020, Lightstone REIT II had a 99% general partnership interest in the common units of the Operating Partnership. All inter-company balances and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2019. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. The accompanying unaudited consolidated financial statements of the Lightstone Value Plus Real Estate Investment Trust II, Inc. and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. The consolidated balance sheet as of December 31, 2019 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10‑K. The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period. To qualify or maintain our qualification as a REIT, we engage in certain activities through wholly-owned taxable REIT subsidiaries (“TRS”). As such, we are subject to U.S. federal and state income and franchise taxes from these activities. Revenue Recognition The following table represents the total revenues from hotel operations on a disaggregated basis: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues Room $ 3,372 $ 19,648 $ 15,823 $ 36,069 Food, beverage and other 224 1,273 1,018 2,616 Total revenues $ 3,596 $ 20,921 $ 16,841 $ 38,685 Restricted cash As required by the Company’s lenders, restricted cash is held in escrow accounts for anticipated capital expenditures, real estate taxes, debt service payments and other reserves for certain of our consolidated properties. Capital reserves are typically utilized for non-operating expenses such as major capital expenditures. Alternatively, a lender may require its own formula for an escrow of capital reserves. As of December 31, 2019, restricted cash also included approximately $7.2 million of the proceeds from the October 2019 sale of the Company’s SpringHill Suites by Marriott hotel, located in Peabody, Massachusetts. These funds were temporarily placed in escrow with a qualified intermediary to potentially facilitate a like-kind exchange transaction in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended. However, the Company decided not to pursue a like-kind exchange transaction and the funds were subsequently released in May 2020. COVID-19 Pandemic Operations and Liquidity Update During the second quarter of 2020, the COVID-19 pandemic continued to evolve on both a global and national level. With respect to the United States, many states have begun a phased approach as to reopening of businesses and venues, which have been subject to various restrictions and other measures. While certain states have begun to reduce and/or lift restrictions, the situation remains both dynamic and unpredictable. As a result of the COVID-19 pandemic, room demand for the Company's consolidated and unconsolidated hotels began to significantly decline in March 2020 and these trends continued throughout the second quarter. The COVID-19 pandemic has had a significant negative impact on the Company's operations and financial results to date and the Company currently expects that the COVID-19 pandemic will continue to have a significant negative impact on its results of operations, financial position and cash flow for the remainder of 2020 and into 2021. The Company cannot estimate when room demand will recover for its hotels. Additionally, the Company has an unconsolidated 48.6% membership interest in Brownmill, which owns two retail properties located in New Jersey that have been subject to various restrictions. If Brownmill’s retail properties are negatively impacted for an extended period because its tenants are unable to pay their rent, the Company’s equity earnings and the carrying value of its investment in Brownmill could be materially and adversely impacted. In light of the impact of the COVID-19 pandemic on the operating results of its hotels, the Company has taken various actions to preserve its liquidity, including the following: · The Company has implemented cost reduction strategies for all of its hotels, which has led to reductions in both operating expenses and planned capital expenditures. · On June 2, 2020, the Company and the lender agreed to certain changes to the terms of the Company's revolving credit facility (the "Revolving Credit Facility"), including (i) the deferral of monthly debt service for payments previously due from April 1, 2020 through September 30, 2020, which will now be due at maturity;(ii) subject to certain conditions, the interest rate spread will be reduced by 100 bps to Libor plus 2.15% for the six-month period beginning September 1, 2020 through February 28, 2021; (iii) the Company deposited $2.5 million into a cash collateral account to be applied against the monthly debt service payments due from October 1, 2020 through March 1, 2021; and (iv) waiver of all financial covenants until June 30, 2021. See Note 5 for additional information. · Although the Company has remained current with respect to scheduled debt service for its other mortgage indebtedness, it has also been proactively working with the lenders and/or servicers to obtain or seek to obtain modification of key terms to its indebtedness. While the Company has historically been successful in obtaining modifications of key terms for certain of its indebtedness, discussions with the other lenders and/or services are ongoing and there can be no assurance the Company will be successful in its endeavors. See Note 5 for additional information. · On March 19, 2020, the Company’s board of directors determined to suspend regular quarterly distributions. See Note 7 for additional information. · On March 19, 2020, the Company’s board of directors approved the suspension of all redemptions under the Company’s shareholder redemption program. See Note 7 for additional information. · In April 2020, the Company received an aggregate of $3.3 million from loans provided under the federal Paycheck Protection Program. See Note 6 for additional information. · In May 2020, the Company had approximately $7.2 million of funds released to it from an escrow account. Based on these actions, the Company believes that it will have sufficient liquidity to meet its obligations for the next twelve months. However, the Company's Revolving Credit Facility is initially scheduled to mature on May 17, 2021 and while it has two one-year extension options, they are both at the sole discretion of the lender. Although the Company currently intends to request the lender exercise the first one-year extension option, there can be no assurance the Company will be successful in obtaining an extension to the maturity of the Revolving Credit Facility. See Note 5 for additional information. New Accounting Pronouncements The Company has reviewed and determined that recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliated Entities | 6 Months Ended |
Jun. 30, 2020 | |
Investments in Unconsolidated Affiliated Entities | |
Investments in Unconsolidated Affiliated Entities | 3. Investments in Unconsolidated Affiliated Entities The entities listed below are partially owned by the Company. The Company accounts for these investments under the equity method of accounting as the Company exercises significant influence, but does not exercise financial and operating control over these entities. A summary of the Company’s investments in the unconsolidated affiliated entities is as follows: As of Entity Date of Ownership Ownership % June 30, 2020 December 31, 2019 Brownmill Various % $ 4,473 $ 4,630 Hilton Garden Inn Joint Venture March 27, 2018 % 11,574 11,764 Total investments in unconsolidated affiliated real estate entities $ 16,047 $ 16,394 Brownmill During 2010 through 2012, the Company entered into various contribution agreements with Lightstone Holdings LLC (‘‘LGH’’), a wholly-owned subsidiary of the Company’s Sponsor, pursuant to which LGH contributed to the Company an approximate aggregate 48.6% equity interest in exchange for the Company issuing an aggregate of 48 units of Subordinated Profits Interests, at $100,000 per unit (at an aggregate total value of $4.8 million), to Lightstone SLP II LLC. As of June 30, 2020, the Company owns a 48.6% membership interest in Brownmill. The Company’s interest in Brownmill is a non-managing interest. An affiliate of the Company’s Sponsor is the majority owner and manager of Brownmill. Profit and cash distributions are allocated in accordance with each investor’s ownership percentage. The Company accounts for its investment in Brownmill in accordance with the equity method of accounting. During the six months ended June 30, 2020, the Company received distributions from Brownmill aggregating $125. Brownmill owns two retail properties known as Browntown Shopping Center, located in Old Bridge, New Jersey, and Millburn Mall, located in Vauxhaull, New Jersey, which collectively, are referred to as the “Brownmill Properties.” Brownmill Financial Information The Company’s carrying value of its interest in Brownmill differs from its share of member’s equity reported in the condensed balance sheet of Brownmill due to the Company’s basis of its investment in excess of the historical net book value of Brownmill. The Company’s additional basis allocated to depreciable assets is being recognized on a straight-line basis over the lives of the appropriate assets. The following table represents the condensed income statements for Brownmill for the periods indicated: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenue $ 895 $ 865 $ 1,820 $ 1,774 Property operating expenses 454 334 1,106 796 Depreciation and amortization 167 175 332 350 Operating income 274 356 382 628 Interest expense and other, net (150) (170) (319) (360) Net income $ 124 $ 186 $ 63 $ 268 Company’s share of net income $ 60 $ 90 $ 30 $ 130 Additional depreciation and amortization expense (1) (31) (31) (62) (63) Company’s earnings from investment $ 29 $ 59 $ (32) $ 67 1) Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in Brownmill and the amount of the underlying equity in net assets of Brownmill. The following table represents the condensed balance sheets for Brownmill: As of As of June 30, 2020 December 31, 2019 Real estate, at cost (net) $ 13,790 $ 13,507 Cash and restricted cash 890 1,016 Other assets 1,440 1,440 Total assets $ 16,120 $ 15,963 Mortgage payable $ 13,970 $ 14,061 Other liabilities 970 648 Members’ capital 1,180 1,254 Total liabilities and members’ capital $ 16,120 $ 15,963 Hilton Garden Inn Joint Venture On March 27, 2018, the Company and Lightstone Value Plus Real Estate Investment Trust III, Inc. (“Lightstone REIT III”), a related party REIT also sponsored by the Company’s Sponsor, acquired, through the Hilton Garden Inn Joint Venture, a 183‑room, limited-service hotel located at 29‑21 41 st Avenue, Long Island City, New York (the “Hilton Garden Inn - Long Island City”) from an unrelated third party, for aggregate consideration of approximately $60.0 million, which consisted of $25.0 million of cash and $35.0 million of proceeds from a loan from a financial institution (the "Hilton Garden Inn Mortgage"), excluding closing and other related transaction costs. The Company and Lightstone REIT III each have a 50.0% membership interest in the Hilton Garden Inn Joint Venture. The Company paid approximately $12.9 million for a 50.0% membership interest in the Hilton Garden Inn Joint Venture. The Company’s membership interest in the Hilton Garden Inn Joint Venture is a co-managing interest. The Company accounts for its membership interest in the Hilton Garden Inn Joint Venture in accordance with the equity method of accounting because it exerts significant influence over but does not control the Hilton Garden Inn Joint Venture. All capital contributions and distributions of earnings from the Hilton Garden Inn Joint Venture are made on a pro rata basis in proportion to each member’s equity interest percentage. Any distributions in excess of earnings from the Hilton Garden Inn Joint Venture are made to the members pursuant to the terms of the Hilton Garden Inn Joint Venture’s operating agreement. The Company commenced recording its allocated portion of profit/loss and cash distributions beginning as of March 27, 2018 with respect to its membership interest of 50.0% in the Hilton Garden Inn Joint Venture. On June 2, 2020, the Hilton Garden Inn Joint Venture and the lender agreed to certain changes to the terms of the Hilton Garden Inn Mortgage, including (i) the deferral of monthly debt service for payments previously due from April 1, 2020 through September 30, 2020, which will now be due at maturity;(ii) subject to certain conditions, the interest rate spread will be reduced by 100 bps to Libor plus 2.15% for the six-month period beginning September 1, 2020 through February 28, 2021; (iii) the Hilton Garden Inn Joint Venture deposited $1.2 million into a cash collateral account to be applied against the monthly debt service payments due from October 1, 2020 through March 1, 2021; and (iv) waiver of all financial covenants until June 30, 2021. Subsequent to the Company’s acquisition of its 50.0% membership interest in the Hilton Garden Joint Venture through June 30, 2020, it has made an aggregate of $1.5 million of additional capital contributions (of which $0.8 million was made in 2020) and received aggregate distributions of $1.5 million (of which $44 was received in 2020). Hilton Garden Inn Joint Venture Financial Information The following table represents the condensed income statements for the Hilton Garden Inn Joint Venture for the period indicated: For the Three Months For the Three Months For the Six Months For the Six Months Ended June 30, 2020 Ended June 30, 2019 Ended June 30, 2020 Ended June 30, 2019 Revenues $ 680 $ 3,086 $ 2,220 $ 5,094 Property operating expenses 616 1,765 1,961 3,270 General and administrative costs 11 (22) 29 (22) Depreciation and amortization 615 627 1,245 1,269 Operating (loss)/income (562) 716 (1,015) 577 Interest expense (460) (520) (917) (1,026) Net (loss)/income $ (1,022) $ 196 $ (1,932) $ (449) Company’s share of net (loss)/income (50.00%) $ (511) $ 98 $ (966) $ (225) The following table represents the condensed balance sheets for the Hilton Garden Inn Joint Venture: As of As of June 30, 2020 December 31, 2019 Investment property, net $ 55,961 $ 56,775 Cash 866 904 Other assets 1,759 894 Total assets $ 58,586 $ 58,573 Mortgage payable, net $ 35,225 $ 34,821 Other liabilities 782 794 Members’ capital 22,579 22,958 Total liabilities and members’ capital $ 58,586 $ 58,573 |
Marketable Securities, Fair Val
Marketable Securities, Fair Value Measurements and Margin Loan | 6 Months Ended |
Jun. 30, 2020 | |
Marketable Securities, Fair Value Measurements and Margin Loan | |
Marketable Securities, Fair Value Measurements and Margin Loan | 4. Marketable Securities, Fair Value Measurements and Margin Loan Marketable Securities The following is a summary of the Company’s available for sale securities as of the dates indicated: As of June 30, 2020 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Debt securities: Corporate Bonds $ 6,653 $ — $ (136) $ 6,517 As of December 31, 2019 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Debt securities: Corporate Bonds $ 8,718 $ 172 $ — $ 8,890 During the first half of 2020, financial markets experienced significant volatility in response to the current COVID-19 pandemic, including significant changes in market interest rates and market prices of certain equity securities during the six months ended June 30, 2020. During the first and second quarter of 2020, the Company experienced a holding loss of approximately $1.2 million and a holding gain of approximately $0.6 million on its available for sale marketable debt securities, respectively, which resulted in a net holding loss of approximately $0.6 million for the six months ended June 30, 2020. These holding gains and losses are included in the Company’s consolidated statements of comprehensive income. As a result, the Company's marketable debt securities had an aggregate net unrealized loss of approximately $0.1 million as of June 30, 2020. The Company considers the declines in market value of its investments in marketable debt securities to be temporary in nature as the unrealized losses were caused primarily by financial market volatility associated with the current COVID-19 pandemic which resulting in significant reductions in market interest rates and market prices of certain equity securities. When evaluating its investments in marketable debt securities for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition of the issuer and any changes thereto, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the marketable debt security before recovery of its amortized cost basis. During the three and six months ended June 30, 2020 and 2019, the Company did not recognize any impairment charges on its investments in marketable debt securities. As of June 30, 2020, the Company does not consider any of its investments in marketable debt securities to be other-than-temporarily impaired. The Company may sell certain of its investments in marketable debt securities prior to their stated maturities for strategic purposes, in anticipation of credit deterioration, or for duration management. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: · Level 1 – Quoted prices in active markets for identical assets or liabilities. · Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of June 30, 2020 and December 31, 2019, all of the Company’s debt securities were classified as Level 2 assets and there were no transfers between the level classifications during the six months ended June 30, 2020. The fair values of the Company’s investments in Corporate Bonds are measured using readily available quoted prices for similar assets. The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities: As of June 30, 2020 Due in 1 year $ — Due in 1 year through 5 years 3,068 Due in 5 year through 10 years — Due after 10 years 3,449 Total $ 6,517 The Company did not have any other significant financial assets or liabilities, which would require revised valuations that are recognized at fair value. Margin loan The Company has access to a margin loan from a financial institution that holds custody of certain of the Company’s marketable securities. The margin loan is collateralized by the marketable securities in the Company’s account. The amounts available to the Company under the margin loan are at the discretion of the financial institution and not limited to the amount of collateral in its account. The amount outstanding under this margin loan was $2.7 million and $4.7 million as of June 30, 2020 and December 31, 2019, respectively, and is due on demand. The margin loan bears interest at Libor plus 0.85% (1.01% as of June 30, 2020). |
Mortgages payable, net
Mortgages payable, net | 6 Months Ended |
Jun. 30, 2020 | |
Mortgages payable, net | |
Mortgages payable, net | 5 . Mortgages payable, net Mortgages payable, net consisted of the following: Weighted Average Interest Rate Interest as of Maturity Amount Due As of As of Description Rate June 30, 2020 Date at Maturity June 30, 2020 December 31, 2019 Revolving Credit Facility LIBOR + 3.15 % 4.43 % May 2021 $ 123,045 $ 123,045 $ 123,045 Courtyard – Paso Robles % 5.49 % November 2023 13,022 13,714 13,806 Total mortgages payable 4.53 % $ 136,067 136,759 136,851 Less: Deferred financing costs (469) (674) Total mortgages payable, net $ 136,290 $ 136,177 Revolving Credit Facility The Company, through certain subsidiaries, has a non-recourse Revolving Credit Facility with a financial institution. The Revolving Credit Facility provides the Company with a line of credit of up to $140.0 million pursuant to which it may designate properties as collateral that allow borrowings up to a 65.0% loan-to-value ratio subject to also meeting certain financial covenants, including a prescribed minimum debt yield. The Revolving Credit Facility provides for monthly interest-only payments and the entire principal balance is due upon its expiration. The Revolving Credit Facility, which was entered into on May 17, 2018, has an initial maturity date of May 17, 2021, subject to two one-year options to extend at the sole discretion of the lender. The initial interest rate on the Revolving Credit Facility was Libor plus 3.50% until it was reduced to Libor plus 3.15% effective March 31, 2019. On June 2, 2020, the Company and the lender agreed to certain changes to the terms of Revolving Credit Facility, including (i) the deferral of monthly debt service for payments previously due from April 1, 2020 through September 30, 2020, which will now be due at maturity; (ii) subject to certain conditions, the interest rate spread will be reduced by 100 bps to Libor plus 2.15% for the six-month period beginning September 1, 2020 through February 28, 2021; (iii) the Company deposited $2.5 million into a cash collateral account (which is classified as restricted cash on the consolidated balance sheets) to be applied against the monthly debt service payments due from October 1, 2020 through March 1, 2021; and (iv) waiver of all financial covenants until June 30, 2021. As of June 30, 2020, twelve of the Company’s hotel properties were pledged as collateral under the Revolving Credit Facility and the outstanding principal balance was approximately $123.0 million. Courtyard – Paso Robles Mortgage Loan In connection with the Company’s acquisition of the Courtyard – Paso Robles on December 14, 2017, it assumed an existing $14.0 million non-recourse mortgage loan collateralized by the Courtyard – Paso Robles (the “Courtyard - Paso Robles Mortgage Loan”). The Courtyard – Paso Robles Mortgage Loan matures in November 2023, bears interest at a fixed rate of 5.49% and requires monthly principal and interest payments of approximately $79 through its stated maturity with a balloon payment of approximately $13.0 million due at maturity. The Courtyard – Paso Robles Mortgage Loan had an outstanding balance of approximately $13.7 million as of June 30, 2020. The Company is current with respect to schedule debt service for the Courtyard – Paso Robles Mortgage Loan. However, in light of the COVID-19 pandemic, it has requested the loan be transferred to a special servicer in order to seek certain modifications to the loan’s terms. However, there can be no assurance that the Company will be successful in obtaining any modifications to the loan’s terms. Principal Maturities The following table, based on the initial terms of the mortgages, sets forth their aggregate estimated contractual principal maturities, including balloon payments due at maturity, as of June 30, 2020: 2020 2021 2022 2023 2024 Thereafter Total Principal maturities $ 95 $ 123,245 $ 211 $ 13,208 $ — $ — $ 136,759 Less: deferred financing costs (469) Total principal maturities, net $ 136,290 Pursuant to the Company’s loan agreements, escrows in the amount of $3.9 million and $1.8 million were held in restricted cash accounts as of June 30, 2020 and December 31, 2019 , respectively. Such escrows will be released in accordance with the applicable loan agreements for payments of real estate taxes, debt service payments, insurance and capital improvement transactions, as required. Certain of our debt agreements also contain clauses providing for prepayment penalties. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Notes Payable. | |
Notes Payable | 6 . Notes Payable During April 2020, the Company, through various subsidiaries (each such entity, a "Borrower"), received aggregate funding of $3.3 million through loans (the "PPP Loans") originated under the federal Paycheck Protection Program, which was established under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and is administered by the U.S. Small Business Administration. The PPP Loans each have a term of five years and provide for an interest rate of 1.00%. Equal payments of principal and interest begin no later than 10 months following the origination dates of the PPP loans and are amortized over the remaining term. Pursuant to the terms of the CARES Act, the proceeds of the PPP Loans may be used for payroll costs, mortgage interest, rent or utility costs. The promissory note for each of the PPP Loans 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 Loans. 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. As of June 30, 2020, the PPP Loans had an outstanding balance of $3.3 million and are classified as Notes Payable on the consolidated balance sheets. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions | |
Related Party Transactions | 8 . Related Party Transactions The Company has agreements with the Advisor and Lightstone Value Plus REIT Management LLC (the “Property Manager”) to pay certain fees in exchange for services performed by these entities and other related party entities. The Company’s ability to secure financing and subsequent real estate operations are dependent upon its Advisor, Property Manager and their affiliates to perform such services as provided in these agreements. The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Development fees (1) $ — $ 57 $ 32 $ 62 Asset management fees (general and administrative costs) 734 758 1,456 1,534 Total $ 734 $ 815 $ 1,488 $ 1,596 (1) Generally, capitalized and amortized over the estimated useful life of the associated asset. In connection with the Company’s Offering and Follow-On Offering, Lightstone SLP II LLC, an affiliate of the Company’s Sponsor, contributed (i) cash of approximately $12.9 million and (ii) equity interests in Brownmill valued at $4.8 million to the Operating Partnership in exchange for 177.0 Subordinated Profits Interests in the Operating Partnership with an aggregate value of $17.7 million, which are included in noncontrolling interests in the consolidated balance sheets. These Subordinated Profit Interests, the purchase price of which will be repaid only after stockholders receive a stated preferred return and their net investment, entitle Lightstone SLP II, LLC to a portion of any regular distributions made by the Operating Partnership. |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Financial Instruments | |
Financial Instruments | 9 . Financial Instruments The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable and other assets, accounts payable and other accrued expenses, margin loan, due to related party, and distributions payable approximated their fair values because of the short maturity of these instruments. The estimated fair value of our mortgages payable is as follows: As of June 30, 2020 As of December 31, 2019 Carrying Estimated Fair Carrying Estimated Fair Amount Value Amount Value Mortgages payable $ 136,759 $ 137,897 $ 136,851 $ 137,303 The fair value of our mortgages payable was determined by discounting the future contractual interest and principal payments by market interest rates. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10 . Commitments and Contingencies Legal Proceedings From time to time in the ordinary course of business, the Company may become subject to legal proceedings, claims or disputes. As of the date hereof, the Company is not a party to any material pending legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on its results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Lightstone REIT II and its Operating Partnership and its subsidiaries (over which the Company exercises financial and operating control). As of June 30, 2020, Lightstone REIT II had a 99% general partnership interest in the common units of the Operating Partnership. All inter-company balances and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of the Company and related notes as contained in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2019. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. The accompanying unaudited consolidated financial statements of the Lightstone Value Plus Real Estate Investment Trust II, Inc. and Subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during a reporting period. The most significant assumptions and estimates relate to the valuation of real estate, depreciable lives, and revenue recognition. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. The consolidated balance sheet as of December 31, 2019 included herein has been derived from the consolidated balance sheet included in the Company’s Annual Report on Form 10‑K. The unaudited consolidated statements of operations for interim periods are not necessarily indicative of results for the full year or any other period. To qualify or maintain our qualification as a REIT, we engage in certain activities through wholly-owned taxable REIT subsidiaries (“TRS”). As such, we are subject to U.S. federal and state income and franchise taxes from these activities. |
Revenue Recognition | Revenue Recognition The following table represents the total revenues from hotel operations on a disaggregated basis: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues Room $ 3,372 $ 19,648 $ 15,823 $ 36,069 Food, beverage and other 224 1,273 1,018 2,616 Total revenues $ 3,596 $ 20,921 $ 16,841 $ 38,685 |
Restricted cash | Restricted cash As required by the Company’s lenders, restricted cash is held in escrow accounts for anticipated capital expenditures, real estate taxes, debt service payments and other reserves for certain of our consolidated properties. Capital reserves are typically utilized for non-operating expenses such as major capital expenditures. Alternatively, a lender may require its own formula for an escrow of capital reserves. As of December 31, 2019, restricted cash also included approximately $7.2 million of the proceeds from the October 2019 sale of the Company’s SpringHill Suites by Marriott hotel, located in Peabody, Massachusetts. These funds were temporarily placed in escrow with a qualified intermediary to potentially facilitate a like-kind exchange transaction in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended. However, the Company decided not to pursue a like-kind exchange transaction and the funds were subsequently released in May 2020. |
COVID-19 Pandemic | COVID-19 Pandemic Operations and Liquidity Update During the second quarter of 2020, the COVID-19 pandemic continued to evolve on both a global and national level. With respect to the United States, many states have begun a phased approach as to reopening of businesses and venues, which have been subject to various restrictions and other measures. While certain states have begun to reduce and/or lift restrictions, the situation remains both dynamic and unpredictable. As a result of the COVID-19 pandemic, room demand for the Company's consolidated and unconsolidated hotels began to significantly decline in March 2020 and these trends continued throughout the second quarter. The COVID-19 pandemic has had a significant negative impact on the Company's operations and financial results to date and the Company currently expects that the COVID-19 pandemic will continue to have a significant negative impact on its results of operations, financial position and cash flow for the remainder of 2020 and into 2021. The Company cannot estimate when room demand will recover for its hotels. Additionally, the Company has an unconsolidated 48.6% membership interest in Brownmill, which owns two retail properties located in New Jersey that have been subject to various restrictions. If Brownmill’s retail properties are negatively impacted for an extended period because its tenants are unable to pay their rent, the Company’s equity earnings and the carrying value of its investment in Brownmill could be materially and adversely impacted. In light of the impact of the COVID-19 pandemic on the operating results of its hotels, the Company has taken various actions to preserve its liquidity, including the following: · The Company has implemented cost reduction strategies for all of its hotels, which has led to reductions in both operating expenses and planned capital expenditures. · On June 2, 2020, the Company and the lender agreed to certain changes to the terms of the Company's revolving credit facility (the "Revolving Credit Facility"), including (i) the deferral of monthly debt service for payments previously due from April 1, 2020 through September 30, 2020, which will now be due at maturity;(ii) subject to certain conditions, the interest rate spread will be reduced by 100 bps to Libor plus 2.15% for the six-month period beginning September 1, 2020 through February 28, 2021; (iii) the Company deposited $2.5 million into a cash collateral account to be applied against the monthly debt service payments due from October 1, 2020 through March 1, 2021; and (iv) waiver of all financial covenants until June 30, 2021. See Note 5 for additional information. · Although the Company has remained current with respect to scheduled debt service for its other mortgage indebtedness, it has also been proactively working with the lenders and/or servicers to obtain or seek to obtain modification of key terms to its indebtedness. While the Company has historically been successful in obtaining modifications of key terms for certain of its indebtedness, discussions with the other lenders and/or services are ongoing and there can be no assurance the Company will be successful in its endeavors. See Note 5 for additional information. · On March 19, 2020, the Company’s board of directors determined to suspend regular quarterly distributions. See Note 7 for additional information. · On March 19, 2020, the Company’s board of directors approved the suspension of all redemptions under the Company’s shareholder redemption program. See Note 7 for additional information. · In April 2020, the Company received an aggregate of $3.3 million from loans provided under the federal Paycheck Protection Program. See Note 6 for additional information. In May 2020, the Company had approximately $7.2 million of funds released to it from an escrow account. Based on these actions, the Company believes that it will have sufficient liquidity to meet its obligations for the next twelve months. However, the Company's Revolving Credit Facility is initially scheduled to mature on May 17, 2021 and while it has two one-year extension options, they are both at the sole discretion of the lender. Although the Company currently intends to request the lender exercise the first one-year extension option, there can be no assurance the Company will be successful in obtaining an extension to the maturity of the Revolving Credit Facility. See Note 5 for additional information. |
New Accounting Pronouncements | New Accounting Pronouncements The Company has reviewed and determined that recently issued accounting pronouncements will not have a material impact on its financial position, results of operations and cash flows, or do not apply to its current operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of total revenues from hotel operations on a disaggregated basis | The following table represents the total revenues from hotel operations on a disaggregated basis: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues Room $ 3,372 $ 19,648 $ 15,823 $ 36,069 Food, beverage and other 224 1,273 1,018 2,616 Total revenues $ 3,596 $ 20,921 $ 16,841 $ 38,685 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliated Entities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Schedule of Equity Method Investments [Line Items] | |
Summary of investments in unconsolidated entities | A summary of the Company’s investments in the unconsolidated affiliated entities is as follows: As of Entity Date of Ownership Ownership % June 30, 2020 December 31, 2019 Brownmill Various % $ 4,473 $ 4,630 Hilton Garden Inn Joint Venture March 27, 2018 % 11,574 11,764 Total investments in unconsolidated affiliated real estate entities $ 16,047 $ 16,394 |
Brownmill, LLC | |
Schedule of Equity Method Investments [Line Items] | |
Schedule of condensed income statements | The following table represents the condensed income statements for Brownmill for the periods indicated: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenue $ 895 $ 865 $ 1,820 $ 1,774 Property operating expenses 454 334 1,106 796 Depreciation and amortization 167 175 332 350 Operating income 274 356 382 628 Interest expense and other, net (150) (170) (319) (360) Net income $ 124 $ 186 $ 63 $ 268 Company’s share of net income $ 60 $ 90 $ 30 $ 130 Additional depreciation and amortization expense (1) (31) (31) (62) (63) Company’s earnings from investment $ 29 $ 59 $ (32) $ 67 1) Additional depreciation and amortization expense relates to the amortization of the difference between the cost of the interest in Brownmill and the amount of the underlying equity in net assets of Brownmill. |
Schedule of condensed balance sheets | The following table represents the condensed balance sheets for Brownmill: As of As of June 30, 2020 December 31, 2019 Real estate, at cost (net) $ 13,790 $ 13,507 Cash and restricted cash 890 1,016 Other assets 1,440 1,440 Total assets $ 16,120 $ 15,963 Mortgage payable $ 13,970 $ 14,061 Other liabilities 970 648 Members’ capital 1,180 1,254 Total liabilities and members’ capital $ 16,120 $ 15,963 |
Hilton Garden Inn Joint Venture | |
Schedule of Equity Method Investments [Line Items] | |
Schedule of condensed income statements | The following table represents the condensed income statements for the Hilton Garden Inn Joint Venture for the period indicated: For the Three Months For the Three Months For the Six Months For the Six Months Ended June 30, 2020 Ended June 30, 2019 Ended June 30, 2020 Ended June 30, 2019 Revenues $ 680 $ 3,086 $ 2,220 $ 5,094 Property operating expenses 616 1,765 1,961 3,270 General and administrative costs 11 (22) 29 (22) Depreciation and amortization 615 627 1,245 1,269 Operating (loss)/income (562) 716 (1,015) 577 Interest expense (460) (520) (917) (1,026) Net (loss)/income $ (1,022) $ 196 $ (1,932) $ (449) Company’s share of net (loss)/income (50.00%) $ (511) $ 98 $ (966) $ (225) |
Schedule of condensed balance sheets | The following table represents the condensed balance sheets for the Hilton Garden Inn Joint Venture: As of As of June 30, 2020 December 31, 2019 Investment property, net $ 55,961 $ 56,775 Cash 866 904 Other assets 1,759 894 Total assets $ 58,586 $ 58,573 Mortgage payable, net $ 35,225 $ 34,821 Other liabilities 782 794 Members’ capital 22,579 22,958 Total liabilities and members’ capital $ 58,586 $ 58,573 |
Marketable Securities, Fair V_2
Marketable Securities, Fair Value Measurements and Margin Loan (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Marketable Securities, Fair Value Measurements and Margin Loan | |
Summary of Available for Sale Securities | The following is a summary of the Company’s available for sale securities as of the dates indicated: As of June 30, 2020 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Debt securities: Corporate Bonds $ 6,653 $ — $ (136) $ 6,517 As of December 31, 2019 Gross Gross Unrealized Unrealized Adjusted Cost Gains Losses Fair Value Debt securities: Corporate Bonds $ 8,718 $ 172 $ — $ 8,890 |
Summary of the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates | The following table summarizes the estimated fair value of our investments in marketable debt securities with stated contractual maturity dates, accounted for as available-for-sale securities and classified by the contractual maturity date of the securities: As of June 30, 2020 Due in 1 year $ — Due in 1 year through 5 years 3,068 Due in 5 year through 10 years — Due after 10 years 3,449 Total $ 6,517 |
Mortgages payable, net (Tables)
Mortgages payable, net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Mortgages payable, net | |
Schedule of Mortgages Payable | Mortgages payable, net consisted of the following: Weighted Average Interest Rate Interest as of Maturity Amount Due As of As of Description Rate June 30, 2020 Date at Maturity June 30, 2020 December 31, 2019 Revolving Credit Facility LIBOR + 3.15 % 4.43 % May 2021 $ 123,045 $ 123,045 $ 123,045 Courtyard – Paso Robles % 5.49 % November 2023 13,022 13,714 13,806 Total mortgages payable 4.53 % $ 136,067 136,759 136,851 Less: Deferred financing costs (469) (674) Total mortgages payable, net $ 136,290 $ 136,177 |
Schedule of Estimated Contractual Principal Maturities | The following table, based on the initial terms of the mortgages, sets forth their aggregate estimated contractual principal maturities, including balloon payments due at maturity, as of June 30, 2020: 2020 2021 2022 2023 2024 Thereafter Total Principal maturities $ 95 $ 123,245 $ 211 $ 13,208 $ — $ — $ 136,759 Less: deferred financing costs (469) Total principal maturities, net $ 136,290 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions | |
Schedule of fees to related parties | The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated: For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019 Development fees (1) $ — $ 57 $ 32 $ 62 Asset management fees (general and administrative costs) 734 758 1,456 1,534 Total $ 734 $ 815 $ 1,488 $ 1,596 (1) Generally, capitalized and amortized over the estimated useful life of the associated asset. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Financial Instruments | |
Summary of estimated fair value of debt | The estimated fair value of our mortgages payable is as follows: As of June 30, 2020 As of December 31, 2019 Carrying Estimated Fair Carrying Estimated Fair Amount Value Amount Value Mortgages payable $ 136,759 $ 137,897 $ 136,851 $ 137,303 |
Business and Structure (Details
Business and Structure (Details) | Mar. 27, 2018item | May 20, 2008USD ($)$ / sharesshares | Jun. 30, 2020USD ($)itemshares | Dec. 31, 2012USD ($)shares |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Date of incorporation | Apr. 28, 2008 | |||
Lightstone REIT, partnership formation date | Jun. 30, 2020 | |||
Advisor's contribution to operating partnership | $ | $ 2 | |||
Partnership units issued | 200 | |||
Sponsor's cash contribution | $ | $ 12,900,000 | |||
Number of operating segments | item | 1 | |||
Number of limited service hotels | item | 14 | |||
Number of rooms | item | 1,802 | |||
Number of retail properties owned | item | 2 | |||
Brownmill, LLC | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Ownership interest | 48.60% | |||
Value of ownership interest | $ | $ 4,800,000 | |||
Subordinate profit interest units | shares | 177 | |||
Aggregate value of subordinate profits | $ | $ 17,700,000 | |||
Advisor | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Number of common shares held | shares | 20,000 | |||
Proceeds from issue of shares | $ | $ 200 | |||
Issue price per share (in dollars per share) | $ / shares | $ 10 | |||
Mr. Lichtenstein | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Beneficial ownership interest (as a percent) | 99.00% | |||
Brownmill, LLC | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Ownership interest | 48.58% | |||
Subordinate profit interest units | shares | 177,000 | 48,000,000 | ||
Aggregate value of subordinate profits | $ | $ 4,800,000 | |||
Joint Venture | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Ownership interest | 97.50% | |||
Number of limited service hotels | item | 7 | |||
Joint Venture | Lightstone I | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Ownership interest | 2.50% | |||
Hilton Garden Inn Joint Venture | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
Ownership interest | 50.00% | 50.00% | ||
Number of rooms | item | 183 | 183 | ||
Lightstone REIT II | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
General partner ownership interest | 99.00% | |||
Hilton Garden Inn Joint Venture | ||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||
General partner ownership interest | 50.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | ||||
Revenue | $ 3,596 | $ 20,921 | $ 16,841 | $ 38,685 |
Room | ||||
Revenues | ||||
Revenue | 3,372 | 19,648 | 15,823 | 36,069 |
Food, beverage and other | ||||
Revenues | ||||
Revenue | $ 224 | $ 1,273 | $ 1,018 | $ 2,616 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | Jun. 02, 2020USD ($) | May 31, 2020USD ($) | Jun. 30, 2020USD ($)item | Apr. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) |
Summary of Significant Accounting Policies [Line Items] | ||||||
Restricted cash | $ 3,921 | $ 8,974 | $ 2,820 | |||
Number of retail properties owned | item | 2 | |||||
Funds released from escrow account | $ 7,200 | |||||
Revolving Credit Facility | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Interest rate | 2.15% | |||||
Cash collateral deposits | $ 2,500 | |||||
Received an aggregate from loans | $ 3,300 | |||||
Brownmill, LLC | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 48.60% | |||||
SpringHill Suites - Peabody Agreement | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Restricted cash | $ 7,200 | $ 7,200 | ||||
Lightstone REIT II | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
General partner ownership interest | 99.00% |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliated Entities (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Dec. 31, 2019 | Mar. 27, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated affiliated entities | $ 16,047 | $ 16,394 | |
Brownmill, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Date of ownership | Various | ||
Ownership % | 48.58% | ||
Investments in unconsolidated affiliated entities | $ 4,473 | 4,630 | |
Hilton Garden Inn Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Date of ownership | March 27, 2018 | ||
Ownership % | 50.00% | 50.00% | |
Investments in unconsolidated affiliated entities | $ 11,574 | $ 11,764 |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliated Entities - Condensed Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Company's share of net (loss)/income | $ (482) | $ 157 | $ (998) | $ (157) |
Brownmill, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | 895 | 865 | 1,820 | 1,774 |
Property operating expenses | 454 | 334 | 1,106 | 796 |
Depreciation and amortization | 167 | 175 | 332 | 350 |
Operating (loss)/income | 274 | 356 | 382 | 628 |
Interest expense and other, net | (150) | (170) | (319) | (360) |
Net (loss)/income | 124 | 186 | 63 | 268 |
Company's share of net (loss)/income | 60 | 90 | 30 | 130 |
Additional depreciation and amortization expense | (31) | (31) | (62) | (63) |
Company's earnings from investment | 29 | 59 | (32) | 67 |
Hilton Garden Inn Joint Venture | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | 680 | 3,086 | 2,220 | 5,094 |
Property operating expenses | 616 | 1,765 | 1,961 | 3,270 |
General and administrative costs | 11 | (22) | 29 | (22) |
Depreciation and amortization | 615 | 627 | 1,245 | 1,269 |
Operating (loss)/income | (562) | 716 | (1,015) | 577 |
Interest expense and other, net | (460) | (520) | (917) | (1,026) |
Net (loss)/income | (1,022) | 196 | (1,932) | (449) |
Company's share of net (loss)/income | $ (511) | $ 98 | $ (966) | $ (225) |
Investments in Unconsolidated_5
Investments in Unconsolidated Affiliated Entities - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Brownmill, LLC | ||
Total assets | $ 16,120 | $ 15,963 |
Members' capital | 1,180 | 1,254 |
Total liabilities and members' capital | 16,120 | 15,963 |
Brownmill, LLC | Real estate, at cost (net) | ||
Total assets | 13,790 | 13,507 |
Brownmill, LLC | Cash and restricted cash | ||
Total assets | 890 | 1,016 |
Brownmill, LLC | Other assets | ||
Total assets | 1,440 | 1,440 |
Brownmill, LLC | Mortgage payable | ||
Total liabilities | 13,970 | 14,061 |
Brownmill, LLC | Other liabilities | ||
Total liabilities | 970 | 648 |
Hilton Garden Inn Joint Venture | ||
Total assets | 58,586 | 58,573 |
Members' capital | 22,579 | 22,958 |
Total liabilities and members' capital | 58,586 | 58,573 |
Hilton Garden Inn Joint Venture | Real estate, at cost (net) | ||
Total assets | 55,961 | 56,775 |
Hilton Garden Inn Joint Venture | Cash and restricted cash | ||
Total assets | 866 | 904 |
Hilton Garden Inn Joint Venture | Other assets | ||
Total assets | 1,759 | 894 |
Hilton Garden Inn Joint Venture | Mortgage payable | ||
Total liabilities | 35,225 | 34,821 |
Hilton Garden Inn Joint Venture | Other liabilities | ||
Total liabilities | $ 782 | $ 794 |
Investments in Unconsolidated_6
Investments in Unconsolidated Affiliated Entities - Additional Information (Details) $ / shares in Units, $ in Millions | Jun. 02, 2020USD ($) | Mar. 27, 2018USD ($)item | Jun. 30, 2020USD ($)itemshares | Jun. 30, 2020USD ($) | Dec. 31, 2012USD ($)$ / sharesshares |
Schedule of Equity Method Investments [Line Items] | |||||
Number of retail properties owned | item | 2 | ||||
Sponsorship | $ 12.9 | ||||
Number of rooms | item | 1,802 | ||||
Brownmill, LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity investment, percentage ownership purchased | 48.60% | ||||
Subordinated general partner participation, per unit cost | $ / shares | $ 100,000 | ||||
Subordinated General Partner Participation Units | shares | 177,000 | 48,000,000 | |||
Subordinated operating partnership | $ 4.8 | ||||
Ownership interest | 48.58% | 48.58% | |||
Aggregate distribution received | $ 125 | ||||
Hilton Garden Inn Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity investment, percentage ownership purchased | 50.00% | ||||
Number of rooms | item | 183 | 183 | |||
Aggregate consideration | $ 60 | ||||
Aggregate consideration, cash | 25 | ||||
Proceeds from loans | $ 35 | ||||
Ownership interest | 50.00% | 50.00% | 50.00% | ||
Interest rate, Libor plus | 2.15% | ||||
Cash collateral deposits | $ 1.2 | ||||
Hilton Garden Inn Joint Venture - Additional Contribution | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Aggregate consideration | $ 0.8 | $ 1.5 | |||
Aggregate distribution received | $ 44 | $ 1.5 |
Marketable Securities, Fair V_3
Marketable Securities, Fair Value Measurements and Margin Loan - Available for Sale Securities (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | $ 6,517 | $ 8,890 |
Debt Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Adjusted Cost | 6,653 | 8,718 |
Gross Unrealized Gains | 0 | 172 |
Gross Unrealized Losses | (136) | 0 |
Fair Value | $ 6,517 | $ 8,890 |
Marketable Securities, Fair V_4
Marketable Securities, Fair Value Measurements and Margin Loan - Classification by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Marketable Securities, Fair Value Measurements and Margin Loan | ||
Due in 1 year | $ 0 | |
Due in 1 year through 5 years | 3,068 | |
Due in 5 year through 10 years | 0 | |
Due after 10 years | 3,449 | |
Total | $ 6,517 | $ 8,890 |
Marketable Securities, Fair V_5
Marketable Securities, Fair Value Measurements and Margin Loan - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Holding loss on available sale of marketable securities | $ (1,200) | ||||
Loss on sale of marketable securities, available for sale | $ 0 | $ 0 | (245) | $ 0 | |
Gain on available fro sale marketable debt securities | 600 | ||||
Net holding loss | 600 | 600 | |||
Net unrealized loss marketable debt securities | 100 | ||||
Transfer of assets from level 2 to 1 | 0 | 0 | $ 0 | ||
Transfer of assets from level 2 to 3 | 0 | 0 | |||
Margin loan outstanding | 2,710 | 2,710 | 4,744 | ||
Margin Loan | |||||
Debt Instrument [Line Items] | |||||
Margin loan outstanding | $ 2,700 | $ 2,700 | $ 4,700 | ||
Interest rate, Libor plus | 0.85% | ||||
Libor | 1.01% | 1.01% |
Mortgages payable, net (Details
Mortgages payable, net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 4.53% | |
Amount due at maturity | $ 136,067 | |
Total mortgages payable | 136,759 | $ 136,851 |
Less: Deferred financing costs | (469) | (674) |
Total mortgages payable, net | $ 136,290 | 136,177 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Variable interest rate basis | LIBOR + 3.15 | |
Weighted Average Interest Rate | 4.43% | |
Maturity Date | May 31, 2021 | |
Amount due at maturity | $ 123,045 | |
Total mortgages payable | $ 123,045 | 123,045 |
Courtyard - Paso Robles | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.49% | |
Weighted Average Interest Rate | 5.49% | |
Maturity Date | Nov. 30, 2023 | |
Amount due at maturity | $ 13,022 | |
Total mortgages payable | $ 13,714 | $ 13,806 |
Mortgages payable, net - Princi
Mortgages payable, net - Principal Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Mortgages payable, net | ||
2020 | $ 95 | |
2021 | 123,245 | |
2022 | 211 | |
2023 | 13,208 | |
2024 | 0 | |
Thereafter | 0 | |
Total | 136,759 | $ 136,851 |
Less: deferred financing costs | (469) | (674) |
Total principal maturities, net | $ 136,290 | $ 136,177 |
Mortgages payable, net - Additi
Mortgages payable, net - Additional Information (Details) $ in Thousands | Jun. 02, 2020USD ($) | Mar. 31, 2019 | May 17, 2018USD ($)Options | Jun. 30, 2020USD ($)item | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||
Line of credit covenant term, description | The Revolving Credit Facility provides the Company with a line of credit of up to $140.0 million pursuant to which it may designate properties as collateral that allow borrowings up to a 65.0% loan-to-value ratio subject to also meeting certain financial covenants, including a prescribed minimum debt yield | ||||
Balloon Payment | $ 136,067 | ||||
Total mortgages payable | 136,759 | $ 136,851 | |||
Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Restricted escrows | 3,900 | $ 1,800 | |||
Courtyard - Paso Robles | |||||
Debt Instrument [Line Items] | |||||
Face amount of the debt | $ 14,000 | ||||
Maturity Date | Nov. 30, 2023 | ||||
Interest Rate | 5.49% | ||||
Monthly principal and interest payments required | $ 79,000 | ||||
Balloon Payment | 13,000 | ||||
Total mortgages payable | $ 13,700 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 140,000 | ||||
Maximum percentage of loan-to-value ratio of properties designated as collateral, provided as borrowings | 65.00% | ||||
Line of credit, description | initial maturity date of May 17, 2021, subject to two one-year options to extend at the sole discretion of the lender | ||||
Number of extension options | Options | 2 | ||||
Term of the extension option | 1 year | ||||
Interest rate, Libor plus | 2.15% | 3.15% | 3.50% | ||
Number of hotel properties pledged | item | 12 | ||||
Total mortgages payable | $ 123,000 | ||||
Cash Collateral Deposits | $ 2,500 |
Notes Payable - (Details)
Notes Payable - (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Apr. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Line of Credit Facility [Line Items] | |||
Proceeds from loans provided under the federal Paycheck Protection Program | $ 3,343 | ||
Notes payable | 3,343 | $ 0 | |
Federal Paycheck Protection Program | |||
Line of Credit Facility [Line Items] | |||
Proceeds from loans provided under the federal Paycheck Protection Program | $ 3,300 | ||
Maximum period to start equal payment of principal and interest from loan origination date | 10 months | ||
Interest rate on loan | 1.00% | ||
Loan term | 5 years | ||
Notes payable | $ 3,300 |
Equity (Details)
Equity (Details) - $ / shares shares in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Equity | ||
REIT annual distribution, percent of taxable income | 90.00% | |
Share Repurchase Program | ||
Number of share redeemed during the period | 0.1 | 1.4 |
Average Price Per Share | $ 10 | $ 9.77 |
Related Party Transactions (Det
Related Party Transactions (Details) - Related Party - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | ||||
Development fees | $ 57 | $ 32 | $ 62 | |
Asset management fees (general and administrative costs) | $ 734 | 758 | 1,456 | 1,534 |
Total | $ 734 | $ 815 | $ 1,488 | $ 1,596 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | 36 Months Ended |
Jun. 30, 2020 | Dec. 31, 2012 | |
Brownmill, LLC | ||
Related Party Transaction [Line Items] | ||
Subordinate profit interest units | 177,000 | 48,000,000 |
Subordinated operating partnership | $ 4.8 | |
Lightstone SLP II LLC | ||
Related Party Transaction [Line Items] | ||
Contribution cash | $ 12.9 | |
Equity interest value | 4.8 | |
Subordinated operating partnership | $ 17.7 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Carrying Amount | $ 136,759 | $ 136,851 |
Mortgage payable | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 136,759 | 136,851 |
Estimated Fair Value | $ 137,897 | $ 137,303 |