Mortgages payable, net | 6. Mortgages payable, net Mortgages payable, net consisted of the following: Weighted Average Interest Rate Description Interest Rate as of June 30, 2018 Maturity Date Amount Due at Maturity As of June 30, 2018 As of December 31, 2017 Revolving Loan, secured by fifteen properties LIBOR + 3.50% 5.61 % May 2021 $ 140,000 $ 140,000 $ - Courtyard – Paso Robles 5.49% 5.49 % November 2023 13,022 14,000 14,000 Promissory Note, secured by two properties (Repaid in full see below) - 6,653 Revolving Loan, secured by nine properties (Repaid in full see below) - 73,616 Courtyard - Parsippany (Repaid in full see below) - 7,240 Hyatt – New Orleans (Repaid in full see below) - 18,000 Residence Inn – Needham (Repaid in full see below) - 25,000 Total mortgages payable 6.03 % $ 153,022 $ 154,000 $ 144,509 Less: Deferred financing costs (1,285 ) (728 ) Total mortgages payable, net $ 152,715 $ 143,781 On May 17, 2018, the Company, through two wholly owned subsidiaries, entered into a loan agreement with Western Alliance Bank (“Western Alliance”) providing for a non-recourse revolving credit facility (the “Revolving Credit Facility”) of up to $140.0 million. The Revolving Credit Facility bears interest at Libor plus 3.50%, has an initial term of three years, subject to two, one-year extension options at the sole discretion of Western Alliance, and provides for monthly interest-only payments with the unpaid principal balance due at maturity. The Revolving Credit Facility’s maturity may be accelerated upon the occurrence of certain customary events of default. The Revolving Credit Facility provides for borrowings up to 65.0% of the loan-to-value ratio of properties designated as collateral. On May 17, 2018, the Company received an initial advance of $123.8 million under the Revolving Credit Facility and designated the following 13 of its hotel properties as collateral: Holiday Inn, Opelika, Alabama Aloft, Tucson, Arizona Aloft, Philadelphia, Pennsylvania Four Points by Sheraton, Philadelphia, Pennsylvania Courtyard by Marriott, Willoughby, Ohio Fairfield Inn & Suites by Marriott, West Des Moines, Iowa SpringHill Suites by Marriott, West Des Moines, Iowa Hampton Inn, Miami, Florida Hampton Inn & Suites, Fort Lauderdale, Florida Holiday Inn Express, Auburn, Alabama Residence Inn by Marriott, Needham, Massachusetts Hyatt Place, New Orleans, Louisiana Courtyard by Marriott, Parsippany, New Jersey The Company used the initial proceeds from the Revolving Credit Facility towards the repayment in full of an aggregate of $123.8 million of existing mortgage indebtedness as follows: $73.6 million of the proceeds were used to repay in full a non-recourse revolving loan, secured by the first nine of the hotel properties listed above, with a scheduled maturity in May 2018; $25.0 million of the proceeds were used to repay in full a non-recourse mortgage loan, secured by the Residence Inn by Marriott, Needham, Massachusetts, with a scheduled maturity in December 2020; $18.0 million of the proceeds were used to repay in full a non-recourse mortgage loan, secured by the Hyatt Place, New Orleans, Louisiana, with a scheduled maturity in December 2020; and $7.2 million of the proceeds were used to repay in full a non-recourse mortgage loan, secured by the Courtyard by Marriott, Parsippany, New Jersey, with a scheduled maturity in August 2018. On June 6, 2018, the Company received the remaining proceeds available under the Revolving Credit Facility of $16.2 million and designated the SpringHill Suites – Peabody and the TownePlace Suites – Little Rock as collateral. The Company used approximately $6.6 million of the proceeds repay in full a non-recourse promissory note, secured by the SpringHill Suites – Peabody and the TownePlace Suites – Little Rock, with a scheduled maturity in August 2018. 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, 2018: Remainder of 2018 2019 2020 2021 2022 Thereafter Total Principal maturities $ 15 $ 179 $ 187 $ 140,200 $ 211 $ 13,208 $ 154,000 Less: deferred financing costs (1,285 ) Total principal maturiteis, net $ 152,715 Restricted escrows Pursuant to the Company’s loan agreements, escrows in the amount of $3.7 million and $5.2 million were held in restricted cash accounts as of June 30, 2018 and December 31, 2017, respectively. Such escrows will be released in accordance with the applicable loan agreements for payments of real estate taxes, insurance and capital improvement transactions, as required. Certain of our mortgages payable also contain clauses providing for prepayment penalties. Debt Compliance Certain of our debt agreements also contain clauses providing for prepayment penalties and require the maintenance of certain ratios, including debt service coverage and fixed leverage charge ratio. As of June 30, 2018, the Company is in compliance with respect to all of its financial debt covenants. |