Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 15, 2021 | Jun. 30, 2020 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 17,400,000 | ||
Entity Common Stock, Shares Outstanding | 17,400,000 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Incorporation Code | MD | ||
Entity File Number | 000-54047 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investment property: | ||
Land and improvements | $ 36,689 | $ 36,662 |
Building and improvements | 203,561 | 200,362 |
Furniture and fixtures | 36,010 | 32,861 |
Construction in progress | 77 | 4,612 |
Gross investment property | 276,337 | 274,497 |
Less accumulated depreciation | (51,269) | (40,545) |
Net investment property | 225,068 | 233,952 |
Investments in unconsolidated affiliated entities | 15,359 | 16,394 |
Cash and cash equivalents | 15,348 | 21,242 |
Marketable securities, available for sale | 6,902 | 8,890 |
Restricted cash | 3,075 | 8,974 |
Accounts receivable and other assets | 2,836 | 3,903 |
Total Assets | 268,588 | 293,355 |
Liabilities and Stockholders' Equity | ||
Accounts payable and other accrued expenses | 7,859 | 8,160 |
Margin loan | 2,599 | 4,744 |
Mortgages payable, net | 136,400 | 136,177 |
Notes payable | 3,343 | 0 |
Due to related party | 618 | 587 |
Distributions payable | 0 | 3,065 |
Total liabilities | 150,819 | 152,733 |
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 income | 82 | 172 |
Accumulated deficit | (41,186) | (19,863) |
Total Company stockholders' equity | 106,170 | 128,408 |
Noncontrolling interests | 11,599 | 12,214 |
Total Stockholders' Equity | 117,769 | 140,622 |
Total Liabilities and Stockholders' Equity | $ 268,588 | $ 293,355 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized | 10,000,000 | 100,000,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 17,400,000 | 17,500,000 |
Common stock, shares outstanding | 17,400,000 | 17,500,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 30,903 | $ 75,265 |
Expenses: | ||
Property operating expenses | 25,766 | 49,713 |
Real estate taxes | 3,579 | 3,677 |
General and administrative costs | 4,652 | 4,697 |
Depreciation and amortization | 10,748 | 11,265 |
Total operating expenses | 44,745 | 69,352 |
Operating (loss)/income | (13,842) | 5,913 |
Interest and dividend income | 513 | 564 |
Interest expense | (6,123) | (8,852) |
Loss on sale of marketable securities, available for sale | (292) | 0 |
Earnings from investments in unconsolidated affiliated entities | (2,053) | (153) |
Other income/(expense), net | 77 | (113) |
Gain on disposition of real estate and other assets, net | 0 | 8,357 |
Net income/(loss) | (21,720) | 5,716 |
Less: net income attributable to noncontrolling interests | 397 | 0 |
Net (loss)/income applicable to Company's common shares | $ (21,323) | $ 5,716 |
Net (loss)/income per Company's common share, basic and diluted | $ (1.22) | $ 0.32 |
Weighted average number of common shares outstanding, basic and diluted | 17,433 | 17,667 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income/(loss) | $ (21,720) | $ 5,716 |
Other comprehensive income/(loss): | ||
Holding gain/(loss) on available for sale securities | (382) | 989 |
Reclassification adjustment for loss included in net loss | 292 | 0 |
Other comprehensive (loss)/income | (90) | 989 |
Comprehensive (loss)/income | (21,810) | 6,705 |
Less: Comprehensive loss attributable to noncontrolling interests | 397 | 0 |
Comprehensive (loss)/income attributable to the Company's common shares | $ (21,413) | $ 6,705 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income/(Loss) [Member] | Accumulated (Deficit)/Surplus | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 179 | $ 151,538 | $ (817) | $ (13,277) | $ 13,466 | $ 151,089 |
Beginning balance (in shares) at Dec. 31, 2018 | 17,874 | |||||
Net income | $ 0 | 0 | 0 | 5,716 | 0 | 5,716 |
Other comprehensive income (loss) | 0 | 0 | 989 | 0 | 0 | 989 |
Distributions declared (a) | 0 | 0 | 0 | (12,302) | 0 | (12,302) |
Contributions from noncontrolling interests | 0 | 0 | 0 | 0 | 115 | 115 |
Distributions to noncontrolling interests | 0 | 0 | 0 | 0 | (1,367) | (1,367) |
Redemption and cancellation of shares | $ (4) | (3,614) | 0 | 0 | 0 | (3,618) |
Redemption and cancellation of shares (in shares) | (362) | |||||
Ending balance at Dec. 31, 2019 | $ 175 | 147,924 | 172 | (19,863) | 12,214 | 140,622 |
Ending balance (in shares) at Dec. 31, 2019 | 17,512 | |||||
Net income | $ 0 | 0 | 0 | (21,323) | (397) | (21,720) |
Other comprehensive income (loss) | 0 | 0 | (90) | 0 | 0 | (90) |
Contributions from noncontrolling interests | 0 | 0 | 0 | 0 | 110 | 110 |
Distributions to noncontrolling interests | 0 | 0 | 0 | 0 | (328) | (328) |
Redemption and cancellation of shares | $ (1) | (824) | 0 | 0 | 0 | (825) |
Redemption and cancellation of shares (in shares) | (82) | |||||
Ending balance at Dec. 31, 2020 | $ 174 | $ 147,100 | $ 82 | $ (41,186) | $ 11,599 | $ 117,769 |
Ending balance (in shares) at Dec. 31, 2020 | 17,430 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Distribution, amount per share | $ 0.70 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss)/income | $ (21,720) | $ 5,716 |
Adjustments to reconcile net (loss)/income to net cash (used in)/ provided by operating activities: | ||
Depreciation and amortization | 10,748 | 11,265 |
Amortization of deferred financing costs | 411 | 411 |
Loss on sale of marketable securities, available for sale | 292 | 0 |
Gain on disposition of real estate and other assets, net | 0 | (8,357) |
Earnings from investments in unconsolidated affiliated entities | 2,053 | 153 |
Other non-cash adjustments | 6 | 118 |
Changes in assets and liabilities: | ||
Decrease in accounts receivable and other assets | 935 | 484 |
Increase/(decrease) in accounts payable and other accrued expenses | 1,405 | (1,416) |
Increase in due to related party | 31 | 30 |
Net cash (used in)/provided by operating activities | (5,839) | 8,404 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of investment property | (3,548) | (7,065) |
Purchase of marketable securities | (3,620) | 0 |
Proceeds from sale of marketable securities | 5,329 | 0 |
Proceeds from disposition of investment property | 0 | 31,754 |
Investments in unconsolidated affiliated entities | (1,187) | (58) |
Distributions from unconsolidated affiliated entities | 169 | 1,232 |
Net cash (used in)/provided by investing activities | (2,857) | 25,863 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment on mortgages payable | (187) | (17,134) |
Payments on margin loan, net | (2,145) | (316) |
Proceeds from notes payable | 3,343 | 0 |
Redemption and cancellation of common shares | (825) | (3,618) |
Contributions from noncontrolling interests | 110 | 115 |
Distributions to noncontrolling interests | (328) | (1,367) |
Distributions to common stockholders | (3,065) | (12,391) |
Net cash used in financing activities | (3,097) | (34,711) |
Net change in cash, cash equivalents and restricted cash | (11,793) | (444) |
Cash, cash equivalents and restricted cash, beginning of year | 30,216 | 30,660 |
Cash, cash equivalents and restricted cash, end of period | $ 18,423 | $ 30,216 |
Structure
Structure | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Structure | 1. 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 December 31, 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 December 31, 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 December 31, 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 December 31, 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, pursuant to the terms of an advisory agreement, 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. COVID-19 Pandemic Operations and Liquidity Update On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic leading many countries, including the United States, particularly at the individual state level, to subsequently impose various degrees of restrictions and other measures, including, but not limited to, mandatory temporary closures, quarantine guidelines, limitations on travel, and “shelter in place” rules in an effort to reduce its duration and the severity of its spread. Although the COVID-19 pandemic has continued to evolve, most of these previously imposed restrictions and other measures have now been reduced and/or lifted. However, the COVID-19 pandemic remains highly unpredictable and dynamic and its duration and extent is likely dependent on numerous developments such as the regulatory approval, mass production, administration and ultimate effectiveness of vaccines, as well as the timeline to achieve a level of sufficient herd immunity amongst the general population. Accordingly, the COVID-19 pandemic may continue to have negative effects on the overall health of the U.S. economy for the foreseeable future. The extent to which the Company’s business may be affected by the ongoing COVID-19 pandemic will largely depend on both current and future developments, all of which are highly uncertain and cannot be reasonably predicted. 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 while there has been some slight improvement; room demand continues to be substantially below historical levels. 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 foreseeable future. The Company cannot currently estimate if and when room demand will fully recover to pre-pandemic levels 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, but not limited to, those described below: ● The Company implemented cost reduction strategies for all of its hotels, leading to reductions in certain operating expenses and capital expenditures. ● Amendments to Revolving Credit Facility – On June 2, 2020, the Company’s revolving credit facility (the “Revolving Credit Facility”) was amended to provide for (i) the deferral of the six monthly debt service payments aggregating $2.6 million for the period from April 1, 2020 through September 30, 2020, which are now due on November 15, 2021; (ii) a 100 bps reduction in the interest rate spread to LIBOR + 2.15%, subject to a 3.00% floor, for the six-month period from September 1, 2020 through February 28, 2021; (iii) the Company pre-funding $2.5 million into a cash collateral reserve account to cover the six monthly debt service payments due from October 1, 2020 through March 1, 2021; and (iv) a waiver of all financial covenants for quarter-end periods before June 30, 2021. Additionally, the Company and the lender have agreed in principle to certain The Company intends to timely pledge the additional collateral and extend the maturity date of the Revolving Credit Facility to September 15, 2021. See Note 6 for additional information. ● Paycheck Protection Program Loans - In April 2020, the Company’s hotels received $3.3 million from loans provided under the federal Paycheck Protection Program (“PPP Loans”). Subsequently, during the first quarter of 2021, the Company’s hotels received an additional $3.7 million from PPP Loans. See Note 7 for additional information. ● On March 19, 2020, the Board of Directors determined to suspend regular quarterly distributions and, as a result, did not declare any distributions on the Company’s Common Shares during 2020. Additionally, on March 19, 2020, the Board of Directors approved the suspension of all redemptions under the Company’s shareholder redemption program. See Note 8 for additional information. ● In May 2020, the Company had approximately $7.2 million of funds released to it from an escrow account. See Note 3 for additional information. ● The Hilton Garden Inn Joint Venture and the lender have agreed in principle to Based on these actions, along with its cash and cash equivalents on hand, the Company believes that it will have sufficient liquidity to meet its obligations for at least 12 months from the date of issuance of these financial statements. Noncontrolling Interests - Partners of the Operating Partnership 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. There were no distributions declared on the Subordinated Profits Interests during the year ended December 31, 2020. For the year ended December 31, 2019, total distributions declared on the Subordinated Profits Interests were $1.2 million. Since the Company’s inception through December 31, 2020, the cumulative distributions declared and paid on the Subordinated Profits Interests were $7.9 million. Any future distributions on the Subordinated Profits Interests will always be subordinated until stockholders receive a stated preferred return, as described above. See Note 9 for additional information with respect to the Subordinated Profits Interests. 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 9 for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
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 the Operating Partnership and its subsidiaries (over which Lightstone REIT II exercises financial and operating control). As of December 31, 2020, Lightstone REIT II had a 99% general partnership interest in the Operating Partnership. All inter-company balances and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). 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 and investments in other real estate entities and depreciable lives of long-lived assets. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Investments in other real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary are accounted for using the equity method. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. All cash equivalents are held in commercial paper and money market funds. 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 resulting from the disposition of a SpringHill Suites by Marriott hotel (the “SpringHill Suites – Peabody”) located in Peabody, Massachusetts (See Note 3). 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. 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: Year Ended December 31, 2020 2019 Cash and cash equivalents $ 15,348 $ 21,242 Restricted cash 3,075 8,974 Total cash, cash equivalents and restricted cash $ 18,423 $ 30,216 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,282 $ 8,608 Distributions declared but not paid $ - $ 3,065 Holding gain/loss in available for sale securities $ 90 $ 989 Investment property acquired but not paid $ - $ 1,709 Marketable Securities Marketable securities consist of equity and debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income. The Company’s marketable equity securities are recorded at fair value and unrealized holding gains and losses are recognized on the consolidated statements of operations. Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below our amortized cost basis, any adverse changes in the financial condition of the issuers and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Revenue Recognition Revenues consist of amounts derived from hotel operations, including occupied hotel rooms and sales of food, beverage and other ancillary services and are presented on a disaggregated basis below. Revenues are recorded net of any sales or occupancy tax collected from our guests. Room revenue is generated through contracts with customers whereby the customers agree to pay a daily rate for right to use a hotel room. The Company’s contract performance obligations are fulfilled at the end of the day that the customer is provided the room and revenue is recognized daily at the contract rate. Payment from the customer is secured at the end of the contract upon check-out by the customer from our hotel. The Company participates in frequent guest programs sponsored by the brand owners of our hotels whereby the brand owner allows guests to earn loyalty points during their hotel stay. The Company recognizes revenue at the amount earned that it will receive from the brand owner when a guest redeems their loyalty points by staying at one of the Company’s hotels. Revenue from food, 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 when these goods or services are provided to the customer and the Company’s contract performance obligations have been fulfilled. Some contracts for rooms, food, beverage or other services require an upfront deposit which is recorded as deferred revenues (or contract liabilities) and recognized once the performance obligations are satisfied. The contract liabilities are not significant. The Company notes no significant judgments regarding the recognition of room, food and beverage or other revenues. The following table represents the total revenues from hotel operations on a disaggregated basis: For the Year Ended December 31, 2020 2019 Revenues Room $ 29,341 $ 69,977 Food, beverage and other 1,562 5,288 Total revenues $ 30,903 $ 75,265 Accounts Receivable The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. The Company’s reported net income or loss is directly affected by management’s estimate of the collectability of accounts receivable. Investment in Real Estate Accounting for Asset Acquisitions When the Company makes an investment in real estate assets, the cost of real estate assets acquired in an asset acquisition are allocated to the acquired tangible assets, consisting of land, building and improvements, furniture and fixtures and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place leases, and the value of tenant relationships, based in each case on their relative fair values, at the date of acquisition, based on evaluation of information and estimates available at that date, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. As final information regarding fair value of the assets acquired, liabilities assumed and noncontrolling interests is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized as soon as all the information necessary is available. Fees incurred related to asset acquisitions are capitalized as part of the cost of the investment. Accounting for Business Combinations Upon the acquisition of real estate operating properties that meet the definition of a business, the Company estimates the fair value of acquired tangible assets and identified intangible assets and liabilities and certain liabilities such as assumed debt and contingent liabilities, at the date of acquisition, based on evaluation of information and estimates available at that date, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Based on these estimates, the Company evaluates the existence of goodwill or a gain from a bargain purchase and allocates the initial purchase price to the applicable assets, liabilities and noncontrolling interests, if any. As final information regarding fair value of the assets acquired, liabilities assumed and noncontrolling interests is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized as soon as all the information necessary is available and in no case later than within twelve months from the acquisition date. Fees incurred related to the acquisition of real estate operating properties that meet the definition of a business are expensed as incurred within general and administrative costs within the consolidated statements of operations. Carrying Value of Assets The amounts capitalized as a result of periodic improvements and additions to real estate property, when applicable, and the periods over which the assets are depreciated or amortized, are determined based on the application of accounting standards that may require estimates as to fair value and the allocation of various costs to the individual assets. Differences in the amount attributed to the assets can be significant based upon the assumptions made in calculating these estimates. Impairment Evaluation The Company evaluates its investments in real estate assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable for a particular property. The Company evaluates the recoverability of its investments in real estate assets at the lowest identifiable level, the individual property level. No single indicator would necessarily result in the Company preparing an estimate to determine if an individual property’s future undiscounted cash flows are less than its carrying value. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a property requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. Relevant facts and circumstances include, among others, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The estimated cash flows used for the impairment analysis are subjective and require the Company to use its judgment and the determination of estimated fair value are based on the Company’s plans for the respective assets and the Company’s views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An impairment loss is recognized only if the carrying amount of a property is not recoverable and exceeds its fair value. Depreciation and Amortization Depreciation expense is computed based on the straight-line method over the estimated useful life of the applicable real estate asset. We generally use estimated useful lives of up to thirty-nine years for buildings and improvements and five to ten years for furniture and fixtures. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. Deferred Costs Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt. 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. Unamortized deferred financing costs are included as a direct deduction from the related debt in the consolidated balance sheets. Investments in Unconsolidated Entities The Company evaluates all investments in other entities for consolidation. The Company considers its percentage interest in the joint venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under the equity method of accounting. If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity in net income or loss and cash contributions and distributions. The net income or loss of an unconsolidated investment is allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of the Company’s investment in the respective joint venture and our share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as earnings from investments in unconsolidated entities. The Company reviews investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. An investment is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. The ultimate realization of our investment in partially owned entities is dependent on a number of factors including the performance of that entity and market conditions. If the Company determines that a decline in the value of a partially owned entity is other than temporary, it will record an impairment charge. The Company believes no impairment of its investments in unconsolidated affiliated entities existed as of December 31, 2020 and 2019. Income Taxes The Company elected to qualify and be taxed as a REIT commencing with the taxable year ending December 31, 2009. As a REIT, the Company generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, or the Code, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at regular corporate rates, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could have a material adverse effect on its net income and net cash available for distribution to its stockholders. The Company engages in certain activities through taxable REIT subsidiaries (“TRSs”), including when it acquires a hotel it usually establishes a TRS which then enters into an operating lease agreement for the hotel. As such, the Company is subject to U.S. federal and state income taxes and franchise taxes from these activities. As of December 31, 2020 and 2019, the Company had no material uncertain income tax positions. Additionally, even if the Company continues to qualify as a REIT for U.S. federal income tax purposes, it may still be subject to some U.S. federal, state and local taxes on its income and property and to U.S. federal income taxes and excise taxes on its undistributed income, if any. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and other assets, accounts payable and other accrued expenses, margin loan, notes payable, due to related party, and distributions payable approximated their fair values as of December 31, 2020 and 2019 because of the short maturity of these instruments. The estimated fair value of our mortgages payable is as follows: As of As of Carrying Estimated Carrying Estimated Mortgages payable $ 136,664 $ 136,743 $ 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. Accounting for Derivative Financial Investments and Hedging Activities. The Company may enter into derivative financial instrument transactions in order to mitigate interest rate risk on a related financial instrument. The Company may designate these derivative financial instruments as hedges and apply hedge accounting. The Company will record all derivative instruments at fair value on the consolidated balance sheet. Concentration of Risk The Company maintains its cash in bank deposit accounts, which, at times, may exceed U.S. federally insured limits. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. Basic and Diluted Net Earnings per Common Share The Company had no potentially dilutive securities outstanding during the periods presented. Accordingly, earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period. 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. |
Disposition of Limited Service
Disposition of Limited Service Hotels | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition of Limited Service Hotels | 3. Disposition of Limited Service Hotels Disposition of Alabama Hotels On February 11, 2019, certain wholly owned subsidiaries of the Operating Partnership and VAH Investments, LLC (the “Alabama Buyer”), an unaffiliated third party, entered into purchase and sale agreements (collectively, the “Alabama Hotel Agreements”) pursuant to which the Company would dispose of two limited services hotels (the “Alabama Hotels”) to the Alabama Buyer for an aggregate contractual sales price of $13.3 million. The Alabama Hotels, which had an aggregate of 169 rooms, were comprised of the following properties: ● a Holiday Inn Express Hotel & Suites (the “Holiday Inn — Opelika”) located in Opelika, Alabama; and ● a Holiday Inn Express Hotel & Suites (“Holiday Inn Express – Auburn”) located in Auburn, Alabama. On May 9, 2019, pursuant to the terms of the Alabama Hotel Agreements, the Company completed the disposition of the Alabama Hotels to the Alabama Buyer for an aggregate of $13.3 million resulting in gain on the disposition of real estate and other assets of approximately $0.1 million during the second quarter of 2019. Approximately $8.2 million of the proceeds were used for a required paydown of the Company’s nonrecourse revolving credit facility (the “Revolving Credit Facility”) (See Note 6). The Holiday Inn Express – Auburn was owned by the Joint Venture. Disposition of the SpringHill Suites – Peabody On August 19, 2019, certain wholly owned subsidiaries of the Operating Partnership and MCR Hospitality Fund REIT LLC (the “Peabody Buyer”), an unaffiliated third party, entered into a purchase and sale agreement (the “SpringHill Suites – Peabody Agreement”) pursuant to which the Company would dispose of a SpringHill Suites hotel located in Peabody, Massachusetts (the “SpringHill Suites – Peabody”) to the Peabody Buyer for a contractual sales price of $19.0 million. On October 24, 2019, pursuant to the terms of the SpringHill Suites – Peabody Agreement, the Company completed the disposition of the SpringHill Suites – Peabody to the Peabody Buyer for $19.0 million resulting in a gain on the disposition of real estate and other assets of approximately $8.3 million during the fourth quarter of 2019. Approximately $8.8 million of the proceeds were used for a required paydown of the Revolving Credit Facility (See Note 6) and approximately $7.2 million of the proceeds were 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 and is classified as restricted cash on the consolidated balance sheet as of December 31, 2019. However, the Company decided not to pursue a like-kind exchange transaction and the funds were subsequently released in May 2020. The aggregate gain on the dispositions of the Alabama Hotels and the SpringHill Suites – Peabody (collectively, the “2019 Disposed Hotels”) of approximately $8.4 million is included in gain on disposition of real estate and other assets on the consolidated statements of operations during the year ended December 31, 2019. The dispositions of the 2019 Disposed Hotels did not qualify to be reported as discontinued operations since the dispositions did not represent a strategic shift in the Company’s operations that had a major effect on its operations and financial results. Accordingly, the operating results of the 2019 Disposed Hotels are reflected in the Company’s results from continuing operations for all periods presented through their respective dates of disposition. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliated Entities | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Affiliated Entities | 4. 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 % December 31, December 31, Brownmill Various 48.58 % $ 4,710 $ 4,630 Hilton Garden Inn Joint Venture March 27, 2018 50.00 % 10,649 11,764 Total investments in unconsolidated affiliated real estate entities $ 15,359 $ 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 Sponsor, pursuant to which LGH contributed to the Company an approximate aggregate 48.6% membership interest in Brownmill 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 December 31, 2020, the Company owns a 48.6% membership interest in Brownmill, which 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 year ended December 31, 2020, the Company made a capital contribution of $0.3 million and received distributions from Brownmill aggregating $0.1 million. During the year ended December 31, 2019, the Company received distributions from Brownmill aggregating $0.3 million. 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 Year Ended December 31, For the Year Ended December 31, Revenues $ 3,387 $ 3,515 Property operating expenses 2,040 1,641 Depreciation and amortization 672 944 Operating income 675 930 Interest expense and other, net (641 ) (692 ) Net income $ 34 $ 238 Company’s share of earnings $ 16 $ 116 Additional depreciation and amortization expense (1) (124 ) (126 ) Company’s earnings from investment $ (108 ) $ (10 ) 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 December 31, December 31, Real estate, at cost (net) $ 14,234 $ 13,507 Cash and restricted cash 1,038 1,016 Other assets 1,279 1,440 Total assets $ 16,551 $ 15,963 Mortgage payable $ 13,834 $ 14,061 Other liabilities 1,018 648 Members’ capital 1,699 1,254 Total liabilities and members’ capital $ 16,551 $ 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 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. In light of the impact of the COVID-19 pandemic on the operating results of the Hilton Garden Inn – Long Island City, the Hilton Garden Inn Joint Venture has entered into certain amendments with respect to the Hilton Garden Inn Mortgage as discussed below. On June 2, 2020, the Hilton Garden Inn Mortgage was amended to provide for (i) the deferral of the six monthly debt service payments aggregating $0.9 million for the period from April 1, 2020 through September 30, 2020 until March 27, 2023; (ii) a 100 bps reduction in the interest rate spread to LIBOR + 2.15%, subject to a 4.03% floor, for the six-month period from September 1, 2020 through February 28, 2021; (iii) the Hilton Garden Inn Joint Venture pre-funding $1.2 million into a cash collateral reserve account to cover the six monthly debt service payments due from October 1, 2020 through March 1, 2021; and (iv) waiver of all financial covenants for quarter-end periods before June 30, 2021. Additionally, the Hilton Garden Inn Joint Venture and the lender have agreed in principle to certain Subsequent to the Company’s acquisition of its 50.0% membership interest in the Hilton Garden Joint Venture through December 31, 2020, it has made an aggregate of $1.5 million of additional capital contributions (of which $0.9 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 periods indicated: For the Year Ended For the Year Ended Revenues $ 3,662 $ 11,009 Property operating expenses 3,259 6,761 General and administrative costs 37 - Depreciation and amortization 2,527 2,527 Operating (loss)/income (2,161 ) 1,721 Interest expense and other, net (1,728 ) (2,006 ) Net loss $ (3,889 ) $ (285 ) Company’s share of net loss (50.00%) $ (1,944 ) $ (143 ) The following table represents the condensed balance sheets for the Hilton Garden Inn Joint Venture: As of As of December 31, December 31, Investment property, net $ 54,826 $ 56,775 Cash 885 904 Other assets 1,211 894 Total assets $ 56,922 $ 58,573 Mortgage payable, net $ 34,988 $ 34,821 Other liabilities 1,207 794 Members’ capital 20,727 22,958 Total liabilities and members’ capital $ 56,922 $ 58,573 |
Marketable Securities and Fair
Marketable Securities and Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Marketable Securities, Fair Value Measurements and Margin Loan | |
Marketable Securities, Fair Value Measurements and Margin Loan | 5. Marketable Securities, Fair Value Measurements and Margin Loan Marketable Securities: Marketable Securities The following is a summary of the Company’s available for sale securities as of the dates indicated: As of December 31, 2020 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Equity securities: Preferred Equities $ 3,620 $ 102 $ - $ 3,722 Debt securities: Corporate Bonds 3,098 82 - 3,180 Total $ 6,718 $ 184 $ - $ 6,902 As of December 31, 2019 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Debt securities: Corporate Bonds $ 8,718 $ 172 $ - $ 8,890 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 years ended December 31, 2020 and 2019, the Company did not recognize any impairment charges on its investments in marketable debt securities. As of December 31, 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 December 31, 2020 and 2019, all of the Company’s preferred equities and corporate bonds were classified as Level 2 assets and there were no transfers between the level classifications during the year ended December 31, 2020. The fair values of the Company’s investments in preferred equities and 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 December 31, Due in 1 year $ - Due in 1 year through 5 years 3,179 Due in 5 year through 10 years - Due after 10 years - Total $ 3,179 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 $2.6 million and $4.7 million as of December 31, 2020 and 2019, respectively, and is due on demand. The margin loan bears interest at LIBOR + 0.85% (0.99% as of December 31, 2020). |
Mortgages Payable, Net
Mortgages Payable, Net | 12 Months Ended |
Dec. 31, 2020 | |
Loans Payable [Abstract] | |
Mortgages Payable, Net | 6. Mortgages Payable, Net Mortgages payable, net consisted of the following: Weighted Description Interest as of Maturity Amount Due As of As of Revolving Credit Facility LIBOR + 2.15% (floor of 3.00%) 3.88 % May 2021 $ 123,045 $ 123,045 $ 123,045 Courtyard – Paso Robles 5.49% 5.49 % November 2023 13,022 13,619 13,806 Total mortgages payable 4.53 % $ 136,067 136,664 136,851 Less: Deferred financing costs (264 ) (674 ) Total mortgages payable, net $ 136,400 $ 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 + 3.50% until it was reduced to LIBOR + 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 aggregating $2.6 million for the period from April 1, 2020 through September 30, 2020, which are now due on November 15, 2021; (ii) subject to certain conditions, the interest rate spread may be reduced by 100 bps to LIBOR + 2.15%, subject to a 3.00% floor, 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 for periods before June 30, 2021. Additionally, the Company and the lender have agreed in principle to certain The Company intends to timely pledge the additional collateral and extend the maturity date of the Revolving Credit Facility to September 15, 2022. As of December 31, 2020, 12 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. Additionally, no additional borrowings were available under the Revolving Credit Facility as of December 31, 2020. Courtyard – Paso Robles Mortgage Loan In connection with the Company’s acquisition of the Courtyard – Paso Robles on December 14, 2017, it assumed 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 $13.6 million as of December 31, 2020. On October 28, 2020, the servicer of the Courtyard – Paso Robles Mortgage Loan agreed to waive the minimum debt yield financial covenant for all periods through June 30, 2021. Principal Mortgage 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 December 31, 2020: 2021 2022 2023 2024 2025 Thereafter Total Principal maturities $ 123,245 $ 211 $ 13,208 $ - $ - $ - $ 136,664 Less: deferred financing costs (264 ) Total principal maturities, net $ 136,400 Pursuant to the Company’s loan agreements, escrows in the amount of $3.1 million and $1.8 million were held in restricted cash accounts as of December 31, 2020 and 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 | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | 7 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%. The payment of principal and interest on the PPP Loan is deferred until the day that the forgiven amount is remitted to the lender (approximately five months after the forgiveness application is submitted to the lender, unless the Borrower appeals a denial of forgiveness) or ten months after the end of the Borrower’s covered period, whichever is earlier. 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. Although the Company intends for each Borrower to apply for loan forgiveness, no assurance can be given that any Borrower will ultimately obtain forgiveness under any relevant PPP Loan, in whole or in part. In the event all or any portion of the PPP Loans is forgiven, the amount forgiven is applied to outstanding principal, and would be recorded as income. As of December 31, 2020, the PPP Loans had an outstanding balance of $3.3 million and are classified as Notes Payable on the consolidated balance sheet. Subsequently, during the first quarter of 2021, the Company’s hotels received an additional $3.7 million from PPP Loans. |
Stockholder's Equity
Stockholder's Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Stockholder's Equity | 8. Stockholder’s Equity Preferred Shares Shares of preferred stock may be issued in the future in one or more series as authorized by the Company’s Board of Directors. Prior to the issuance of shares of any series, the Board of Directors is required by the Company’s charter to fix the number of shares to be included in each series and the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each series. Because the Company’s Board of Directors has the power to establish the preferences, powers and rights of each series of preferred stock, it may provide the holders of any series of preferred stock with preferences, powers and rights, voting or otherwise, senior to the rights of holders of our common stock. The issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of the Company’s common stock. To date, the Company had no outstanding preferred shares. Common Shares All of the common stock offered by the Company will be duly authorized, fully paid and nonassessable. Subject to the preferential rights of any other class or series of stock and to the provisions of its charter regarding the restriction on the ownership and transfer of shares of our stock, holders of the Company’s common stock will be entitled to receive distributions if authorized by the Board of Directors and to share ratably in the Company’s assets available for distribution to the stockholders in the event of a liquidation, dissolution or winding-up. Each outstanding share of the Company’s common stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors. There is no cumulative voting in the election of directors, which means that the holders of a majority of the outstanding common stock can elect all of the directors then standing for election, and the holders of the remaining common stock will not be able to elect any directors. Holders of the Company’s common stock have no conversion, sinking fund, redemption or exchange rights, and have no preemptive rights to subscribe for any of its securities. Maryland law provides that a stockholder has appraisal rights in connection with some transactions. However, the Company’s charter provides that the holders of its stock do not have appraisal rights unless a majority of the Board of Directors determines that such rights shall apply. Shares of the Company’s common stock have equal dividend, distribution, liquidation and other rights. Under its charter, the Company cannot make any material changes to its business form or operations without the approval of stockholders holding at least a majority of the shares of our stock entitled to vote on the matter. These include (1) amendment of its charter, (2) its liquidation or dissolution, (3) its reorganization, and (4) its merger, consolidation or the sale or other disposition of its assets. Share exchanges in which the Company is the acquirer, however, do not require stockholder approval. Distributions on Common Shares The Company’s Board of Directors commenced declaring and the Company began paying regular quarterly distributions on its Common Shares at the pro rata equivalent of an annual distribution of $0.65 per share, or an annualized rate of 6.5% assuming a purchase price of $10.00 per share, beginning with the fourth quarter of 2009 through the third quarter of 2015. Beginning in the fourth quarter of 2015, the Board of Directors increased the regular quarterly distributions on the Company’s Common Shares to the pro rata equivalent of an annual distribution of $0.70 per share, or an annualized rate of 7.0% assuming a purchase price of $10.00 per share. Additionally, in February 2017 the Board of Directors declared, and in March 2017 the Company paid a special “catch-up” distribution on its Common Shares at an annualized rate of 0.5% assuming a purchase price of $10.00 per share for all the quarterly periods beginning with the fourth quarter of 2009 and ending with the third quarter of 2015. During the year ended December 31, 2019, distributions on the Company’s Common Shares were declared quarterly, for each calendar quarter end, at the pro rata equivalent of an annual distribution of $0.70 per share, or an annualized rate of 7.0% assuming a purchase price of $10.00 per share, to stockholders of record at the close of business on the last day of the quarter-end. All distributions were paid on or about the 15th day of the month following the quarter-end. There were no distributions declared during the year ended December 31, 2020. Total distributions declared during the year ended December 31, 2019 were $12.3 million. On March 19, 2020, the Board of Directors determined to suspend regular quarterly distributions. Future distributions declared, if any, will be at the discretion of the Board of Directors based on their analysis of the Company’s performance over the previous periods and expectations of performance for future periods. The Board of Directors will consider various factors in its determination, including but not limited to, the sources and availability of capital, revenues and other sources of income, operating and interest expenses and the Company’s ability to refinance near-term debt as well as the IRS’s annual distribution requirement that REITs distribute no less than 90% of their taxable income. The Company cannot assure that any future distributions will be made or that it will maintain any particular level of distributions that it has previously established or may establish. Share Repurchase Program The Company’s share repurchase program (the “Share Repurchase Program”) may provide eligible stockholders with limited, interim liquidity by enabling them to sell Common Shares back to the Company, subject to restrictions and applicable law. A selling stockholder must be unaffiliated with the Company, and must have beneficially held the Common Shares for at least one year prior to offering the Common Shares for sale to the Company through the Share Repurchase Program. Subject to certain limitations, the Company will also redeem Common Shares upon the request of the estate, heir or beneficiary of a deceased stockholder. The price for all purchases under our Share Repurchase Program is 100% of the estimated net asset value per share of the Company’s common stock, which is $8.02 per share as of December 31, 2020. Redemption of shares, when requested, will be made on a quarterly basis subject to the Company’s Board of Director’s approval. Provided sufficient funds are available, the number of shares repurchased during the current calendar year will not exceed two percent of the weighted average number of shares outstanding during the prior calendar year. Funding for the Share Repurchase Program will come exclusively from operating funds, if any, as the Board of Directors, at its sole discretion, may reserve for this purpose. For the period from January 1 through March 18, 2020, the Company redeemed 0.1 million common shares at an average price of $10.00 per share. During 2019, the Company redeemed 0.4 million common shares at an average price per share of $10.00 per share. On March 19, 2020, the Board of Directors amended the share repurchase program to remove stockholder notice requirements and also approved the suspension of all redemptions effective immediately. Noncontrolling Interests See Note 1 and Note 9 for a discussion of Noncontrolling Interests and the rights related to the Subordinated Profits Interests, respectively. |
Related Party and Other Transac
Related Party and Other Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party and Other Transactions | 9. Related Party and Other Transactions The Company has agreements with the Advisor and its affiliates to pay certain fees, as follows, in exchange for services performed by these entities and other related party entities. The Company’s ability to secure financing and real estate operations are dependent upon its Advisor and affiliates to perform such services as provided in these agreements. Fees Amount Acquisition Fee The Advisor is paid an acquisition fee equal to 0.95% of the gross contractual purchase price (including any mortgage assumed) of each property purchased. The Advisor is also be reimbursed for expenses that it incurs in connection with the purchase of a property. Property Management – Residential/Retail/ Hospitality Either third party or affiliated property managers are paid a monthly management fee of up to 5% of the gross revenues from residential, hospitality and retail properties. The Company may pay the property manager a separate fee for (i) the development of (ii) one-time initial rent-up or (iii) leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. Property Management – Office/Industrial The property managers are paid monthly property management and leasing fees of up to 4.5% of gross revenues from office and industrial properties. In addition, the Company may pay the property managers a separate fee for the one-time initial rent-up or leasing-up of newly constructed properties in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. Asset Management Fee The Advisor or its affiliates are paid an asset management fee of 0.95% of the Company’s average invested assets, as defined, payable quarterly in an amount equal to 0.2375 of 1% of average invested assets as of the last day of the immediately preceding quarter. Reimbursement of Other expenses For any year in which the Company qualifies as a REIT, the Advisor must reimburse the Company for the amounts, if any, by which the total operating expenses, the sum of the advisor asset management fee plus other operating expenses paid during the previous fiscal year exceed the greater of 2% of average invested assets, as defined, for that fiscal year, or, 25% of net income for that fiscal year. Items such as property operating expenses, depreciation and amortization expenses, interest payments, taxes, non-cash expenditures, the special liquidation distribution, the special termination distribution, organization and offering expenses, and acquisition fees and expenses are excluded from the definition of total operating expenses, which otherwise includes the aggregate expense of any kind paid or incurred by the Company. The Advisor or its affiliates are reimbursed for expenses that may include costs of goods and services, administrative services and non-supervisory services performed directly for the Company by independent parties. Subordinated Profits Interests In connection with the Company’s Offerings which concluded on September 27, 2014, Lightstone SLP II, LLC acquired 177.0 Subordinated Profits Interests in the Operating Partnership for aggregate consideration of $17.7 million. These Subordinated Profits Interests, for which the aggregate consideration of $17.7 million will only be repaid after stockholders receive a stated preferred return in addition to their net investment, entitle Lightstone SLP II, LLC to a portion of any regular distributions made by the Operating Partnership. There were no distributions paid on the Subordinated Profit Interests through December 31, 2016. However, in connection with the Board of Directors declaration of a special distribution on the Company’s Common Shares on February 28, 2017, they also declared that distributions be brought current through December 31, 2016 on the Subordinated Profits Interests at a 7% annualized rate of return which amounted to approximately $4.2 million and were paid to Lightstone SLP II, LLC on March 15, 2017. Beginning with the first quarter of 2017, the Company’s Board of Directors declared and the Company paid regular quarterly distributions on the Subordinated Profits Interests at an annualized rate of 7.0% along with the regular quarterly distributions on its Common Shares for all quarterly periods through December 31, 2019. There were no distributions declared on the Subordinated Profits Interests during the year ended December 31, 2020. For the year ended December 31, 2019, total distributions declared on the Subordinated Profits Interests were $1.2 million. Since the Company’s inception through December 31, 2020, the cumulative distributions declared and paid on the Subordinated Profits Interests were $7.9 million. Any future distributions on the Subordinated Profits Interests will always be subordinated until stockholders receive a stated preferred return, as described below. The Subordinated Profits Interests may also entitle Lightstone SLP II, LLC to a portion of any liquidating distributions made by the Operating Partnership. The value of such distributions will depend upon the net sale proceeds upon the liquidation of the Company and, therefore, cannot be determined at the present time. Liquidating distributions to Lightstone SLP II, LLC will always be subordinated until stockholders receive a distribution equal to their initial investment plus a stated preferred return, as described below: Liquidating Stage Distributions Amount of Distribution 7% Stockholder Return Threshold Once stockholders have received liquidation distributions, and a cumulative non-compounded 7% return per year on their initial net investment, Lightstone SLP, LLC will receive available distributions until it has received an amount equal to its initial purchase price of the Subordinated Profits Interests plus a cumulative non-compounded return of 7% per year. Returns in Excess of 7% Once stockholders have received liquidation distributions, and a cumulative non-compounded return of 7% per year on their initial net investment, 70% of the aggregate amount of any additional distributions from the Operating Partnership will be payable to the stockholders, and 30% of such amount will be payable to Lightstone SLP II, LLC, until a 12% return is reached. Returns in Excess of 12% After stockholders and Lightstone SLP II, LLC have received liquidation distributions, and a cumulative non-compounded return of 12% per year on their initial net investment, 60% of any remaining distributions from the Operating Partnership will be distributable to stockholders, and 40% of such amount will be payable to Lightstone SLP II, LLC. Operating Stage Distributions Amount of Distribution 7% stockholder Return Threshold Once a cumulative non-compounded return of 7% return on their net investment is realized by stockholders, Lightstone SLP II, LLC is eligible to receive available distributions from the Operating Partnership until it has received an amount equal to a cumulative non-compounded return of 7% per year on the purchase price of the Subordinated Profits Interests. “Net investment” refers to $10 per share, less a pro rata share of any proceeds received from the sale or refinancing of the Company’s assets. Returns in excess of 7% Once a cumulative non-compounded return of 7% per year is realized by stockholders on their net investment, 70% of the aggregate amount of any additional distributions from the Operating Partnership will be payable to the stockholders, and 30% of such amount will be payable to Lightstone SLP II, LLC until a 12% return is reached. Returns in Excess of 12% After the 12% return threshold is realized by stockholders and Lightstone SLP II, LLC, 60% of any remaining distributions from the Operating Partnership will be distributable to stockholders, and 40% of such amount will be payable to Lightstone SLP II, LLC. The following table represents the fees incurred associated with the payments to the Company’s Advisor for the periods indicated: For the Years Ended December 31, 2020 2019 Development fees (1) $ 32 $ 62 Asset management fees (general and administrative costs) 2,929 3,011 Total $ 2,961 $ 3,073 (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. The Company did not incur any fees to affiliates of its Advisor for property management services during the years ended December 31, 2020 and 2019. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Management Agreements The Company’s hotels operate pursuant to management agreements (the “Management Agreements”) with various third-party property management companies. The property management companies perform management functions including, but not limited to, hiring and supervising employees, establishing room prices, establishing administrative policies and procedures, managing expenditures and arranging and supervising public relations and advertising. The Management Agreements are for terms ranging from 1 year to 10 years however, the agreements can be cancelled for any reason by the Company after giving 60 days notice after the one year anniversary of the commencement of the respective agreement. The Management Agreements provide for the payment of a base management fee equal to 3% to 3.5% of gross revenues, as defined, and an incentive management fee based on the operating results of the hotel, as defined. The base management fee and incentive management fee, if any, are recorded as a component of property operating expenses in the consolidated statements of operations. Franchise Agreements As of December 31, 2020, the Company’s hotels operated pursuant to various franchise agreements. Under the franchise agreements, the Company generally pays a fee equal to 5% of gross room sales, as defined, and a marketing fund charge from 1.5% to 3.5% of gross room sales. The franchise fee and marketing fund charge are recorded as a component of property operating expenses in the consolidated statements of operations. The franchise agreements are generally for initial terms ranging from 15 years to 20 years, expiring between 2025 and 2037. 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) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Lightstone REIT II and the Operating Partnership and its subsidiaries (over which Lightstone REIT II exercises financial and operating control). As of December 31, 2020, Lightstone REIT II had a 99% general partnership interest in the Operating Partnership. All inter-company balances and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). 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 and investments in other real estate entities and depreciable lives of long-lived assets. Application of these assumptions requires the exercise of judgment as to future uncertainties and, as a result, actual results could differ from these estimates. Investments in other real estate entities where the Company has the ability to exercise significant influence, but does not exercise financial and operating control, and is not considered to be the primary beneficiary are accounted for using the equity method. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. All cash equivalents are held in commercial paper and money market funds. 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 resulting from the disposition of a SpringHill Suites by Marriott hotel (the “SpringHill Suites – Peabody”) located in Peabody, Massachusetts (See Note 3). 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. 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: Year Ended December 31, 2020 2019 Cash and cash equivalents $ 15,348 $ 21,242 Restricted cash 3,075 8,974 Total cash, cash equivalents and restricted cash $ 18,423 $ 30,216 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,282 $ 8,608 Distributions declared but not paid $ - $ 3,065 Holding gain/loss in available for sale securities $ 90 $ 989 Investment property acquired but not paid $ - $ 1,709 |
Marketable Securities | Marketable Securities Marketable securities consist of equity and debt securities that are designated as available-for-sale. Marketable debt securities are recorded at fair value and unrealized holding gains or losses are reported as a component of accumulated other comprehensive income. The Company’s marketable equity securities are recorded at fair value and unrealized holding gains and losses are recognized on the consolidated statements of operations. Realized gains or losses resulting from the sale of these securities are determined based on the specific identification of the securities sold. An impairment charge is recognized when the decline in the fair value of a debt security below the amortized cost basis is determined to be other-than-temporary. The Company considers various factors in determining whether to recognize an impairment charge, including the duration and severity of any decline in fair value below our amortized cost basis, any adverse changes in the financial condition of the issuers and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. |
Revenue Recognition | Revenue Recognition Revenues consist of amounts derived from hotel operations, including occupied hotel rooms and sales of food, beverage and other ancillary services and are presented on a disaggregated basis below. Revenues are recorded net of any sales or occupancy tax collected from our guests. Room revenue is generated through contracts with customers whereby the customers agree to pay a daily rate for right to use a hotel room. The Company’s contract performance obligations are fulfilled at the end of the day that the customer is provided the room and revenue is recognized daily at the contract rate. Payment from the customer is secured at the end of the contract upon check-out by the customer from our hotel. The Company participates in frequent guest programs sponsored by the brand owners of our hotels whereby the brand owner allows guests to earn loyalty points during their hotel stay. The Company recognizes revenue at the amount earned that it will receive from the brand owner when a guest redeems their loyalty points by staying at one of the Company’s hotels. Revenue from food, 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 when these goods or services are provided to the customer and the Company’s contract performance obligations have been fulfilled. Some contracts for rooms, food, beverage or other services require an upfront deposit which is recorded as deferred revenues (or contract liabilities) and recognized once the performance obligations are satisfied. The contract liabilities are not significant. The Company notes no significant judgments regarding the recognition of room, food and beverage or other revenues. The following table represents the total revenues from hotel operations on a disaggregated basis: For the Year Ended December 31, 2020 2019 Revenues Room $ 29,341 $ 69,977 Food, beverage and other 1,562 5,288 Total revenues $ 30,903 $ 75,265 |
Accounts Receivable | Accounts Receivable The Company analyzes accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. The Company’s reported net income or loss is directly affected by management’s estimate of the collectability of accounts receivable. |
Investment in Real Estate | Investment in Real Estate Accounting for Asset Acquisitions When the Company makes an investment in real estate assets, the cost of real estate assets acquired in an asset acquisition are allocated to the acquired tangible assets, consisting of land, building and improvements, furniture and fixtures and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, acquired in-place leases, and the value of tenant relationships, based in each case on their relative fair values, at the date of acquisition, based on evaluation of information and estimates available at that date, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. As final information regarding fair value of the assets acquired, liabilities assumed and noncontrolling interests is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized as soon as all the information necessary is available. Fees incurred related to asset acquisitions are capitalized as part of the cost of the investment. Accounting for Business Combinations Upon the acquisition of real estate operating properties that meet the definition of a business, the Company estimates the fair value of acquired tangible assets and identified intangible assets and liabilities and certain liabilities such as assumed debt and contingent liabilities, at the date of acquisition, based on evaluation of information and estimates available at that date, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other relevant market data. Based on these estimates, the Company evaluates the existence of goodwill or a gain from a bargain purchase and allocates the initial purchase price to the applicable assets, liabilities and noncontrolling interests, if any. As final information regarding fair value of the assets acquired, liabilities assumed and noncontrolling interests is received and estimates are refined, appropriate adjustments are made to the purchase price allocation. The allocations are finalized as soon as all the information necessary is available and in no case later than within twelve months from the acquisition date. Fees incurred related to the acquisition of real estate operating properties that meet the definition of a business are expensed as incurred within general and administrative costs within the consolidated statements of operations. Carrying Value of Assets The amounts capitalized as a result of periodic improvements and additions to real estate property, when applicable, and the periods over which the assets are depreciated or amortized, are determined based on the application of accounting standards that may require estimates as to fair value and the allocation of various costs to the individual assets. Differences in the amount attributed to the assets can be significant based upon the assumptions made in calculating these estimates. Impairment Evaluation The Company evaluates its investments in real estate assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable for a particular property. The Company evaluates the recoverability of its investments in real estate assets at the lowest identifiable level, the individual property level. No single indicator would necessarily result in the Company preparing an estimate to determine if an individual property’s future undiscounted cash flows are less than its carrying value. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a property requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. Relevant facts and circumstances include, among others, significant underperformance relative to historical or projected future operating results and significant negative industry or economic trends. The estimated cash flows used for the impairment analysis are subjective and require the Company to use its judgment and the determination of estimated fair value are based on the Company’s plans for the respective assets and the Company’s views of market and economic conditions. The estimates consider matters such as future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition, and recent sales data for comparable properties. An impairment loss is recognized only if the carrying amount of a property is not recoverable and exceeds its fair value. |
Depreciation and Amortization | Depreciation and Amortization Depreciation expense is computed based on the straight-line method over the estimated useful life of the applicable real estate asset. We generally use estimated useful lives of up to thirty-nine years for buildings and improvements and five to ten years for furniture and fixtures. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. |
Deferred Costs | Deferred Costs Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt. 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. Unamortized deferred financing costs are included as a direct deduction from the related debt in the consolidated balance sheets. |
Investments in Unconsolidated Affiliated Entities | Investments in Unconsolidated Entities The Company evaluates all investments in other entities for consolidation. The Company considers its percentage interest in the joint venture, evaluation of control and whether a variable interest entity exists when determining whether or not the investment qualifies for consolidation or if it should be accounted for as an unconsolidated investment under the equity method of accounting. If an investment qualifies for the equity method of accounting, the Company’s investment is recorded initially at cost, and subsequently adjusted for equity in net income or loss and cash contributions and distributions. The net income or loss of an unconsolidated investment is allocated to its investors in accordance with the provisions of the operating agreement of the entity. The allocation provisions in these agreements may differ from the ownership interest held by each investor. Differences, if any, between the carrying amount of the Company’s investment in the respective joint venture and our share of the underlying equity of such unconsolidated entity are amortized over the respective lives of the underlying assets as applicable. These items are reported as a single line item in the statements of operations as earnings from investments in unconsolidated entities. The Company reviews investments for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such investment may not be recoverable. An investment is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. The ultimate realization of our investment in partially owned entities is dependent on a number of factors including the performance of that entity and market conditions. If the Company determines that a decline in the value of a partially owned entity is other than temporary, it will record an impairment charge. The Company believes no impairment of its investments in unconsolidated affiliated entities existed as of December 31, 2020 and 2019. |
Income Taxes | Income Taxes The Company elected to qualify and be taxed as a REIT commencing with the taxable year ending December 31, 2009. As a REIT, the Company generally will not be subject to U.S. federal income tax on its net taxable income that it distributes currently to its stockholders. To maintain its REIT qualification under the Internal Revenue Code of 1986, as amended, or the Code, the Company must meet a number of organizational and operational requirements, including a requirement that it annually distribute to its stockholders at least 90% of its REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding any net capital gain. If the Company fails to remain qualified for taxation as a REIT in any subsequent year and does not qualify for certain statutory relief provisions, its income for that year will be taxed at regular corporate rates, and it may be precluded from qualifying for treatment as a REIT for the four-year period following its failure to qualify as a REIT. Such an event could have a material adverse effect on its net income and net cash available for distribution to its stockholders. The Company engages in certain activities through taxable REIT subsidiaries (“TRSs”), including when it acquires a hotel it usually establishes a TRS which then enters into an operating lease agreement for the hotel. As such, the Company is subject to U.S. federal and state income taxes and franchise taxes from these activities. As of December 31, 2020 and 2019, the Company had no material uncertain income tax positions. Additionally, even if the Company continues to qualify as a REIT for U.S. federal income tax purposes, it may still be subject to some U.S. federal, state and local taxes on its income and property and to U.S. federal income taxes and excise taxes on its undistributed income, if any. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable and other assets, accounts payable and other accrued expenses, margin loan, notes payable, due to related party, and distributions payable approximated their fair values as of December 31, 2020 and 2019 because of the short maturity of these instruments. The estimated fair value of our mortgages payable is as follows: As of As of Carrying Estimated Carrying Estimated Mortgages payable $ 136,664 $ 136,743 $ 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. |
Accounting for Derivative Financial Investments and Hedging Activities. | Accounting for Derivative Financial Investments and Hedging Activities. The Company may enter into derivative financial instrument transactions in order to mitigate interest rate risk on a related financial instrument. The Company may designate these derivative financial instruments as hedges and apply hedge accounting. The Company will record all derivative instruments at fair value on the consolidated balance sheet. |
Concentration of Risk | Concentration of Risk The Company maintains its cash in bank deposit accounts, which, at times, may exceed U.S. federally insured limits. The Company believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Basic and Diluted Net Earnings per Common Share | Basic and Diluted Net Earnings per Common Share The Company had no potentially dilutive securities outstanding during the periods presented. Accordingly, earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the applicable period. |
Recently Adopted 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) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of supplemental cash flow information | 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: Year Ended December 31, 2020 2019 Cash and cash equivalents $ 15,348 $ 21,242 Restricted cash 3,075 8,974 Total cash, cash equivalents and restricted cash $ 18,423 $ 30,216 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,282 $ 8,608 Distributions declared but not paid $ - $ 3,065 Holding gain/loss in available for sale securities $ 90 $ 989 Investment property acquired but not paid $ - $ 1,709 |
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 Year Ended December 31, 2020 2019 Revenues Room $ 29,341 $ 69,977 Food, beverage and other 1,562 5,288 Total revenues $ 30,903 $ 75,265 |
Summary of estimated fair value of mortgages payable | The estimated fair value of our mortgages payable is as follows: As of As of Carrying Estimated Carrying Estimated Mortgages payable $ 136,664 $ 136,743 $ 136,851 $ 137,303 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliated Entities (Tables) | 12 Months Ended |
Dec. 31, 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 % December 31, December 31, Brownmill Various 48.58 % $ 4,710 $ 4,630 Hilton Garden Inn Joint Venture March 27, 2018 50.00 % 10,649 11,764 Total investments in unconsolidated affiliated real estate entities $ 15,359 $ 16,394 |
Brownmill Llc [Member] | |
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 Year Ended December 31, For the Year Ended December 31, Revenues $ 3,387 $ 3,515 Property operating expenses 2,040 1,641 Depreciation and amortization 672 944 Operating income 675 930 Interest expense and other, net (641 ) (692 ) Net income $ 34 $ 238 Company’s share of earnings $ 16 $ 116 Additional depreciation and amortization expense (1) (124 ) (126 ) Company’s earnings from investment $ (108 ) $ (10 ) 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 December 31, December 31, Real estate, at cost (net) $ 14,234 $ 13,507 Cash and restricted cash 1,038 1,016 Other assets 1,279 1,440 Total assets $ 16,551 $ 15,963 Mortgage payable $ 13,834 $ 14,061 Other liabilities 1,018 648 Members’ capital 1,699 1,254 Total liabilities and members’ capital $ 16,551 $ 15,963 |
Hilton Garden Inn Joint Venture [Member] | |
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 periods indicated: For the Year Ended For the Year Ended Revenues $ 3,662 $ 11,009 Property operating expenses 3,259 6,761 General and administrative costs 37 - Depreciation and amortization 2,527 2,527 Operating (loss)/income (2,161 ) 1,721 Interest expense and other, net (1,728 ) (2,006 ) Net loss $ (3,889 ) $ (285 ) Company’s share of net loss (50.00%) $ (1,944 ) $ (143 ) |
Schedule of condensed balance sheets | The following table represents the condensed balance sheets for the Hilton Garden Inn Joint Venture: As of As of December 31, December 31, Investment property, net $ 54,826 $ 56,775 Cash 885 904 Other assets 1,211 894 Total assets $ 56,922 $ 58,573 Mortgage payable, net $ 34,988 $ 34,821 Other liabilities 1,207 794 Members’ capital 20,727 22,958 Total liabilities and members’ capital $ 56,922 $ 58,573 |
Marketable Securities and Fai_2
Marketable Securities and Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2020 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: Equity securities: Preferred Equities $ 3,620 $ 102 $ - $ 3,722 Debt securities: Corporate Bonds 3,098 82 - 3,180 Total $ 6,718 $ 184 $ - $ 6,902 As of December 31, 2019 Adjusted Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable Securities: 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 December 31, Due in 1 year $ - Due in 1 year through 5 years 3,179 Due in 5 year through 10 years - Due after 10 years - Total $ 3,179 |
Mortgages Payable, Net (Tables)
Mortgages Payable, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Loans Payable [Abstract] | |
Schedule of Mortgages Payable | Mortgages payable, net consisted of the following: Weighted Description Interest as of Maturity Amount Due As of As of Revolving Credit Facility LIBOR + 2.15% (floor of 3.00%) 3.88 % May 2021 $ 123,045 $ 123,045 $ 123,045 Courtyard – Paso Robles 5.49% 5.49 % November 2023 13,022 13,619 13,806 Total mortgages payable 4.53 % $ 136,067 136,664 136,851 Less: Deferred financing costs (264 ) (674 ) Total mortgages payable, net $ 136,400 $ 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 December 31, 2020: 2021 2022 2023 2024 2025 Thereafter Total Principal maturities $ 123,245 $ 211 $ 13,208 $ - $ - $ - $ 136,664 Less: deferred financing costs (264 ) Total principal maturities, net $ 136,400 |
Related Party and Other Trans_2
Related Party and Other Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
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 Years Ended December 31, 2020 2019 Development fees (1) $ 32 $ 62 Asset management fees (general and administrative costs) 2,929 3,011 Total $ 2,961 $ 3,073 (1) Generally, capitalized and amortized over the estimated useful life of the associated asset. |
Structure (Details Narrative)
Structure (Details Narrative) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2020USD ($) | Mar. 27, 2018item | May 20, 2008USD ($)item$ / sharesshares | Dec. 31, 2020USD ($)itemshares | Dec. 31, 2019USD ($) | Mar. 31, 2021USD ($) | Jun. 02, 2020USD ($) | May 31, 2020USD ($) | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Date of incorporation | Apr. 28, 2008 | |||||||
Number of limited service hotels | item | 14 | |||||||
Number of rooms | item | 1,802 | |||||||
Advisor's contribution to operating partnership | $ 2 | |||||||
Partnership units issued | item | 200 | |||||||
Escrow deposit | $ 7,200 | |||||||
Sponsor's cash contribution | $ 12,900 | |||||||
Distributions declared for subordinated profits interests | 7,900 | $ 1,200 | ||||||
Paycheck Protection Program [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Proceed from loans | $ 3,300 | |||||||
Revolving Credit Facility [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Debt service payments | $ 2,600 | |||||||
Cash collateral reserve account | $ 2,500 | $ 2,500 | ||||||
Lightstone Value Plus Reit Ii Llc [Member] | ||||||||
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 | |||||||
Lightstone Slp Llc [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Aggregate value of subordinate profits | $ 17,700 | |||||||
Brownmill Llc [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Ownership interest | 48.60% | |||||||
Aggregate value of subordinate profits | $ 17,700 | |||||||
Value of ownership interest | $ 4,800 | |||||||
Subordinate profit interest units | shares | 177 | |||||||
Mr. Lichtenstein [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Beneficial ownership interest (as a percent) | 99.00% | |||||||
Hilton Garden Inn Joint Venture [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Number of rooms | item | 183 | 183 | ||||||
Ownership interest | 50.00% | 50.00% | ||||||
Joint Venture [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Ownership interest | 48.58% | |||||||
Joint Venture [Member] | Lightstone Value Plus Real Estate Investment Trust Inc [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Ownership interest | 2.50% | |||||||
Brownmill Llc [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
Ownership interest | 48.58% | |||||||
Aggregate value of subordinate profits | $ 4,800 | |||||||
Subordinate profit interest units | shares | 48 | |||||||
Number of retail properties owned | item | 2 | |||||||
Lightstone Reit Ii [Member] | ||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||||||||
General partner ownership interest | 99.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details - Supplemental disclosure of cash flow information) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 15,348 | $ 21,242 | |
Restricted cash | 3,075 | 8,974 | |
Total cash, cash equivalents and restricted cash | 18,423 | 30,216 | $ 30,660 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 3,282 | 8,608 | |
Distributions declared but not paid | 0 | 3,065 | |
Holding gain/loss in available for sale securities | 90 | 989 | |
Investment property acquired but not paid | $ 0 | $ 1,709 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details - Revenue Recognition) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues | ||
Revenue | $ 30,903 | $ 75,265 |
Room [Member] | ||
Revenues | ||
Revenue | 29,341 | 69,977 |
Food And Beverage [Member] | ||
Revenues | ||
Revenue | $ 1,562 | $ 5,288 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details - Fair Value of Financial Instruments) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Mortgages payable-Carrying Amount | $ 136,664 | $ 136,851 |
Mortgages payable-Estimated Fair Value | $ 136,743 | $ 137,303 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 3,075 | $ 8,974 |
Real Estate Investment Trust Mandated Annual Distributions Percentage Taxable Income | 90.00% | |
Springhill Suites Peabody Agreement [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 7,200 | |
Building Improvements [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 39 years | |
Minimum [Member] | Furniture And Fixtures [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 5 years | |
Maximum [Member] | Furniture And Fixtures [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Estimated useful lives | 10 years | |
Lightstone Reit Ii [Member] | ||
Summary of Significant Accounting Policies [Line Items] | ||
Percentage of general partnership interest in common units of the operating partnership | 99.00% |
Disposition of Limited Servic_2
Disposition of Limited Service Hotels (Details Narrative) $ in Thousands | May 09, 2019USD ($) | Feb. 11, 2019USD ($)item | Oct. 24, 2019USD ($) | Aug. 19, 2019USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2020item | Dec. 31, 2019USD ($) |
Number Of Rooms | item | 1,802 | |||||||
Net gain on disposition of real estate | $ 8,400 | |||||||
Alabama Hotel Agreements [Member] | ||||||||
Aggregate contractual sales price | $ 13,300 | $ 13,300 | ||||||
Number Of Rooms | item | 169 | |||||||
Net gain on disposition of real estate | $ 100 | |||||||
Springhill Suites Peabody Agreement [Member] | ||||||||
Aggregate contractual sales price | $ 19,000 | |||||||
Net gain on disposition of real estate | $ 8,300 | |||||||
Proceeds placed in escrow | $ 7,200 | |||||||
Revolving Credit Facility [Member] | ||||||||
Repayment of revolving credit facility | $ 8,200 | |||||||
Revolving Credit Facility [Member] | Springhill Suites Peabody Agreement [Member] | ||||||||
Repayment of revolving credit facility | $ 8,800 |
Investments in Unconsolidated_3
Investments in Unconsolidated Affiliated Entities (Details - Unconsolidated Affiliated Entities) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Mar. 27, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated affiliated entities | $ 15,359 | $ 16,394 | |
Brownmill Llc [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Date of ownership | Various | ||
Ownership % | 48.58% | ||
Investments in unconsolidated affiliated entities | $ 4,710 | 4,630 | |
Hilton Garden Inn Joint Venture [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Date of ownership | March 27, 2018 | ||
Ownership % | 50.00% | 50.00% | |
Investments in unconsolidated affiliated entities | $ 10,649 | $ 11,764 |
Investments in Unconsolidated_4
Investments in Unconsolidated Affiliated Entities (Details - Condensed Income Statement) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | $ 30,903 | $ 75,265 | |
General and administrative costs | 4,652 | 4,697 | |
Depreciation and amortization | 10,748 | 11,265 | |
Operating income | (13,842) | 5,913 | |
Net income | (21,323) | 5,716 | |
Company's share of earnings | (2,053) | (153) | |
Brownmill Llc [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 3,387 | 3,515 | |
Property operating expenses | 2,040 | 1,641 | |
Depreciation and amortization | 672 | 944 | |
Operating income | 675 | 930 | |
Interest expense and other, net | (641) | (692) | |
Net income | 34 | 238 | |
Company's share of earnings | 16 | 116 | |
Additional depreciation and amortization expense | [1] | (124) | (126) |
Company's earnings from investment | (108) | (10) | |
Hilton Garden Inn Joint Venture [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Revenues | 3,662 | 11,009 | |
Property operating expenses | 3,259 | 6,761 | |
General and administrative costs | 37 | 0 | |
Depreciation and amortization | 2,527 | 2,527 | |
Operating income | (2,161) | 1,721 | |
Interest expense and other, net | (1,728) | (2,006) | |
Net income | (3,889) | (285) | |
Company's share of earnings | $ (1,944) | $ (143) | |
[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. |
Investments in Unconsolidated_5
Investments in Unconsolidated Affiliated Entities (Details - Condensed Balance Sheet) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Total assets | $ 268,588 | $ 293,355 |
Total liabilities | 150,819 | 152,733 |
Members' capital | 106,170 | 128,408 |
Total liabilities and members' capital | 268,588 | 293,355 |
Brownmill Llc [Member] | ||
Total assets | 16,551 | 15,963 |
Members' capital | 1,699 | 1,254 |
Total liabilities and members' capital | 16,551 | 15,963 |
Brownmill Llc [Member] | Real Estate Investment [Member] | ||
Total assets | 14,234 | 13,507 |
Brownmill Llc [Member] | Restricted Cash And Cash Equivalents Cash And Cash Equivalents1 [Member] | ||
Total assets | 1,038 | 1,016 |
Brownmill Llc [Member] | Other Assets [Member] | ||
Total assets | 1,279 | 1,440 |
Brownmill Llc [Member] | Secured Debt [Member] | ||
Total liabilities | 13,834 | 14,061 |
Brownmill Llc [Member] | Other Liabilities [Member] | ||
Total liabilities | 1,018 | 648 |
Hilton Garden Inn Joint Venture [Member] | ||
Total assets | 56,922 | 58,573 |
Members' capital | 20,727 | 22,958 |
Total liabilities and members' capital | 56,922 | 58,573 |
Hilton Garden Inn Joint Venture [Member] | Real Estate Investment [Member] | ||
Total assets | 54,826 | 56,775 |
Hilton Garden Inn Joint Venture [Member] | Restricted Cash And Cash Equivalents Cash And Cash Equivalents1 [Member] | ||
Total assets | 885 | 904 |
Hilton Garden Inn Joint Venture [Member] | Other Assets [Member] | ||
Total assets | 1,211 | 894 |
Hilton Garden Inn Joint Venture [Member] | Secured Debt [Member] | ||
Total liabilities | 34,988 | 34,821 |
Hilton Garden Inn Joint Venture [Member] | Other Liabilities [Member] | ||
Total liabilities | $ 1,207 | $ 794 |
Investments in Unconsolidated_6
Investments in Unconsolidated Affiliated Entities (Details Narrative) $ / shares in Units, $ in Thousands | Jun. 02, 2020USD ($) | Mar. 27, 2018item | Mar. 27, 2018USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($)item$ / sharesshares | Dec. 31, 2019USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||||
Sponsorship | $ 12,900 | |||||
Number Of Rooms | item | 1,802 | |||||
Brownmill Llc [Member] | ||||||
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 | 48 | |||||
Subordinated operating partnership | $ 4,800 | |||||
Capital contribution | 300 | |||||
Aggregate distribution received | $ 100 | $ 300 | ||||
Number of retail properties owned | item | 2 | |||||
Ownership interest | 48.58% | |||||
Hilton Garden Inn Joint Venture Additional Contribution [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Capital contribution | $ 1,500 | |||||
Aggregate consideration | $ 1,500 | |||||
Hilton Garden Inn Joint Venture [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Aggregate consideration | $ 60,000 | |||||
Number Of Rooms | item | 183 | 183 | ||||
Ownership interest | 50.00% | 50.00% | 50.00% | |||
Aggregate consideration, cash | $ 25,000 | |||||
Proceeds from loans | $ 35,000 | |||||
Proceeds from mortgage | $ 900 | |||||
Venture pre-funding | $ 1,200 | |||||
Interest rate | LIBOR + 2.15%, subject to a 4.03% floor | |||||
Hilton Garden Inn Joint Venture [Member] | Subsequent Event [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Capital contribution | $ 700 | |||||
Principal amount | $ 1,700 |
Marketable Securities, Fair Val
Marketable Securities, Fair Value Measurements and Margin Loan (Details - Available for sale securities) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 6,902 | $ 8,890 |
Preferred Equities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 3,620 | |
Gross Unrealized Gains | 102 | |
Gross Unrealized Losses | 0 | |
Fair Value | 3,722 | |
Corporate Bond [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 3,098 | 8,718 |
Gross Unrealized Gains | 82 | 172 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 3,180 | $ 8,890 |
Debt Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 6,718 | |
Gross Unrealized Gains | 184 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 6,902 |
Marketable Securities, Fair V_2
Marketable Securities, Fair Value Measurements and Margin Loan (Details - Classification by contractual maturity) $ in Thousands | Dec. 31, 2020USD ($) |
Marketable Securities, Fair Value Measurements and Margin Loan | |
Due in 1 year | $ 0 |
Due in 1 year through 5 years | 3,179 |
Due in 5 year through 10 years | 0 |
Due after 10 years | 0 |
Total | $ 3,179 |
Marketable Securities, Fair V_3
Marketable Securities, Fair Value Measurements and Margin Loan (Details Narrative) - Margin Loan [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Margin loan outstanding | $ 2,600 | $ 4,700 |
Debt Instrument, Description of Variable Rate Basis | LIBOR + 0.85% | |
Interest Rate | 0.99% |
Mortgages Payable (Details - Mo
Mortgages Payable (Details - Mortgages payable, net) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Weighted Average Interest Rate | 4.53% | |
Amount due at maturity | $ 136,067 | |
Total mortgages payable | 136,664 | $ 136,851 |
Less: Deferred financing costs | (264) | (674) |
Total mortgages payable, net | $ 136,400 | 136,177 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Variable interest rate basis | LIBOR + 2.15% (floor of 3.00%) | |
Weighted Average Interest Rate | 3.88% | |
Maturity Date | May 31, 2021 | |
Amount due at maturity | $ 123,045 | |
Total mortgages payable | $ 123,045 | 123,045 |
Courtyard Paso Robles [Member] | ||
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 | $ 13,619 | $ 13,806 |
Mortgages payable (Details - Pr
Mortgages payable (Details - Principal maturities) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Loans Payable [Abstract] | ||
2021 | $ 123,245 | |
2022 | 211 | |
2023 | 13,208 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total | 136,664 | $ 136,851 |
Less: Deferred financing costs | (264) | (674) |
Total principal maturities, net | $ 136,400 | $ 136,177 |
Mortgages Payable (Details Narr
Mortgages Payable (Details Narrative) - USD ($) $ in Thousands | Jun. 02, 2020 | May 17, 2018 | Dec. 31, 2020 | Mar. 31, 2021 | May 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||||
Monthly principal and interest payments required | $ 79 | |||||
Restricted escrows | $ 7,200 | |||||
Balloon Payment | 136,067 | |||||
Total mortgages payable | 136,664 | $ 136,851 | ||||
Mortgages payable, net | 136,400 | 136,177 | ||||
Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Restricted escrows | $ 3,100 | 1,800 | ||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR + 2.15% (floor of 3.00%) | |||||
Debt Instrument, Maturity Date | May 31, 2021 | |||||
Restricted cash | $ 2,500 | |||||
Balloon Payment | 123,045 | |||||
Total mortgages payable | $ 123,045 | 123,045 | ||||
Courtyard Paso Robles [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Nov. 30, 2023 | |||||
Interest Rate | 5.49% | |||||
Balloon Payment | $ 13,022 | |||||
Total mortgages payable | $ 13,619 | $ 13,806 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.49% | |||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 2,600 | $ 140,000 | ||||
Maximum percentage of loan-to-value ratio of properties designated as collateral, provided as borrowings | 65.00% | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR + 2.15%, subject to a 3.00% floor | |||||
Restricted cash | $ 2,500 | |||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Restricted cash | $ 2,500 | |||||
Revolving Credit Facility [Member] | London Interbank Offered Rate L I B O R [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | Libor plus 3.50% | |||||
Debt Instrument, Maturity Date | May 17, 2021 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Proceeds from notes payable | $ 3,343 | $ 0 | |
Borrower [Member] | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Proceeds from notes payable | $ 3,300 | ||
Debt term | 5 years | ||
Debt interest rate | 1.00% | ||
Paycheck Protection Program [Member] | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Notes payable | $ 3,300 | ||
Paycheck Protection Program [Member] | Subsequent Event [Member] | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Proceeds from notes payable | $ 3,700 |
Stockholder's Equity (Details N
Stockholder's Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 18, 2020 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2017 | |
Stockholders Equity Note [Line Items] | ||||||
REIT annual distribution, percent of taxable income | 90.00% | |||||
Share Price | $ 10 | $ 10 | $ 10 | $ 10 | $ 10 | |
Redemption of shares | $ 100 | $ 400 | ||||
Annualized Distribution Rate | 7.00% | 6.50% | 0.50% | |||
Annual distributions paid per share | $ 0.70 | $ 0.65 | $ 0.70 | |||
Total distributions declared | $ 12,300 | |||||
Share Repurchase Program [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Share Price | $ 8.02 |
Related Party and Other Trans_3
Related Party and Other Transactions (Details - Fees to Related Parties) - Related Party [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Related Party Transaction [Line Items] | |||
Development fees (1) | [1] | $ 32 | $ 62 |
Asset management fees (general and administrative costs) | 2,929 | 3,011 | |
Total | $ 2,961 | $ 3,073 | |
[1] | Generally, capitalized and amortized over the estimated useful life of the associated asset. |
Related Party and Other Trans_4
Related Party and Other Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 15, 2015 | Dec. 31, 2019 | Sep. 27, 2014 | Mar. 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 18, 2020 | Dec. 31, 2015 | Sep. 30, 2015 |
Acquisition fees received by the advisor as percentage of acquisition price | 0.95% | ||||||||
Maximum percentage of gross revenues allocated to management fees for residential, hospitality and retail properties | 5.00% | ||||||||
Maximum percentage of gross revenues allocated to management fees for office and industrial properties | 4.50% | ||||||||
Asset Management Fees Percentage Of Average Invested Assets | 0.95% | ||||||||
Asset Management Fees Payout Terms | 0.2375 | ||||||||
Minimum Percentage Of Other Operating Expenses For Reimbursement | 2.00% | ||||||||
Minimum percentage of net income required to be reimbursed | 25.00% | ||||||||
Share Price | $ 10 | $ 10 | $ 10 | $ 10 | $ 10 | $ 10 | |||
Lightstone Slp Llc [Member] | |||||||||
Distributions, annualized rate of return | 7.00% | 7.00% | |||||||
Proceeds from Limited Partnership Investments | $ 4,200 | $ 1,290 | $ 1,200 | ||||||
Subordinated General Partner Participation Units | 177 | ||||||||
Subordinate Profit Interest Value | $ 17,700 | $ 7,900 | |||||||
Liquidating Stage Distribution One [Member] | |||||||||
Stockholders' return threshold, percent | 7.00% | ||||||||
Distribution due, cumulative rate of return | 7.00% | ||||||||
Liquidating Stage Distribution Two [Member] | |||||||||
Distribution due, cumulative rate of return | 7.00% | ||||||||
Liquidating Stage Distribution Two [Member] | Lightstone Slp Llc [Member] | |||||||||
Percent of additional distributions payable to related party | 30.00% | ||||||||
Liquidating Stage Distribution Two [Member] | Investor [Member] | |||||||||
Percent of additional distributions payable to related party | 7.00% | ||||||||
Liquidating Stage Distribution Three [Member] | |||||||||
Distribution due, cumulative rate of return | 12.00% | ||||||||
Liquidating Stage Distribution Three [Member] | Lightstone Slp Llc [Member] | |||||||||
Percent of additional distributions payable to related party | 40.00% | ||||||||
Liquidating Stage Distribution Three [Member] | Investor [Member] | |||||||||
Percent of additional distributions payable to related party | 60.00% | ||||||||
Operating Stage Distribution One [Member] | |||||||||
Stockholders' return threshold, percent | 7.00% | ||||||||
Distribution due, cumulative rate of return | 7.00% | ||||||||
Share Price | $ 10 | ||||||||
Operating Stage Distribution Two [Member] | |||||||||
Distribution due, cumulative rate of return | 7.00% | ||||||||
Operating Stage Distribution Two [Member] | Lightstone Slp Llc [Member] | |||||||||
Percent of additional distributions payable to related party | 30.00% | ||||||||
Operating Stage Distribution Two [Member] | Investor [Member] | |||||||||
Percent of additional distributions payable to related party | 7.00% | ||||||||
Operating Stage Distribution Three [Member] | |||||||||
Distribution due, cumulative rate of return | 12.00% | ||||||||
Operating Stage Distribution Three [Member] | Lightstone Slp Llc [Member] | |||||||||
Percent of additional distributions payable to related party | 60.00% | ||||||||
Operating Stage Distribution Three [Member] | Investor [Member] | |||||||||
Percent of additional distributions payable to related party | 40.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2020 | |
Franchise Fee Percentage | 5.00% |
Minimum [Member] | |
Management Agreement Term | 1 year |
Marketing Fund Charge Percent | 1.50% |
Franchise Agreement Term | 15 years |
Property Management Fee, Percent Fee | 3.00% |
Maximum [Member] | |
Management Agreement Term | 10 years |
Marketing Fund Charge Percent | 3.50% |
Franchise Agreement Term | 20 years |
Property Management Fee, Percent Fee | 3.50% |