Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 01, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Registrant Name | 'BRE Select Hotels Corp | ' |
Entity Central Index Key | '0001566445 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 100 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Investment in real estate, net of accumulated depreciation of $29,593 and $16,359, respectively | $959,644 | $959,014 |
Hotels held for sale | 1,504 | 9,485 |
Cash and cash equivalents | 25,061 | 23,902 |
Restricted cash | 36,868 | 39,179 |
Due from third party managers, net | 4,324 | 4,841 |
Prepaid expenses | 2,908 | 2,352 |
Deferred financing costs, net | 9,829 | 12,575 |
Goodwill | 126,377 | 126,377 |
Other assets | 976 | 3,858 |
TOTAL ASSETS | 1,167,491 | 1,181,583 |
LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 9,104 | 12,453 |
Due to third party managers, net | 616 | 0 |
Mortgages payable | 609,044 | 617,855 |
Mezzanine loans | 172,488 | 175,000 |
Mortgages payable and mezzanine loans related to assets of hotels held for sale | 2,660 | 0 |
TOTAL LIABILITIES | 793,912 | 805,308 |
Commitments and contingencies (Note 8) | ' | ' |
SHAREHOLDERS' EQUITY | ' | ' |
Preferred stock, $0.0001 par value; 30,000,000 shares authorized, none issued and outstanding at both June 30, 2014 and December 31, 2013 | 0 | 0 |
Common stock, $0.01 par value; 100,000 shares authorized, 100 shares issued and outstanding at both June 30, 2014 and December 31, 2013 | 0 | 0 |
Additional paid-in capital | 171,988 | 192,450 |
Retained earnings | 17,766 | 0 |
TOTAL SHAREHOLDERS' EQUITY | 189,754 | 192,450 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,167,491 | 1,181,583 |
7% Series A Cumulative Redeemable Preferred Stock [Member] | ' | ' |
LIABILITIES | ' | ' |
Preferred Stock, $1.90 initial liquidation preference; 120,000,000 shares authorized, 97,032,848 shares issued and outstanding at both June 30, 2014 and December 31, 2013 | $183,825 | $183,825 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accumulated depreciation of Investment in real estate | $29,593 | $16,359 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 100 | 100 |
Common stock, shares outstanding | 100 | 100 |
7% Series A Cumulative Redeemable Preferred Stock [Member] | ' | ' |
Preferred Shares in Percentage | 7.00% | 7.00% |
Initial liquidation preference | $1.90 | $1.90 |
Preferred stock, shares authorized | 120,000,000 | 120,000,000 |
Preferred stock, shares issued | 97,032,848 | 97,032,848 |
Preferred stock, shares outstanding | 97,032,848 | 97,032,848 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 4 Months Ended | 1 Months Ended | 4 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | 13-May-13 | 13-May-13 | 13-May-13 | 13-May-13 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |
Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | |||||||
REVENUE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Room revenue | $68,504 | $35,230 | $125,646 | $35,230 | ' | ' | ' | ' | $28,945 | $82,063 | ' | ' |
Other revenue | 4,829 | 2,331 | 9,174 | 2,331 | ' | ' | ' | ' | 2,223 | 6,212 | ' | ' |
Reimbursed expenses | 0 | 0 | 0 | 0 | ' | ' | ' | ' | 944 | 2,838 | ' | ' |
Total revenue | 73,333 | 37,561 | 134,820 | 37,561 | ' | ' | ' | ' | 32,112 | 91,113 | ' | ' |
EXPENSES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating expense | 17,007 | 8,454 | 32,406 | 8,454 | ' | ' | ' | ' | 7,930 | 23,167 | ' | ' |
Hotel administrative expense | 5,714 | 2,904 | 10,984 | 2,904 | ' | ' | ' | ' | 2,445 | 7,159 | ' | ' |
Sales and marketing | 5,467 | 2,828 | 10,201 | 2,828 | ' | ' | ' | ' | 2,599 | 7,407 | ' | ' |
Utilities | 2,282 | 1,236 | 4,714 | 1,236 | ' | ' | ' | ' | 996 | 3,188 | ' | ' |
Repair and maintenance | 2,712 | 1,450 | 5,372 | 1,450 | ' | ' | ' | ' | 1,402 | 4,081 | ' | ' |
Franchise fees | 3,408 | 1,728 | 6,254 | 1,728 | ' | ' | ' | ' | 1,305 | 3,716 | ' | ' |
Management fees | 2,901 | 1,216 | 5,039 | 1,216 | ' | ' | ' | ' | 1,096 | 3,010 | ' | ' |
Taxes, insurance and other | 3,541 | 1,967 | 6,891 | 1,967 | ' | ' | ' | ' | 1,357 | 4,457 | ' | ' |
General and administrative | 827 | 890 | 1,765 | 890 | ' | ' | ' | ' | 1,223 | 2,828 | ' | ' |
Merger transaction costs | 0 | 6,255 | 0 | 21,143 | ' | ' | ' | ' | 66,962 | 67,633 | ' | ' |
Reimbursed expenses | 0 | 0 | 0 | 0 | ' | ' | ' | ' | 944 | 2,838 | ' | ' |
Depreciation expense | 6,662 | 3,320 | 13,234 | 3,320 | ' | ' | ' | ' | 3,425 | 10,651 | ' | ' |
Total expenses | 50,521 | 32,248 | 96,860 | 47,136 | ' | ' | ' | ' | 91,684 | 140,135 | ' | ' |
Operating income (loss) | 22,812 | 5,313 | 37,960 | -9,575 | ' | ' | ' | ' | -59,572 | -49,022 | ' | ' |
Interest expense, net | -9,713 | -5,286 | -19,030 | -5,286 | ' | ' | ' | ' | -926 | -1,439 | ' | ' |
Unrealized (loss) gain on derivatives | -223 | 439 | -419 | 439 | ' | ' | ' | ' | 0 | 0 | ' | ' |
Income (loss) from continuing operations before income tax expense | 12,876 | 466 | 18,511 | -14,422 | ' | ' | ' | ' | -60,498 | -50,461 | ' | ' |
Income tax expense | -1,749 | -1,475 | -814 | -1,475 | ' | ' | ' | ' | -45 | -140 | ' | ' |
Income (loss) from continuing operations | 11,127 | -1,009 | 17,697 | -15,897 | ' | ' | ' | ' | -60,543 | -50,601 | ' | ' |
Income from discontinued operations, net of tax | 2 | 152 | 69 | 152 | ' | ' | ' | ' | 57 | 18 | ' | ' |
Net income (loss) | 11,129 | -857 | 17,766 | -15,745 | ' | ' | ' | ' | -60,486 | -50,583 | ' | ' |
Accrued Series A Preferred Stock dividends | ' | ' | ' | ' | -3,231 | -2,907 | -3,231 | -2,907 | ' | ' | 0 | 0 |
Net (loss) income available for common stockholders | $7,898 | ($3,764) | $14,535 | ($18,652) | ' | ' | ' | ' | ($60,486) | ($50,583) | ' | ' |
Basic and diluted net income (loss) per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
From continuing operations, after Series A Preferred Stock dividends | ' | ' | ' | ' | $78,960 | ($39,160) | $144,660 | ($188,040) | ' | ' | ($0.66) | ($0.55) |
From discontinued operations | $20 | $1,520 | $690 | $1,520 | ' | ' | ' | ' | $0 | $0 | ' | ' |
Total basic and diluted net income (loss) per common share available to common stockholders | $78,980 | ($37,640) | $145,350 | ($186,520) | ' | ' | ' | ' | ($0.66) | ($0.55) | ' | ' |
Dividends per common share | $9,000 | $0 | $14,000 | $0 | ' | ' | ' | ' | $0 | $0 | ' | ' |
Weighted average common shares outstanding-basic and diluted | 100 | 100 | 100 | 100 | ' | ' | ' | ' | 91,361,488 | 91,270,197 | ' | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | 4 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | 13-May-13 |
Successor [Member] | Successor [Member] | Predecessor [Member] | |
Cash flows from operating activities: | ' | ' | ' |
Net income (loss) | $17,766 | ($15,745) | ($50,583) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ' | ' | ' |
Depreciation | 13,234 | 3,361 | 10,912 |
Gain on sale of assets | -81 | 0 | 0 |
Fair value adjustment of interest rate cap | 419 | -439 | 0 |
Amortization of deferred financing costs | 2,746 | 662 | 93 |
Other non-cash expenses, net | -15 | 0 | 2 |
Changes in operating assets and liabilities: | ' | ' | ' |
Increase in cash restricted for operating expenses | -256 | -2,091 | 0 |
Decrease (increase) in due to/from third party managers, net | 1,133 | -5,947 | -1,001 |
Decrease (increase) in prepaid expenses and other assets | 1,554 | -3,668 | -313 |
(Decrease) increase in accounts payable and accrued expenses | -1,876 | 2,776 | -1,301 |
Net cash provided by (used in) operating activities | 34,624 | -21,091 | -42,191 |
Cash flows from investing activities: | ' | ' | ' |
Capital improvements, net | -15,362 | 0 | -7,735 |
Proceeds from sale of assets, net | 8,102 | 0 | 5,866 |
Property insurance proceeds | 353 | 0 | 0 |
Cash paid for business acquisition, net of cash acquired | 0 | -881,652 | 0 |
Net decrease (increase) in cash restricted for property improvements | 2,567 | -23,943 | 113 |
Net cash used in investing activities | -4,340 | -905,595 | -1,756 |
Cash flows from financing activities: | ' | ' | ' |
Net payments on credit facility | 0 | -30,970 | -3,500 |
Net proceeds from borrowings on mortgage payable and mezzanine loans | 0 | 775,000 | 0 |
Payments of mortgage debt | -6,752 | -30 | -5,869 |
Payments of mezzanine debt | -1,911 | 0 | 0 |
Financing fees | 0 | -15,884 | 0 |
Dividends paid to Series A Preferred shareholders | -6,462 | 0 | 0 |
Conversion of Series B convertible preferred stock | 0 | 0 | 64,367 |
Net capital contribution from Sponsor | 0 | 214,880 | 0 |
Merger costs related to issuance of Series A Preferred Stock | 0 | -1,223 | 0 |
Dividends paid to common shareholders | -14,000 | 0 | 0 |
Net cash (used in) provided by financing activities | -29,125 | 941,773 | 54,998 |
Net increase in cash and cash equivalents | 1,159 | 15,087 | 11,051 |
Cash and cash equivalents, beginning of period | 23,902 | 0 | 0 |
Cash and cash equivalents, end of period | 25,061 | 15,087 | 11,051 |
Supplemental Cash Flow Information including Non-Cash Activities: | ' | ' | ' |
Interest paid | 16,709 | 3,200 | 933 |
Taxes paid | 919 | 39 | 367 |
Accrued capital improvements | $783 | $0 | $0 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Organization | ' |
1. Organization | |
BRE Select Hotels Corp, together with its wholly-owned subsidiaries (the “Company”), is a Delaware corporation that made an election, through the filing of Form 1120-REIT for 2012, to qualify as a real estate investment trust, or REIT, for federal income tax purposes. The Company was formed on November 28, 2012 to invest in income-producing real estate in the United States through the acquisition of Apple REIT Six, Inc. (“Apple Six”) on behalf of BRE Select Hotels Holdings LP (“BRE Holdings”), a Delaware limited partnership and an affiliate of the Company. 100% of the common stock of the Company is owned by BRE Holdings, which is an affiliate of Blackstone Real Estate Partners VII L.P. (“Sponsor”). The acquisition of Apple Six was completed on May 14, 2013 (“Acquisition Date”). As of June 30, 2014, the Company owned 63 hotels located in 18 states with an aggregate of 7,426 rooms. | |
For purposes of this quarterly report on Form 10-Q, references to the Company for periods prior to the Acquisition Date shall be deemed to refer to Apple Six, unless the context indicates otherwise. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies | |
Principles of Consolidation—The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. | |
Basis of Presentation—The Company was determined to be the acquirer for accounting purposes and, therefore, the merger was accounted for using the acquisition method of accounting. Accordingly, the purchase price of the Merger (as defined below) has been allocated to the Company’s assets and liabilities based upon their estimated fair values at the Acquisition Date. As used herein, the term “Predecessor” refers to the financial position and results of operations of Apple Six prior to the Acquisition Date. The term “Successor” refers to the financial position and results of operations of the Company on or after the Acquisition Date. Certain merger transaction costs incurred prior to May 14, 2013 by the Company are included in the Successor period, as that period represents the commencement of Successor operations. Prior to May 14, 2013, the Company had no revenues, and expenses were comprised solely of merger related costs. For accounting purposes, the purchase price allocation was applied on May 14, 2013. | |
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principals generally accepted in the United States (“U.S. GAAP”) for interim financial information and certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with standards for the preparation of interim financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation have been included. Operating results for the interim periods noted herein are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2014. | |
Use of Estimates—The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |
Cash and Cash Equivalents—Cash and cash equivalents primarily consists of cash in banks. Cash equivalents consist of investments with maturities of three months or less at acquisition. The Company has deposits in excess of $250,000 within single financial institutions that are not insured by the Federal Deposit Insurance Corporation. The Company believes it mitigates this risk by depositing with major financial institutions. | |
Restricted Cash—Restricted cash consists of deposits held in escrow for the payment of certain required repairs, capital improvements, property taxes, insurance and ground rent pursuant to the terms of the Company’s mortgages payable and mezzanine loans, as well as a repairs and improvements reserve required by the Marriott International Inc. or its affiliates (“Marriott”) management agreements. | |
Due from Third Party Manager, net—Due from third party managers, net, represents the current earnings and working capital advanced to the hotel management companies for operation of the hotels, net of management fees payable. | |
Investment in Real Estate and Related Depreciation—Real estate is stated at cost, net of accumulated depreciation. Repair and maintenance costs are expensed as incurred while significant improvements, renovations, and replacements that extend the useful life of the real estate asset are capitalized and depreciated over the estimated useful life of the real estate asset. Depreciation is computed using the straight-line method over the average estimated useful lives of the assets, which are 39 years for buildings, 10 years for major improvements and three to seven years for furniture and equipment. | |
The Company considers expenditures to be capital in nature based on the following criteria: (1) for a single asset, the cost must be at least $500, including all normal and necessary costs to place the asset in service, and the useful life must be at least one year; (2) for group purchases of 10 or more identical assets, the unit cost for each asset must be at least $50, including all normal and necessary costs to place the asset in service, and the useful life must be at least one year; and (3) for major repairs to a single asset, the repair must be at least $2,500 and the useful life of the asset must be substantially extended. | |
Impairment of Investment in Real Estate—The Company records impairment losses on hotel properties used in operations if indicators of impairment are present, and the sum of the undiscounted cash flows estimated to be generated by the respective properties over their estimated remaining useful life, based on historical and industry data, is less than the properties’ carrying amount. Indicators of impairment include: (1) a property with current or potential losses from operations, (2) when it becomes more likely than not that a property will be sold before the end of its previously estimated useful life or (3) when events, trends, contingencies or changes in circumstances indicate that a triggering event has occurred and an asset’s carrying value may not be recoverable. The Company monitors its properties on an ongoing basis by analytically reviewing financial performance and considers each property individually for purposes of reviewing for indicators of impairment. As many indicators of impairment are subjective, such as general economic and market declines, the Company also prepares a quarterly recoverability analysis to assist with its evaluation of impairment indicators. The analysis compares each property’s net book value to each property’s estimated operating income using current operating results for each stabilized property and projected stabilized operating results based on the property’s market for properties that recently opened, were recently renovated or experienced other short-term business disruption. No triggering events have occurred to indicate the asset carrying values will not be recoverable. If events or circumstances change, such as the operating performance of a property declines substantially for an extended period of time, the Company’s carrying value for a particular property may not be recoverable and an impairment loss would be recorded. Impairment losses are measured as the difference between the asset’s fair value and its carrying value. | |
Hotels Held for Sale—The Company classifies assets as held for sale when the criteria specified under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360, Impairment or Disposal of Long-Lived Assets, are met. Specifically, the criteria followed by the Company includes (a) management commits to a plan to sell, (b) the asset is available for immediate sale in its present condition, (c) the Company initiates an active program to locate a buyer, (d) the sale is probable to be completed within one year, and (e) the Company is actively marketing the asset at a reasonable price in relation to its current fair value. The Company discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management’s opinion, the net sales price of the assets that have been identified for sale is less than the net book value of the assets, an impairment charge is recorded. In connection with the decision to sell the one hotel currently classified as held for sale in the condensed consolidated financial statements, the Company recorded an impairment charge of $0.1 million in the fourth quarter of 2013, which represented the difference between the net book value and the fair value less cost to sell. | |
Goodwill—Goodwill represents the excess of purchase price over fair value of assets acquired and liabilities assumed in business combinations, and is characterized by the intangible assets that do not qualify for separate recognition. In accordance with accounting guidance related to goodwill and other intangible assets, the Company performs its annual testing for impairment of goodwill during the fourth quarter of each year and in certain situations between those annual dates if indicators of impairment are present. No indicators of impairment which would require a test of goodwill during the interim periods presented were identified. | |
Revenue Recognition—Revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel’s services. | |
Sales and Marketing Costs—Sales and marketing costs are expensed when incurred. These costs represent the expense for franchise advertising and reservations systems under the terms of the hotel management and franchise agreements and general and administrative expenses that are directly attributable to advertising and promotion. | |
Income Taxes—The Company made an election, through the filing of Form 1120-REIT for 2012, to qualify as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the Company’s short taxable year ended December 31, 2012. In order to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its adjusted taxable income to its shareholders, subject to certain adjustments and excluding any net capital gain. The Company intends to adhere to these requirements to qualify for REIT status, and assuming it does qualify for taxation as a REIT, it will generally not be subject to federal income taxes to the extent it distributes substantially all of its taxable income to the Company’s shareholders. However, the Company’s taxable REIT subsidiaries (“TRS”) will generally be subject to federal, state, and local income taxes and the consolidated income tax provision includes those taxes. | |
Valuation of Deferred Tax Assets – The Company has approximately $1.6 million of deferred tax assets as of June 30, 2014. Management considered various factors, including tax planning strategies, future reversals of existing taxable temporary differences and future projected taxable income in determining that a valuation allowance for the deferred tax assets of $0.9 million is required, and the Company believes that it is more likely than not that it will be able to realize the $0.7 million of net deferred tax assets in the future. If a determination is made that all, or a portion, of the deferred tax assets may not be realized, an increase in income tax expense would be recorded in that period. | |
Income (loss) from Discontinued Operations—Income (loss) from discontinued operations is computed in accordance with ASC 205-20, Discontinued Operations, which requires, among other things, that the primary assets and liabilities and the results of operations of the Company’s real property that has been sold, or otherwise qualifies as held for sale, be classified as discontinued operations and segregated from the Company’s continuing operations in the condensed consolidated statements of operations. | |
Income (loss) per Common Share (Predecessor)—Basic income (loss) per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted income (loss) per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Series B convertible preferred shares were converted on May 13, 2013 in connection with the Merger (as defined below) and included in the weighted average common shares calculation for the applicable periods. There were no potential common shares with a dilutive effect during the applicable periods, and as a result, basic and dilutive outstanding shares were the same. | |
Income (loss) per Common Share (Successor)—Basic income (loss) per common share is computed based upon the weighted average number of shares outstanding during the period. There were no potential dilutive shares during the applicable periods, and as a result, basic and dilutive outstanding shares were the same. | |
New Accounting Pronouncements—In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the update, discontinued operations as defined as either 1) a component of an entity (or group of components) that (i) has been disposed of or meets the criteria to be classified as held-for-sale and (ii) represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, or 2) is a business or nonprofit activity that on acquisition, meets the criteria to be classified as held-for-sale. The accounting update is effective on a prospective basis for disposals or assets meeting the definition as held-for-sale for accounting periods beginning on or after December 15, 2014. Early application is permitted, but only for those disposals that have not been reported in previously issued financial statements. | |
Historically, the Company has classified and reported disposals of its operating properties for which operations and cash flows are clearly distinguished as discontinued operations. See Note 13. Upon adoption of this standard, we expect that future disposals of operating real estate assets will not qualify for discontinued operations reporting treatment, unless the disposals represent a strategic shift that will have a major effect on the Company’s operations and financial results. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The accounting update is effective for accounting periods beginning on or after December 15, 2016. Early application is not permitted. The Company is currently assessing the impact this new guidance may have on the Company’s operations and financial results. |
Merger
Merger | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Merger | ' | ||||
3. Merger | |||||
On May 14, 2013, the Company completed the acquisition of Apple Six, pursuant to the Agreement and Plan of Merger, dated as of November 29, 2012 (the “Merger Agreement”), by and between the Company, BRE Holdings and Apple Six, pursuant to which Apple Six merged with and into the Company (the “Merger”). As a result of the Merger, the Company acquired 100% of the controlling interest of Apple Six. Each issued and outstanding common share and related Series A preferred share of Apple Six were exchanged for (i) $9.20 in cash and (ii) one share of 7% Series A Cumulative Redeemable Preferred Stock (“Series A Preferred Stock”) of the Company with an initial liquidation preference of $1.90 per share. The Merger was funded by a net cash contribution of $214.9 million indirectly made by the Sponsor and its affiliates, Series A Preferred Stock with an aggregate initial liquidation preference of $184.4 million, and $775.0 million of debt. In connection with these activities, the Company incurred $6.3 million and $21.1 million in merger transaction costs for the three and six months ended June 30, 2013, respectively. The Predecessor incurred Merger transaction costs of $67.0 million and $67.6 million for the period from April 1, 2013 through May 13, 2013 and January 1, 2013 through May 13, 2013, respectively. All costs related to the Merger were expensed in the period in which they were incurred and are reflected in Merger transaction costs in the condensed consolidated statements of operations. | |||||
The Merger was accounted for using the purchase method of accounting in accordance with ASC 805, Business Combinations, and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values at the Acquisition Date. The Company engaged a third party valuation firm to assist in the determination of the fair values of tangible and intangible assets acquired. | |||||
The following is a summary of the amounts (in thousands) assigned to the assets acquired and liabilities assumed by the Company in connection with the Merger: | |||||
Investment in real estate (including real estate held for sale) | $ | 980,895 | |||
Goodwill | 126,377 | ||||
Cash | 11,051 | ||||
Restricted cash-furniture, fixtures and other escrows | 1,196 | ||||
Due from third party managers, net | 7,186 | ||||
Prepaid expenses and other assets | 4,160 | ||||
Credit facility | (30,970 | ) | |||
Mortgage debt | (18,078 | ) | |||
Accounts payable and accrued expenses | (4,452 | ) | |||
Ground lease | (300 | ) | |||
$ | 1,077,065 | ||||
Goodwill recognized is deductible for tax purposes. |
Investment_in_Real_Estate_net
Investment in Real Estate, net | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Real Estate [Abstract] | ' | ||||||||
Investment in Real Estate, net | ' | ||||||||
4. Investment in Real Estate, net | |||||||||
Investment in real estate, net as of June 30, 2014 and December 31, 2013 consisted of the following (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land | $ | 154,245 | $ | 153,968 | |||||
Building and Improvements | 794,842 | 793,900 | |||||||
Furniture, Fixtures and Equipment | 28,448 | 25,408 | |||||||
Construction in Progress | 11,702 | 2,097 | |||||||
989,237 | 975,373 | ||||||||
Less: Accumulated Depreciation | (29,593 | ) | (16,359 | ) | |||||
Investment in Real Estate, net | $ | 959,644 | $ | 959,014 | |||||
Deferred_Financing_Costs
Deferred Financing Costs | 6 Months Ended |
Jun. 30, 2014 | |
Text Block [Abstract] | ' |
Deferred Financing Costs | ' |
5. Deferred Financing Costs | |
Deferred financing costs consist of amounts paid for direct and indirect costs associated with the origination of the mortgage and mezzanine loan agreements entered into at the time of the Merger and further discussed in Note 6. Such costs are amortized on a straight-line basis (which approximates the effective interest method) over the term of the related debt. Amortization of deferred financing costs totaled $1.4 million and $2.7 million for the three and six months ended June 30, 2014, respectively, and is included in interest expense in the condensed consolidated statements of operations. |
Mortgages_Payable_and_Mezzanin
Mortgages Payable and Mezzanine Loans | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Mortgage Loans On Real Estate [Abstract] | ' | ||||||||||||
Mortgages Payable and Mezzanine Loans | ' | ||||||||||||
6. Mortgages Payable and Mezzanine Loans | |||||||||||||
On May 14, 2013, in connection with the acquisition of Apple Six pursuant to the Merger Agreement, certain indirect, wholly-owned subsidiaries of the Company (the “Mortgage Borrowers”) obtained a $600.0 million mortgage loan (the “Mortgage Loan”) from Citigroup Global Markets Realty Corp. and Bank of America, N.A. (collectively, the “Lenders”). The Mortgage Loan is secured by first-priority, cross-collateralized mortgage liens on 62 of the 63 properties owned or ground-leased by certain subsidiaries of the Company, all related personal property, reserves, a pledge of all income received by the Mortgage Borrowers with respect to the properties and a security interest in a cash management account. | |||||||||||||
Certain indirect, wholly-owned subsidiaries of the Company that own direct ownership interests in the Mortgage Borrowers (the “Mezzanine A Borrowers”) obtained a $100.0 million loan (the “Mezzanine A Loan”) from the Lenders. Certain other indirect, wholly-owned subsidiaries of the Company that own direct or indirect ownership interests in the Mortgage Borrowers (the “Mezzanine B Borrowers” and, together with the Mezzanine A Borrowers, the “Mezzanine Borrowers” and, together with the Mortgage Borrowers, the “Borrowers”) obtained a $75.0 million loan (the “Mezzanine B Loan” and, together with the Mezzanine A Loan, the “Mezzanine Loans” and, together with the Mortgage Loan, the “Loans”) from the Lenders. Each of the Mezzanine Loans is secured by first-priority, cross-collateralized pledges of the direct or indirect ownership interests of each of the Mezzanine Borrowers in the Mortgage Borrowers, all related personal property, reserves, a pledge of all income received by each of the Mezzanine Borrowers with respect to its direct or indirect ownership interests in the Mortgage Borrowers and a security interest in a cash management account. | |||||||||||||
Each portion of the collateral security of the Mezzanine Loans is cross-defaulted with the Mortgage Loan and each portion of the collateral security of the Mezzanine B Loan is cross-defaulted with the Mezzanine A Loan. In addition to the payment of the cash consideration in the Merger, the proceeds from the Loans were used to repay Apple Six’s credit facility with Wells Fargo Bank, N.A., to repay or defease certain of Apple Six’s mortgage debt, for other costs and expenses relating to the transactions in connection with the Merger Agreement and to establish reserves, including certain reserves required to be established under the terms of the Loans. | |||||||||||||
The initial interest rate of the Mortgage Loan is equal to the one-month London interbank offered rate for deposits, or LIBOR, plus a margin rate of approximately 3.34%. By amendments executed on July 8, 2013 and July 22, 2013, respectively, the Mortgage Borrowers and the Lenders assigned the principal balance of the Mortgage Loan among each of the six components of the Mortgage Loan and the Mortgage Borrowers and the Lenders assigned each of the six components of the Mortgage Loan with varying floating interest rates with an initial collective weighted average interest rate equal to LIBOR plus a margin of approximately 3.34%. The initial interest rate of the Mezzanine A Loan is equal to the one-month LIBOR plus a margin rate of 5.75%. The initial interest rate of the Mezzanine B Loan is equal to the one-month LIBOR plus a margin rate of 6.95%. The Loans are scheduled to mature on May 9, 2016, with an option for the Borrowers to extend the initial term for two one-year extension terms, subject to certain conditions. In the event the Borrowers exercise the second one-year extension option, there will be a one-time increase in the applicable interest rate by 25 basis points for the last one-year extension period. The Loans are not subject to any mandatory amortization. | |||||||||||||
The Loans contain various representations and warranties, as well as certain financial, operating and other covenants that will, among other things, limit the Company’s ability to: | |||||||||||||
• | incur additional secured or unsecured indebtedness; | ||||||||||||
• | make cash distributions at any time that the debt yield, representing the quotient (expressed as a percentage) calculated by dividing the annualized net operating income of the properties subject to the Loans by the outstanding principal amount of the indebtedness under the Loans, is less than 8.75% or if there is a default continuing under any Mezzanine Loan (including the failure to make regularly scheduled debt service payments thereunder) until such time as the debt yield is equal to or greater than 9.00% or the Mezzanine Loan default has been cured; | ||||||||||||
• | make investments or acquisitions; | ||||||||||||
• | use assets as security in other transactions; | ||||||||||||
• | sell assets (except that the Borrowers are permitted to sell assets so long as the debt yield is not reduced, subject to payment of applicable prepayment premiums and other property release requirements); | ||||||||||||
• | guarantee other indebtedness; and | ||||||||||||
• | consolidate, merge or transfer all or substantially all of the Company’s assets. | ||||||||||||
Defaults under the Loans include, among other things, the failure to pay interest or principal when due, material misrepresentations, transfers of the underlying security for the Loans without any required consent from the applicable Lender, defaults under material agreements relating to the properties, including franchise and management agreements, bankruptcy of a Borrower or the Company, failure to maintain required insurance and a failure to observe other covenants under the Loans, in each case subject to any applicable cure rights. | |||||||||||||
The Loans are not prepayable during the first twelve months of the initial term of the Loans, except that each Borrower may prepay up to 15% of the Loan to which it is a party during such twelve month period and at any time thereafter without prepayment penalty or fee. The Borrowers may prepay the Loans, in whole or in part, at any time after the twelfth month of the initial term of the Loans, except that, if a prepayment is made at any time during the period from the thirteenth month through the eighteenth month of the initial term of the Loans and such prepayment, when aggregated with all other prepayments made by a Borrower of the applicable Loan, exceeds 15% of the amount of the Loans funded to such Borrower, then such Borrower will pay to the Lenders an amount equal to the present value of the interest payable on the principal being prepaid for the period from the date of the prepayment through the eighteenth month of the initial term of the Loans. Any prepayment made after the eighteenth month of the initial term of the Loans may be made without any prepayment penalty or fee. Notwithstanding the foregoing, any prepayment of the Loans with casualty or condemnation proceeds or any prepayment to enable the Borrowers to remove a ground leased property as collateral security due to a default by a Borrower under the applicable ground lease will not be subject to any limitation on prepayment or any prepayment fee or penalty. | |||||||||||||
In addition, the applicable Borrowers for each Loan and the Company will have recourse liability under the Loans for certain matters typical of a transaction of this type, including, without limitation, relating to losses arising out of actions by the Borrowers, the Company, the Sponsor or their respective affiliates which constitute fraud, intentional misrepresentation, misappropriation of funds (including insurance proceeds), removal or disposal of any property after an event of default under the Loans, a material violation of the due on sale/encumbrance covenants set forth in the loan agreements, willful misconduct that results in waste to any property and any material modification or voluntary termination of a ground lease without the Lenders’ prior written consent if required under the loan agreements. The applicable Borrowers for each Loan and the Company will also have recourse liability for the Loans in the event any security instrument or loan agreement is deemed a fraudulent conveyance or a preference, in the event of a voluntary or collusive involuntary bankruptcy of any Borrower or any operating lessee of the properties, in the event Borrower, the Company, the Sponsor or their respective affiliates consent to or join in the application for the appointment of a custodian, receiver, trustee or examiner of any Borrower, or the operating lessee of any of the properties or any property or any Borrower or any operating lessee of the properties making an assignment for the benefit of creditors. | |||||||||||||
The Company sold three hotels during the second quarter of 2014, as further discussed in Note 13. As part of the sales, the Company repaid $6.6 million of the Mortgage Loan and $1.9 million of the Mezzanine Loans. | |||||||||||||
As part of the Merger, the Company assumed an existing loan with a commercial lender secured by the Company’s Fort Worth, Texas Residence Inn property. The loan matures on October 6, 2022 and carries a fixed interest rate of 4.73%. The outstanding principal balance as of June 30, 2014 was $17.7 million and is included in mortgages payable in the condensed consolidated balance sheets. In addition, in conjunction with the Merger, Apple Six’s unsecured credit facility of $31.0 million was paid in full and extinguished and the mortgage loan of $5.6 million on the Hillsboro, Oregon Courtyard property was defeased. Interest expense, excluding deferred financing costs discussed in Note 5, was $8.4 million and $16.4 million for the three and six months ended June 30, 2014, respectively, and is included in interest expense, net in the condensed consolidated statements of operations. | |||||||||||||
Future scheduled principal payments of debt obligations (assuming no exercise of extension options) as of June 30, 2014 are as follows (in thousands): | |||||||||||||
Mortgages | Mezzanine | Total | |||||||||||
Payable | Loans | ||||||||||||
2014 (remaining months) | $ | 202 | $ | 0 | $ | 202 | |||||||
2015 | 421 | 0 | 421 | ||||||||||
2016 | 591,829 | 172,488 | 764,317 | ||||||||||
2017 | 464 | 0 | 464 | ||||||||||
2018 | 487 | 0 | 487 | ||||||||||
Thereafter | 15,641 | 0 | 15,641 | ||||||||||
Total | $ | 609,044 | $ | 172,488 | $ | 781,532 | |||||||
In connection with the expected sale of the SpringHill Suites – Montgomery, Alabama in the third quarter of fiscal 2014, the Company expects to repay $2.1 million of the Mortgage Loan and $0.6 million of the Mezzanine Loans. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
7. Fair Value of Financial Instruments | |||||||||||||||||
In accordance with the authoritative guidance on fair value measurements and disclosures, the Company measures nonfinancial assets and liabilities subject to nonrecurring measurement and financial assets and liabilities subject to recurring measurement based on a hierarchy that prioritizes inputs to valuation techniques used to measure the fair value. Inputs used in determining fair value should be from the highest level available in the following hierarchy: | |||||||||||||||||
Level 1 — Inputs based on quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access. | |||||||||||||||||
Level 2 — Inputs based on quoted prices for similar assets or liabilities, quoted market prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. | |||||||||||||||||
Level 3 — Inputs are unobservable for the asset or liability and typically based on an entity’s own assumptions as there is little, if any, related market activity. | |||||||||||||||||
Determining estimated fair values of the Company’s financial instruments such as mortgages payable and mezzanine loans requires considerable judgment to interpret market data. The market assumptions and/or estimation methodologies used may have a material effect on estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts by which these instruments could be purchased, sold, or settled. Carrying amounts and estimated fair values of financial instruments, for periods indicated, were as follows (in thousands): | |||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
Value | Fair Value | Value | Fair Value | ||||||||||||||
Financial assets and liabilities measured at | |||||||||||||||||
fair value on a recurring basis: | |||||||||||||||||
Interest rate caps | $ | 46 | $ | 46 | $ | 465 | $ | 465 | |||||||||
Financial assets not measured at fair value: | |||||||||||||||||
Cash and cash equivalents | $ | 25,061 | $ | 25,061 | $ | 23,902 | $ | 23,902 | |||||||||
Restricted cash | $ | 36,868 | $ | 36,868 | $ | 39,179 | $ | 39,179 | |||||||||
Due from third party managers, net | $ | 4,324 | $ | 4,324 | $ | 4,841 | $ | 4,841 | |||||||||
Financial liabilities not measured at fair value: | |||||||||||||||||
Accounts payable and accrued expenses | $ | 9,104 | $ | 9,104 | $ | 12,453 | $ | 12,453 | |||||||||
Due to third party managers, net | $ | 616 | $ | 616 | $ | 0 | $ | 0 | |||||||||
Mortgages payable | $ | 609,044 | $ | 608,163 | $ | 617,855 | $ | 616,425 | |||||||||
Mezzanine loans | $ | 172,488 | $ | 172,488 | $ | 175,000 | $ | 175,000 | |||||||||
Mortgages payable and mezzanine loans related to assets of hotels held for sale | $ | 2,660 | $ | 2,660 | $ | 0 | $ | 0 | |||||||||
Interest rate caps—The Company acquired three interest rate cap agreements, as required by the terms of its Loans, considered to be derivative instruments. Each agreement caps the interest rate on its mortgages payable and mezzanine loans obtained in connection with the Merger. The Company did not designate the derivative as hedges for accounting purposes and, accordingly, accounts for the interest rate caps at fair value in the accompanying consolidated balance sheet in other assets with adjustments to fair value recorded in unrealized gain (loss) on derivatives in the condensed consolidated statements of operations. The interest rate caps were acquired at a cost of $431,210. Fair value is determined by using prevailing market data and incorporating proprietary models based on well recognized financial principals and reasonable estimates where applicable from a third party source. This is considered a Level 2 valuation technique. | |||||||||||||||||
Cash, cash equivalents and restricted cash—These financial assets bear interest at market rates and have maturities of less than 90 days. The carrying value approximates fair value due to the short-term nature of these assets. This is considered a Level 1 valuation technique. | |||||||||||||||||
Due from/to third party managers, accounts payable and accrued expenses—The carrying value of these financial instruments approximates their fair value due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique. | |||||||||||||||||
Mortgages payable and mezzanine loans—For the fixed rate mortgage payable, fair value is calculated by discounting the future cash flows of each instrument at estimated market rates of debt obligations with similar maturities and credit profiles or quality. This is considered a Level 3 valuation technique. The fair value of the variable rate mortgage payable and mezzanine loans cannot be reasonably estimated because it is not readily determinable without undue cost. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
8. Commitments and Contingencies | |||||
Legal Fees – In connection with the Merger, on November 29, 2012 Apple Six entered into a litigation cost sharing agreement with Apple REIT Seven, Inc., Apple REIT Eight, Inc., Apple REIT Nine, Inc. and Apple REIT Ten, Inc. (the “other Apple REIT companies”). Pursuant to the litigation cost sharing agreement: | |||||
• | The Company, as successor to Apple Six, will pay 20%, and the other parties to the litigation cost sharing agreement will pay 80%, of the fees and expenses of specified counsel or any other counsel, consultant or service provider jointly retained in connection with the Apple REIT class action litigation, incurred after November 29, 2012 in connection with the Apple REIT class action litigation. | ||||
The following is a description of the class action litigation: | |||||
On December 13, 2011, the United States District Court for the Eastern District of New York ordered that three putative class actions, Kronberg, et al. v. David Lerner Associates, Inc., et al., Kowalski v. Apple REIT Ten, Inc., et al., and Leff v. Apple REIT Ten, Inc., et al., be consolidated and amended the caption of the consolidated matter to be In re Apple REITs Litigation. The District Court also appointed lead plaintiffs and lead counsel for the consolidated action and ordered lead plaintiffs to file and serve a consolidated complaint by February 17, 2012. Apple Six was previously named as a party in the Kronberg, et al. v. David Lerner Associates, Inc. et al. class action lawsuit, which was filed on June 20, 2011. | |||||
On February 17, 2012, lead plaintiffs and lead counsel in the In re Apple REITs Litigation, Civil Action No. 1:11-cv-02919-KAM-JO, filed an amended consolidated complaint in the United States District Court for the Eastern District of New York against Apple Six, Apple Suites Realty Group, Inc., Apple Eight Advisors, Inc., Apple Nine Advisors, Inc., Apple Ten Advisors, Inc., Apple Fund Management, LLC, Apple REIT Seven, Inc., Apple REIT Eight, Inc., Apple REIT Nine, Inc. and Apple REIT Ten, Inc., their directors and certain officers, and David Lerner Associates, Inc. (“David Lerner Associates”) and David Lerner. Apple REIT Seven, Inc., Apple REIT Eight, Inc., Apple REIT Nine, Inc. and Apple REIT Ten, Inc. are collectively referred to as “other Apple REIT companies.” The consolidated complaint, purportedly brought on behalf of all purchasers of units in Apple Six and the other Apple REIT companies, or those who otherwise acquired these units that were offered and sold to them by David Lerner Associates or its affiliates and on behalf of subclasses of shareholders in New Jersey, New York, Connecticut and Florida, asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933. The consolidated complaint also asserts claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, negligence, and unjust enrichment, and claims for violation of the securities laws of Connecticut and Florida. The complaint seeks, among other things, certification of a putative nationwide class and the state subclasses, damages, rescission of share purchases and other costs and expenses. | |||||
On February 16, 2012, one shareholder of Apple Six and Apple REIT Seven, Inc., filed a putative class action lawsuit captioned Laurie Brody v. David Lerner Associates, Inc., et al., Case No. 1:12-cv-782-ERK-RER, in the United States District Court for the Eastern District of New York against Apple Six, Apple REIT Seven, Inc., Glade M. Knight, Apple Suites Realty Group, Inc., David Lerner Associates, and certain executives of David Lerner Associates. The complaint, purportedly brought on behalf of all purchasers of units of Apple Six and Apple REIT Seven, Inc., or those who otherwise acquired these units, asserts claims for breach of fiduciary duty and aiding and abetting breach of fiduciary duty, unjust enrichment, negligence, breach of written or implied contract (against the David Lerner Associates defendants only), and for violation of New Jersey’s state securities laws. On March 13, 2012, by order of the court, Laurie Brody v. David Lerner Associates, Inc., et al. was consolidated into the In re Apple REITs Litigation. | |||||
On April 18, 2012, Apple Six and the other Apple REIT companies served a motion to dismiss the consolidated complaint in the In re Apple REITs Litigation. Apple Six and the other Apple REIT companies accompanied their motion to dismiss the consolidated complaint with a memorandum of law in support of their motion to dismiss the consolidated complaint. | |||||
On April 3, 2013, the motion to dismiss the consolidated complaint in the In re Apple REITs Litigation was granted in full with prejudice. On April 12, 2013, plaintiffs filed a notice of appeal in the Apple REIT class action litigation, appealing the decision to the United States Court of Appeals for the Second Circuit. On July 26, 2013, plaintiffs filed a brief in support of their appeal. On October 25, 2013, defendants filed a brief opposing plaintiffs’ appeal. On November 15, 2013, plaintiffs filed a reply brief in further support of their appeal. Oral argument on plaintiffs’ appeal was held on March 31, 2014. | |||||
On April 23, 2014, the United States Court of Appeals for the Second Circuit (the “Second Circuit”) entered a summary order in the In re Apple REITs Litigation . In the summary order, the Second Circuit affirmed the dismissal by the United States District Court for the Eastern District of New York (the “District Court”) of the federal securities claims and state securities law claims and affirmed the dismissal of the unjust enrichment claim. However, the Second Circuit vacated the District Court’s dismissal of the plaintiffs’ state law breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, and negligence claims and remanded for further proceedings. | |||||
After remand, on June 6, 2014, defendants filed a brief in support of their motion to dismiss. On July 9, 2014, plaintiffs filed an opposition brief. Defendants’ reply brief is scheduled to be filed on August 8, 2014. | |||||
The Company believes that any claims against it are without merit, and it intends to continue to defend against them vigorously. At this time, the Company cannot reasonably predict the outcome of this proceeding or provide a reasonable estimate of the possible loss or range of loss due to this proceeding. | |||||
• | The Company, as successor to Apple Six, will pay 25%, and the other parties to the litigation cost sharing agreement will pay 75%, of the fees and expenses of specified counsel or any other counsel, consultant or service provider jointly retained in connection with the SEC investigation, incurred after November 29, 2012 in connection with the SEC investigation. On February 12, 2014, the SEC entered into a settlement with the Company, the Other Apple REIT Companies and Apple Six Advisors, Inc., Apple Seven Advisors, Inc., Apple Eight Advisors, Inc. and Apple Nine Advisors, Inc. (collectively the “Advisory Companies”) and Glade M. Knight, Apple Six’s former Chief Executive Officer, and Bryan F. Peery, Apple Six’s former Chief Financial Officer. The settlement related to the previously announced SEC investigation focused principally on the adequacy of certain disclosures in the filings of Apple Six beginning in 2008, as well as the review of certain transactions involving Apple Six and certain of the other Apple REIT companies with which the Company is not affiliated. Following completion of the Company’s acquisition of Apple Six on May 14, 2013, the Company, as the surviving corporation in the Merger, became involved in the SEC investigation. The settlement requires the Company to, without admitting or denying any allegations, consent to the issuance of an administrative order alleging various disclosure deficiencies that occurred at the Apple REITs prior to the Company’s acquisition of Apple Six and to cease and desist from committing or causing violations of specified securities laws, but does not require the Company to pay any financial penalties. Certain of the other parties to the settlement agreement with which the Company is not affiliated, however, also agreed to pay financial penalties and made certain undertakings that are not applicable to the Company. The settlement and the allegations have no impact on the financial statements of the Company. | ||||
Franchise Agreements—As of June 30, 2014, the Company’s hotel properties, other than the Courtyard in Myrtle Beach, South Carolina, the SpringHill Suites in Fort Worth, Texas and the Marriott in Redmond, Washington, (the “Marriott Managed Properties”) are operated under franchise agreements between the Company’s TRS and Marriott International, Inc. (“Marriott”) or Hilton Hotels Corporation (“Hilton”) or one of their respective affiliates. The franchise agreements for these hotels allow the properties to operate under the brand identified in the applicable franchise agreements. The management agreements for each of the Marriott Managed Properties allow the Marriott Managed Properties to operate under the brand identified therein. Pursuant to the franchise agreements, the Company pays a royalty fee, generally between 4.5% and 6.0% of room revenue, which is included in Franchise fees in the consolidated statements of operations. Program fees, which include additional fees for marketing, are included in Sales and marketing expense, and central reservation system and other franchisor costs are included in Operating expense in the condensed consolidated statements of operations. | |||||
Management Agreements – As of June 30, 2014, each of the Company’s 63 hotels are operated and managed, under separate management agreements, by affiliates of the following companies: Marriott, Stonebridge Realty Advisors, Inc. (“Stonebridge”), Western International (“Western”), Larry Blumberg & Associates (“LBA”), White Lodging Services Corporation (“White”), Inn Ventures, Inc. (“Inn Ventures”), or Interstate Hotels & Resorts, Inc. (“Interstate”). In connection with the Merger, the five hotels previously managed by affiliates of Hilton Worldwide, Inc. and the one hotel previously managed by Newport Hospitality Group, Inc. were converted to management by Interstate on May 14, 2013. The management agreements require the Company to pay a monthly fee calculated as a percentage of revenues, generally between 2.5%—7.0%, as well as annual incentive fees, if applicable, and are included in Management fees in the condensed consolidated statements of operations. If the Company terminates a management agreement prior to its expiration, it may be liable for estimated management fees through the remaining term and liquidated damages. Additionally, the Company, from time to time, enters into management agreements to manage retail premises ancillary to its hotels. | |||||
TRS Lease Agreements – The Company’s lease agreements are intercompany agreements between the TRS lessees and our property-owning subsidiaries. These agreements generally contain terms which are customary for third-party lease agreements, including terms for rent payments and other expenses. All related rental income and expense related to the TRS lease agreements net to zero and have no impact on the condensed consolidated financial statements. | |||||
Ground Leases – As of June 30, 2014, four of the Company’s hotel properties had ground leases with remaining terms ranging from two to 20 years. Two properties, the Courtyard in Tuscaloosa, Alabama and the Fairfield Inn in Tuscaloosa, Alabama, are leased to the Company pursuant to a single ground lease. The ground lease for the Residence Inn in Pittsburgh, Pennsylvania originated at the time of the Merger and has a term of 20 years. Payments under this lease are payable to a subsidiary of the Company and, therefore eliminated in consolidation and excluded from the table below. Each of the remaining three leases has the option for the Company to extend the lease. The Residence Inn in Portland, Oregon has a lease for parking space which is included in the table below. Ground lease expenses totaled $0.1 million for each of the three and six months ended June 30, 2014, and are included in taxes, insurance and other in the condensed consolidated statements of operations. The aggregate amounts of minimum lease payments under these lease agreements for the five years subsequent to June 30, 2014 and thereafter are as follows (in thousands): | |||||
Amount | |||||
2014 (remaining months) | $ | 131 | |||
2015 | 267 | ||||
2016 | 209 | ||||
2017 | 132 | ||||
2018 | 99 | ||||
Thereafter | 479 | ||||
Total | $ | 1,317 | |||
7_Series_A_Cumulative_Redeemab
7% Series A Cumulative Redeemable Preferred Stock | 6 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
7% Series A Cumulative Redeemable Preferred Stock | ' |
9. 7% Series A Cumulative Redeemable Preferred Stock | |
In connection with the Merger, the Company issued 97,032,848 shares of Series A Preferred Stock. The terms of these shares provide the Company with the right to redeem such shares at any time for an amount equal to the liquidation preference, plus any accumulated and unpaid dividends. In addition, the terms of these shares include an option for a holder of such shares to require the Company to redeem all or a portion of such holder’s shares on or after November 14, 2020 for an amount equal to the liquidation preference, plus any accumulated and unpaid dividends. The initial dividend rate on these shares is 7% per annum. The dividend rate will increase to 9% per annum if dividends are not paid in cash for more than six quarters, and to 11% per annum if they are not redeemed after the earlier of certain change of control events and May 14, 2018. Due to the option provided to the holders of these shares, such shares have been classified outside permanent shareholders’ equity. | |
On September 30, 2013, BRE Holdings purchased approximately 2.0 million shares of the Series A Preferred Stock for $1.30 per share as part of a tender offer extended to all shareholders. The shares are currently held by BRE Holdings. | |
The initial liquidation preference of $1.90 per share will be subject to downward adjustment should net costs and payments relating to certain legacy litigation and regulatory matters exceed $3.5 million from the date of the Merger Agreement (November 29, 2012). The Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying amount of the Series A Preferred Stock to equal the redemption value at the end of each reporting period. As of June 30, 2014, the initial liquidation preference has not been adjusted. | |
On March 31, 2014, the Board of Directors of the Company declared a dividend for the Series A Preferred Stock of $0.0333 per share, which was paid on April 15, 2014 to shareholders of record on April 1, 2014. On June 18, 2014, the Board of Directors of the Company declared a dividend for the Series A Preferred Stock of $0.0333 per share, which was paid on July 15, 2014 to shareholders of record on July 1, 2014. |
Shareholders_Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2014 | |
Equity [Abstract] | ' |
Shareholders' Equity | ' |
10. Shareholders’ Equity | |
The Company is authorized to issue 150,100,000 shares of capital stock pursuant to its Amended and Restated Certificate of Incorporation, consisting of (i) 100,000 shares of common stock, par value $0.01 per share, and (ii) 150,000,000 shares of preferred stock, par value $0.0001 per share. | |
Holders of the Company’s common stock are entitled to one vote for each share of common stock held. At June 30, 2014 and December 31, 2013, there were 100 shares of common stock issued and outstanding. | |
On February 14, 2014, the Board of Directors of the Company declared a dividend for common stock of $50,000 per share, which was paid on February 19, 2014. On May 14, 2014, the Board of Directors of the Company declared a dividend for common stock of $90,000 per share, which was paid on May 16, 2014. | |
Under the prior Amended and Restated Certificate of Incorporation, the authorized preferred stock of the Company included a series designated Series B Redeemable Preferred Stock (“Series B Preferred Stock”), of which 125 shares were authorized. The Company, at its option, was able to redeem shares of the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price equal to $1,000 per share plus an amount equal to all accrued and unpaid dividends thereon to and including the dated fixed for redemption. Dividends on the Series B Preferred Stock were payable at the rate of 12% per annum of the total $1,000 per share. 113 shares of Series B Preferred Stock were issued on January 18, 2013 and were redeemed on May 10, 2013. |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
11. Income Taxes | |
The Company accounts for TRS income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The analysis utilized by the Company in determining the deferred tax valuation allowance involves considerable management judgment and assumptions. For the three and six months ended June 30, 2014, the Company recorded $1.8 million and $0.8 million of income tax expense, respectively. Tax expense for the three and six months ended June 30, 2014 is comprised of federal taxes and state taxes. |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
12. Related Party Transactions | |
The Sponsor and its affiliates are in the business of making investments in companies and real estate assets and currently own, and may, from time to time acquire and hold, in each case, interests in businesses or assets that compete directly or indirectly with the Company. In addition, certain affiliates of the Sponsor control Hilton Worldwide Holdings Inc., which indirectly owns the entities that serve as franchisors and receive franchise fees for 27 of the hotels owned by the Company. In connection with the Sponsor’s and its affiliates’ business activities, the Sponsor, BRE Holdings or any of their affiliates, including, without limitation, Hilton Worldwide Holdings Inc. or its subsidiaries (“Hilton”), may from time to time enter into arrangements with the Company or its subsidiaries. These arrangements may be subject to restrictions on affiliate transactions contained in agreements entered into in connection with the debt financing arranged to complete the Merger. The Company incurred $4.0 million and $7.5 million of franchise fees, marketing fees, and other expenses in the three and six months ended June 30, 2014, respectively, payable to Hilton. |
Hotels_Held_for_Sale_and_Dispo
Hotels Held for Sale and Dispositions | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Discontinued Operations And Disposal Groups [Abstract] | ' | ||||||||||||||||||||
Hotels Held for Sale and Dispositions | ' | ||||||||||||||||||||
13. Hotels Held for Sale and Dispositions | |||||||||||||||||||||
Based on the performance, location and capital requirements, the Company committed to a plan to sell the four properties identified below: | |||||||||||||||||||||
• | Fairfield Inn—Birmingham, Alabama | ||||||||||||||||||||
• | SpringHill Suites—Montgomery, Alabama | ||||||||||||||||||||
• | Fairfield Inn—Orange Park, Florida | ||||||||||||||||||||
• | SpringHill Suites—Savannah, Georgia | ||||||||||||||||||||
Three of the hotels were sold during the second quarter of 2014 as summarized below (in thousands): | |||||||||||||||||||||
Hotel | Sale Date | Net Proceeds | Gain/(Loss) | ||||||||||||||||||
Fairfield Inn—Orange Park, Florida | April 23, 2014 | $ | 3,015 | ($ | 30 | ) | |||||||||||||||
Fairfield Inn—Birmingham, Alabama | 8-May-14 | 1,587 | 301 | ||||||||||||||||||
SpringHill Suites—Savannah, Georgia | 2-Jun-14 | 3,500 | (190 | ) | |||||||||||||||||
Total | $ | 8,102 | $ | 81 | |||||||||||||||||
The SpringHill Suites – Montgomery, Alabama is expected to be sold in the third quarter of 2014. | |||||||||||||||||||||
The results of operations for all four of these properties are classified as income from discontinued operations. The remaining unsold property has been classified in the consolidated financial statements as hotels held for sale of $1.5 million and is recorded at the anticipated sale proceeds less cost to sell at June 30, 2014. The estimated fair value is based on actual third party bids for the property and other third party information which is considered a Level 2 measurement under the FASB’s standard on Fair Value Measurements and Disclosures. | |||||||||||||||||||||
The following table sets forth the operating results from discontinued operations for the Successor and Predecessor periods (in thousands). | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three | Six Months | Three and | Period from | Period from | |||||||||||||||||
Months | Ended | Six Months | April 1 | January 1 | |||||||||||||||||
Ended | June 30, | Ended | through | through | |||||||||||||||||
June 30, | 2014 | June 30, | May 13, | May 13, | |||||||||||||||||
2014 | 2013 | 2013 | 2013 | ||||||||||||||||||
Total revenue | $ | 941 | $ | 2,225 | $ | 799 | $ | 683 | $ | 1,856 | |||||||||||
Hotel operating expenses | 724 | 1,716 | 576 | 497 | 1,408 | ||||||||||||||||
Taxes, insurance and other | 29 | 132 | 29 | 45 | 168 | ||||||||||||||||
General and administrative | 23 | 58 | 0 | 0 | 0 | ||||||||||||||||
Depreciation expense | 0 | 0 | 42 | 84 | 262 | ||||||||||||||||
Interest expense | 181 | 301 | 0 | 0 | 0 | ||||||||||||||||
Income tax expense | 63 | 30 | 0 | 0 | 0 | ||||||||||||||||
Gain from hotel dispositions | 81 | 81 | 0 | 0 | 0 | ||||||||||||||||
Income from discontinued operations | $ | 2 | $ | 69 | $ | 152 | $ | 57 | $ | 18 | |||||||||||
The Company allocates interest expense to discontinued operations and has included such interest expense in computing income (loss) from discontinued operations. The allocation method used took the loan release amounts for the discontinued operations, as a percentage of the outstanding principal, multiplied by interest expense for the period. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Principles of Consolidation | ' |
Principles of Consolidation—The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. | |
Basis of Presentation | ' |
Basis of Presentation—The Company was determined to be the acquirer for accounting purposes and, therefore, the merger was accounted for using the acquisition method of accounting. Accordingly, the purchase price of the Merger (as defined below) has been allocated to the Company’s assets and liabilities based upon their estimated fair values at the Acquisition Date. As used herein, the term “Predecessor” refers to the financial position and results of operations of Apple Six prior to the Acquisition Date. The term “Successor” refers to the financial position and results of operations of the Company on or after the Acquisition Date. Certain merger transaction costs incurred prior to May 14, 2013 by the Company are included in the Successor period, as that period represents the commencement of Successor operations. Prior to May 14, 2013, the Company had no revenues, and expenses were comprised solely of merger related costs. For accounting purposes, the purchase price allocation was applied on May 14, 2013. | |
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principals generally accepted in the United States (“U.S. GAAP”) for interim financial information and certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with standards for the preparation of interim financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation have been included. Operating results for the interim periods noted herein are not necessarily indicative of the results that may be expected for the twelve month period ending December 31, 2014. | |
Use of Estimates | ' |
Use of Estimates—The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents—Cash and cash equivalents primarily consists of cash in banks. Cash equivalents consist of investments with maturities of three months or less at acquisition. The Company has deposits in excess of $250,000 within single financial institutions that are not insured by the Federal Deposit Insurance Corporation. The Company believes it mitigates this risk by depositing with major financial institutions. | |
Restricted Cash | ' |
Restricted Cash—Restricted cash consists of deposits held in escrow for the payment of certain required repairs, capital improvements, property taxes, insurance and ground rent pursuant to the terms of the Company’s mortgages payable and mezzanine loans, as well as a repairs and improvements reserve required by the Marriott International Inc. or its affiliates (“Marriott”) management agreements. | |
Due from Third Party Manager, net | ' |
Due from Third Party Manager, net—Due from third party managers, net, represents the current earnings and working capital advanced to the hotel management companies for operation of the hotels, net of management fees payable. | |
Investment in Real Estate and Related Depreciation | ' |
Investment in Real Estate and Related Depreciation—Real estate is stated at cost, net of accumulated depreciation. Repair and maintenance costs are expensed as incurred while significant improvements, renovations, and replacements that extend the useful life of the real estate asset are capitalized and depreciated over the estimated useful life of the real estate asset. Depreciation is computed using the straight-line method over the average estimated useful lives of the assets, which are 39 years for buildings, 10 years for major improvements and three to seven years for furniture and equipment. | |
The Company considers expenditures to be capital in nature based on the following criteria: (1) for a single asset, the cost must be at least $500, including all normal and necessary costs to place the asset in service, and the useful life must be at least one year; (2) for group purchases of 10 or more identical assets, the unit cost for each asset must be at least $50, including all normal and necessary costs to place the asset in service, and the useful life must be at least one year; and (3) for major repairs to a single asset, the repair must be at least $2,500 and the useful life of the asset must be substantially extended. | |
Impairment of Investment in Real Estate | ' |
Impairment of Investment in Real Estate—The Company records impairment losses on hotel properties used in operations if indicators of impairment are present, and the sum of the undiscounted cash flows estimated to be generated by the respective properties over their estimated remaining useful life, based on historical and industry data, is less than the properties’ carrying amount. Indicators of impairment include: (1) a property with current or potential losses from operations, (2) when it becomes more likely than not that a property will be sold before the end of its previously estimated useful life or (3) when events, trends, contingencies or changes in circumstances indicate that a triggering event has occurred and an asset’s carrying value may not be recoverable. The Company monitors its properties on an ongoing basis by analytically reviewing financial performance and considers each property individually for purposes of reviewing for indicators of impairment. As many indicators of impairment are subjective, such as general economic and market declines, the Company also prepares a quarterly recoverability analysis to assist with its evaluation of impairment indicators. The analysis compares each property’s net book value to each property’s estimated operating income using current operating results for each stabilized property and projected stabilized operating results based on the property’s market for properties that recently opened, were recently renovated or experienced other short-term business disruption. No triggering events have occurred to indicate the asset carrying values will not be recoverable. If events or circumstances change, such as the operating performance of a property declines substantially for an extended period of time, the Company’s carrying value for a particular property may not be recoverable and an impairment loss would be recorded. Impairment losses are measured as the difference between the asset’s fair value and its carrying value. | |
Hotels Held for Sale | ' |
Hotels Held for Sale—The Company classifies assets as held for sale when the criteria specified under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360, Impairment or Disposal of Long-Lived Assets, are met. Specifically, the criteria followed by the Company includes (a) management commits to a plan to sell, (b) the asset is available for immediate sale in its present condition, (c) the Company initiates an active program to locate a buyer, (d) the sale is probable to be completed within one year, and (e) the Company is actively marketing the asset at a reasonable price in relation to its current fair value. The Company discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management’s opinion, the net sales price of the assets that have been identified for sale is less than the net book value of the assets, an impairment charge is recorded. In connection with the decision to sell the one hotel currently classified as held for sale in the condensed consolidated financial statements, the Company recorded an impairment charge of $0.1 million in the fourth quarter of 2013, which represented the difference between the net book value and the fair value less cost to sell | |
Goodwill | ' |
Goodwill—Goodwill represents the excess of purchase price over fair value of assets acquired and liabilities assumed in business combinations, and is characterized by the intangible assets that do not qualify for separate recognition. In accordance with accounting guidance related to goodwill and other intangible assets, the Company performs its annual testing for impairment of goodwill during the fourth quarter of each year and in certain situations between those annual dates if indicators of impairment are present. No indicators of impairment which would require a test of goodwill during the interim periods presented were identified. | |
Revenue Recognition | ' |
Revenue Recognition—Revenue is recognized as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel’s services. | |
Sales and Marketing Costs | ' |
Sales and Marketing Costs—Sales and marketing costs are expensed when incurred. These costs represent the expense for franchise advertising and reservations systems under the terms of the hotel management and franchise agreements and general and administrative expenses that are directly attributable to advertising and promotion. | |
Income Taxes | ' |
Income Taxes—The Company made an election, through the filing of Form 1120-REIT for 2012, to qualify as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the Company’s short taxable year ended December 31, 2012. In order to qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute at least 90% of its adjusted taxable income to its shareholders, subject to certain adjustments and excluding any net capital gain. The Company intends to adhere to these requirements to qualify for REIT status, and assuming it does qualify for taxation as a REIT, it will generally not be subject to federal income taxes to the extent it distributes substantially all of its taxable income to the Company’s shareholders. However, the Company’s taxable REIT subsidiaries (“TRS”) will generally be subject to federal, state, and local income taxes and the consolidated income tax provision includes those taxes. | |
Valuation of Deferred Tax Assets | ' |
Valuation of Deferred Tax Assets – The Company has approximately $1.6 million of deferred tax assets as of June 30, 2014. Management considered various factors, including tax planning strategies, future reversals of existing taxable temporary differences and future projected taxable income in determining that a valuation allowance for the deferred tax assets of $0.9 million is required, and the Company believes that it is more likely than not that it will be able to realize the $0.7 million of net deferred tax assets in the future. If a determination is made that all, or a portion, of the deferred tax assets may not be realized, an increase in income tax expense would be recorded in that period. | |
Income (loss) from Discontinued Operations | ' |
Income (loss) from Discontinued Operations—Income (loss) from discontinued operations is computed in accordance with ASC 205-20, Discontinued Operations, which requires, among other things, that the primary assets and liabilities and the results of operations of the Company’s real property that has been sold, or otherwise qualifies as held for sale, be classified as discontinued operations and segregated from the Company’s continuing operations in the condensed consolidated statements of operations. | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements—In April 2014, the FASB issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the update, discontinued operations as defined as either 1) a component of an entity (or group of components) that (i) has been disposed of or meets the criteria to be classified as held-for-sale and (ii) represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results, or 2) is a business or nonprofit activity that on acquisition, meets the criteria to be classified as held-for-sale. The accounting update is effective on a prospective basis for disposals or assets meeting the definition as held-for-sale for accounting periods beginning on or after December 15, 2014. Early application is permitted, but only for those disposals that have not been reported in previously issued financial statements. | |
Historically, the Company has classified and reported disposals of its operating properties for which operations and cash flows are clearly distinguished as discontinued operations. See Note 13. Upon adoption of this standard, we expect that future disposals of operating real estate assets will not qualify for discontinued operations reporting treatment, unless the disposals represent a strategic shift that will have a major effect on the Company’s operations and financial results. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. The update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The accounting update is effective for accounting periods beginning on or after December 15, 2016. Early application is not permitted. The Company is currently assessing the impact this new guidance may have on the Company’s operations and financial results. | |
Successor [Member] | ' |
Income (loss) per Common Share | ' |
Income (loss) per Common Share (Successor)—Basic income (loss) per common share is computed based upon the weighted average number of shares outstanding during the period. There were no potential dilutive shares during the applicable periods, and as a result, basic and dilutive outstanding shares were the same. | |
Predecessor [Member] | ' |
Income (loss) per Common Share | ' |
Income (loss) per Common Share (Predecessor)—Basic income (loss) per common share is computed based upon the weighted average number of shares outstanding during the period. Diluted income (loss) per common share is calculated after giving effect to all potential common shares that were dilutive and outstanding for the period. Series B convertible preferred shares were converted on May 13, 2013 in connection with the Merger (as defined below) and included in the weighted average common shares calculation for the applicable periods. There were no potential common shares with a dilutive effect during the applicable periods, and as a result, basic and dilutive outstanding shares were the same. |
Merger_Tables
Merger (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Summary of Amounts Assigned to Assets Acquired and Liabilities Assumed in Connection with the Merger | ' | ||||
The following is a summary of the amounts (in thousands) assigned to the assets acquired and liabilities assumed by the Company in connection with the Merger: | |||||
Investment in real estate (including real estate held for sale) | $ | 980,895 | |||
Goodwill | 126,377 | ||||
Cash | 11,051 | ||||
Restricted cash-furniture, fixtures and other escrows | 1,196 | ||||
Due from third party managers, net | 7,186 | ||||
Prepaid expenses and other assets | 4,160 | ||||
Credit facility | (30,970 | ) | |||
Mortgage debt | (18,078 | ) | |||
Accounts payable and accrued expenses | (4,452 | ) | |||
Ground lease | (300 | ) | |||
$ | 1,077,065 | ||||
Investment_in_Real_Estate_net_
Investment in Real Estate, net (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Real Estate [Abstract] | ' | ||||||||
Investment in Real Estate | ' | ||||||||
Investment in real estate, net as of June 30, 2014 and December 31, 2013 consisted of the following (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Land | $ | 154,245 | $ | 153,968 | |||||
Building and Improvements | 794,842 | 793,900 | |||||||
Furniture, Fixtures and Equipment | 28,448 | 25,408 | |||||||
Construction in Progress | 11,702 | 2,097 | |||||||
989,237 | 975,373 | ||||||||
Less: Accumulated Depreciation | (29,593 | ) | (16,359 | ) | |||||
Investment in Real Estate, net | $ | 959,644 | $ | 959,014 | |||||
Mortgages_Payable_and_Mezzanin1
Mortgages Payable and Mezzanine Loans (Tables) | 6 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Mortgage Loans On Real Estate [Abstract] | ' | ||||||||||||
Schedule of Future Principal Payments of Debt Obligations | ' | ||||||||||||
Future scheduled principal payments of debt obligations (assuming no exercise of extension options) as of June 30, 2014 are as follows (in thousands): | |||||||||||||
Mortgages | Mezzanine | Total | |||||||||||
Payable | Loans | ||||||||||||
2014 (remaining months) | $ | 202 | $ | 0 | $ | 202 | |||||||
2015 | 421 | 0 | 421 | ||||||||||
2016 | 591,829 | 172,488 | 764,317 | ||||||||||
2017 | 464 | 0 | 464 | ||||||||||
2018 | 487 | 0 | 487 | ||||||||||
Thereafter | 15,641 | 0 | 15,641 | ||||||||||
Total | $ | 609,044 | $ | 172,488 | $ | 781,532 | |||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Carrying Amounts and Estimated Fair Values of Financial Instruments | ' | ||||||||||||||||
Carrying amounts and estimated fair values of financial instruments, for periods indicated, were as follows (in thousands): | |||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
Value | Fair Value | Value | Fair Value | ||||||||||||||
Financial assets and liabilities measured at | |||||||||||||||||
fair value on a recurring basis: | |||||||||||||||||
Interest rate caps | $ | 46 | $ | 46 | $ | 465 | $ | 465 | |||||||||
Financial assets not measured at fair value: | |||||||||||||||||
Cash and cash equivalents | $ | 25,061 | $ | 25,061 | $ | 23,902 | $ | 23,902 | |||||||||
Restricted cash | $ | 36,868 | $ | 36,868 | $ | 39,179 | $ | 39,179 | |||||||||
Due from third party managers, net | $ | 4,324 | $ | 4,324 | $ | 4,841 | $ | 4,841 | |||||||||
Financial liabilities not measured at fair value: | |||||||||||||||||
Accounts payable and accrued expenses | $ | 9,104 | $ | 9,104 | $ | 12,453 | $ | 12,453 | |||||||||
Due to third party managers, net | $ | 616 | $ | 616 | $ | 0 | $ | 0 | |||||||||
Mortgages payable | $ | 609,044 | $ | 608,163 | $ | 617,855 | $ | 616,425 | |||||||||
Mezzanine loans | $ | 172,488 | $ | 172,488 | $ | 175,000 | $ | 175,000 | |||||||||
Mortgages payable and mezzanine loans related to assets of hotels held for sale | $ | 2,660 | $ | 2,660 | $ | 0 | $ | 0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | ' | ||||
Aggregate Amounts of Minimum Lease Payments under Lease Agreements | ' | ||||
The aggregate amounts of minimum lease payments under these lease agreements for the five years subsequent to June 30, 2014 and thereafter are as follows (in thousands): | |||||
Amount | |||||
2014 (remaining months) | $ | 131 | |||
2015 | 267 | ||||
2016 | 209 | ||||
2017 | 132 | ||||
2018 | 99 | ||||
Thereafter | 479 | ||||
Total | $ | 1,317 | |||
Hotels_Held_for_Sale_and_Dispo1
Hotels Held for Sale and Dispositions (Tables) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Discontinued Operations And Disposal Groups [Abstract] | ' | ||||||||||||||||||||
Summary of Hotels Sold | ' | ||||||||||||||||||||
Three of the hotels were sold during the second quarter of 2014 as summarized below (in thousands): | |||||||||||||||||||||
Hotel | Sale Date | Net Proceeds | Gain/(Loss) | ||||||||||||||||||
Fairfield Inn—Orange Park, Florida | April 23, 2014 | $ | 3,015 | ($ | 30 | ) | |||||||||||||||
Fairfield Inn—Birmingham, Alabama | 8-May-14 | 1,587 | 301 | ||||||||||||||||||
SpringHill Suites—Savannah, Georgia | 2-Jun-14 | 3,500 | (190 | ) | |||||||||||||||||
Total | $ | 8,102 | $ | 81 | |||||||||||||||||
Operating Results from Discontinued Operations | ' | ||||||||||||||||||||
The following table sets forth the operating results from discontinued operations for the Successor and Predecessor periods (in thousands). | |||||||||||||||||||||
Successor | Predecessor | ||||||||||||||||||||
Three | Six Months | Three and | Period from | Period from | |||||||||||||||||
Months | Ended | Six Months | April 1, | January 1, | |||||||||||||||||
Ended | June 30, | Ended | through | through | |||||||||||||||||
June 30, | 2014 | June 30, | May 13, | May 13, | |||||||||||||||||
2014 | 2013 | 2013 | 2013 | ||||||||||||||||||
Total revenue | $ | 941 | $ | 2,225 | $ | 799 | $ | 683 | $ | 1,856 | |||||||||||
Hotel operating expenses | 724 | 1,716 | 576 | 497 | 1,408 | ||||||||||||||||
Taxes, insurance and other | 29 | 132 | 29 | 45 | 168 | ||||||||||||||||
General and administrative | 23 | 58 | 0 | 0 | 0 | ||||||||||||||||
Depreciation expense | 0 | 0 | 42 | 84 | 262 | ||||||||||||||||
Interest expense | 181 | 301 | 0 | 0 | 0 | ||||||||||||||||
Income tax expense | 63 | 30 | 0 | 0 | 0 | ||||||||||||||||
Gain from hotel dispositions | 81 | 81 | 0 | 0 | 0 | ||||||||||||||||
Income from discontinued operations | $ | 2 | $ | 69 | $ | 152 | $ | 57 | $ | 18 | |||||||||||
Organization_Additional_Inform
Organization - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2014 | |
State | |
Room | |
Hotel | |
Property, Plant and Equipment [Line Items] | ' |
Percentage of common stock owned by BRE Select Hotels Holdings LP | 100.00% |
Number of hotels owned | 63 |
Number of states the hotels located | 18 |
Aggregate number of rooms | 7,426 |
Apple Six [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Acquisition date | 14-May-13 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 1 Months Ended | 4 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Dec. 31, 2013 | Jun. 30, 2014 | 13-May-13 | 13-May-13 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Property | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Buildings [Member] | Major Improvements [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | ||
Hotel | Furniture, Fixtures and Equipment [Member] | Furniture, Fixtures and Equipment [Member] | ||||||||||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deposits within financial institutions | ' | $250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful lives of assets | ' | ' | ' | ' | ' | ' | ' | ' | '39 years | '10 years | '1 year | '3 years | ' | '7 years |
Cost of asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500 | ' | ' | ' |
Number of identical assets purchase | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Asset per unit cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50 | ' | ' | ' |
Repairs cost of asset | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500 | ' | ' | ' |
Sales completion period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' |
Number of hotels | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment charges | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of adjusted taxable income to be distributed to shareholders | ' | 90.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets, gross | ' | 1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net deferred tax assets | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Valuation allowance for the deferred tax assets | ' | $900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Potential common shares with a dilutive effect | ' | ' | 0 | 0 | 0 | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' |
Merger_Additional_Information_
Merger - Additional Information (Detail) (USD $) | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 4 Months Ended | 6 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | 13-May-13 | 13-May-13 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | 7% Series A Cumulative Redeemable Preferred Stock [Member] | 7% Series A Cumulative Redeemable Preferred Stock [Member] | Series A Preferred Stock [Member] | ||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of controlling interest of Apple Six acquired | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock dividend rate | ' | ' | ' | ' | ' | ' | ' | 7.00% | ' | ' |
Exchange price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $9.20 |
Preferred Stock initial liquidation preference per share | ' | ' | ' | ' | ' | ' | ' | $1.90 | $1.90 | ' |
Merger consideration, net cash contribution | $214,900,000 | ' | ' | $0 | $881,652,000 | ' | $0 | ' | ' | ' |
Cumulative preferred shares | 184,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt incurred in merger transaction | 775,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Merger transaction costs | ' | $0 | $6,255,000 | $0 | $21,143,000 | $66,962,000 | $67,633,000 | ' | ' | ' |
Merger_Summary_of_Amounts_Assi
Merger - Summary of Amounts Assigned to Assets Acquired and Liabilities Assumed in Connection with the Merger (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Business Acquisition [Line Items] | ' | ' |
Goodwill | $126,377 | $126,377 |
Apple Six [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Investment in real estate (including real estate held for sale) | 980,895 | ' |
Goodwill | 126,377 | ' |
Cash | 11,051 | ' |
Restricted cash-furniture, fixtures and other escrows | 1,196 | ' |
Due from third party managers, net | 7,186 | ' |
Prepaid expenses and other assets | 4,160 | ' |
Credit facility | -30,970 | ' |
Mortgage debt | -18,078 | ' |
Accounts payable and accrued expenses | -4,452 | ' |
Ground lease | -300 | ' |
Assets acquired and liabilities assumed, net | $1,077,065 | ' |
Recovered_Sheet1
Investment in Real Estate, Net - Investment in Real Estate (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real Estate Properties [Line Items] | ' | ' |
Investment in Real Estate, gross | $989,237 | $975,373 |
Less: Accumulated Depreciation | -29,593 | -16,359 |
Investment in Real Estate, net | 959,644 | 959,014 |
Land [Member] | ' | ' |
Real Estate Properties [Line Items] | ' | ' |
Investment in Real Estate, gross | 154,245 | 153,968 |
Major Improvements [Member] | ' | ' |
Real Estate Properties [Line Items] | ' | ' |
Investment in Real Estate, gross | 794,842 | 793,900 |
Furniture, Fixtures and Equipment [Member] | ' | ' |
Real Estate Properties [Line Items] | ' | ' |
Investment in Real Estate, gross | 28,448 | 25,408 |
Construction in Process [Member] | ' | ' |
Real Estate Properties [Line Items] | ' | ' |
Investment in Real Estate, gross | $11,702 | $2,097 |
Deferred_Financing_Costs_Addit
Deferred Financing Costs - Additional Information (Detail) (Successor [Member], USD $) | 3 Months Ended | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 |
Successor [Member] | ' | ' |
Deferred Finance Costs [Line Items] | ' | ' |
Amortization of deferred financing costs | $1.40 | $2.70 |
Mortgages_Payable_and_Mezzanin2
Mortgages Payable and Mezzanine Loans - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | ||||||||
Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | 14-May-13 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | 14-May-13 | Jun. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | |
Hotel | Property | Fort Worth, Texas Residence Inn [Member] | Unsecured Credit Facility [Member] | Successor [Member] | Successor [Member] | Mortgages Payable [Member] | Mortgages Payable [Member] | Mortgages Payable [Member] | Mortgages Payable [Member] | Mezzanine A Loan [Member] | Mezzanine A Loan [Member] | Mezzanine B Loan [Member] | Mezzanine B Loan [Member] | Mezzanine Loans [Member] | Mezzanine Loans [Member] | |||
Component | One-Month LIBOR [Member] | Scenario, Forecast [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | Scenario, Forecast [Member] | |||||||||||||
Mortgage Loans on Real Estate [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan, Outstanding principle balance | ' | ' | ' | ' | $17,700,000 | ' | ' | ' | ' | $600,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties leased | ' | ' | ' | 62 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties owned | ' | ' | ' | 63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mezzanine Loan | 172,488,000 | 172,488,000 | 175,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | 75,000,000 | ' | ' | ' |
Margin rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.34% | ' | ' | 5.75% | ' | 6.95% | ' | ' |
Loan, maturity date | ' | 9-May-16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in the applicable interest rate, basis points | ' | 0.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans maturity, description | ' | ' | ' | ' | ' | ' | ' | ' | 'The Loans are scheduled to mature on May 9, 2016, with an option for the Borrowers to extend the initial term for two one-year extension terms, subject to certain conditions. In the event the Borrowers exercise the second one-year extension option, there will be a one-time increase in the applicable interest rate by 25 basis points for the last one-year extension period. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of components of Mortgage Loan | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt yield | 8.75% | 8.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.00% | ' |
Prepayment percentage of loan during first twelve months of initial term | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loans prepayment term, description | ' | ' | ' | ' | ' | ' | ' | ' | 'Prepayment is made at any time during the period from the thirteenth month through the eighteenth month of the initial term of the Loans and such prepayment, when aggregated with all other prepayments made by a Borrower of the applicable Loan, exceeds 15% of the amount of the Loans funded to such Borrower, then such Borrower will pay to the Lenders an amount equal to the present value of the interest payable on the principal being prepaid for the period from the date of the prepayment through the eighteenth month of the initial term of the Loans. Any prepayment made after the eighteenth month of the initial term of the Loans may be made without any prepayment penalty or fee. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hotels sold | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of mortgage loan | 6,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of mezzanine loan | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan, maturity date | ' | ' | ' | ' | 6-Oct-22 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan, interest rate | ' | ' | ' | ' | 4.73% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of debt | ' | ' | ' | ' | ' | 31,000,000 | ' | ' | 5,600,000 | ' | ' | 2,100,000 | ' | ' | ' | ' | ' | 600,000 |
Interest expense, excluding deferred financing costs | ' | ' | ' | ' | ' | ' | $8,400,000 | $16,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgages_Payable_and_Mezzanin3
Mortgages Payable and Mezzanine Loans - Schedule of Future Principal Payments of Debt Obligations (Detail) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Mortgage Loans on Real Estate [Line Items] | ' |
2014 (remaining months) | $202 |
2015 | 421 |
2016 | 764,317 |
2017 | 464 |
2018 | 487 |
Thereafter | 15,641 |
Total | 781,532 |
Mortgages Payable [Member] | ' |
Mortgage Loans on Real Estate [Line Items] | ' |
2014 (remaining months) | 202 |
2015 | 421 |
2016 | 591,829 |
2017 | 464 |
2018 | 487 |
Thereafter | 15,641 |
Total | 609,044 |
Mezzanine Loans [Member] | ' |
Mortgage Loans on Real Estate [Line Items] | ' |
2014 (remaining months) | 0 |
2015 | 0 |
2016 | 172,488 |
2017 | 0 |
2018 | 0 |
Thereafter | 0 |
Total | $172,488 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Carrying Amounts and Estimated Fair Values of Financial Instruments (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Cash and cash equivalents, Carrying Value | $25,061 | $23,902 |
Restricted cash, Carrying Value | 36,868 | 39,179 |
Due from third party managers, net, Carrying Value | 4,324 | 4,841 |
Accounts payable and accrued expenses, Carrying Value | 9,104 | 12,453 |
Due to third party managers, net, Carrying Value | 616 | 0 |
Mortgages payable, Carrying Value | 609,044 | 617,855 |
Mezzanine loans, Carrying Value | 172,488 | 175,000 |
Mortgages payable and mezzanine loans related to assets of hotels held for sale, Carrying Value | 2,660 | 0 |
Cash and cash equivalents, Estimated Fair Value | 25,061 | 23,902 |
Restricted cash, Estimated Fair Value | 36,868 | 39,179 |
Due from third party managers, net, Estimated Fair Value | 4,324 | 4,841 |
Accounts payable and accrued expenses, Estimated Fair Value | 9,104 | 12,453 |
Due to third party managers, net, Estimated Fair Value | 616 | 0 |
Mortgages payable, Estimated Fair Value | 608,163 | 616,425 |
Mezzanine loans, Estimated Fair Value | 172,488 | 175,000 |
Mortgages payable and mezzanine loans related to assets of hotels held for sale, Estimated Fair Value | 2,660 | 0 |
Fair Value, Measurements, Recurring [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Interest rate caps, Carrying Value | 46 | 465 |
Interest rate caps, Estimated Fair Value | $46 | $465 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Additional Information (Detail) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Agreement | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Number of interest rate cap agreements acquired | 3 |
Cash, cash equivalents and restricted cash, Maturity | 'Less than 90 days |
Interest Rate Cap [Member] | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Interest rate derivative instrument cost | 431,210 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||||||
Jun. 30, 2014 | Jun. 30, 2014 | 14-May-13 | 14-May-13 | 14-May-13 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Hotel | Hotel | Property | Hilton Worldwide, Inc. [Member] | Newport Hospitality Group, Inc. [Member] | PA Residence Inn [Member] | Management Agreements [Member] | TRS Lease Agreements [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Ground Leases [Member] | Ground Leases [Member] | Ground Leases [Member] | Apple REIT Class Action Litigation [Member] | Apple REIT Class Action Litigation [Member] | SEC Investigation [Member] | SEC Investigation [Member] | |
Hotel | Hotel | Hotel | Franchise Agreements [Member] | Franchise Agreements [Member] | Courtyard and Fairfield Inn [Member] | Minimum [Member] | Maximum [Member] | Other Parties [Member] | Other Parties [Member] | ||||||||||
Property | |||||||||||||||||||
Long-term Purchase Commitment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 80.00% | 25.00% | 75.00% |
Royalty fee | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.50% | ' | 6.00% | ' | ' | ' | ' | ' | ' | ' |
Number of hotel properties | ' | ' | 63 | ' | ' | ' | 63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hotel properties converted under management agreement | ' | ' | ' | 5 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payment of management fee as percentage of revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2.50% | ' | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Rental income (expense), net | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hotel properties | 4 | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease obligation remaining period | ' | ' | ' | ' | ' | '20 years | ' | ' | ' | ' | ' | ' | ' | '2 years | '20 years | ' | ' | ' | ' |
Number of properties leased under single ground lease | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Ground lease expenses | $100,000 | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Aggregate Amounts of Minimum Lease Payments under Lease Agreements (Detail) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | ' |
2014 (remaining months) | $131 |
2015 | 267 |
2016 | 209 |
2017 | 132 |
2018 | 99 |
Thereafter | 479 |
Total | $1,317 |
7_Series_A_Cumulative_Redeemab1
7% Series A Cumulative Redeemable Preferred Stock - Additional Information (Detail) (USD $) | 0 Months Ended | 6 Months Ended | 6 Months Ended | 9 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Jun. 18, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Sep. 30, 2013 |
7% Series A Cumulative Redeemable Preferred Stock [Member] | 7% Series A Cumulative Redeemable Preferred Stock [Member] | 7% Series A Cumulative Redeemable Preferred Stock [Member] | 7% Series A Cumulative Redeemable Preferred Stock [Member] | 7% Series A Cumulative Redeemable Preferred Stock [Member] | Series A Preferred Stock [Member] | |
Maximum [Member] | BRE Holdings [Member] | |||||
Issue of shares expected | ' | ' | 97,032,848 | 97,032,848 | ' | ' |
Initial date for redemption of shares | ' | ' | 14-Nov-20 | ' | ' | ' |
Preferred Stock, dividend rate | ' | ' | 7.00% | ' | ' | ' |
Increase in dividend rate of preferred stock per annum, if not paid in cash for more than six quarters | ' | ' | 9.00% | ' | ' | ' |
Increase in dividend rate of preferred stock if not redeemed after control events and May 14, 2018 | ' | ' | 11.00% | ' | ' | ' |
Date of issuance of Preferred Stock | ' | ' | 14-May-18 | ' | ' | ' |
Preferred Stock tender offer number of shares | ' | ' | ' | ' | ' | 2,000,000 |
Preferred Stock, purchase price | ' | ' | ' | ' | ' | $1.30 |
Preferred Stock initial liquidation preference per share | ' | ' | $1.90 | $1.90 | ' | ' |
Date of merger agreement | ' | ' | 29-Nov-12 | ' | ' | ' |
Legacy litigation and regulatory matters, expense | ' | ' | ' | ' | $3.50 | ' |
Preferred Stock, dividend declared per share | $0.03 | $0.03 | ' | ' | ' | ' |
Dividend payable, date to be paid | 15-Jul-14 | 15-Apr-14 | ' | ' | ' | ' |
Preferred Stock, dividend record date | 1-Jul-14 | 1-Apr-14 | ' | ' | ' | ' |
Dividend payable, date declared | 18-Jun-14 | 31-Mar-14 | ' | ' | ' | ' |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | ||||
14-May-14 | Feb. 14, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jan. 18, 2013 | 14-May-14 | Feb. 14, 2014 | |
Series B Redeemable Preferred Stock [Member] | Series B Redeemable Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member] | |||||
Shares authorized to issue | ' | ' | 150,100,000 | ' | ' | ' | ' | ' |
Common stock, shares authorized | ' | ' | 100,000 | 100,000 | ' | ' | ' | ' |
Common stock, par value | ' | ' | $0.01 | $0.01 | ' | ' | ' | ' |
Preferred stock, shares authorized | ' | ' | 30,000,000 | 30,000,000 | 125 | ' | ' | ' |
Preferred stock, par value | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' |
Common stock voting rights | ' | ' | 'Company's common stock are entitled to one vote for each share of common stock. | ' | ' | ' | ' | ' |
Common stock, shares outstanding | ' | ' | 100 | 100 | ' | ' | ' | ' |
Common stock, shares issued | ' | ' | 100 | 100 | ' | ' | ' | ' |
Dividend payable, date declared | ' | ' | ' | ' | ' | ' | 14-May-14 | 14-Feb-14 |
Common Stock, dividend declared per share | $90,000 | $50,000 | ' | ' | ' | ' | ' | ' |
Dividend payable, date to be paid | ' | ' | ' | ' | ' | ' | 16-May-14 | 19-Feb-14 |
Redemption price per share | ' | ' | ' | ' | $1,000 | ' | ' | ' |
Dividend payable rate of percentage per annum | ' | ' | ' | ' | 12.00% | ' | ' | ' |
Preferred stock, shares issued | ' | ' | 0 | 0 | ' | 113 | ' | ' |
Preferred Stock, issued date | ' | ' | ' | ' | 18-Jan-13 | ' | ' | ' |
Preferred Stock, redeemed date | ' | ' | ' | ' | 10-May-13 | ' | ' | ' |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (Successor [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Successor [Member] | ' | ' | ' | ' |
Income Tax Contingency [Line Items] | ' | ' | ' | ' |
Income tax expense | $1,749 | $1,475 | $814 | $1,475 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 |
Related Party Transaction [Line Items] | ' | ' |
Number of hotels | 63 | 63 |
Hilton Worldwide, Inc. [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Franchise fees, marketing fees, and other expenses | $4,000 | $7,500 |
Hilton Worldwide Holdings Inc. Franchisor [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Number of hotels | 27 | 27 |
Hotels_Held_for_Sale_and_Dispo2
Hotels Held for Sale and Dispositions - Additional Information (Detail) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Property | ||
Discontinued Operations And Disposal Groups [Abstract] | ' | ' |
Number of properties to be sold | 4 | ' |
Hotels held for sale | $1,504 | $9,485 |
Hotels_Held_for_Sale_and_Dispo3
Hotels Held for Sale and Dispositions - Summary of Hotels Sold (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' |
Gain/(Loss) from sale of hotels | $81 |
Net Proceeds from sale of hotels | 8,102 |
Fairfield Inn - Orange Park, Florida [Member] | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' |
Hotels sale date | 23-Apr-14 |
Gain/(Loss) from sale of hotels | -30 |
Net Proceeds from sale of hotels | 3,015 |
Fairfield Inn - Birmingham, Alabama [Member] | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' |
Hotels sale date | 8-May-14 |
Gain/(Loss) from sale of hotels | 301 |
Net Proceeds from sale of hotels | 1,587 |
SpringHill Suites - Montgomery, Alabama [Member] | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' |
Hotels sale date | 2-Jun-14 |
Gain/(Loss) from sale of hotels | -190 |
Net Proceeds from sale of hotels | $3,500 |
Hotels_Held_for_Sale_and_Dispo4
Hotels Held for Sale and Dispositions - Operating Results from Discontinued Operations (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 1 Months Ended | 4 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | 13-May-13 | 13-May-13 |
Successor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | Predecessor [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Total revenue | ' | $941 | $799 | $2,225 | $799 | $683 | $1,856 |
Hotel operating expenses | ' | 724 | 576 | 1,716 | 576 | 497 | 1,408 |
Taxes, insurance and other | ' | 29 | 29 | 132 | 29 | 45 | 168 |
General and administrative | ' | 23 | 0 | 58 | 0 | 0 | 0 |
Depreciation expense | ' | 0 | 42 | 0 | 42 | 84 | 262 |
Interest expense | ' | 181 | 0 | 301 | 0 | 0 | 0 |
Income tax expense | ' | 63 | 0 | 30 | 0 | 0 | 0 |
Gain from hotel dispositions | 81 | 81 | 0 | 81 | 0 | 0 | 0 |
Income from discontinued operations | ' | $2 | $152 | $69 | $152 | $57 | $18 |