Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 04, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AMERICAN REALTY CAPITAL HOSPITALITY TRUST, INC. | |
Entity Central Index Key | 1,583,077 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 38,259,818 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Real estate investments: | ||
Land | $ 339,819 | $ 317,871 |
Buildings and improvements | 1,832,486 | 1,729,960 |
Furniture, fixtures and equipment | 203,218 | 163,516 |
Total real estate investments | 2,375,523 | 2,211,347 |
Less: accumulated depreciation and amortization | (143,949) | (70,648) |
Total real estate investments, net | 2,231,574 | 2,140,699 |
Assets held for sale | 10,171 | 0 |
Cash and cash equivalents | 50,735 | 46,829 |
Acquisition deposits | 7,500 | 40,504 |
Restricted cash | 37,538 | 71,288 |
Investments in unconsolidated entities | 3,498 | 3,458 |
Below-market lease asset, net | 9,926 | 10,225 |
Prepaid expenses and other assets | 39,121 | 34,836 |
Total Assets | 2,390,063 | 2,347,839 |
LIABILITIES, NON-CONTROLLING INTEREST AND EQUITY | ||
Mortgage notes payable, net | 1,418,280 | 1,341,033 |
Promissory note payable, net | 23,093 | 0 |
Mandatorily redeemable preferred securities, net | 290,117 | 291,796 |
Accounts payable and accrued expenses | 75,801 | 67,255 |
Due to related parties | 8,757 | 6,546 |
Total Liabilities | 1,816,048 | 1,706,630 |
Equity | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 37,833,988 and 36,300,777 shares issued and outstanding, respectively | 378 | 363 |
Additional paid-in capital | 829,129 | 793,786 |
Deficit | (258,216) | (155,680) |
Total equity of American Realty Capital Hospitality Trust, Inc. stockholders | 571,291 | 638,469 |
Non-controlling interest - consolidated variable interest entity | 2,724 | 2,740 |
Total Equity | 574,015 | 641,209 |
Total Liabilities, Non-controlling Interest and Equity | $ 2,390,063 | $ 2,347,839 |
CONSOLIDATED BALANCE SHEETS (u3
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 37,833,988 | 36,300,777 |
Common stock, outstanding (in shares) | 37,833,988 | 36,300,777 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | ||||
Rooms | $ 153,182 | $ 126,205 | $ 434,455 | $ 302,706 |
Food and beverage | 4,850 | 4,041 | 15,422 | 11,202 |
Other | 3,426 | 2,606 | 9,964 | 7,260 |
Total revenue | 161,458 | 132,852 | 459,841 | 321,168 |
Operating expenses | ||||
Rooms | 36,958 | 29,752 | 104,984 | 68,395 |
Food and beverage | 4,089 | 3,410 | 12,226 | 8,933 |
Management fees | 11,030 | 5,433 | 32,061 | 12,965 |
Other property-level operating expenses | 58,768 | 50,793 | 175,492 | 120,321 |
Depreciation and amortization | 25,788 | 19,817 | 74,912 | 46,438 |
Impairment of long-lived assets | 0 | 0 | 2,399 | 0 |
Rent | 1,945 | 1,865 | 4,993 | 4,693 |
Total operating expenses | 138,578 | 111,070 | 407,067 | 261,745 |
Income from operations | 22,880 | 21,782 | 52,774 | 59,423 |
Interest expense | (23,087) | (23,081) | (69,033) | (56,724) |
Acquisition and transaction related costs | 7 | (698) | (25,270) | (39,129) |
Other income (expense) | (542) | (200) | (1,396) | 2,001 |
Equity in earnings (losses) of unconsolidated entities | 286 | 228 | 407 | 236 |
General and administrative | (5,128) | (2,020) | (12,623) | (5,984) |
Total other expenses, net | (28,464) | (25,771) | (107,915) | (99,600) |
Net income (loss) before taxes | (5,584) | (3,989) | (55,141) | (40,177) |
Provision for income taxes | 948 | 939 | 2,246 | 4,295 |
Net income (loss) and comprehensive income (loss) | (6,532) | (4,928) | (57,387) | (44,472) |
Less: Net income (loss) attributable to non-controlling interest | 152 | 154 | 278 | 148 |
Net income (loss) attributable to American Realty Capital Hospitality Trust, Inc. | $ (6,684) | $ (5,082) | $ (57,665) | $ (44,620) |
Basic and Diluted net income (loss) per share (usd per share) | $ (0.17) | $ (0.19) | $ (1.50) | $ (2) |
Basic and Diluted weighted average shares outstanding (shares) | 38,259,374 | 26,595,560 | 38,183,711 | 22,234,426 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Deficit | Total Equity of American Realty Capital Hospitality Trust, Inc. Stockholders | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2015 | 36,300,777 | 36,300,777 | ||||
Beginning balance at Dec. 31, 2015 | $ 641,209 | $ 363 | $ 793,786 | $ (155,680) | $ 638,469 | $ 2,740 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, net (in shares) | 45,107 | |||||
Issuance of common stock, net | 956 | 956 | 956 | |||
Net loss attributable to American Realty Capital Hospitality Trust, Inc. | (57,665) | (57,665) | (57,665) | |||
Net income attributable to non-controlling interest | 278 | 278 | ||||
Dividends paid or declared (in shares) | 1,089,454 | |||||
Dividends paid or declared | (20,270) | $ 11 | 24,884 | (44,871) | (19,976) | (294) |
Common stock issued through Distribution Reinvestment Plan (in shares) | 398,650 | |||||
Common stock issued through Distribution Reinvestment Plan | 9,468 | $ 4 | 9,464 | 9,468 | ||
Share-based payments | 49 | 49 | 49 | |||
Common stock offering costs, commissions and dealer manager fees | $ (10) | (10) | (10) | |||
Ending balance (in shares) at Sep. 30, 2016 | 37,833,988 | 37,833,988 | ||||
Ending balance at Sep. 30, 2016 | $ 574,015 | $ 378 | $ 829,129 | $ (258,216) | $ 571,291 | $ 2,724 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (57,387) | $ (44,472) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 74,912 | 46,438 |
Impairment of long-lived assets | 2,399 | 0 |
Amortization and write-off of deferred financing costs | 8,152 | 7,764 |
Change in fair value of contingent consideration | 1,454 | (1,720) |
Loss of acquisition deposits | 22,000 | 0 |
Other adjustments, net | 249 | 930 |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | (4,285) | (19,175) |
Restricted cash | (6,890) | (27,950) |
Due to related parties | 2,479 | (3,417) |
Accounts payable and accrued expenses | 8,406 | 44,907 |
Net cash provided by operating activities | 51,489 | 3,305 |
Cash flows from investing activities: | ||
Acquisition of hotel assets, net of cash received | (69,892) | (375,777) |
Real estate investment improvements and purchases of property and equipment | (69,828) | (17,386) |
Acquisition deposits | 0 | (73,144) |
Change in restricted cash related to real estate improvements | 40,602 | (39,699) |
Net cash used in investing activities | (99,118) | (506,006) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net | 678 | 495,774 |
Payments of offering costs | (73) | (61,131) |
Dividends/Distributions paid | (11,500) | (12,164) |
Mandatorily redeemable preferred securities redemptions | (2,270) | (90,760) |
Payment of deferred consideration payable | 0 | (3,500) |
Proceeds from mortgage note payable | 70,384 | 227,000 |
Deferred financing fees | (721) | (27,124) |
Repayments of promissory and mortgage notes payable | (5,000) | (64,849) |
Restricted cash for debt service | 37 | (2,747) |
Net cash provided by financing activities | 51,535 | 460,499 |
Net change in cash and cash equivalents | 3,906 | (42,202) |
Cash and cash equivalents, beginning of period | 46,829 | 131,861 |
Cash and cash equivalents, end of period | 50,735 | 89,659 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 62,854 | 44,617 |
Taxes paid | 1,163 | 4,870 |
Non-cash investing and financing activities: | ||
Offering costs payable | 0 | 650 |
Real estate investment improvements and purchases of property and equipment in accounts payable and accrued expenses | 8,950 | 5,321 |
Proceeds receivable from stock sales | 0 | 2,516 |
Seller financed acquisition deposit | 7,500 | 0 |
Seller financed acquisition | 20,000 | 0 |
Mortgage and mezzanine debt assumed on real estate investments | 0 | 904,185 |
Dividends declared but not paid | 4,533 | 4,150 |
Mandatorily redeemable preferred securities issued in acquisition of property and equipment | 0 | 447,097 |
Common stock issued through distribution reinvestment plan | $ 9,468 | $ 11,418 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization American Realty Capital Hospitality Trust, Inc. (the "Company") was incorporated on July 25, 2013 as a Maryland corporation and qualified as a real estate investment trust for U.S. federal income tax purposes ("REIT") beginning with the taxable year ended December 31, 2014 . The Company was formed primarily to acquire lodging properties in the midscale limited service, extended stay, select service, upscale select service, and upper upscale full service segments within the hospitality sector. As of September 30, 2016 , the Company had acquired or had an interest in a total of 142 hotels (including one hotel which was classified as held for sale as of September 30, 2016 , and was subsequently sold on October 14, 2016), with a total of 17,351 guest rooms located in 32 states. As of September 30, 2016 , all but one of these hotels operated under a franchise or license agreement with a national brand owned by one of Hilton Worldwide, Inc., Marriott International, Inc., Hyatt Hotels Corporation, Starwood Hotels and Resorts Worldwide, and Intercontinental Hotels Group or one of their respective subsidiaries or affiliates. On January 7, 2014 , the Company commenced its primary initial public offering (the "IPO" or the "Offering") on a "reasonable best efforts" basis of up to 80,000,000 shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11 (File No. 333-190698 ), as well as up to 21,052,631 shares of common stock available pursuant to the Distribution Reinvestment Plan (the "DRIP") under which the Company's common stockholders could elect to have their cash distributions reinvested in additional shares of the Company's common stock. On November 15, 2015 , the Company suspended the IPO, and, on November 18, 2015 , Realty Capital Securities, LLC (the "Former Dealer Manager"), the dealer manager of the IPO, suspended sales activities, effective immediately. On December 31, 2015 , the Company terminated the Former Dealer Manager as the dealer manager of the IPO. Prior to suspension of the IPO, the Company depended, and expected to continue to depend, in substantial part on proceeds from the IPO to meet its major capital requirements. Because the Company does not expect it will resume the IPO, it will require funds in addition to operating cash flow and cash on hand to meet its capital requirements. In March 2016, the Company’s board of directors changed the distribution policy, such that distributions paid with respect to April 2016 were paid in shares of common stock instead of cash. Accordingly, the Company paid a cash distribution to stockholders of record each day during the quarter ended March 31, 2016, but distributions for subsequent periods have been, and unless and until the Company's board of directors determines otherwise, will continue to be paid in shares of common stock. Distributions for the quarter ended June 30, 2016 were paid in common stock in an amount equivalent to $1.70 per annum, divided by $23.75 . On July 1, 2016, the Company's board of directors approved an estimated net asset value per share of common stock (“Estimated Per-Share NAV”), which was published on the same date. This was the first time that the Company’s board of directors determined an Estimated Per-Share NAV. In connection with its determination of Estimated Per-Share NAV, the Company’s board of directors revised the amount of the distribution to $1.46064 per share per annum, equivalent to a 6.80% annual rate based on the Estimated Per-Share NAV, automatically adjusting if and when the Company publishes an updated Estimated Per-Share NAV. Distributions for the quarter ended September 30, 2016 were paid in shares of common stock in an amount equal to 0.000185792 per share per day, or $1.46064 per annum, divided by $21.48 . It is currently anticipated that the Company will publish an updated Estimated Per-Share NAV on at least an annual basis. The distributions are made by the fifth day following each month-end to stockholders of record at the close of business each day during the prior month. As of September 30, 2016 , the Company had approximately 37.8 million shares of common stock outstanding and had received total proceeds of approximately $ 913.0 million from the IPO and shares issued under the DRIP, net of repurchases. The shares outstanding include shares of common stock issued as stock distributions through September 30, 2016 , as a result of the Company's change in distribution policy adopted by the Company's board of directors in March 2016 as described above. The Company will not issue any additional shares of common stock under the DRIP unless and until it recommences paying distributions in cash. Substantially all of the Company's business is conducted through American Realty Capital Hospitality Operating Partnership, L.P. (the "OP"), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partner interest in the OP ("OP Units"). Additionally, American Realty Capital Hospitality Advisors, LLC (the "Advisor") contributed $2,020 to the OP in exchange for 90 OP Units, which represents a nominal percentage of the aggregate OP ownership. The holders of OP Units have the right to convert OP Units for the cash value of a corresponding number of shares of common stock or, at the option of the OP, a corresponding number of shares of common stock of the Company in accordance with the limited partnership agreement of the OP. The remaining rights of the limited partner interests are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP's assets. The Company has no employees. The Company has retained the Advisor to manage certain aspects of the Company's affairs on a day-to-day basis. American Realty Capital Hospitality Properties, LLC or one of its subsidiaries (collectively, the "Property Manager"), serves as property manager and the Property Manager has retained Crestline Hotels & Resorts, LLC ("Crestline"), to provide services, including locating investments, negotiating financing and operating certain hotel assets in the Company's portfolio. The Advisor, the Property Manager and Crestline are under common control with AR Capital, LLC (“AR Capital”), the parent of the Company’s sponsor, American Realty Capital IX, LLC (the "Sponsor"), and AR Global Investments, LLC, the successor to AR Capital’s business (“AR Global”), as a result of which they are related parties, and each of these entities has received or will receive compensation, fees and expense reimbursements from the Company for services related to the IPO and the investment and management of the Company’s assets. The Company, directly or indirectly through its taxable REIT subsidiaries ("TRSs"), enters into agreements with the Property Manager, which, in turn, engages Crestline or a third-party sub-property manager to manage the Company’s hotel properties. Crestline is a leading hospitality management company in the United States, and, as of September 30, 2016 , had 106 hotels and 15,800 rooms under management in 28 states and the District of Columbia. As of September 30, 2016 , 72 of the Company's hotels and 9,594 rooms were managed by Crestline, and 70 of the Company's hotels and 7,757 rooms were managed by third-party sub-property managers. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying consolidated financial statements of the Company included herein were prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Certain immaterial amounts in prior periods have been reclassified in order to conform to current period presentation, including $0.9 million of expense recognized during the six months ended June 30, 2016, that was reclassified from other property-level expenses to general and administrative expenses in the three months ended September 30, 2016. Operating results for the three-month and nine-month periods ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015, and the notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 28, 2016. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as percentage ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding purchase price allocations to record investments in real estate, the useful lives of real estate and real estate taxes, as applicable. Real Estate Investments The Company allocates the purchase price of properties acquired in real estate investments to tangible and identifiable intangible assets acquired based on their respective fair values at the date of acquisition. Tangible assets include land, land improvements, buildings and furniture, fixtures and equipment. The Company utilizes various estimates, processes and information to determine the property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and furniture, fixtures and equipment are based on purchase price allocation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets and liabilities, as applicable, are typically related to contracts, including operating lease agreements, ground lease agreements and hotel management agreements, which will be recorded at fair value. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Investments in real estate that are not considered to be business combinations under GAAP are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation of the Company's assets is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for furniture, fixtures and equipment, and the shorter of the useful life or the remaining lease term for leasehold interests. The Company is required to make subjective assessments as to the useful lives of the Company’s assets for purposes of determining the amount of depreciation to record on an annual basis with respect to the Company’s investments in real estate. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s investments in real estate, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis. Below-Market Lease The below-market lease intangible is based on the difference between the market rent and the contractual rent and is discounted to a present value using an interest rate reflecting the Company's current assessment of the risk associated with the leases acquired (See Note 4 - Leases). Acquired lease intangible assets are amortized over the remaining lease term. The amortization of a below-market lease is recorded as an increase to rent expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition and other factors. If an impairment exists due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property. An impairment loss results in an immediate negative adjustment reflected in net income. An impairment loss of $2.4 million was recorded on one hotel during the quarter ended June 30, 2016 (See Note 13 - Impairment of Long-Lived Assets). The Company has not recorded an impairment in any other periods. Assets Held for Sale (Long Lived-Assets) When the Company initiates the sale of long-lived assets, it assesses whether the assets meet the criteria to be considered assets held for sale. The review is based on whether the following criteria are met: • Management has committed to a plan to sell the asset group; • The subject assets are available for immediate sale in their present condition; • The Company is actively locating buyers as well as other initiatives required to complete the sale; • The sale is probable and the transfer is expected to qualify for recognition as a complete sale in one year; • The long-lived asset is being actively marketed for sale at a price that is reasonable in relation to fair value; and • Actions necessary to complete the plan indicate it is unlikely significant changes will be made to the plan or the plan will be withdrawn. If all the criteria are met, a long-lived asset held for sale is measured at the lower of its carrying amount or fair value less cost to sell, and the Company will cease recording depreciation. The Company had one hotel that qualified to be treated as an asset held for sale as of September 30, 2016 , which was subsequently sold on October 14, 2016 (See Note 14 - Assets Held for Sale and Note 15 - Subsequent Events). Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. Restricted Cash Restricted cash consists of amounts required under mortgage agreements for future capital improvements to owned assets, future interest and property tax payments and cash flow deposits while subject to mortgage agreement restrictions. For purposes of the statement of cash flows, changes in restricted cash caused by changes to the amount needed for future capital improvements are treated as investing activities, changes related to future debt service payments are treated as financing activities, and changes related to real estate tax payments and excess cash flow deposits are treated as operating activities. Deferred Financing Fees Deferred financing fees represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized over the terms of the respective financing agreements using the effective interest method. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful. In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-03 Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which was designed to simplify the presentation of debt issuance costs. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Prior to application of this new guidance, the Company presented debt issuance costs as an asset on the Consolidated Balance Sheets. The recognition and measurement guidance for debt issuance costs were not affected by the amendments in ASU 2015-03. The Company adopted this ASU as of January 1, 2016, on a retrospective basis. The impact to the Consolidated Balance Sheets as of December 31, 2015 , was to reduce total assets, mortgage notes payable, and mandatorily redeemable preferred securities by $18.8 million . Variable Interest Entities Accounting Standards Codification 810 ("ASC 810") contains the guidance surrounding the definition of variable interest entities ("VIE"), the definition of variable interests and the consolidation rules surrounding VIEs. In general, VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. In February 2015, the FASB issued Accounting Standards Update 2015-02 (“ASU 2015-02”), which amended ASC 810. The amendment modifies the evaluation of whether certain legal entities are VIEs, eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs. The revised guidance was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016. The Company has evaluated the impact of the adoption of the new guidance on its consolidated financial statements and has determined the Company’s OP is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the Company’s partnership interest is considered a majority voting interest. As such, the new guidance did not have an impact on the Company’s consolidated financial statements. The Company also has variable interests in VIEs through its investments in entities which own the Westin Virginia Beach Town Center (the "Westin Virginia Beach") and the Hilton Garden Inn Blacksburg. Once it is determined that the Company holds a variable interest in an entity, GAAP requires that the Company perform a qualitative analysis to determine (i) which entity has the power to direct the matters that most significantly impact the VIE’s financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. An entity that has both of these characteristics is deemed to be the primary beneficiary and is required to consolidate the VIE. The Company holds an interest in BSE/AH Blacksburg Hotel, LLC (the "HGI Blacksburg JV"), an entity that owns the assets of the Hilton Garden Inn Blacksburg, and an interest in TCA Block 7 Hotel, LLC (the "Westin Virginia Beach JV"), an entity that owns the assets of the Westin Virginia Beach. During the quarter ended June 30, 2015 , upon the acquisition of an additional equity interest in the HGI Blacksburg JV, the Company concluded that it was the primary beneficiary, with the power to direct activities that most significantly impact its economic performance, and therefore consolidated the entity in its consolidated financial statements subsequent to the acquisition (See Note 3 - Business Combinations). The Company has concluded it is not the primary beneficiary with the power to direct activities that most significantly impact economic performance of the Westin Virginia Beach JV, and has therefore not consolidated the entity. The Company has accounted for the entity under the equity method of accounting and included it in investments in unconsolidated entities in the accompanying Consolidated Balance Sheets. The Company classifies the distributions from its investments in unconsolidated entities in the Consolidated Statements of Cash Flows based upon an evaluation of the specific facts and circumstances of each distribution. For example, distributions of cash generated by property operations are classified as cash flows from operating activities. However, distributions received as a result of property sales are classified as cash flows from investing activities. Revenue Recognition The Company recognizes hotel revenue as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel services. Income Taxes The Company qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its tax year ended December 31, 2014 . In order to continue to qualify as a REIT, the Company must annually distribute to its stockholders 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gains, and must comply with various other organizational and operational requirements. The Company generally will not be subject to federal corporate income tax on that portion of its REIT taxable income that it distributes to its stockholders. The Company may be subject to certain state and local taxes on its income, property tax and federal income and excise taxes on its undistributed income. The Company's hotels are leased to TRSs which are owned by the OP. The TRSs are subject to federal, state and local income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss, capital loss, and tax credit carryovers. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which such amounts are expected to be realized or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement in order to determine the amount of benefit to recognize in the financial statements. This accounting standard applies to all tax positions related to income taxes. Earnings/Loss per Share The Company calculates basic income or loss per share by dividing net income or loss for the period by the weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and unvested stock awards, except when doing so would be anti-dilutive. Beginning with distributions payable with respect to April 2016 and through November 2016, the Company has paid cumulative distributions of 1,519,210 shares of common stock and adjusted retroactively for all periods presented its computation of loss per share in order to reflect this change in capital structure. The Company expects it will continue to make similar retroactive adjustments in subsequent quarters for so long as it continues to pay distributions in shares of common stock (See Note 8 - Common Stock). Fair Value Measurements In accordance with ASC 820, Fair Value Measurement , certain assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction on the measurement date. The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market. When no principal market exists, the most advantageous market is used. This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid. Fair value is based on assumptions market participants would make in pricing the asset or liability. Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available. When such prices or inputs are not available, the reporting entity should use valuation models. The Company’s financial instruments recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows: • Level 1 - Inputs that are based upon quoted prices for identical instruments traded in active markets. • Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar investments in markets that are not active, or models based on valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the investment. • Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Advertising Costs The Company expenses advertising costs for hotel operations as incurred. These costs were $4.6 million for the three months ended September 30, 2016 , and $3.8 million for the three months ended September 30, 2015 . Advertising expense was $13.2 million for the nine months ended September 30, 2016 , and $9.1 million for the nine months ended September 30, 2015 . Allowance for Doubtful Accounts Receivables consist principally of trade receivables from customers and are generally unsecured and are due within 30 to 90 days. The Company records a provision for uncollectible accounts using the allowance method. Expected credit losses associated with trade receivables are recorded as an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based upon historical patterns of credit losses for aged receivables as well as specific provisions for certain identifiable, potentially uncollectible balances. When internal collection efforts on accounts have been exhausted, the accounts are written off and the associated allowance for doubtful accounts is reduced. Trade receivable balances, net of the allowance for doubtful accounts, are included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets, and are as follows (in thousands): September 30, 2016 December 31, 2015 Trade receivables $ 7,746 $ 5,848 Allowance for doubtful accounts (558 ) (697 ) Trade receivables, net of allowance $ 7,188 $ 5,151 Reportable Segments The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level, none of which represent a reportable segment. Derivative Transactions The Company at certain times enters into derivative instruments to hedge exposure to changes in interest rates. The Company’s derivatives as of September 30, 2016 , consist of interest rate cap agreements which it believes will help to mitigate its exposure to increasing borrowing costs under floating rate indebtedness. The Company has elected not to designate its interest rate cap agreements as cash flow hedges. The impact of the interest rate caps for the three-month and nine-month periods ended September 30, 2016 , was immaterial to the consolidated financial statements. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled to for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. In April 2015, the FASB proposed an accounting standards update for ASU 2014-09 for the deferral of the effective date of ASU 2014-09. This proposal defers the effective date of ASU 2014-09 from annual reporting periods beginning after December 15, 2016, back one year, to annual reporting periods beginning after December 15, 2017 for all public business entities, certain not-for-profit entities, and certain employee benefit plans. Early application of ASU 2014-09 is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In April and May 2016, two amendments ("ASU 2016-10" and "ASU 2016-12") were made in which guidance related to accounting for revenue from contracts with customers was clarified further. ASU 2016-10 provides clarity around identifying performance obligations and licensing implementation guidance. ASU 2016-12 addresses topics such as collectability criterion, presentation of sales tax, non-cash consideration, completed contracts at transition and technical corrections. There have been no adjustments to the effective date of ASU 2014-09. The Company is evaluating the effect that ASU 2014-09, ASU 2016-10 and ASU 2016-12 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method and has not determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in the financial statements. The standard provides accounting guidance that will be used along with existing auditing standards. The adoption of ASU 2014-15 becomes effective for the Company on its fiscal year ending December 31, 2016, and all subsequent annual periods. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on the Company's consolidated financial statements. In January 2015, the FASB issued ASU 2015-01 Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (“ASU 2015-01”), which eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement-Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. The adoption of ASU 2015-01 became effective for the Company for its fiscal year ending December 31, 2016. The adoption of ASU 2015-01 did not have a material effect on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU 2015-16 Business Combinations ("ASU 2015-16"), which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 also requires the acquirer to record in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects as a result of the change to the acquisition date. Additionally, ASU 2015-16 requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this ASU as of January 1, 2016. No prior year restatements are permitted for this change in policy. The adoption of ASU 2015-16 did not have a material effect on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 Leases ("ASU 2016-02"), which requires an entity to separate lease components from nonlease components in a contract. ASU 2016-02 provides more guidance on how to identify and separate components than did previous GAAP. ASU 2016-02 requires lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This amendment has not fundamentally changed lessor accounting, however some changes have been made to align and conform to the lessee guidance. The adoption of ASU 2016-02 becomes effective for the Company for the fiscal year beginning after December 15, 2018, and all subsequent annual and interim periods. Upon adoption, the Company will be required to recognize its operating leases, which are primarily comprised of one operating lease of the Georgia Tech Hotel & Conference Center and nine ground leases, on the balance sheet. Early adoption is permitted. In March 2016, the FASB issued ASU 2016-07 Investments—Equity Method and Joint Ventures ("ASU 2016-07"), which requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The adoption of ASU 2016-07 becomes effective for the Company for the fiscal year beginning after December 15, 2016, and all subsequent annual and interim periods. Early adoption is permitted. The adoption of ASU 2016-07 is not expected to have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 Compensation—Stock Compensation ("ASU 2016-09"), which requires that all excess tax benefits and all tax deficiencies should be recognized as income tax expense or benefits in the income statement. These benefits and deficiencies are discrete items in the reporting period in which they occur. An entity should not consider these benefits or deficiencies in determining the annual estimated tax rate. The adoption of ASU 2016-09 becomes effective for the Company for the fiscal year beginning after December 15, 2016, and all subsequent annual and interim periods. Early adoption is permitted. The adoption of ASU 2016-09 is not expected to have a material effect on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which addresses the presentation and classification of certain cash flow receipts and payments. The adoption of ASU 2016-15 becomes effective for the Company for the fiscal year beginning after December 15, 2017, and all subsequent annual and interim periods. The adoption of ASU 2016-15 is not expected to have a material effect on the Company's consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Barceló Portfolio : On March 21, 2014 , the Company completed an acquisition comprising investments in six hotels (the "Barceló Portfolio") through fee simple, leasehold and joint venture interests. The aggregate purchase price of the Barceló Portfolio was approximately $110.1 million , exclusive of closing costs. The Barceló Portfolio consists of (i) three wholly owned hotel assets, the Baltimore Courtyard Inner Harbor Hotel (the "Baltimore Courtyard"), the Courtyard Providence Downtown Hotel (the "Providence Courtyard") and the Homewood Suites by Hilton Stratford (the "Stratford Homewood Suites"); (ii) one leased asset, the Georgia Tech Hotel & Conference Center and (iii) equity interests in two joint ventures that each own one hotel, the Westin Virginia Beach and the Hilton Garden Inn Blacksburg. Grace Acquisition : On February 27, 2015 , the Company acquired a portfolio of 116 hotels (the "Grace Portfolio") through fee simple or leasehold interests from certain subsidiaries of Whitehall Real Estate Funds, an investment arm controlled by The Goldman Sachs Group, Inc. The aggregate purchase price under the purchase agreement was $1.808 billion , exclusive of closing costs and subject to certain adjustments at closing. After adjustments, the net purchase price was $1.800 billion . Approximately $221.7 million of the purchase price was satisfied with cash on hand, approximately $904.2 million (fair value on the acquisition date) through the assumption of existing mortgage and mezzanine indebtedness (comprising the "Assumed Grace Mortgage Loan" and the "Assumed Grace Mezzanine Loan", collectively, the "Assumed Grace Indebtedness") and approximately $227.0 million through additional mortgage financing (the "Original Additional Grace Mortgage Loan"). The Original Additional Grace Mortgage Loan was refinanced during October 2015 (the “Refinanced Additional Grace Mortgage Loan” and, together with the Assumed Grace Indebtedness, the "Grace Indebtedness") (See Note 5 - Mortgage Notes Payable). The remaining $447.1 million of the contract purchase price was satisfied by the issuance of the preferred equity interests (the "Grace Preferred Equity Interests") in two newly-formed Delaware limited liability companies, ARC Hospitality Portfolio I Holdco, LLC and ARC Hospitality Portfolio II Holdco, LLC, (the "Holdco entities"), each of which is an indirect subsidiary of the Company and an indirect owner of the Grace Portfolio. The holders of the Grace Preferred Equity Interests were entitled to monthly distributions at a rate of 7.50% per annum for the first 18 months following closing, through August 2016, and 8.00% per annum thereafter. On liquidation of the Holdco entities, the holders of the Grace Preferred Equity Interests are entitled to receive their original value (as reduced by redemptions) prior to any distributions being made to the Company or the Company's stockholders. Beginning in April 2015 , the Company became obligated to use 35% of any IPO proceeds to redeem the Grace Preferred Equity Interests at par, up to a maximum of $350.0 million in redemptions for any 12 -month period. As of September 30, 2016 , the Company has redeemed $154.8 million of the Grace Preferred Equity Interests, resulting in $292.3 million of liquidation value remaining outstanding under the Grace Preferred Equity Interests. As of September 30, 2016, the Company is required to redeem 50.0% of the Grace Preferred Equity Interests originally issued, or an additional $68.8 million by February 27, 2018 , and is required to redeem the remaining $223.5 million by February 27, 2019 . Because the Company does not expect it will resume the IPO, it will require funds in addition to operating cash flow and cash on hand to meet its capital requirements. There can be no assurances that the Company will be able to secure these additional funds. The Company is also required, in certain circumstances, to apply debt proceeds to redeem the Grace Preferred Equity Interests at par. In addition, the Company has the right, at its option, to redeem the Grace Preferred Equity Interests, in whole or in part, at any time at par. The holders of the Grace Preferred Equity Interests have certain consent rights over major actions by the Company relating to the Grace Portfolio. In connection with the issuance of the Grace Preferred Equity Interests, the Company and the OP have made certain guarantees and indemnities to the sellers and their affiliates or indemnifying the sellers and their affiliates related to the Grace Portfolio. If the Company is unable to satisfy the redemption, distribution or other requirements of the Grace Preferred Equity Interests (including if there is a default under the related guarantees provided by the Company and the OP), the holders of the Grace Preferred Equity Interests have certain rights, including the ability to assume control of the operations of the Grace Portfolio through the assumption of control of the Holdco entities. Due to the fact that the Grace Preferred Equity Interests are mandatorily redeemable and certain of their other characteristics, the Grace Preferred Equity Interests are treated as debt in accordance with GAAP. The following table presents the allocation of the assets acquired and liabilities assumed by the Company on February 27, 2015 (in thousands): Assets acquired and liabilities assumed February 27, 2015 Land $ 274,512 Buildings and improvements 1,391,695 Below-market lease obligation 2,605 Furniture, fixtures and equipment 127,954 Prepaid expenses and other assets 8,247 Accounts payable and accrued expenses (5,002 ) Total operating assets acquired, net 1,800,011 Financing of real estate investments (1,351,282 ) Total assets acquired, net $ 448,729 HGI Blacksburg JV: On May 20, 2015 , the Company acquired an additional equity interest in the HGI Blacksburg JV, increasing its percentage ownership to 56.5% from 24.0% . As a result of this transaction, the Company concluded that it is the primary beneficiary, with the power to direct activities that most significantly impact economic performance of the HGI Blacksburg JV, and therefore consolidated the entity in its consolidated financial statements subsequent to the acquisition. The purchase price of the additional equity interest was approximately $2.2 million, exclusive of closing costs. The joint venture asset holds one hotel, the Hilton Garden Inn Blacksburg. Summit Acquisitions: In June 2, 2015 , the Company entered into agreements with affiliates of Summit Hotel Properties, Inc. (the "Summit Sellers"), as amended from time to time thereafter, to purchase fee simple interests in a portfolio of 26 hotels in three separate closings for a total purchase price of approximately $347.4 million , subject to closing prorations and other adjustments. The first closing was completed on October 15, 2015 . On October 15, 2015 , the Company completed the acquisition of ten hotels (the "First Summit Closing") for $150.1 million , which was funded with $7.6 million previously paid as an earnest money deposit, $45.6 million from the Company’s IPO and $96.9 million from an advance, secured by a mortgage on the hotels in the First Summit Closing, under the SN Term Loan (See Note 5 - Mortgage Notes Payable). The following table presents the preliminary allocation of the assets acquired and liabilities assumed by the Company for the First Summit Closing on October 15, 2015 (in thousands): Assets acquired and liabilities assumed October 15, 2015 Land $ 16,949 Buildings and improvements 120,414 Furniture, fixtures and equipment 12,706 Accounts payable and accrued expenses (1,042 ) Total operating assets acquired, net 149,027 SN Term Loan (96,850 ) Total assets acquired, net $ 52,177 The Company is finalizing the fair value of certain tangible and intangible assets acquired and adjustments may be made to the preliminary purchase price allocation shown above. On December 29, 2015 , the second closing of hotels to be acquired from the Summit Sellers was terminated. The Company and the Summit Sellers agreed to terminate the purchase agreement pursuant to which the Company had the right to acquire a fee simple interest in ten hotels (the "Second Summit Closing") for a total purchase price of $89.1 million . As a result of this termination, the Company forfeited $9.1 million in non-refundable earnest money deposits. On February 11, 2016 , the Company completed the acquisition of six hotels (the "Third Summit Closing") from the Summit Sellers for an aggregate purchase price of $108.3 million , which together with certain closing costs, was funded with $18.5 million previously paid as an earnest money deposit, $20.0 million in proceeds from a loan from the Summit Sellers (the "Summit Loan") described in Note 6 - Promissory Note Payable, and $70.4 million from an advance, secured by a mortgage on the hotels in the Third Summit Closing, under the SN Term Loan. The acquisition was immaterial to the consolidated financial statements. Also on February 11, 2016 , the Company entered into an agreement with the Summit Sellers to reinstate, with certain changes, the purchase agreement (the "Reinstatement Agreement") related to the hotels in the Second Summit Closing, pursuant to which the Company had been scheduled to acquire from the Summit Sellers ten hotels for an aggregate purchase price of $89.1 million . Pursuant to the Reinstatement Agreement, the Second Summit Closing is scheduled to occur on December 30, 2016 and $7.5 million (the “New Deposit”) borrowed by the Company from the Summit Sellers was used as a new earnest money deposit. Under the Reinstatement Agreement, the Summit Sellers have the right to market and ultimately sell any or all of the hotels in the Second Summit Closing to a bona fide third party purchaser without the consent of the Company at any time prior to the Company completing its acquisition of the Second Summit Closing. If any hotel is sold in this manner, the Reinstatement Agreement will terminate with respect to such hotel and the purchase price will be reduced by the amount allocated to such hotel. If all (but not less than all) of the hotels in the Second Summit Closing are sold in this manner, or if the Reinstatement Agreement is terminated with respect to all (but not less than all) of the hotels in the Second Summit Closing under certain other circumstances (including if there are title issues or material casualties or condemnations involving a particular hotel), then the New Deposit will be automatically applied towards any then outstanding principal balance of the Summit Loan, and any remaining balance of the New Deposit will be remitted to the Company. In June 2016, the Summit Sellers informed the Company that two of the ten hotels had been sold, thereby reducing the Second Summit Closing to eight hotels for an aggregate purchase price of $77.2 million . Noble Acquisitions: On June 15, 2015 , the Company entered into agreements with affiliates of Noble Investment Group, LLC (the "Noble Sellers"), as amended from time to time thereafter, to purchase fee simple interests in a portfolio of 13 hotels in four separate closing for a total purchase price of $300.0 million . On November 2, 2015 , the Company completed the acquisition of two hotels (the "First Noble Closing") from the Noble Sellers for $48.6 million , which was funded with $3.6 million previously paid as an earnest money deposit, $19.0 million from the Company’s IPO and $26.0 million from an advance, secured by a mortgage on the hotels in the First Noble Closing under the SN Term Loan. On December 2, 2015 , the Company completed the acquisition of two hotels (the “Second Noble Closing”) from the Noble Sellers for an aggregate purchase price of $59.0 million , which was funded with $4.4 million previously paid as an earnest money deposit, $12.3 million in proceeds from the Company’s IPO and $42.3 million from an advance, secured by a mortgage on the hotels in the Second Noble Closing under the SN Term Loan. On January 25, 2016 , the third and fourth closing of the Noble acquisition comprising nine hotels in total were terminated. The Company and the Noble Sellers agreed to terminate each of the applicable hotels purchase agreements. As a result of this termination, the Company forfeited $22.0 million in non-refundable earnest money deposits. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Leases | Leases In connection with its acquisitions the Company has assumed various lease agreements. These lease agreements primarily comprise one operating lease of the Georgia Tech Hotel & Conference Center and nine ground leases which are also classified as operating leases. The following table summarizes the Company's future minimum rental commitments under these leases (in thousands). Minimum Rental Commitments Amortization of Above and Below Market Lease Intangibles to Rent Expense For the three months ending December 31, 2016 $ 1,298 $ 100 Year ending December 31, 2017 5,210 398 Year ending December 31, 2018 5,217 398 Year ending December 31, 2019 5,227 398 Year ending December 31, 2020 5,265 398 Thereafter 87,014 8,234 Total $ 109,231 $ 9,926 The Company has allocated values to certain above and below-market lease intangibles based on the difference between market rents and rental commitments under the leases. During the three months ended September 30, 2016 and September 30, 2015 , and the nine months ended September 30, 2016 and September 30, 2015 , amortization of below-market lease intangibles, net, to rent expense was $0.1 million and $0.1 million , and $0.3 million and $0.3 million , respectively. Rent expense for the three months ended September 30, 2016 and September 30, 2015 , and nine months ended September 30, 2016 and September 30, 2015 , was $1.8 million and $1.8 million , and $4.7 million and $4.4 million , respectively. |
Mortgage Notes Payable
Mortgage Notes Payable | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | Mortgage Notes Payable The Company’s mortgage notes payable as of September 30, 2016 and December 31, 2015 consist of the following, respectively (in thousands): Outstanding Mortgage Notes Payable Encumbered Properties September 30, 2016 December 31, 2015 Interest Rate Payment Maturity Baltimore Courtyard & Providence Courtyard $ 45,500 $ 45,500 4.30% Interest Only, Principal paid at Maturity April 2019 Hilton Garden Inn Blacksburg Joint Venture 10,500 10,500 4.31% Interest Only, Principal paid at Maturity June 2020 Assumed Grace Mortgage Loan - 96 properties in Grace Portfolio 801,198 801,430 LIBOR plus 3.29% Interest Only, Principal paid at Maturity May 2017, subject to two, one year extension rights Assumed Grace Mezzanine Loan - 96 properties in Grace Portfolio 102,726 102,550 LIBOR plus 4.77% Interest Only, Principal paid at Maturity May 2017, subject to two, one year extension rights Refinanced Additional Grace Mortgage Loan - 20 properties in Grace Portfolio and one additional property 232,000 232,000 4.96% Interest Only, Principal paid at Maturity October 2020 SN Term Loan - 20 properties in Summit and Noble Portfolios 235,484 165,100 LIBOR plus between 3.25% and 3.75% Interest Only, Principal paid at Maturity August 2018, subject to two, one year extension rights Total Mortgage Notes Payable $ 1,427,408 $ 1,357,080 Less: Deferred Financing Fees, Net $ 9,128 $ 16,047 Total Mortgage Notes Payable, Net $ 1,418,280 $ 1,341,033 Interest expense related to the Company's mortgage notes payable for the three months ended September 30, 2016 and for the three months ended September 30, 2015 , was $15.2 million and $12.7 million , respectively. Interest expense related to the Company's mortgage notes payable for the nine months ended September 30, 2016 and for the nine months ended September 30, 2015 , was $44.7 million and $29.3 million , respectively. Baltimore Courtyard and Providence Courtyard The Baltimore Courtyard and Providence Courtyard Loan matures on April 6, 2019 . On May 6, 2014 and each month thereafter, the Company is required to make an interest only payment based on the outstanding principal and a fixed annual interest rate of 4.30% . The entire principal amount is due at maturity. Hilton Garden Inn Blacksburg Joint Venture The Hilton Garden Inn Blacksburg Joint Venture Loan matures June 6, 2020 . On July 6, 2015 and each month thereafter, the Company is required to make an interest only payment based on the outstanding principal and a fixed annual interest rate of 4.31% . The entire principal amount is due at maturity. Assumed Grace Indebtedness The Assumed Grace Mortgage Loan and the Assumed Grace Mezzanine Loan mature on May 1, 2017 , subject to two (one-year) extension rights which, if both are exercised, would result in an outside maturity date of May 1, 2019 . The extensions on the Assumed Grace Mortgage Loan and the Assumed Grace Mezzanine Loan can only occur if certain conditions are met, including a condition that a minimum ratio of net operating income to debt outstanding be satisfied. There can be no assurance that the Company will be able to meet these conditions and extend these loans pursuant to their terms. The Assumed Grace Mortgage Loan carries an interest rate of London Interbank Offered Rate ("LIBOR") plus 3.29% , and the Assumed Grace Mezzanine Loan carries an interest rate of LIBOR plus 4.77% , for a combined weighted average interest rate of LIBOR plus 3.46% . Pursuant to the Assumed Grace Indebtedness, the Company has agreed to make periodic payments into an escrow account for the property improvement plans required by the franchisors. The Assumed Grace Indebtedness includes the following financial covenants: minimum consolidated net worth and minimum consolidated liquidity. As of September 30, 2016 , the Company was in compliance with these financial covenants. Refinanced Additional Grace Mortgage Loan The Refinanced Additional Grace Mortgage Loan carries a fixed annual interest rate of 4.96% per annum with a maturity date on October 6, 2020. Pursuant to the Refinanced Additional Grace Mortgage Loan, the Company agreed to make periodic payments into an escrow account for the property improvement plans required by the franchisors. The Refinanced Additional Grace Mortgage Loan includes the following financial covenants: minimum consolidated net worth and minimum consolidated liquidity. As of September 30, 2016 , the Company was in compliance with these financial covenants. SN Term Loan On August 21, 2015 , the Company entered into a Term Loan Agreement with Deutsche Bank AG New York Branch, as administrative agent and Deutsche Bank Securities Inc., as sole lead arranger and book-running manager (as amended, the "SN Term Loan"). On October 15, 2015 , the Company amended and restated the SN Term Loan and made the initial draw down of borrowings of $96.9 million in connection with the First Summit Closing. On November 2, 2015 , the Company drew down borrowings of $26.0 million in connection with the First Noble Closing. On December 2, 2015 the Company drew down borrowings of $42.3 million in connection with the Second Noble Closing. On February 11, 2016 , the Company drew down borrowings of $70.4 million in connection with the Third Summit Closing, and amended the SN Term Loan to reduce the lenders’ total commitment from $450.0 million to $293.4 million . On July 1, 2016, the period in which the Company had the ability to further draw down on the SN Term Loan expired, reducing the lenders' total commitment to $235.5 million . No additional amounts are available to be drawn under the SN Term Loan. Due to the amendment and the expiration, the Company recorded a reduction to its deferred financing fees associated with the SN Term Loan. The reduction of $3.0 million was reflected as a general and administrative expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). The SN Term Loan provided for financing (the “Loans”) at a rate equal to a base rate plus a spread of between 3.25% and 3.75% for Eurodollar rate Loans and between 2.25% and 2.75% for base rate Loans, depending on the aggregate debt yield and aggregate loan-to-value of the properties securing the Loans measured periodically. Prior to November 1, 2015 , all spreads were 0.5% less than they will be during the rest of the term. The SN Term Loan has a term of three years , with two one -year extension options, and is secured by the fee interest in the hotels acquired. The extensions on the SN Term Loan can only occur if certain conditions are met, including a condition that a minimum ratio of net operating income to debt outstanding be satisfied. If the Company exercises the extension options the Loans will amortize in an amount of 2.5% per annum payable quarterly. There can be no assurance that we will be able to meet these conditions and extend this loan pursuant to its terms. Pursuant to the SN Term Loan, the Company agreed to make periodic payments into an escrow account for the property improvement plans required by the franchisors. The SN Term Loan includes the following financial covenants: minimum debt service coverage ratio, minimum consolidated net worth and minimum consolidated liquidity. As of September 30, 2016 , the Company was in compliance with these financial covenants. |
Promissory Note Payable
Promissory Note Payable | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Promissory Note Payable | Promissory Note Payable The Company’s promissory note payable as of September 30, 2016 and December 31, 2015 were as follows (in thousands): Outstanding Promissory Note Payable Note Payable September 30, 2016 December 31, 2015 Interest Rate Summit Loan Promissory Note $ 23,172 $ — 13.0 % Less: Deferred Financing Fees, Net 79 — Promissory Notes Payable, Net $ 23,093 $ — On February 11, 2016 , the Summit Sellers loaned the Company $27.5 million under the Summit Loan. Proceeds from the Summit Loan totaling $20.0 million were used to pay a portion of the purchase price of the Third Summit Closing and proceeds from the Summit Loan totaling $7.5 million were used as a new purchase price deposit on the reinstated Second Summit Closing. The Summit Loan initially bears interest at a rate of 13.0% per annum, of which 9.0% is paid in cash monthly and an additional 4% (the “Added Rate”) accrues and is compounded monthly and added to the outstanding principal balance at maturity unless otherwise paid in cash by the Company. The Summit Loan has an initial maturity date of February 11, 2017 , and the Seller Loan Agreement provides for two one -year extensions at the Company’s option, subject to the payment in cash of the interest accrued at the Added Rate. Upon each extension, the Added Rate will be increased by 1% . As required pursuant to the Summit Loan, the Company paid principal in the amount of $3.0 million during the quarter ended September 30, 2016 , and $5.0 million for the nine months ended September 30, 2016 . No other principal payments are required pursuant to the Summit Loan prior to maturity. The Company may pre-pay the Summit Loan in whole or in part without penalty at any time. The Company also made certain other agreements with respect to future sales and purchases of hotels under the Summit Loan. Interest expense related to the Company's promissory notes payable for the three months ended September 30, 2016 was $0.8 million . There was no interest expense related to the Company's promissory notes payable for the three months ended September 30, 2015 . Interest expense related to the Company's promissory notes payable for the nine months ended September 30, 2016 and for the nine months ended September 30, 2015 , was $2.2 million and $1.4 million , respectively. Interest expense recognized for the nine months ended September 30, 2015 was related to notes payable in connection with the Barceló Portfolio, which were repaid in full during the quarter ended June 30, 2015. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses The following is a summary of the components of accounts payable and accrued expenses (in thousands): September 30, 2016 December 31, 2015 Trade accounts payable and accrued expenses $ 60,957 $ 57,472 Contingent consideration from Barceló Portfolio (See Note 10 - Commitments and Contingencies) 4,618 3,164 Hotel accrued salaries and related liabilities 10,226 6,619 Total $ 75,801 $ 67,255 |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company had 37,833,988 shares and 36,300,777 shares of common stock outstanding and had received total proceeds of $ 913.0 million and $902.9 million as of September 30, 2016 and December 31, 2015 , respectively. The shares outstanding include shares of common stock issued as stock distributions through September 30, 2016 , as a result of the Company's change in distribution policy adopted by the Company's board of directors in March 2016 as described below. Distributions On February 3, 2014 , the Company's board of directors authorized, and the Company declared, distributions payable in cash to stockholders of record each day during the applicable month equal to $0.0046575343 per day (or $0.0046448087 if a 366-day year), or $1.70 per annum, per share of common stock. The first distribution was paid in May 2014 to holders of record in April 2014. The distributions are payable by the fifth day following each month end to stockholders of record at the close of business each day during the prior month. To date, the Company has funded all of its cash distributions with proceeds from the Offering, which was suspended as of December 31, 2015 . Because the Company requires funds in addition to its operating cash flow and cash on hand to meet its capital requirements, in March 2016 the Company’s board of directors changed the distribution policy, such that distributions paid with respect to April 2016 were paid in shares of common stock instead of cash. Accordingly, the Company paid a cash distribution to stockholders of record each day during the quarter ended March 31, 2016, but distributions for subsequent periods have been and, unless and until the Company's board of directors determines otherwise, will continue to be paid in shares of common stock. Distributions for the quarter ended June 30, 2016 were paid in common stock in an amount equivalent to $1.70 per annum, divided by $23.75 . On July 1, 2016 , the Company's board of directors approved an Estimated Per-Share NAV, which was published on the same date. This was the first time that the Company’s board of directors determined an Estimated Per-Share NAV. In connection with its determination of Estimated Per-Share NAV, the Company’s board of directors revised the amount of the distribution to $1.46064 per share per annum, equivalent to a 6.80% annual rate based on Estimated Per-Share NAV, automatically adjusting if and when the Company publishes an updated Estimated Per-Share NAV. It is currently anticipated that the Company will publish an updated Estimated Per-Share NAV on at least an annual basis. The Company’s board of directors authorized distributions, payable in shares of common stock, at a rate of 0.068 multiplied by the Estimated Per-Share NAV in effect as of the close of business on the applicable date. Therefore, beginning with distributions payable with respect to July 2016, the Company has paid distributions to its stockholders in shares of common stock on a monthly basis to stockholders of record each day during the prior month in an amount equal to 0.000185792 per share per day, or $1.46064 per annum, divided by $21.48 . The Company’s distribution policy is subject to revision at the discretion of its board of directors, and may be changed at any time. There can be no assurance that the Company will continue to pay distributions in shares of common stock or be able to pay distributions in cash in the future. The Company’s ability to make future cash distributions will depend on its future cash flows and may be dependent on its ability to obtain additional liquidity, which may not be available on favorable terms, or at all. Share Repurchase Program On January 28, 2016 , the Company announced that its board of directors had unanimously approved an amendment and restatement of the Company's share repurchase program (the "SRP"), which became effective on February 28, 2016 . Under the SRP as amended and restated, subject to certain conditions, stockholders that purchased shares of common stock of the Company or received their shares from the Company (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of common stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder are not subject to any minimum holding period. Repurchases pursuant to the SRP, when requested, generally will be made semiannually (each six-month period ending June 30 or December 31, a “semi-annual period”). Repurchases for any semi-annual period will be limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. Repurchases pursuant to the SRP for any given semi-annual period will be funded from proceeds received during that same semi-annual period through the issuance of common stock pursuant to the DRIP, unless the board of directors in its sole discretion makes available other funds for this purpose. As described further above, beginning with distributions payable with respect to April 2016, the Company commenced paying distributions to its stockholders in shares of common stock instead of cash. The Company will not issue any additional shares of common stock under the DRIP unless and until it recommences paying distributions in cash. The Company also does not expect the board of directors will make other funds available for these purposes until the Company is able to obtain additional liquidity on favorable terms. Accordingly, the Company does not currently expect to make any repurchases under the SRP during 2016. To the extent the Company makes repurchases under the SRP, the repurchase price per share for requests other than for death or disability will be an amount equal to the then-current Estimated Per-Share NAV, in each case multiplied by a percentage equal to: • 92.5% , if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; • 95% , if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; • 97.5% , if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or • 100% , if the person seeking repurchase has held his or her shares for a period greater than four years. In the case of requests for death or disability, the repurchase price per share will be equal to the Estimated Per-Share NAV at the time of repurchase. If the establishment of an Estimated Per-Share NAV occurs during any semi-annual period, any repurchase requests received during such semi-annual period will be paid at a price based on Estimated Per-Share NAV applicable on the last day of the semi-annual period, as described above. Distribution Reinvestment Plan Pursuant to the DRIP, to the extent the Company pays distributions in cash, stockholders may elect to reinvest distributions by purchasing shares of common stock. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. The shares purchased pursuant to the DRIP have the same rights and are treated in the same manner as all other shares of the Company's common stock. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company has the right to amend or suspend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. Shares issued under the DRIP are recorded to equity in the Consolidated Balance Sheets in the period distributions are paid. There were 1,226,867 shares issued under the DRIP as of September 30, 2016 and 828,217 shares issued under the DRIP as of December 31, 2015 . Commencing with distributions paid with respect to April 2016, the Company has paid distributions in shares of common stock instead of cash. The Company will not issue any additional shares of common stock under the DRIP unless and until it recommences paying distributions in cash. All shares issued under the DRIP were purchased at $23.75 per share. If and when the Company issues any additional shares of common stock under the DRIP, distributions reinvested in common stock will be at a price equal to the Estimated Per-Share NAV. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company is required to disclose the fair value of financial instruments which it is practicable to estimate. The fair value of cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate their carrying amounts due to the relatively short maturity of these items. The following table shows the carrying values and the fair values of material liabilities that qualify as financial instruments (in thousands): September 30, 2016 Carrying Amount Fair Value Mortgage and promissory notes payable (1) $ 1,450,580 $ 1,451,968 (1) Carrying amount does not include the associated deferred financing fees as of September 30, 2016. The fair value of the mortgage and promissory notes payable were determined using the discounted cash flow method and applying current market rates and is classified as level 3 under the fair value hierarchy. As described in Note 10 - Commitments and Contingencies, the carrying amount of the contingent consideration related to the Barceló Portfolio acquisition was remeasured to fair value as of September 30, 2016 . As described in Note 13 - Impairment of Long Lived Assets, the Company recorded an impairment charge of $2.4 million during the quarter ended June 30, 2016, to reflect one hotel asset at its fair value of $6.2 million . This value was determined using one or more unobservable inputs representing a nonrecurring level 3 fair value measurement. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company at the date of this filing. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. Contingent Consideration Included as part of the acquisition of the Barceló Portfolio is a contingent consideration payable to the seller based on the operating results of the Baltimore Courtyard, Providence Courtyard and Stratford Homewood Suites. During August 2016, the Company and the seller entered into an agreement extending and modifying the payment terms of the contingent consideration. The amount payable is calculated by applying a contractual capitalization rate to the excess earnings before interest, taxes, and depreciation and amortization, earned in the third year after the acquisition over an agreed upon target, provided the contingent consideration generally will not be less than $4.1 million or exceed $4.6 million . In each of the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016, the Company revised its forecast resulting in an increase in the contingent consideration payable of $1.4 million , including $0.6 million during the quarter ended September 30, 2016. The change in the contingent consideration payable is reflected in other income (expense) in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine month periods ended September 30, 2016 . The contingent consideration payable as of September 30, 2016 is $4.6 million . The Company anticipates paying the contingent consideration on July 3, 2017 . |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Related Party Transactions and Arrangements As of September 30, 2016 , American Realty Capital Hospitality Special Limited Partner, LLC (the "Special Limited Partner"), which is wholly owned by AR Capital, owned 9,153 shares of the Company’s outstanding common stock. Additionally, as of September 30, 2016 , AR Capital, the parent of the Sponsor, owned 22,881 shares of the Company's outstanding common stock, and AR Global owned 6,587 shares of the Company's outstanding common stock. The Company's Former Dealer Manager served as the dealer manager of the IPO. SK Research, LLC and American National Stock Transfer, LLC ("ANST"), both subsidiaries of the parent company of the Former Dealer Manager, provided other general professional services through December 2015 and January 2016 , respectively. RCS Capital Corporation ("RCAP"), the parent company of the Former Dealer Manager and certain of its affiliates that provided services to the Company, filed for Chapter 11 bankruptcy protection in January 2016 , prior to which it was also under common control with AR Capital, the parent of the Company's Sponsor, and AR Global. In May 2016, RCAP and its affiliated debtors emerged from bankruptcy under the new name, Aretec Group, Inc. The Advisor and its affiliates are entitled to a variety of fees, and may incur and pay costs and fees on behalf of the Company for which they are entitled to reimbursement. The Company had a payable due to related parties related to operating, acquisition, financing and offering costs of $8.8 million and $6.5 million as of September 30, 2016 and December 31, 2015 , respectively. Fees Paid in Connection with the Offering The Former Dealer Manager was paid fees and compensation in connection with the sale of the Company's common stock in the Offering prior to its suspension. The Former Dealer Manager was paid a selling commission of up to 7.0% of the per share purchase price of the Company’s Offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Former Dealer Manager was paid up to 3.0% of the gross proceeds from the sale of shares, before reallowance to participating broker-dealers, as a dealer-manager fee. The Former Dealer Manager was entitled to reallow its dealer-manager fee to participating broker-dealers. A participating broker dealer was entitled to elect to receive a fee equal to 7.5% of the gross proceeds from the sale of shares by such participating broker dealer, with 2.5% thereof paid at the time of such sale and 1.0% thereof paid on each anniversary of the closing of such sale up to and including the fifth anniversary of the closing of such sale. If this option was elected, the dealer manager fee has been reduced to 2.5% of gross proceeds. On December 31, 2015 , the Company, the Advisor and the Former Dealer Manager mutually agreed, pursuant to a termination agreement dated December 31, 2015 , to terminate the Exclusive Dealer Manager Agreement dated January 7, 2014 among the Company, the Advisor and the Former Dealer Manager. No dealer manager fees or selling commissions have been paid with respect to shares which were purchased pursuant to the DRIP. The table below shows the commissions and fees incurred from and payable to the Former Dealer Manager for the Offering during the three months ended September 30, 2016 and 2015 , the nine months ended September 30, 2016 and 2015 , and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total commissions and fees incurred from the Dealer Manager $ — $ 13,289 $ 71 $ 47,914 $ — $ 1 The Advisor and its affiliates were paid compensation and/or received reimbursement for services relating to the Offering, including transfer agency services provided by ANST, an affiliate of the Former Dealer Manager. The Company is responsible for the Offering and related costs (excluding selling commissions and dealer manager fees) up to a maximum of 2.0% of gross proceeds received from the Offering, measured at the end of the Offering. Offering costs in excess of the 2.0% cap as of the end of the Offering are the Advisor’s responsibility. As of September 30, 2016 , Offering and related costs (excluding selling commissions and dealer manager fees) exceeded 2.0% of gross proceeds received from the Offering by $5.9 million . Offering costs incurred by the Advisor or its affiliated entities on behalf of the Company have generally been recorded as a reduction to additional paid-in-capital on the accompanying Consolidated Balance Sheets. The table below shows compensation and reimbursements incurred and payable to the Advisor and its affiliates for services relating to the Offering during the three months ended September 30, 2016 and 2015 , the nine months ended September 30, 2016 and 2015 , and the associated amounts payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company’s Consolidated Balance Sheets (in thousands). Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total compensation and reimbursement for services provided by the Advisor and its affiliates related to the Offering $ — $ 4,045 $ — $ 13,979 $ 433 $ 787 AR Capital was a party to a services agreement with RCS Advisory Services, LLC ("RCS Advisory"), an affiliate of the Former Dealer Manager, pursuant to which RCS Advisory and its affiliates provided the Company and certain other companies sponsored by AR Global with services (including, without limitation, transaction management, compliance, due diligence, event coordination and marketing services, among others) on a time and expenses incurred basis or at a flat rate based on services performed. AR Capital instructed RCS Advisory to stop providing such services in November 2015 and no services have since been provided by RCS Advisory. The Company was also party to a transfer agency agreement with ANST, pursuant to which ANST provided the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services), and supervisory services overseeing the transfer agency services performed by a third-party transfer agent. AR Global received written notice from ANST on February 10, 2016 that it would wind down operations by the end of the month and would withdraw as the transfer agent effective February 29, 2016 . On February 26, 2016 , the Company entered into a definitive agreement with DST Systems, Inc., its previous provider of sub-transfer agency services, to provide the Company directly with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services). Following the suspension of the IPO on November 15, 2015, fees payable with respect to transfer agency services are included in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss) during the period the service was provided. Fees Paid in Connection With the Operations of the Company Fees Paid to the Advisor The Advisor is paid an acquisition fee of 1.5% of (A) the contract purchase price of each acquired property and (B) the amount advanced for a loan or other investment. The Advisor may also be reimbursed for expenses incurred in the process of acquiring properties, in addition to third-party costs the Company may pay directly to, or reimburse the Advisor for. Additionally, the Company may reimburse the Advisor for legal expenses it or its affiliates directly incur in the process of acquiring properties in an amount not to exceed 0.1% of the contract purchase price of the Company’s assets acquired. Once the proceeds from the Offering have been fully invested, the aggregate amount of acquisition fees and financing coordination fees (as described below) may not exceed 1.9% of the contract purchase price, for any new investments, including reinvested proceeds, and the amount advanced for a loan or other investment, for all the assets acquired. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect to the Company's total portfolio of investments, calculated after the close of the Offering and once the Company has invested substantially all the proceeds of the Offering, exceed 4.5% of (A) the contract purchase price of all of the Company's properties and (B) the amount advanced for all of the Company's loans or other investments. Fees paid to the Advisor related to acquisitions are reported as a component of net income (loss) in the period incurred. If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay the Advisor or its assignees a financing coordination fee equal to 0.75% of the amount available and/or outstanding under such financing, subject to certain limitations. Fees paid to the Advisor related to debt financings are deferred and amortized over the term of the related debt instrument. The Advisor receives a fee for asset management services it provides to the Company. For asset management services provided by the Advisor prior to October 1, 2015 , the Advisor received a subordinated participation in the form of performance-based restricted, forfeitable partnership units of the OP (designated as “Class B Units”). On November 11, 2015 , the Company, the OP and the Advisor agreed to an amendment to the advisory agreement (as amended, the "Advisory Agreement"), pursuant to which, effective October 1, 2015 , the Company became required to pay asset management fees in cash (subject to certain coverage limitations during the pendency of the Offering), or shares of the Company's common stock, or a combination of both, at the Advisor’s election, and the asset management fee is paid on a monthly basis. The monthly fees are equal to: • The cost of the Company’s assets (until July 1, 2016 , then the lower of the cost of the Company's assets or the fair market value of the Company's assets), multiplied by • 0.0625% . For asset management services provided by the Advisor prior to October 1, 2015 , the Company issued Class B Units on a quarterly basis in an amount equal to: • The cost of the Company’s assets multiplied by • 0.1875% , divided by • The value of one share of common stock as of the last day of such calendar quarter, which was equal to $22.50 (the Offering price prior to its suspension minus selling commissions and dealer manager fees). The Advisor is entitled to receive distributions on the Class B Units it has received in connection with its asset management subordinated participation at the same rate as distributions received on the Company’s common stock. Such distributions are in addition to the incentive fees and other distributions the Advisor and its affiliates may receive from the Company and the OP, including without limitation, the annual subordinated performance fee and the subordinated participation in net sales proceeds, the subordinated incentive listing distribution or the subordinated distribution upon termination of the Advisory Agreement, each as described below. The Class B Units do not become unrestricted until certain performance conditions are satisfied, including until the adjusted market value of the OP’s assets plus applicable distributions equals or exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return to investors, and the occurrence of a sale of all or substantially all of the OP’s assets, a listing of the Company’s common stock, or a termination of the Advisory Agreement without cause. A total of 524,956 Class B Units have been issued as of September 30, 2016 for asset management services performed by the Advisor, and a total of 12,311 shares of common stock have been issued as of September 30, 2016 to the Advisor for distributions payable on the Class B Units. The issuance of Class B Units did not result in any expense on the Company’s consolidated statements of operations, except for distributions paid on the Class B Units. The distributions payable on Class B Units for periods through March 31, 2016 were paid in cash. Beginning in the second quarter ended June 30, 2016 , the Company began paying distributions on the Class B Units in shares of common stock on the same terms paid to the Company’s stockholders. The table below presents the Class B Units distribution expense for the three months ended September 30, 2016 and 2015 respectively, and for the nine months ended September 30, 2016 , and 2015 , respectively, and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Class B Units distribution expense $ 193 $ 96 $ 637 $ 224 $ 62 $ 92 The table below presents the asset management fees, acquisition fees, acquisition cost reimbursements and financing coordination fees charged by the Advisor in connection with the operations of the Company for the three months ended September 30, 2016 and 2015 , and for the nine months ended September 30, 2016 and 2015 , and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Asset management fees $ 4,469 $ — $ 13,446 $ — $ 39 $ 1,190 Acquisition fees $ — $ — $ 1,624 $ 27,203 $ — $ — Acquisition cost reimbursements $ — $ — $ 108 $ 1,808 $ — $ — Financing coordination fees $ — $ 3,375 $ 206 $ 15,254 $ — $ — $ 4,469 $ 3,375 $ 15,384 $ 44,265 $ 39 $ 1,190 In March 2016, the Company, the OP and the Advisor further amended (the "Amendment") the Advisory Agreement to provide the Company with the right to pay up to $500,000 per month of asset management fees payable to the Advisor under the Advisory Agreement in shares of the Company’s common stock for the period of time beginning on June 1, 2016 and ending on June 1, 2017 . The Company's right to pay such portion of the asset management fees in shares of common stock will commence on the date (the “Trigger”) that the elimination of its payment of cash distributions is insufficient to provide adequate liquidity levels consistent with assumptions mutually agreed to in good faith by the Company's independent directors and the Advisor from time to time (the “Relief Period”). As of September 30, 2016, the Trigger has not occurred and the Company has not exercised this right. The Company's right is subject to termination on the earlier of: • the date on which the Company has completed a public or private offering, which provides net proceeds in excess of $500,000 multiplied by the remaining months prior to June 1, 2017 , after repayment or redemption of any indebtedness or preferred stock which is repayable or redeemable out of the proceeds of such offering; • the date on which the Company has completed an asset sale or borrowing, which provides net proceeds in excess of $50.0 million , after repayment or redemption of any indebtedness or preferred stock which is repayable or redeemable out of the proceeds of such transaction; • the date that the Company’s board of directors declares a distribution all or a portion of which is payable in cash; • a change of control (as defined in the Amendment), any restructuring of the Company’s debt or preferred stock that results in net proceeds in excess of $500,000 multiplied by the remaining months prior to June 1, 2017 , after repayment or redemption of any indebtedness or preferred stock which is repayable or redeemable out of the proceeds of such transaction or such transaction results in the reduction in other cash usage by the Company during the Relief Period in excess of $500,000 multiplied by the remaining months prior to June 1, 2017 , or a sale, exchange, transfer or other disposition of substantially all of the Company’s assets; or • termination of the Advisory Agreement. If an event described in the fourth or fifth bullets above occurs, the Company has agreed to redeem any shares of common stock issued to the Advisor as payment of asset management fees as described above for cash at the original issuance price. Pursuant to the Amendment, the Company also agreed to certain registration rights for the benefit of the Advisor with respect to the resale of the shares of common stock issued to the Advisor as payment of asset management fees as described above. Pursuant to the Amendment, the Company also agreed, subject to the effectiveness of an amendment of the Company’s charter, to extend the term of the Advisory Agreement to June 1, 2017 and that the notice period for terminating the Advisory Agreement will be ninety ( 90 ) days’ notice instead of sixty ( 60 ) days’ notice if the Trigger occurs prior to an expiration of the term. In August 2016, the stockholders of the Company approved the charter amendment and it became effective. In order to increase operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may elect to waive certain fees. Because the Advisor may waive certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders. The fees that may be forgiven are not deferrals and accordingly, will not be paid to the Advisor. In certain instances, to improve the Company’s working capital, the Advisor may elect to absorb a portion of the Company’s general and administrative costs. No expenses were absorbed by the Advisor during the nine months ended September 30, 2016 or for the year ended December 31, 2015 , respectively. The Company reimburses the Advisor’s costs for providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairment or other similar non-cash reserves and excluding any gain from the sale of assets for that period, unless the Company’s independent directors determine that such excess was justified based on unusual and nonrecurring factors which they deem sufficient, in which case the excess amount may be reimbursed to the Advisor in subsequent periods. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services; however, the Company will not reimburse the Advisor for personnel costs, including executive salaries, in connection with services for which the Advisor receives acquisition fees, acquisition expenses or real estate commissions. The table below represents reimbursements to the Advisor for the three months ended September 30, 2016 and 2015 , and for the nine months ended September 30, 2016 and 2015 , and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total general and administrative expense reimbursement for services provided by the Advisor $ 574 $ — $ 1,702 $ — $ 344 $ 72 The Advisor at its election may also contribute capital to enhance the Company’s cash position for working capital and distribution purposes. Any contributed capital amounts are not reimbursable to the Advisor. Further, any capital contributions are made without any corresponding issuance of common or preferred shares. There were no contributions to capital from the Advisor for the three months ended September 30, 2016 and 2015, or the nine months ended September 30, 2016 and 2015. Fees Paid to the Property Manager and Crestline The Company pays a property management fee of up to 4.0% of the monthly gross receipts from the Company's properties to the Property Manager. The Property Manager, in turn, pays a portion of the property management fees to Crestline or a third-party sub-property manager, as applicable. The Company also reimburses Crestline or a third-party sub-property manager, as applicable, for property level expenses, as well as fees and expenses of such sub-property manager. The Company does not, however, reimburse Crestline or any third-party sub-property manager for general overhead costs or for the wages and salaries and other employee-related expenses of employees of such sub-property managers, other than employees or subcontractors who are engaged in the on-site operation, management, maintenance or access control of the Company’s properties, and, in certain circumstances, who are engaged in off-site activities. The Company will also pay its Property Manager (which payment has been assigned to Crestline) an annual incentive fee equal to 15% of the amount by which the operating profit from the properties sub-managed by Crestline for such fiscal year (or partial fiscal year) exceeds 8.5% of the total investment of such properties. The Company has agreed and may in the future agree to similar incentive fee arrangements with the Property Manager and certain of the third party sub-property managers. Incentive fees incurred by the Company were less than $0.1 million for the three months ended September 30, 2016 and were $0.1 million for the nine months ended September 30, 2016 , respectively, and $0.1 million in incentive fees were incurred by the Company for the three months ended and nine months ended September 30, 2015 , respectively. The table below shows the management fees (including incentive fees described above) and reimbursable expenses incurred by the Company from Crestline or the Property Manager (and not payable to a third party sub-property manager) during three months ended September 30, 2016 and 2015 , and during the nine months ended September 30, 2016 , and 2015 , respectively, and the associated payable as of September 30, 2016 and December 31, 2015 (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total management fees and reimbursable expenses incurred from Crestline $ 4,134 $ 2,631 $ 12,305 $ 6,564 $ 1,461 $ 1,106 Total management fees incurred from Property Manager $ 2,262 $ 2,055 $ 6,501 $ 5,000 $ 6,419 $ 3,553 Total $ 6,396 $ 4,686 $ 18,806 $ 11,564 $ 7,880 $ 4,659 Fees and Participations Paid in Connection with the Liquidation or Listing The Company is required to pay the Advisor an annual subordinated performance fee calculated on the basis of the Company’s total return to stockholders, payable monthly in arrears, such that for any year in which the Company’s total return on stockholders’ capital exceeds 6.0% per annum, the Advisor will be entitled to 15.0% of the excess total return but not to exceed 10.0% of the aggregate total return for such year. This fee will be payable only upon the sale of assets, other disposition or refinancing of such assets, which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the three months ended or nine months ended September 30, 2016 or 2015 , respectively. The Company may pay a brokerage commission to the Advisor on the sale of property, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third-party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such fees were incurred during the three months ended or nine months ended September 30, 2016 or 2015 , respectively. The Special Limited Partner is entitled to receive a subordinated participation in the net sales proceeds of the sale of real estate assets of 15.0% of the remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 6.0% cumulative, pre-tax, non-compounded annual return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a 6.0% cumulative non-compounded return on their capital contributions plus the return of their capital. No such participation became due and payable during the three months ended or nine months ended September 30, 2016 or 2015 , respectively. If the common stock of the Company is listed on a national exchange, the Special Limited Partner is entitled to receive a subordinated incentive listing distribution of 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return on their capital contributions. The Special Limited Partner will not be entitled to the subordinated incentive listing distribution unless investors have received a 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such distributions were incurred during the three months ended or nine months ended September 30, 2016 or 2015 , respectively. Neither the Special Limited Partner nor any of its affiliates can earn both the subordinated participation in the net sale proceeds and the subordinated incentive listing distribution. Upon termination or non-renewal of the Advisory Agreement with the Advisor, with or without cause, the Special Limited Partner, through its controlling interest in the Advisor, is entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or another liquidity event occurs. No such distributions were incurred during the three months ended or nine months ended September 30, 2016 or 2015 , respectively. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2016 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor and its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In the second quarter ended June 30, 2016 , the Company identified an indicator of impairment at one of its hotels, primarily due to decreased operating performance. As required by Accounting Standards Codification section 360 (ASC 360), once an indicator of impairment is identified, the Company is required to perform a test for recoverability. This test compares the sum of the estimated undiscounted future cash flows attributable to the hotel to its carrying amount. The Company determined that the estimated undiscounted future cash flows attributable to the hotel did not exceed its carrying amount and an impairment existed. The Company then determined the fair value of the hotel using the discounted cash flow method to be $6.2 million , approximately $2.4 million less than the carrying amount of the hotel at June 30, 2016 of $8.6 million , and recorded the impairment loss in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has not recorded an impairment in any other periods. Assets Held for Sale As part of the Company's efforts to address its capital requirements, the Company has been marketing select hotels for sale. If completed, these sales will generate net proceeds that can be used to meet liquidity requirements, eliminate any associated future PIP obligations, and reduce debt associated with these hotels. As of September 30, 2016 the Company had one hotel that was held for sale, which was subsequently sold on October 14, 2016 (See Note 15 - Subsequent Events). The sale of the hotel does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results, and therefore the operating results for the period of ownership of this property are included in income from continuing operations for the three months ended and nine months ended September 30, 2016 and September 30, 2015 , respectively. Assets held for sale as of September 30, 2016 consisted of the following (in thousands): September 30, 2016 Land $ 2,675 Buildings and improvements 7,069 Furniture, fixtures and equipment 1,450 11,194 Less: Accumulated Depreciation (1,023 ) Assets Held for Sale $ 10,171 |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Assets Held for Sale | Impairment of Long-Lived Assets In the second quarter ended June 30, 2016 , the Company identified an indicator of impairment at one of its hotels, primarily due to decreased operating performance. As required by Accounting Standards Codification section 360 (ASC 360), once an indicator of impairment is identified, the Company is required to perform a test for recoverability. This test compares the sum of the estimated undiscounted future cash flows attributable to the hotel to its carrying amount. The Company determined that the estimated undiscounted future cash flows attributable to the hotel did not exceed its carrying amount and an impairment existed. The Company then determined the fair value of the hotel using the discounted cash flow method to be $6.2 million , approximately $2.4 million less than the carrying amount of the hotel at June 30, 2016 of $8.6 million , and recorded the impairment loss in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has not recorded an impairment in any other periods. Assets Held for Sale As part of the Company's efforts to address its capital requirements, the Company has been marketing select hotels for sale. If completed, these sales will generate net proceeds that can be used to meet liquidity requirements, eliminate any associated future PIP obligations, and reduce debt associated with these hotels. As of September 30, 2016 the Company had one hotel that was held for sale, which was subsequently sold on October 14, 2016 (See Note 15 - Subsequent Events). The sale of the hotel does not represent a strategic shift that has, or will have, a major effect on the Company’s operations and financial results, and therefore the operating results for the period of ownership of this property are included in income from continuing operations for the three months ended and nine months ended September 30, 2016 and September 30, 2015 , respectively. Assets held for sale as of September 30, 2016 consisted of the following (in thousands): September 30, 2016 Land $ 2,675 Buildings and improvements 7,069 Furniture, fixtures and equipment 1,450 11,194 Less: Accumulated Depreciation (1,023 ) Assets Held for Sale $ 10,171 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the accompanying condensed consolidated financial statements except for the following transactions: Issuances of Common Stock Subsequent to the quarter ended September 30, 2016 and through November 4, 2016 , the Company issued 429,907 shares of common stock as stock distributions. Sale of Hotel On October 14, 2016 , the Company completed the sale of one hotel for a sales price of $13.0 million , resulting in a gain of approximately $2.5 million , which will be reflected in the Company’s consolidated statements of operations in the fourth quarter of 2016. The Company used the proceeds from the sale to reduce the Assumed Grace Indebtedness by $8.5 million , redeem $2.1 million in mandatorily redeemable preferred securities, and for other general corporate purposes. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements of the Company included herein were prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Certain immaterial amounts in prior periods have been reclassified in order to conform to current period presentation, including $0.9 million of expense recognized during the six months ended June 30, 2016, that was reclassified from other property-level expenses to general and administrative expenses in the three months ended September 30, 2016. Operating results for the three-month and nine-month periods ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015, and the notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 28, 2016. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as percentage ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding purchase price allocations to record investments in real estate, the useful lives of real estate and real estate taxes, as applicable. |
Real Estate Investments and Below-Market Lease | Real Estate Investments The Company allocates the purchase price of properties acquired in real estate investments to tangible and identifiable intangible assets acquired based on their respective fair values at the date of acquisition. Tangible assets include land, land improvements, buildings and furniture, fixtures and equipment. The Company utilizes various estimates, processes and information to determine the property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and furniture, fixtures and equipment are based on purchase price allocation studies performed by independent third parties or on the Company’s analysis of comparable properties in the Company’s portfolio. Identifiable intangible assets and liabilities, as applicable, are typically related to contracts, including operating lease agreements, ground lease agreements and hotel management agreements, which will be recorded at fair value. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Investments in real estate that are not considered to be business combinations under GAAP are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation of the Company's assets is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for furniture, fixtures and equipment, and the shorter of the useful life or the remaining lease term for leasehold interests. The Company is required to make subjective assessments as to the useful lives of the Company’s assets for purposes of determining the amount of depreciation to record on an annual basis with respect to the Company’s investments in real estate. These assessments have a direct impact on the Company’s net income because if the Company were to shorten the expected useful lives of the Company’s investments in real estate, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis. Below-Market Lease The below-market lease intangible is based on the difference between the market rent and the contractual rent and is discounted to a present value using an interest rate reflecting the Company's current assessment of the risk associated with the leases acquired (See Note 4 - Leases). Acquired lease intangible assets are amortized over the remaining lease term. The amortization of a below-market lease is recorded as an increase to rent expense on the Consolidated Statements of Operations and Comprehensive Income (Loss). |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. The estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of demand, competition and other factors. If an impairment exists due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property. An impairment loss results in an immediate negative adjustment reflected in net income. |
Assets Held for Sale (Long Lived-Assets) | Assets Held for Sale (Long Lived-Assets) When the Company initiates the sale of long-lived assets, it assesses whether the assets meet the criteria to be considered assets held for sale. The review is based on whether the following criteria are met: • Management has committed to a plan to sell the asset group; • The subject assets are available for immediate sale in their present condition; • The Company is actively locating buyers as well as other initiatives required to complete the sale; • The sale is probable and the transfer is expected to qualify for recognition as a complete sale in one year; • The long-lived asset is being actively marketed for sale at a price that is reasonable in relation to fair value; and • Actions necessary to complete the plan indicate it is unlikely significant changes will be made to the plan or the plan will be withdrawn. If all the criteria are met, a long-lived asset held for sale is measured at the lower of its carrying amount or fair value less cost to sell, and the Company will cease recording depreciation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. |
Restricted Cash | Restricted Cash Restricted cash consists of amounts required under mortgage agreements for future capital improvements to owned assets, future interest and property tax payments and cash flow deposits while subject to mortgage agreement restrictions. For purposes of the statement of cash flows, changes in restricted cash caused by changes to the amount needed for future capital improvements are treated as investing activities, changes related to future debt service payments are treated as financing activities, and changes related to real estate tax payments and excess cash flow deposits are treated as operating activities. |
Deferred Financing Fees | Deferred Financing Fees Deferred financing fees represent commitment fees, legal fees and other costs associated with obtaining commitments for financing. These fees are amortized over the terms of the respective financing agreements using the effective interest method. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not be successful. In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-03 Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which was designed to simplify the presentation of debt issuance costs. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Prior to application of this new guidance, the Company presented debt issuance costs as an asset on the Consolidated Balance Sheets. The recognition and measurement guidance for debt issuance costs were not affected by the amendments in ASU 2015-03. The Company adopted this ASU as of January 1, 2016, on a retrospective basis. |
Variable Interest Entities | Variable Interest Entities Accounting Standards Codification 810 ("ASC 810") contains the guidance surrounding the definition of variable interest entities ("VIE"), the definition of variable interests and the consolidation rules surrounding VIEs. In general, VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. In February 2015, the FASB issued Accounting Standards Update 2015-02 (“ASU 2015-02”), which amended ASC 810. The amendment modifies the evaluation of whether certain legal entities are VIEs, eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs. The revised guidance was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016. The Company has evaluated the impact of the adoption of the new guidance on its consolidated financial statements and has determined the Company’s OP is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the Company’s partnership interest is considered a majority voting interest. As such, the new guidance did not have an impact on the Company’s consolidated financial statements. The Company also has variable interests in VIEs through its investments in entities which own the Westin Virginia Beach Town Center (the "Westin Virginia Beach") and the Hilton Garden Inn Blacksburg. Once it is determined that the Company holds a variable interest in an entity, GAAP requires that the Company perform a qualitative analysis to determine (i) which entity has the power to direct the matters that most significantly impact the VIE’s financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. An entity that has both of these characteristics is deemed to be the primary beneficiary and is required to consolidate the VIE. The Company holds an interest in BSE/AH Blacksburg Hotel, LLC (the "HGI Blacksburg JV"), an entity that owns the assets of the Hilton Garden Inn Blacksburg, and an interest in TCA Block 7 Hotel, LLC (the "Westin Virginia Beach JV"), an entity that owns the assets of the Westin Virginia Beach. During the quarter ended June 30, 2015 , upon the acquisition of an additional equity interest in the HGI Blacksburg JV, the Company concluded that it was the primary beneficiary, with the power to direct activities that most significantly impact its economic performance, and therefore consolidated the entity in its consolidated financial statements subsequent to the acquisition (See Note 3 - Business Combinations). The Company has concluded it is not the primary beneficiary with the power to direct activities that most significantly impact economic performance of the Westin Virginia Beach JV, and has therefore not consolidated the entity. The Company has accounted for the entity under the equity method of accounting and included it in investments in unconsolidated entities in the accompanying Consolidated Balance Sheets. The Company classifies the distributions from its investments in unconsolidated entities in the Consolidated Statements of Cash Flows based upon an evaluation of the specific facts and circumstances of each distribution. For example, distributions of cash generated by property operations are classified as cash flows from operating activities. However, distributions received as a result of property sales are classified as cash flows from investing activities. |
Revenue Recognition | Revenue Recognition The Company recognizes hotel revenue as earned, which is generally defined as the date upon which a guest occupies a room or utilizes the hotel services. |
Income Taxes | Income Taxes The Company qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its tax year ended December 31, 2014 . In order to continue to qualify as a REIT, the Company must annually distribute to its stockholders 90% of its REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gains, and must comply with various other organizational and operational requirements. The Company generally will not be subject to federal corporate income tax on that portion of its REIT taxable income that it distributes to its stockholders. The Company may be subject to certain state and local taxes on its income, property tax and federal income and excise taxes on its undistributed income. The Company's hotels are leased to TRSs which are owned by the OP. The TRSs are subject to federal, state and local income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for net operating loss, capital loss, and tax credit carryovers. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which such amounts are expected to be realized or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. The Company must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Once it is determined that a position meets the more-likely-than-not recognition threshold, the position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement in order to determine the amount of benefit to recognize in the financial statements. This accounting standard applies to all tax positions related to income taxes. |
Earnings/Loss per Share | Earnings/Loss per Share The Company calculates basic income or loss per share by dividing net income or loss for the period by the weighted-average shares of its common stock outstanding for a respective period. Diluted income per share takes into account the effect of dilutive instruments, such as stock options and unvested stock awards, except when doing so would be anti-dilutive. Beginning with distributions payable with respect to April 2016 and through November 2016, the Company has paid cumulative distributions of 1,519,210 shares of common stock and adjusted retroactively for all periods presented its computation of loss per share in order to reflect this change in capital structure. |
Fair Value Measurements | Fair Value Measurements In accordance with ASC 820, Fair Value Measurement , certain assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction on the measurement date. The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market. When no principal market exists, the most advantageous market is used. This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid. Fair value is based on assumptions market participants would make in pricing the asset or liability. Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available. When such prices or inputs are not available, the reporting entity should use valuation models. The Company’s financial instruments recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows: • Level 1 - Inputs that are based upon quoted prices for identical instruments traded in active markets. • Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar investments in markets that are not active, or models based on valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the investment. • Level 3 - Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. |
Advertising Costs | Advertising Costs The Company expenses advertising costs for hotel operations as incurred. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Receivables consist principally of trade receivables from customers and are generally unsecured and are due within 30 to 90 days. The Company records a provision for uncollectible accounts using the allowance method. Expected credit losses associated with trade receivables are recorded as an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based upon historical patterns of credit losses for aged receivables as well as specific provisions for certain identifiable, potentially uncollectible balances. When internal collection efforts on accounts have been exhausted, the accounts are written off and the associated allowance for doubtful accounts is reduced. |
Reportable Segments | Reportable Segments The Company has determined that it has one reportable segment, with activities related to investing in real estate. The Company’s investments in real estate generate room revenue and other income through the operation of the properties, which comprise 100% of the total consolidated revenues. Management evaluates the operating performance of the Company’s investments in real estate on an individual property level, none of which represent a reportable segment. |
Derivative Transactions | Derivative Transactions The Company at certain times enters into derivative instruments to hedge exposure to changes in interest rates. The Company’s derivatives as of September 30, 2016 , consist of interest rate cap agreements which it believes will help to mitigate its exposure to increasing borrowing costs under floating rate indebtedness. The Company has elected not to designate its interest rate cap agreements as cash flow hedges. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers ("ASU 2014-09"), which requires an entity to recognize the amount of revenue to which it expects to be entitled to for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. The standard permits the use of either the retrospective or cumulative effect transition method. In April 2015, the FASB proposed an accounting standards update for ASU 2014-09 for the deferral of the effective date of ASU 2014-09. This proposal defers the effective date of ASU 2014-09 from annual reporting periods beginning after December 15, 2016, back one year, to annual reporting periods beginning after December 15, 2017 for all public business entities, certain not-for-profit entities, and certain employee benefit plans. Early application of ASU 2014-09 is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In April and May 2016, two amendments ("ASU 2016-10" and "ASU 2016-12") were made in which guidance related to accounting for revenue from contracts with customers was clarified further. ASU 2016-10 provides clarity around identifying performance obligations and licensing implementation guidance. ASU 2016-12 addresses topics such as collectability criterion, presentation of sales tax, non-cash consideration, completed contracts at transition and technical corrections. There have been no adjustments to the effective date of ASU 2014-09. The Company is evaluating the effect that ASU 2014-09, ASU 2016-10 and ASU 2016-12 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method and has not determined the effect of the standard on its ongoing financial reporting. In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”), which describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in the financial statements. The standard provides accounting guidance that will be used along with existing auditing standards. The adoption of ASU 2014-15 becomes effective for the Company on its fiscal year ending December 31, 2016, and all subsequent annual periods. Early adoption is permitted. The adoption of ASU 2014-15 is not expected to have a material effect on the Company's consolidated financial statements. In January 2015, the FASB issued ASU 2015-01 Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (“ASU 2015-01”), which eliminates from GAAP the concept of extraordinary items. Subtopic 225-20, Income Statement-Extraordinary and Unusual Items, required that an entity separately classify, present, and disclose extraordinary events and transactions. The adoption of ASU 2015-01 became effective for the Company for its fiscal year ending December 31, 2016. The adoption of ASU 2015-01 did not have a material effect on the Company’s consolidated financial statements. In September 2015, the FASB issued ASU 2015-16 Business Combinations ("ASU 2015-16"), which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 also requires the acquirer to record in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects as a result of the change to the acquisition date. Additionally, ASU 2015-16 requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this ASU as of January 1, 2016. No prior year restatements are permitted for this change in policy. The adoption of ASU 2015-16 did not have a material effect on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 Leases ("ASU 2016-02"), which requires an entity to separate lease components from nonlease components in a contract. ASU 2016-02 provides more guidance on how to identify and separate components than did previous GAAP. ASU 2016-02 requires lessees to recognize assets and liabilities arising from operating leases on the balance sheet. This amendment has not fundamentally changed lessor accounting, however some changes have been made to align and conform to the lessee guidance. The adoption of ASU 2016-02 becomes effective for the Company for the fiscal year beginning after December 15, 2018, and all subsequent annual and interim periods. Upon adoption, the Company will be required to recognize its operating leases, which are primarily comprised of one operating lease of the Georgia Tech Hotel & Conference Center and nine ground leases, on the balance sheet. Early adoption is permitted. In March 2016, the FASB issued ASU 2016-07 Investments—Equity Method and Joint Ventures ("ASU 2016-07"), which requires that an equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The adoption of ASU 2016-07 becomes effective for the Company for the fiscal year beginning after December 15, 2016, and all subsequent annual and interim periods. Early adoption is permitted. The adoption of ASU 2016-07 is not expected to have a material effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 Compensation—Stock Compensation ("ASU 2016-09"), which requires that all excess tax benefits and all tax deficiencies should be recognized as income tax expense or benefits in the income statement. These benefits and deficiencies are discrete items in the reporting period in which they occur. An entity should not consider these benefits or deficiencies in determining the annual estimated tax rate. The adoption of ASU 2016-09 becomes effective for the Company for the fiscal year beginning after December 15, 2016, and all subsequent annual and interim periods. Early adoption is permitted. The adoption of ASU 2016-09 is not expected to have a material effect on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which addresses the presentation and classification of certain cash flow receipts and payments. The adoption of ASU 2016-15 becomes effective for the Company for the fiscal year beginning after December 15, 2017, and all subsequent annual and interim periods. The adoption of ASU 2016-15 is not expected to have a material effect on the Company's consolidated financial statements. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Trade receivable balances, net of the allowance for doubtful accounts, are included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets, and are as follows (in thousands): September 30, 2016 December 31, 2015 Trade receivables $ 7,746 $ 5,848 Allowance for doubtful accounts (558 ) (697 ) Trade receivables, net of allowance $ 7,188 $ 5,151 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table presents the preliminary allocation of the assets acquired and liabilities assumed by the Company for the First Summit Closing on October 15, 2015 (in thousands): Assets acquired and liabilities assumed October 15, 2015 Land $ 16,949 Buildings and improvements 120,414 Furniture, fixtures and equipment 12,706 Accounts payable and accrued expenses (1,042 ) Total operating assets acquired, net 149,027 SN Term Loan (96,850 ) Total assets acquired, net $ 52,177 The following table presents the allocation of the assets acquired and liabilities assumed by the Company on February 27, 2015 (in thousands): Assets acquired and liabilities assumed February 27, 2015 Land $ 274,512 Buildings and improvements 1,391,695 Below-market lease obligation 2,605 Furniture, fixtures and equipment 127,954 Prepaid expenses and other assets 8,247 Accounts payable and accrued expenses (5,002 ) Total operating assets acquired, net 1,800,011 Financing of real estate investments (1,351,282 ) Total assets acquired, net $ 448,729 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | The following table summarizes the Company's future minimum rental commitments under these leases (in thousands). Minimum Rental Commitments Amortization of Above and Below Market Lease Intangibles to Rent Expense For the three months ending December 31, 2016 $ 1,298 $ 100 Year ending December 31, 2017 5,210 398 Year ending December 31, 2018 5,217 398 Year ending December 31, 2019 5,227 398 Year ending December 31, 2020 5,265 398 Thereafter 87,014 8,234 Total $ 109,231 $ 9,926 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s mortgage notes payable as of September 30, 2016 and December 31, 2015 consist of the following, respectively (in thousands): Outstanding Mortgage Notes Payable Encumbered Properties September 30, 2016 December 31, 2015 Interest Rate Payment Maturity Baltimore Courtyard & Providence Courtyard $ 45,500 $ 45,500 4.30% Interest Only, Principal paid at Maturity April 2019 Hilton Garden Inn Blacksburg Joint Venture 10,500 10,500 4.31% Interest Only, Principal paid at Maturity June 2020 Assumed Grace Mortgage Loan - 96 properties in Grace Portfolio 801,198 801,430 LIBOR plus 3.29% Interest Only, Principal paid at Maturity May 2017, subject to two, one year extension rights Assumed Grace Mezzanine Loan - 96 properties in Grace Portfolio 102,726 102,550 LIBOR plus 4.77% Interest Only, Principal paid at Maturity May 2017, subject to two, one year extension rights Refinanced Additional Grace Mortgage Loan - 20 properties in Grace Portfolio and one additional property 232,000 232,000 4.96% Interest Only, Principal paid at Maturity October 2020 SN Term Loan - 20 properties in Summit and Noble Portfolios 235,484 165,100 LIBOR plus between 3.25% and 3.75% Interest Only, Principal paid at Maturity August 2018, subject to two, one year extension rights Total Mortgage Notes Payable $ 1,427,408 $ 1,357,080 Less: Deferred Financing Fees, Net $ 9,128 $ 16,047 Total Mortgage Notes Payable, Net $ 1,418,280 $ 1,341,033 |
Promissory Note Payable (Tables
Promissory Note Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Promissory Notes | The Company’s promissory note payable as of September 30, 2016 and December 31, 2015 were as follows (in thousands): Outstanding Promissory Note Payable Note Payable September 30, 2016 December 31, 2015 Interest Rate Summit Loan Promissory Note $ 23,172 $ — 13.0 % Less: Deferred Financing Fees, Net 79 — Promissory Notes Payable, Net $ 23,093 $ — |
Accounts Payable and Accrued 28
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following is a summary of the components of accounts payable and accrued expenses (in thousands): September 30, 2016 December 31, 2015 Trade accounts payable and accrued expenses $ 60,957 $ 57,472 Contingent consideration from Barceló Portfolio (See Note 10 - Commitments and Contingencies) 4,618 3,164 Hotel accrued salaries and related liabilities 10,226 6,619 Total $ 75,801 $ 67,255 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table shows the carrying values and the fair values of material liabilities that qualify as financial instruments (in thousands): September 30, 2016 Carrying Amount Fair Value Mortgage and promissory notes payable (1) $ 1,450,580 $ 1,451,968 (1) Carrying amount does not include the associated deferred financing fees as of September 30, 2016. |
Related Party Transactions an30
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The table below presents the Class B Units distribution expense for the three months ended September 30, 2016 and 2015 respectively, and for the nine months ended September 30, 2016 , and 2015 , respectively, and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Class B Units distribution expense $ 193 $ 96 $ 637 $ 224 $ 62 $ 92 The table below shows compensation and reimbursements incurred and payable to the Advisor and its affiliates for services relating to the Offering during the three months ended September 30, 2016 and 2015 , the nine months ended September 30, 2016 and 2015 , and the associated amounts payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company’s Consolidated Balance Sheets (in thousands). Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total compensation and reimbursement for services provided by the Advisor and its affiliates related to the Offering $ — $ 4,045 $ — $ 13,979 $ 433 $ 787 The table below shows the commissions and fees incurred from and payable to the Former Dealer Manager for the Offering during the three months ended September 30, 2016 and 2015 , the nine months ended September 30, 2016 and 2015 , and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total commissions and fees incurred from the Dealer Manager $ — $ 13,289 $ 71 $ 47,914 $ — $ 1 The table below presents the asset management fees, acquisition fees, acquisition cost reimbursements and financing coordination fees charged by the Advisor in connection with the operations of the Company for the three months ended September 30, 2016 and 2015 , and for the nine months ended September 30, 2016 and 2015 , and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Asset management fees $ 4,469 $ — $ 13,446 $ — $ 39 $ 1,190 Acquisition fees $ — $ — $ 1,624 $ 27,203 $ — $ — Acquisition cost reimbursements $ — $ — $ 108 $ 1,808 $ — $ — Financing coordination fees $ — $ 3,375 $ 206 $ 15,254 $ — $ — $ 4,469 $ 3,375 $ 15,384 $ 44,265 $ 39 $ 1,190 The table below represents reimbursements to the Advisor for the three months ended September 30, 2016 and 2015 , and for the nine months ended September 30, 2016 and 2015 , and the associated payable as of September 30, 2016 and December 31, 2015 , which is recorded in due to related parties on the Company's Consolidated Balance Sheets (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total general and administrative expense reimbursement for services provided by the Advisor $ 574 $ — $ 1,702 $ — $ 344 $ 72 The table below shows the management fees (including incentive fees described above) and reimbursable expenses incurred by the Company from Crestline or the Property Manager (and not payable to a third party sub-property manager) during three months ended September 30, 2016 and 2015 , and during the nine months ended September 30, 2016 , and 2015 , respectively, and the associated payable as of September 30, 2016 and December 31, 2015 (in thousands): Three Months Ended Nine Months Ended Payable as of 2016 2015 2016 2015 September 30, 2016 December 31, 2015 Total management fees and reimbursable expenses incurred from Crestline $ 4,134 $ 2,631 $ 12,305 $ 6,564 $ 1,461 $ 1,106 Total management fees incurred from Property Manager $ 2,262 $ 2,055 $ 6,501 $ 5,000 $ 6,419 $ 3,553 Total $ 6,396 $ 4,686 $ 18,806 $ 11,564 $ 7,880 $ 4,659 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Summary of Long Lived Assets Held-for-sale | Assets held for sale as of September 30, 2016 consisted of the following (in thousands): September 30, 2016 Land $ 2,675 Buildings and improvements 7,069 Furniture, fixtures and equipment 1,450 11,194 Less: Accumulated Depreciation (1,023 ) Assets Held for Sale $ 10,171 |
Organization - Narrative (Detai
Organization - Narrative (Details) | Jul. 01, 2016$ / shares | Feb. 03, 2014$ / shares | Jul. 31, 2016$ / shares | Sep. 30, 2016USD ($)hotel_roomstatehotel$ / sharesshares | Jun. 30, 2016$ / shares | Sep. 30, 2016USD ($)hotel_roomstatehotel$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Jan. 07, 2014$ / sharesshares |
Class of Stock [Line Items] | ||||||||
Number of properties owned (property) | hotel | 142 | 142 | ||||||
Number of assets held for sale (hotel) | hotel | 1 | 1 | ||||||
Number of guest rooms (hotel room) | hotel_room | 17,351 | 17,351 | ||||||
Number of states in which entity operates (state) | state | 32 | 32 | ||||||
Shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | 300,000,000 | 80,000,000 | ||||
Par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Share price (in dollars per share) | 22.50 | 22.50 | ||||||
Dividends declared per year (in dollars per share) | $ 1.46064 | $ 1.7 | $ 1.46064 | 1.46064 | $ 1.70 | |||
Denominator for common stock equivalent of dividends declared (in dollars per share) | 21.48 | 21.48 | $ 23.75 | $ 21.48 | ||||
Annual distribution rate | 6.80% | |||||||
Dividends declared per day (in dollars per share) | $ 0.0046575343 | $ 0.000185792 | $ 0.000185792 | |||||
Common stock, outstanding (in shares) | shares | 37,833,988 | 37,833,988 | 36,300,777 | |||||
Cumulative proceeds from issuance of common stock, net | $ | $ 913,000,000 | $ 913,000,000 | $ 902,900,000 | |||||
Sub-Property Manager | United States | ||||||||
Class of Stock [Line Items] | ||||||||
Number of hotels managed by third-party (hotel) | hotel | 70 | 70 | ||||||
Number of hotel rooms managed by third party (hotel room) | hotel_room | 7,757 | 7,757 | ||||||
Crestline Hotels and Resorts, LLC | Affiliated Entity | United States | ||||||||
Class of Stock [Line Items] | ||||||||
Number of hotels managed by related party (hotel) | hotel | 72 | 72 | ||||||
Number of hotel rooms managed by related party (hotel room) | hotel_room | 9,594 | 9,594 | ||||||
American Realty Capital Hospitality Special Limited Partner, LLC | ||||||||
Class of Stock [Line Items] | ||||||||
Expected contributed capital | $ | $ 2,020 | |||||||
Operating partnership units (in shares) | shares | 90 | |||||||
Crestline Hotels and Resorts, LLC | United States | ||||||||
Class of Stock [Line Items] | ||||||||
Number of states in which entity operates (state) | state | 28 | 28 | ||||||
Number of hotels under management (hotel) | hotel | 106 | 106 | ||||||
Number of hotel rooms under management (hotel room) | hotel_room | 15,800 | 15,800 | ||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Par value (in dollars per share) | $ 0.01 | |||||||
Share price (in dollars per share) | $ 25 | |||||||
Distribution Reinvestment Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Shares authorized (in shares) | shares | 21,052,631 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($)hotellease | Jun. 30, 2016USD ($)hotel | Sep. 30, 2015USD ($) | Nov. 10, 2016shares | Sep. 30, 2016USD ($)segmenthotellease | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||||||
Other property-level operating expenses | $ 58,768 | $ 50,793 | $ 175,492 | $ 120,321 | |||
General and administrative expense | 5,128 | 2,020 | 12,623 | 5,984 | |||
Impairment of long-lived assets | $ 0 | $ 2,400 | 0 | $ 2,399 | 0 | ||
Number of impaired hotels (hotel) | hotel | 1 | ||||||
Number of assets held for sale (hotel) | hotel | 1 | 1 | |||||
Debt issuance costs | $ 9,128 | $ 9,128 | $ 16,047 | ||||
Advertising expense | $ 4,600 | $ 3,800 | $ 13,200 | $ 9,100 | |||
Number of reportable segments (segment) | segment | 1 | ||||||
Number of operating leases (lease) | lease | 1 | 1 | |||||
Number of ground leases (lease) | lease | 9 | 9 | |||||
Sales Revenue, Net | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Percentage of total consolidated/ combined revenues | 100.00% | ||||||
Minimum | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Period after which receivables are due (days) | 30 days | ||||||
Maximum | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Period after which receivables are due (days) | 90 days | ||||||
Change in EPS Calculation from Change in Capital Structure | Subsequent Event | Common Stock | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Distributions paid (in shares) | shares | 1,519,210 | ||||||
Assets | Accounting Standards Update 2015-03 | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Debt issuance costs | (18,800) | ||||||
Mortgage Notes Payable and Mandatorily Redeemable Preferred Securities | Accounting Standards Update 2015-03 | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Debt issuance costs | $ 18,800 | ||||||
Building | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Useful life (years) | 40 years | ||||||
Land Improvements | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Useful life (years) | 15 years | ||||||
Furniture, Fixtures and Equipment | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Useful life (years) | 5 years | ||||||
Restatement Adjustment | |||||||
Summary of Significant Accounting Policies [Line Items] | |||||||
Other property-level operating expenses | $ (900) | ||||||
General and administrative expense | $ 900 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Trade receivables | $ 7,746 | $ 5,848 |
Allowance for doubtful accounts | (558) | (697) |
Trade receivables, net of allowance | $ 7,188 | $ 5,151 |
Business Combinations - Barcelo
Business Combinations - Barcelo Portfolio (Details) $ in Millions | Mar. 21, 2014USD ($)hotel_assethotelleased_assetjoint_venture | Sep. 30, 2016hotel |
Business Acquisition [Line Items] | ||
Number of properties owned (property) | 142 | |
The Barcelo Acquisition | ||
Business Acquisition [Line Items] | ||
Number of properties owned (property) | 6 | |
Aggregate purchase price | $ | $ 110.1 | |
Number of wholly owned hotel assets (hotel asset) | hotel_asset | 3 | |
Number of leased assets (leased asset) | leased_asset | 1 | |
Number of joint ventures (joint venture) | joint_venture | 2 |
Business Combinations - Grace A
Business Combinations - Grace Acquisition (Details) $ in Thousands | Feb. 27, 2015USD ($)hotelcompany | Apr. 30, 2015USD ($) | Sep. 30, 2016USD ($)hotel | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||||
Number of properties owned (property) | hotel | 142 | ||||
Mandatorily redeemable preferred securities redemptions | $ 2,270 | $ 90,760 | |||
Liquidation value remaining outstanding | 290,117 | $ 291,796 | |||
The Grace Acquisition | |||||
Business Acquisition [Line Items] | |||||
Number of properties owned (property) | hotel | 116 | ||||
Business combination purchase price | $ 1,808,000 | ||||
Purchase price after adjustments | 1,800,000 | ||||
Payments to acquire businesses | 221,700 | ||||
Business combination consideration, liabilities incurred | 904,200 | ||||
Proceeds from issuance of long term debt | $ 227,000 | ||||
Number of newly formed limited liability companies | company | 2 | ||||
The Grace Acquisition | Redeemable Preferred Stock | |||||
Business Acquisition [Line Items] | |||||
Proceeds from issuance of preferred limited partners units | $ 447,100 | ||||
Preferred stock, percent of equity offering proceeds to redeem preferred equity interests at par | 35.00% | ||||
Preferred stock, maximum equity offering proceeds used to redeem preferred equity interests at par | $ 350,000 | ||||
Preferred stock, period for maximum equity offering proceeds used to redeem preferred equity interests at par | 12 months | ||||
Mandatorily redeemable preferred securities redemptions | 154,800 | ||||
Liquidation value remaining outstanding | $ 292,300 | ||||
Preferred stock, percent of preferred equity interests required to be redeemed at the end of the third year | 50.00% | ||||
Preferred stock, preferred equity interests required to be redeemed at the end of the third year | $ 68,800 | ||||
Preferred stock, preferred equity interests required to be redeemed at the end of the fourth | $ 223,500 | ||||
The Grace Acquisition | Redeemable Preferred Stock | Minimum | |||||
Business Acquisition [Line Items] | |||||
Preferred stock dividend rate (percent) | 7.50% | ||||
The Grace Acquisition | Redeemable Preferred Stock | Maximum | |||||
Business Acquisition [Line Items] | |||||
Preferred stock dividend rate (percent) | 8.00% |
Business Combinations - Allocat
Business Combinations - Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Oct. 15, 2015 | Feb. 27, 2015 |
The Grace Acquisition | ||
Business Acquisition [Line Items] | ||
Land | $ 274,512 | |
Buildings and improvements | 1,391,695 | |
Below-market lease obligation | 2,605 | |
Furniture, fixtures and equipment | 127,954 | |
Prepaid expenses and other assets | 8,247 | |
Accounts payable and accrued expenses | (5,002) | |
Total operating assets acquired, net | 1,800,011 | |
Financing of real estate investments | (1,351,282) | |
Total assets acquired, net | $ 448,729 | |
Summit Portfolio | ||
Business Acquisition [Line Items] | ||
Land | $ 16,949 | |
Buildings and improvements | 120,414 | |
Furniture, fixtures and equipment | 12,706 | |
Accounts payable and accrued expenses | (1,042) | |
Total operating assets acquired, net | 149,027 | |
SN Term Loan | (96,850) | |
Total assets acquired, net | $ 52,177 |
Business Combinations - HGI Bla
Business Combinations - HGI Blacksburg JV (Details) $ in Millions | May 20, 2015USD ($)hotel | Sep. 30, 2016hotel |
Business Acquisition [Line Items] | ||
Number of properties owned (property) | 142 | |
HGI Blacksburg JV | ||
Business Acquisition [Line Items] | ||
Ownership interest (percent) | 56.50% | |
Ownership interest prior to acquisition (percent) | 24.00% | |
Business combination purchase price | $ | $ 2.2 | |
Number of properties owned (property) | 1 |
Business Combinations - Summit
Business Combinations - Summit Acquisition (Details) $ in Thousands | Feb. 11, 2016USD ($)hotel | Dec. 29, 2015USD ($)hotel | Oct. 15, 2015USD ($)hotel | Jun. 02, 2015USD ($)closing_transactionhotel | Jun. 30, 2016USD ($)hotel | Sep. 30, 2016USD ($)hotel | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | ||||||||
Number of properties owned (property) | hotel | 142 | |||||||
Proceeds from issuance of common stock, net | $ 678 | $ 495,774 | ||||||
Acquisition deposits | $ 7,500 | $ 40,504 | ||||||
Summit Portfolio | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of real estate properties expected to be acquired | hotel | 26 | |||||||
Number of closing transactions | closing_transaction | 3 | |||||||
Business combination purchase price | $ 150,100 | $ 347,400 | ||||||
Number of properties owned (property) | hotel | 6 | 10 | ||||||
Deposits to acquire businesses | $ 7,600 | |||||||
Proceeds from issuance of common stock, net | 45,600 | |||||||
Number of properties no longer expected to be acquired (hotel) | hotel | 10 | |||||||
Escrow deposit forfeited | $ 9,100 | |||||||
Summit Portfolio | Secured Debt | Deutsche Bank Term Loan | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from issuance of long term debt | $ 70,400 | $ 96,900 | ||||||
Summit Portfolio, Second Closing | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of real estate properties expected to be acquired | hotel | 10 | 8 | ||||||
Business combination purchase price | $ 89,100 | $ 89,100 | $ 77,200 | |||||
Number of properties no longer expected to be acquired (hotel) | hotel | 2 | |||||||
Acquisition deposits | 7,500 | |||||||
Summit Portfolio, Third Closing | ||||||||
Business Acquisition [Line Items] | ||||||||
Business combination purchase price | 108,300 | |||||||
Previously paid earnest money deposit | 18,500 | |||||||
Summit Portfolio, Third Closing | Summit Loan | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from loan | 20,000 | |||||||
Summit Portfolio, Third Closing | Secured Debt | Deutsche Bank Term Loan | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from issuance of long term debt | $ 70,400 |
Business Combinations - Noble A
Business Combinations - Noble Acquisitions (Details) $ in Thousands | Jan. 25, 2016USD ($)hotel | Dec. 02, 2015USD ($)hotel | Nov. 02, 2015USD ($)hotel | Jun. 15, 2015USD ($)closing_transactionhotel | Sep. 30, 2016USD ($)hotel | Sep. 30, 2015USD ($) |
Business Acquisition [Line Items] | ||||||
Number of properties owned (property) | hotel | 142 | |||||
Proceeds from issuance of common stock, net | $ 678 | $ 495,774 | ||||
Noble Portfolio | ||||||
Business Acquisition [Line Items] | ||||||
Number of real estate properties expected to be acquired | hotel | 13 | |||||
Number of closing transactions | closing_transaction | 4 | |||||
Business combination purchase price | $ 59,000 | $ 48,600 | $ 300,000 | |||
Number of properties owned (property) | hotel | 2 | 2 | ||||
Deposits to acquire businesses | $ 4,400 | $ 3,600 | ||||
Proceeds from issuance of common stock, net | 12,300 | 19,000 | ||||
Number of properties no longer expected to be acquired (hotel) | hotel | 9 | |||||
Escrow deposit forfeited | $ 22,000 | |||||
Noble Portfolio | Deutsche Bank Term Loan | Secured Debt | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from issuance of long term debt | $ 42,300 | $ 26,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($)lease | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)lease | Sep. 30, 2015USD ($) | |
Leases [Abstract] | ||||
Number of operating leases (lease) | lease | 1 | 1 | ||
Number of ground leases (lease) | lease | 9 | 9 | ||
Amortization of below-market lease intangibles, net, to rent expense | $ | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.3 |
Rent expense | $ | $ 1.8 | $ 1.8 | $ 4.7 | $ 4.4 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments for Operating Leases (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Minimum Rental Commitments | |
For the three months ending December 31, 2016 | $ 1,298 |
Year ending December 31, 2017 | 5,210 |
Year ending December 31, 2018 | 5,217 |
Year ending December 31, 2019 | 5,227 |
Year ending December 31, 2020 | 5,265 |
Thereafter | 87,014 |
Total | 109,231 |
Amortization of Above and Below Market Lease Intangibles to Rent Expense | |
For the three months ending December 31, 2016 | 100 |
Year ending December 31, 2017 | 398 |
Year ending December 31, 2018 | 398 |
Year ending December 31, 2019 | 398 |
Year ending December 31, 2020 | 398 |
Thereafter | 8,234 |
Total | $ 9,926 |
Mortgage Notes Payable (Details
Mortgage Notes Payable (Details) $ in Thousands | Feb. 27, 2015hotel | Sep. 30, 2016USD ($)hotelpropertyextension | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 1,427,408 | $ 1,357,080 | |
Less: Deferred Financing Fees, Net | 9,128 | 16,047 | |
Mortgage notes payable, net | $ 1,418,280 | 1,341,033 | |
Number of properties owned (property) | hotel | 142 | ||
The Grace Acquisition | |||
Debt Instrument [Line Items] | |||
Number of properties owned (property) | hotel | 116 | ||
The Grace Acquisition | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.46% | ||
Mortgage notes payable | Grace Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 801,198 | 801,430 | |
Number of extension rights | extension | 2 | ||
Extension right (years) | 1 year | ||
Mortgage notes payable | Grace Mortgage Loan | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.29% | ||
Mortgage notes payable | Grace Mortgage Loan | The Grace Acquisition | |||
Debt Instrument [Line Items] | |||
Number of properties owned (property) | property | 96 | ||
Mortgage notes payable | Grace Mezzanine Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 102,726 | 102,550 | |
Number of extension rights | extension | 2 | ||
Extension right (years) | 1 year | ||
Mortgage notes payable | Grace Mezzanine Loan | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 4.77% | ||
Mortgage notes payable | Grace Mezzanine Loan | The Grace Acquisition | |||
Debt Instrument [Line Items] | |||
Number of properties owned (property) | property | 96 | ||
Mortgage notes payable | New Additional Grace Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 232,000 | 232,000 | |
Interest rate (percent) | 4.96% | ||
Number of properties owned (property) | property | 1 | ||
Mortgage notes payable | New Additional Grace Mortgage Loan | The Grace Acquisition | |||
Debt Instrument [Line Items] | |||
Number of properties owned (property) | property | 20 | ||
Mortgage notes payable | Deutsche Bank Term Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 235,484 | 165,100 | |
Number of extension rights | extension | 2 | ||
Extension right (years) | 1 year | ||
Mortgage notes payable | Deutsche Bank Term Loan | Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.25% | ||
Mortgage notes payable | Deutsche Bank Term Loan | Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Mortgage notes payable | Deutsche Bank Term Loan | SWN Acquisitions | |||
Debt Instrument [Line Items] | |||
Number of properties owned (property) | property | 20 | ||
Mortgage notes payable | Baltimore Courtyard & Providence Courtyard | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 45,500 | 45,500 | |
Interest rate (percent) | 4.30% | ||
Mortgage notes payable | Hilton Garden Inn Blacksburg Joint Venture | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 10,500 | $ 10,500 | |
Interest rate (percent) | 4.31% |
Mortgage Notes Payable - Narrat
Mortgage Notes Payable - Narrative (Details) | Feb. 11, 2016USD ($) | Dec. 02, 2015USD ($) | Nov. 02, 2015USD ($) | Oct. 31, 2015 | Oct. 15, 2015USD ($)extension | Feb. 27, 2015USD ($)extension | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Jul. 01, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Reduction in deferred financing fees | $ (9,128,000) | $ (9,128,000) | $ (16,047,000) | |||||||||
General and administrative expense | 5,128,000 | $ 2,020,000 | 12,623,000 | $ 5,984,000 | ||||||||
The Grace Acquisition | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from issuance of long term debt | $ 227,000,000 | |||||||||||
The Grace Acquisition | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.46% | |||||||||||
Mortgage notes payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest expense | $ 15,200,000 | $ 12,700,000 | $ 44,700,000 | $ 29,300,000 | ||||||||
Mortgage notes payable | New Additional Grace Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate (percent) | 4.96% | 4.96% | ||||||||||
Mortgage notes payable | Deutsche Bank Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Extension right (years) | 1 year | |||||||||||
Mortgage notes payable | Deutsche Bank Term Loan | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.25% | |||||||||||
Mortgage notes payable | Deutsche Bank Term Loan | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.75% | |||||||||||
Mezzanine Mortgage | The Grace Acquisition | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of one-year extensions | extension | 2 | |||||||||||
Mezzanine Mortgage | The Grace Acquisition | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 4.77% | |||||||||||
Secured Debt | New Additional Grace Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate (percent) | 4.96% | |||||||||||
Secured Debt | Deutsche Bank Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of one-year extensions | extension | 2 | |||||||||||
Extension right (years) | 1 year | |||||||||||
Amount of loan | $ 293,400,000 | $ 450,000,000 | $ 235,500,000 | |||||||||
Reduction in deferred financing fees | 3,000,000 | |||||||||||
General and administrative expense | 3,000,000 | |||||||||||
Percent less of spreads prior to November 1, 2015 | 0.50% | |||||||||||
Term of debt (years) | 3 years | |||||||||||
Amortization rate if extension option is exercised | 2.50% | |||||||||||
Secured Debt | Deutsche Bank Term Loan | Minimum | Eurodollar | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.25% | |||||||||||
Secured Debt | Deutsche Bank Term Loan | Minimum | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.25% | |||||||||||
Secured Debt | Deutsche Bank Term Loan | Maximum | Eurodollar | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.75% | |||||||||||
Secured Debt | Deutsche Bank Term Loan | Maximum | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.75% | |||||||||||
Secured Debt | Additional Grace Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of one-year extensions | extension | 1 | |||||||||||
Secured Debt | The Grace Acquisition | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.29% | |||||||||||
Secured Debt | Summit Portfolio | Deutsche Bank Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from issuance of long term debt | $ 70,400,000 | $ 96,900,000 | ||||||||||
Secured Debt | Noble Portfolio | Deutsche Bank Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from issuance of long term debt | $ 42,300,000 | $ 26,000,000 | ||||||||||
Baltimore Courtyard & Providence Courtyard | Mortgage notes payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate (percent) | 4.30% | 4.30% | ||||||||||
Hilton Garden Inn Blacksburg Joint Venture | Mortgage notes payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest rate (percent) | 4.31% | 4.31% |
Promissory Note Payable - Sched
Promissory Note Payable - Schedule of Promissory Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Feb. 11, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Summit Loan Promissory Note | $ 1,427,408 | $ 1,357,080 | |
Less: Deferred Financing Fees, Net | 9,128 | 16,047 | |
Loan | Summit Loan | |||
Debt Instrument [Line Items] | |||
Summit Loan Promissory Note | 23,172 | 0 | |
Less: Deferred Financing Fees, Net | 79 | 0 | |
Promissory Notes Payable, Net | $ 23,093 | $ 0 | |
Interest rate (percent) | 13.00% | 13.00% |
Promissory Note Payable - Narra
Promissory Note Payable - Narrative (Details) | Feb. 11, 2016USD ($)extension | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||||
Acquisition deposits | $ 7,500,000 | $ 7,500,000 | $ 40,504,000 | |||
Loan | Summit Loan | ||||||
Debt Instrument [Line Items] | ||||||
Amount of loan | $ 27,500,000 | |||||
Interest rate (percent) | 13.00% | 13.00% | 13.00% | |||
Interest rate, percent paid in cash | 9.00% | |||||
Additional interest rate | 4.00% | |||||
Number of extension rights | extension | 2 | |||||
Extension right (years) | 1 year | |||||
Increase in additional rate | 1.00% | |||||
Principal paid | $ 3,000,000 | $ 5,000,000 | ||||
Interest expense | $ 800,000 | $ 0 | $ 2,200,000 | $ 1,400,000 | ||
Loan | Summit Loan | Summit Portfolio | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from loan | $ 20,000,000 | |||||
Acquisition deposits | $ 7,500,000 |
Accounts Payable and Accrued 47
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Trade accounts payable and accrued expenses | $ 60,957 | $ 57,472 |
Contingent consideration from Barceló Portfolio | 4,618 | 3,164 |
Hotel accrued salaries and related liabilities | 10,226 | 6,619 |
Total | $ 75,801 | $ 67,255 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 01, 2016 | Feb. 28, 2016 | Feb. 03, 2014 | Jul. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jan. 07, 2014 |
Class of Stock [Line Items] | ||||||||
Common stock, outstanding (in shares) | 37,833,988 | 36,300,777 | ||||||
Cumulative proceeds from issuance of common stock, net | $ 913 | $ 902.9 | ||||||
Dividends declared per day (in dollars per share) | $ 0.0046575343 | $ 0.000185792 | $ 0.000185792 | |||||
Dividends declared per day if leap year (in dollars per share) | 0.0046448087 | |||||||
Dividends declared per year (in dollars per share) | $ 1.46064 | $ 1.7 | 1.46064 | 1.46064 | $ 1.70 | |||
Denominator for common stock equivalent of dividends declared (in dollars per share) | $ 21.48 | $ 21.48 | $ 23.75 | |||||
Annual distribution rate | 6.80% | |||||||
Period shares have been held before a repurchase request can be made | 1 year | |||||||
Repurchase limit percent per fiscal semester | 2.50% | |||||||
Repurchase limit percent per fiscal year | 5.00% | |||||||
Repurchase price, percent of NAV per share, year one | 92.50% | |||||||
Repurchase price, percent of NAV per share, year two | 95.00% | |||||||
Repurchase price, percent of NAV per share, year three | 97.50% | |||||||
Repurchase price, percent of NAV per share, year four | 100.00% | |||||||
Common stock, issued (in shares) | 37,833,988 | 36,300,777 | ||||||
Share price (in dollars per share) | $ 22.50 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in dollars per share) | $ 25 | |||||||
Distribution Reinvestment Plan | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, issued (in shares) | 1,226,867 | 828,217 | ||||||
Distribution Reinvestment Plan | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Share price (in dollars per share) | $ 23.75 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, outstanding (in shares) | 37,833,988 | 36,300,777 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, by Balance Sheet Grouping (Details) - Mortgage and promissory notes payable - Level 3 $ in Thousands | Sep. 30, 2016USD ($) |
Carrying Amount | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Mortgage and promissory notes payable | $ 1,450,580 |
Fair Value | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Mortgage and promissory notes payable | $ 1,451,968 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($)hotel | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||||
Impairment of long-lived assets | $ 0 | $ 2,400 | $ 0 | $ 2,399 | $ 0 | |
Number of impaired hotels (hotel) | hotel | 1 | |||||
Real estate investment property | $ 2,231,574 | $ 2,231,574 | $ 2,140,699 | |||
Fair Value | ||||||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||||||
Real estate investment property | $ 6,200 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Commitments [Line Items] | |||
Increase (decrease) in fair value of contingent consideration | $ 1,454,000 | $ (1,720,000) | |
The Barcelo Acquisition | |||
Other Commitments [Line Items] | |||
Business combination, contingent consideration arrangements, minimum | $ 4,100,000 | 4,100,000 | |
Business combination, contingent consideration arrangements, maximum | 4,600,000 | 4,600,000 | |
Increase (decrease) in fair value of contingent consideration | 600,000 | 1,400,000 | |
Contingent consideration payable | $ 4,600,000 | $ 4,600,000 |
Related Party Transactions an52
Related Party Transactions and Arrangements - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||
Common stock, outstanding (in shares) | 37,833,988 | 36,300,777 |
Due to related parties | $ 8,757 | $ 6,546 |
Special Limited Partner | ||
Related Party Transaction [Line Items] | ||
Common stock, outstanding (in shares) | 9,153 | |
Affiliated Entity | AR Capital LLC | ||
Related Party Transaction [Line Items] | ||
Common stock, outstanding (in shares) | 22,881 | |
Affiliated Entity | AR Global | ||
Related Party Transaction [Line Items] | ||
Common stock, outstanding (in shares) | 6,587 |
Related Party Transactions an53
Related Party Transactions and Arrangements - Fees Paid in Connection with the Offering (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 8,757 | $ 8,757 | $ 6,546 | ||
Liability for initial public offering costs (percent) | 2.00% | ||||
Offering and related costs in excess of gross proceeds form the offering limit | $ 5,900 | $ 5,900 | |||
Participating Broker Dealers | |||||
Related Party Transaction [Line Items] | |||||
Sales commissions earned by related party (percent) | 7.50% | 7.50% | |||
Brokerage fees earned by related party (percent) | 1.00% | 1.00% | |||
Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Sales commissions earned by related party (percent) | 7.00% | 7.00% | |||
Gross proceeds from the sales of common stock, before reallowance (percent) | 3.00% | 3.00% | |||
Brokerage fees earned by related party (percent) | 2.50% | 2.50% | |||
Commissions and Brokerage Fees | Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Fees incurred with the offering | $ 0 | $ 13,289 | $ 71 | $ 47,914 | |
Due to related parties | 0 | 0 | 1 | ||
Compensation and Reimbursement for Services | Advisor and Affiliates | |||||
Related Party Transaction [Line Items] | |||||
Fees incurred with the offering | 0 | $ 4,045 | 0 | $ 13,979 | |
Due to related parties | $ 433 | $ 433 | $ 787 |
Related Party Transactions an54
Related Party Transactions and Arrangements - Fees Paid in Connection With the Operations of the Company (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||||
Quarterly asset management fee earned by related party, percent of benchmark | 0.0625% | 0.0625% | ||||
Quarterly asset management fee earned (percent) | 0.1875% | 0.1875% | ||||
Share price (in dollars per share) | $ 22.50 | $ 22.50 | ||||
Units issued (shares) | 37,833,988 | 37,833,988 | 36,300,777 | |||
Due to related parties | $ 8,757,000 | $ 8,757,000 | $ 6,546,000 | |||
Common Class B | ||||||
Related Party Transaction [Line Items] | ||||||
Cumulative capital investment return (percent) | 6.00% | 6.00% | ||||
Units issued (shares) | 524,956 | 524,956 | ||||
Stock issued for service (shares) | 12,311 | |||||
Fees incurred with the offering | $ 193,000 | $ 96,000 | $ 637,000 | $ 224,000 | ||
Due to related parties | 62,000 | 62,000 | 92,000 | |||
Advisor | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 4,469,000 | 3,375,000 | 15,384,000 | 44,265,000 | ||
Due to related parties | 39,000 | 39,000 | 1,190,000 | |||
Maximum monthly asset management fee payable | $ 500,000 | |||||
Amount to trigger termination clause one | 500,000 | |||||
Amount to trigger termination clause two | 50,000,000 | |||||
Amount to trigger termination clause three part one | 500,000 | |||||
Amount to trigger termination clause three part two | $ 500,000 | |||||
Termination notice period (days) | 90 days | |||||
Termination notice period if trigger occurs prior to expiration (days) | 60 days | |||||
Advisor | Asset management fees | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 4,469,000 | 0 | 13,446,000 | 0 | ||
Due to related parties | 39,000 | 39,000 | 1,190,000 | |||
Advisor | Acquisition fees | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 0 | 0 | 1,624,000 | 27,203,000 | ||
Due to related parties | 0 | 0 | 0 | |||
Advisor | Acquisition cost reimbursements | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 0 | 0 | 108,000 | 1,808,000 | ||
Due to related parties | 0 | 0 | 0 | |||
Advisor | Financing coordination fees | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 0 | 3,375,000 | 206,000 | 15,254,000 | ||
Due to related parties | 0 | 0 | 0 | |||
Advisor | Reimbursement for Administrative Services and Personnel Costs | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 574,000 | 0 | 1,702,000 | 0 | ||
Due to related parties | $ 344,000 | $ 344,000 | 72,000 | |||
Property Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Cumulative capital investment return (percent) | 8.50% | 8.50% | ||||
Fees incurred with the offering | $ 6,396,000 | 4,686,000 | $ 18,806,000 | 11,564,000 | ||
Due to related parties | 7,880,000 | $ 7,880,000 | 4,659,000 | |||
Property management fee (percent) | 4.00% | |||||
Annual incentive fee (percent) | 15.00% | |||||
Property Manager | Incentive Fees | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 100,000 | 100,000 | $ 100,000 | 100,000 | ||
Property Manager | Total management fees and reimbursable expenses incurred from Crestline | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 4,134,000 | 2,631,000 | 12,305,000 | 6,564,000 | ||
Due to related parties | 1,461,000 | 1,461,000 | 1,106,000 | |||
Property Manager | Total management fees incurred from Property Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Fees incurred with the offering | 2,262,000 | $ 2,055,000 | 6,501,000 | $ 5,000,000 | ||
Due to related parties | $ 6,419,000 | $ 6,419,000 | $ 3,553,000 | |||
ARC Realty Finance Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Real estate acquisition fee | 1.50% | 1.50% | ||||
Real estate acquisition fee reimbursement maximum (percent) | 0.10% | 0.10% | ||||
Real estate acquisition fee acquisition cost reimbursement aggregate (percent) | 1.90% | 1.90% | ||||
Real estate acquisition fee acquisition maximum (percent) | 4.50% | 4.50% | ||||
Annual asset management fee lower of cost of assets or net asset value (percent) | 0.75% | 0.75% | ||||
Reimbursement costs for administrative services maximum of operating expenses (percent) | 2.00% | 2.00% | ||||
Reimbursement costs for administrative services maximum of net income (percent) | 25.00% | 25.00% |
Related Party Transactions an55
Related Party Transactions and Arrangements - Fees and Participations Paid in Connection with the Liquidation or Listing (Details) | Sep. 30, 2016 |
ARC Realty Finance Advisors, LLC | |
Related Party Transaction [Line Items] | |
Subordinated performance fee return threshold (percent) | 6.00% |
Subordinated participation in asset sale fee (percent) | 15.00% |
Subordinated participation in asset sale fee maximum (percent) | 10.00% |
Transaction termination or nonrenewal of advisory agreement fee (percent) | 15.00% |
Termination or nonrenewal of advisory agreement fee threshold (percent) | 6.00% |
ARC Realty Finance Advisors, LLC | Brokerage Commission Fees | |
Related Party Transaction [Line Items] | |
Real estate commission earned by related party (percent) | 2.00% |
ARC Realty Finance Advisors, LLC | Brokerage Fee Commission for Third Party | |
Related Party Transaction [Line Items] | |
Real estate commission earned by related party (percent) | 50.00% |
ARC Realty Finance Advisors, LLC | Real Estate Commissions | |
Related Party Transaction [Line Items] | |
Real estate commission earned by related party (percent) | 6.00% |
Special Limited Partner | |
Related Party Transaction [Line Items] | |
Subordinated incentive listing distribution (percent) | 15.00% |
Special Limited Partner | Annual Targeted Investor Return | |
Related Party Transaction [Line Items] | |
Cumulative capital investment return (percent) | 6.00% |
Impairment of Long-Lived Asse56
Impairment of Long-Lived Assets (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($)hotel | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Real Estate [Line Items] | ||||||
Number of impaired hotels (hotel) | hotel | 1 | |||||
Real estate investment property | $ 2,231,574 | $ 2,231,574 | $ 2,140,699 | |||
Impairment of long-lived assets | $ 0 | $ 2,400 | $ 0 | $ 2,399 | $ 0 | |
Fair Value | ||||||
Real Estate [Line Items] | ||||||
Real estate investment property | 6,200 | |||||
Carrying Amount | ||||||
Real Estate [Line Items] | ||||||
Real estate investment property | $ 8,600 |
Assets Held for Sale (Details)
Assets Held for Sale (Details) $ in Thousands | Oct. 14, 2016hotel | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Long Lived Assets Held-for-sale [Line Items] | |||
Buildings and improvements | $ 1,832,486 | $ 1,729,960 | |
Furniture, fixtures and equipment | 203,218 | 163,516 | |
Total real estate investments | 2,375,523 | 2,211,347 | |
Less: Accumulated Depreciation | (143,949) | (70,648) | |
Total real estate investments, net | 2,231,574 | $ 2,140,699 | |
Real Estate Held-for-sale | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Land | 2,675 | ||
Buildings and improvements | 7,069 | ||
Furniture, fixtures and equipment | 1,450 | ||
Total real estate investments | 11,194 | ||
Less: Accumulated Depreciation | (1,023) | ||
Total real estate investments, net | $ 10,171 | ||
Subsequent Event | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Number of real estate properties sold (hotel) | hotel | 1 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event $ in Millions | Oct. 14, 2016USD ($)hotel | Nov. 04, 2016shares |
Subsequent Event [Line Items] | ||
Number of real estate properties sold (hotel) | hotel | 1 | |
Proceeds from sale of hotel | $ 13 | |
Gain on sale of hotel property | 2.5 | |
Redemption of preferred securities | 2.1 | |
The Grace Acquisition | ||
Subsequent Event [Line Items] | ||
Repayments of debt | $ 8.5 | |
Common Stock | ||
Subsequent Event [Line Items] | ||
Common stock issued through Distribution Reinvestment Plan (in shares) | shares | 429,907 |