Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Hospitality Investors Trust, Inc. | |
Entity Central Index Key | 1,583,077 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 39,618,833 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Real estate investments: | ||
Land | $ 344,365 | $ 339,819 |
Buildings and improvements | 1,906,168 | 1,838,594 |
Furniture, fixtures and equipment | 221,553 | 212,994 |
Total real estate investments | 2,472,086 | 2,391,407 |
Less: accumulated depreciation and amortization | (234,131) | (169,486) |
Total real estate investments, net | 2,237,955 | 2,221,921 |
Cash and cash equivalents | 70,310 | 42,787 |
Assets held for sale | 17,030 | 0 |
Acquisition deposits | 0 | 7,500 |
Restricted cash | 68,090 | 35,050 |
Investments in unconsolidated entities | 3,628 | 3,490 |
Below-market lease asset, net | 9,528 | 9,827 |
Prepaid expenses and other assets | 35,255 | 32,836 |
Goodwill | 15,282 | 0 |
Total Assets | 2,457,078 | 2,353,411 |
LIABILITIES, NON-CONTROLLING INTEREST AND EQUITY | ||
Mortgage notes payable, net | 1,492,866 | 1,410,925 |
Promissory notes payable, net | 2,000 | 23,380 |
Mandatorily redeemable preferred securities, net | 241,620 | 288,265 |
Accounts payable and accrued expenses | 70,311 | 68,519 |
Due to related parties | 0 | 2,879 |
Total Liabilities | 1,806,797 | 1,793,968 |
Commitments and Contingencies | ||
Contingently Redeemable Class C Units in operating partnership; 9,387,935 units issued and outstanding ($138,472 liquidation preference) | 125,704 | 0 |
Stockholders' Equity | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, one and zero shares issued and outstanding, respectively | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 39,618,833 and 38,493,430 shares issued and outstanding, respectively | 396 | 385 |
Additional paid-in capital | 872,400 | 843,149 |
Deficit | (350,858) | (286,852) |
Total equity of Hospitality Investors Trust, Inc. stockholders | 521,938 | 556,682 |
Non-controlling interest - consolidated variable interest entity | 2,639 | 2,761 |
Total Stockholders' Equity | 524,577 | 559,443 |
Total Liabilities, Contingently Redeemable Class C Units, Non-controlling Interest and Equity | $ 2,457,078 | $ 2,353,411 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Contingently redeemable class c units in operating partnership, shares issued (in shares) | 9,387,935 | 9,387,935 |
Contingently redeemable class c units in operating partnership, shares outstanding (in shares) | 9,387,935 | 9,387,935 |
Contingently redeemable class c units in operating partnership, liquidation preference | $ 138,472 | $ 138,472 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (in shares) | 1 | 0 |
Preferred stock, outstanding (in shares) | 1 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 39,618,833 | 38,493,430 |
Common stock, outstanding (in shares) | 39,618,833 | 38,493,430 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | ||||
Rooms | $ 159,423 | $ 153,182 | $ 453,073 | $ 434,455 |
Food and beverage | 4,607 | 4,850 | 15,174 | 15,422 |
Other | 3,211 | 3,426 | 9,709 | 9,964 |
Total revenue | 167,241 | 161,458 | 477,956 | 459,841 |
Operating expenses | ||||
Rooms | 39,385 | 36,958 | 112,218 | 104,984 |
Food and beverage | 3,981 | 4,089 | 12,206 | 12,226 |
Management fees | 4,606 | 11,030 | 19,649 | 32,061 |
Other property-level operating expenses | 64,787 | 58,768 | 185,210 | 175,492 |
Acquisition and transaction related costs | 0 | (7) | 498 | 25,270 |
General and administrative | 4,389 | 5,128 | 14,230 | 12,623 |
Depreciation and amortization | 26,464 | 25,788 | 78,519 | 74,912 |
Impairment of goodwill and long-lived assets | 5,396 | 0 | 22,838 | 2,399 |
Rent | 1,625 | 1,945 | 4,906 | 4,993 |
Total operating expenses | 150,633 | 143,699 | 450,274 | 444,960 |
Operating income | 16,608 | 17,759 | 27,682 | 14,881 |
Interest expense | (24,728) | (23,087) | (74,019) | (69,033) |
Other income (expense) | 15 | (542) | 52 | (1,396) |
Equity in earnings of unconsolidated entities | 231 | 286 | 381 | 407 |
Total other expenses, net | (24,482) | (23,343) | (73,586) | (70,022) |
Net loss before taxes | (7,874) | (5,584) | (45,904) | (55,141) |
Income taxes | 1,105 | 948 | 1,538 | 2,246 |
Net loss and comprehensive loss | (8,979) | (6,532) | (47,442) | (57,387) |
Less: Net income attributable to non-controlling interest | 154 | 152 | 237 | 278 |
Net loss before dividends and accretion | (9,133) | (6,684) | (47,679) | (57,665) |
Deemed dividend related to beneficial conversion feature of Class C Units | 0 | 0 | (4,535) | 0 |
Dividends on Class C Units (cash and PIK) | (4,369) | 0 | (8,681) | 0 |
Accretion of Class C Units | (556) | 0 | (1,097) | 0 |
Net loss attributable to common stockholders | $ (14,058) | $ (6,684) | $ (61,992) | $ (57,665) |
Basic and Diluted net loss attributable to common stockholders per common share (in dollars per share) | $ (0.35) | $ (0.17) | $ (1.58) | $ (1.49) |
Basic and Diluted weighted average common shares outstanding (in shares) | 39,611,261 | 38,788,041 | 39,346,904 | 38,712,378 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Deficit | Total Equity of Hospitality Investors Trust, Inc. Stockholders | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2016 | 38,493,430 | 38,493,430 | ||||
Beginning balance at Dec. 31, 2016 | $ 559,443 | $ 385 | $ 843,149 | $ (286,852) | $ 556,682 | $ 2,761 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, net (in shares) | 809,799 | |||||
Issuance of common stock, net | 11,986 | $ 8 | 11,978 | 11,986 | ||
Net loss before dividends and accretion | (47,679) | (47,679) | (47,679) | |||
Net income attributable to non-controlling interest | 237 | 237 | ||||
Dividends paid or declared (in shares) | 315,604 | |||||
Dividends paid or declared | 4,406 | $ 3 | 6,776 | (2,014) | 4,765 | (359) |
Deemed dividend related to beneficial conversion feature of Class C Units | 0 | 4,535 | (4,535) | |||
Cash distributions on Class C Units | (5,208) | (5,208) | (5,208) | |||
Accretion on Class C Units | (1,097) | (1,097) | (1,097) | |||
PIK distributions on Class C Units | (3,473) | (3,473) | (3,473) | |||
Share-based payments | 140 | 140 | 140 | |||
Waiver of obligation from Former Advisor | $ 5,822 | 5,822 | 5,822 | |||
Ending balance (in shares) at Sep. 30, 2017 | 39,618,833 | 39,618,833 | ||||
Ending balance at Sep. 30, 2017 | $ 524,577 | $ 396 | $ 872,400 | $ (350,858) | $ 521,938 | $ 2,639 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (47,442) | $ (57,387) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 78,519 | 74,912 |
Impairment of goodwill and long-lived assets | 22,838 | 2,399 |
Amortization and write-off of deferred financing costs | 8,194 | 8,152 |
Change in fair value of contingent consideration | 0 | 1,454 |
Loss of acquisition deposits | 0 | 22,000 |
Other adjustments, net | 284 | 249 |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | (2,751) | (4,285) |
Restricted cash | (3,836) | (6,890) |
Due to related parties | (2,879) | 2,479 |
Accounts payable and accrued expenses | 17,401 | 8,406 |
Net cash provided by operating activities | 70,328 | 51,489 |
Cash flows from investing activities: | ||
Acquisition of hotel assets, net of cash received | (60,028) | (69,892) |
Real estate investment improvements and purchases of property and equipment | (56,995) | (69,828) |
Fees related to Property Management Transactions | (12,000) | 0 |
Change in restricted cash related to real estate improvements | (29,241) | 40,602 |
Other adjustments, net | 1,044 | 0 |
Net cash used in investing activities | (157,220) | (99,118) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net | 0 | 678 |
Proceeds from Class C Units | 135,000 | 0 |
Payment of Class C Units issuance costs | (13,866) | 0 |
Payment of offering costs | 0 | (73) |
Dividends/Distributions paid | (5,567) | (11,500) |
Mandatorily redeemable preferred securities redemptions | (47,275) | (2,270) |
Proceeds from mortgage notes payable | 1,101,000 | 70,384 |
Repayment of Contingent Consideration | (4,620) | 0 |
Deferred financing fees | (19,672) | (721) |
Repayments of promissory and mortgage notes payable | (1,030,622) | (5,000) |
Restricted cash for debt service | 37 | 37 |
Net cash provided by financing activities | 114,415 | 51,535 |
Net change in cash and cash equivalents | 27,523 | 3,906 |
Cash and cash equivalents, beginning of period | 42,787 | 46,829 |
Cash and cash equivalents, end of period | 70,310 | 50,735 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 66,550 | 62,854 |
Taxes paid | 1,301 | 1,163 |
Non-cash investing and financing activities: | ||
Deemed dividend related to beneficial conversion feature of Class C Units | (4,535) | 0 |
Accretion of Class C Units | (1,097) | 0 |
PIK Accrual on Class C Units | (3,473) | 0 |
Waiver of obligation from Former Advisor | (5,822) | 0 |
Real estate investment improvements and purchases of property and equipment in accounts payable and accrued expenses | 6,571 | 8,950 |
Class B Units in operating partnership converted and redeemed for Common Stock | 7,659 | 0 |
Note payable to Former Property Manager | 2,000 | 0 |
Common stock issued to Former Property Manager | 4,076 | 0 |
Seller financed acquisition deposit | 0 | 7,500 |
Seller financed acquisition | 0 | 20,000 |
Dividends declared but not paid | 0 | 4,533 |
Common stock issued through distribution reinvestment plan | $ 0 | $ 9,468 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Hospitality Investors Trust, Inc. (the "Company") was incorporated on July 25, 2013 as a Maryland corporation and qualified as a real estate investment trust ("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, 2017 , the Company had acquired or had an interest in a total of 148 hotels, including four hotels that were classified as held for sale (See Note 17 - Assets Held For Sale) with a total of 17,846 guest rooms located in 33 states. As of September 30, 2017 , 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, Intercontinental Hotels Group, and Red Lion Hotels Corporation or one of their respective subsidiaries or affiliates. As of September 30, 2017 , 80 of the hotel assets the Company has acquired were managed by Crestline and 68 of the hotel assets the Company has acquired were managed by other property managers. As of September 30, 2017 , the Company’s other property managers were Hampton Inns Management LLC and Homewood Suites Management LLC, affiliates of Hilton Worldwide Holdings Inc. ( 41 hotels), InnVentures IVI, LP ( 2 hotels), McKibbon Hotel Management, Inc. ( 21 hotels) and Larry Blumberg & Associates, Inc. ( 4 hotels). 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 its 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. On March 28, 2016 , the Company announced that, because it required funds in addition to operating cash flow and cash on hand to meet its capital requirements, beginning with distributions payable with respect to April 2016 the Company would pay distributions to its stockholders in shares of common stock instead of cash. On July 1, 2016 , the Company's board of directors approved an initial estimated net asset value per share of common stock (“Estimated Per-Share NAV”) equal to $21.48 based on an estimated fair value of the Company's assets less the estimated fair value of its liabilities, divided by 36,636,016 shares of common stock outstanding on a fully diluted basis as of March 31, 2016. On June 19, 2017, the Company's board of directors approved an updated Estimated Per-Share NAV (the "2017 NAV") equal to $13.20 based on an estimated fair value of the Company’s assets less the estimated fair value of the Company’s liabilities, divided by 39,617,676 shares of common stock outstanding on a fully diluted basis as of March 31, 2017. It is currently anticipated that the Company will publish an updated Estimated Per-Share NAV on at least an annual basis. On January 7, 2017 , the third anniversary of the commencement of the IPO, it terminated in accordance with its terms. On January 12, 2017 , the Company along with its operating partnership, Hospitality Investors Trust Operating Partnership, L.P. (then known as American Realty Capital Hospitality Operating Partnership, L.P.) (the "OP"), entered into (i) a Securities Purchase, Voting and Standstill Agreement (the “SPA”) with Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC (the “Brookfield Investor”), as well as related guarantee agreements with certain affiliates of the Brookfield Investor, and (ii) a Framework Agreement (the “Framework Agreement”) with the Company’s former advisor, American Realty Capital Hospitality Advisors, LLC (the "Former Advisor"), the Company’s former property managers, American Realty Capital Hospitality Properties, LLC and American Realty Capital Hospitality Grace Portfolio, LLC (together, the “Former Property Manager”), Crestline Hotels & Resorts, LLC (“Crestline”), then an affiliate of the Former Advisor and the Former Property Manager, American Realty Capital Hospitality Special Limited Partnership, LLC (the “Former Special Limited Partner”), another affiliate of the Former Advisor and the Former Property Manager, and, for certain limited purposes, the Brookfield Investor. In connection with the Company’s entry into the SPA, the Company suspended paying distributions to stockholders entirely and suspended the DRIP. Currently, under the Brookfield Approval Rights (as defined below), prior approval is required before the Company can declare or pay any distributions or dividends to its common stockholders, except for cash distributions equal to or less than $0.525 per annum per share. On March 31, 2017 , the initial closing under the SPA (the “Initial Closing”) occurred and various transactions and agreements contemplated by the SPA were consummated and executed, including but not limited to: • the sale by the Company and purchase by the Brookfield Investor of one share of a new series of preferred stock designated as the Redeemable Preferred Share, par value $0.01 per share (the “Redeemable Preferred Share”), for a nominal purchase price; and • the sale by the Company and purchase by the Brookfield Investor of 9,152,542.37 units of a new class of units of limited partnership in the OP entitled "Class C Units" (the “Class C Units”), for a purchase price of $14.75 per Class C Unit, or $135.0 million in the aggregate. Subject to the terms and conditions of the SPA, the Company, through the OP, also has the right to sell, and the Brookfield Investor has agreed to purchase, additional Class C Units in an aggregate amount of up to $265.0 million at subsequent closings (each, a "Subsequent Closing") that may occur through February 2019. The Subsequent Closings are subject to conditions, and there can be no assurance they will be completed on their current terms, or at all. Substantially all of the Company’s business is conducted through the OP. Prior to the Initial Closing, the Company was the sole general partner and held substantially all of the units of limited partnership in the OP entitled “OP Units” ("OP Units"). As of September 30, 2017 , the Brookfield Investor holds all the issued and outstanding Class C Units, representing $138.5 million in liquidation preference with respect to the OP that ranks senior in payment of distributions and in the distribution of assets to the OP Units held by the Company, and BSREP II Hospitality II Special GP, OP LLC (the “Special General Partner”), an affiliate of the Brookfield Investor, is the special general partner of the OP, with certain non-economic rights that apply if the OP fails to redeem the Class C Units when required to do so, including the ability to commence selling the OP's assets until the Class C Units have been fully redeemed. Without obtaining the prior approval of the majority of the then outstanding Class C Units, the OP is restricted from taking certain actions including equity issuances, debt incurrences, payment of dividends or other distributions, redemptions or repurchases of securities, property acquisitions and property sales and dispositions that do not meet transaction-size limits and other defined criteria and would be outside of the OP’s normal course of business. In addition, pursuant to the terms of the Redeemable Preferred Share, in addition to other governance and board rights, the Brookfield Investor has elected and has a continuing right to elect two directors (each, a “Redeemable Preferred Director”) to the Company’s board of directors and the Company is similarly restricted from taking the foregoing actions without the prior approval of at least one of the Redeemable Preferred Directors. Prior approval of at least one of the Redeemable Preferred Directors is also required to approve the annual business plan (including the annual operating and capital budget) required under the terms of the Redeemable Preferred Share (the "Annual Business Plan"), hiring and compensation decisions related to certain key personnel (including our executive officers) and various matters related to the structure and composition of the Company’s board of directors. These restrictions (collectively referred to herein as the “Brookfield Approval Rights”) are subject to certain exceptions and conditions. Also at the Initial Closing, as contemplated by the SPA and the Framework Agreement, the Company changed its name from American Realty Capital Hospitality Trust, Inc. to Hospitality Investors Trust, Inc. and the name of the OP from American Realty Capital Hospitality Operating Partnership, L.P. to Hospitality Investors Trust Operating Partnership, L.P. and completed various other actions required to effect the Company’s transition from external management to self-management. Prior to the Initial Closing, the Company had no employees, and the Company depended on the Former Advisor to manage certain aspects of its affairs on a day-to-day basis pursuant to the advisory agreement with the Former Advisor (the "Advisory Agreement"). In addition, prior to the Initial Closing, the Former Property Manager served as the Company's property manager and had retained Crestline to provide services, including locating investments, negotiating financing and operating certain hotel assets in the Company's portfolio. As of March 31, 2017 , the Former Advisor, the Former Property Manager and Crestline were under common control with AR Capital, LLC (“AR Capital”), the parent of American Realty Capital IX, LLC (“ARC IX”), and AR Global Investments, LLC ("AR Global"), the successor to certain of AR Capital's businesses. ARC IX served as the Company’s sponsor prior to its transition to self-management at the Initial Closing. Following the sale of AR Global’s membership interest in Crestline in April 2017, Crestline is no longer under common control with AR Global and AR Capital. At the Initial Closing, the Advisory Agreement was terminated and certain employees of the Former Advisor or its affiliates (including Crestline) who had been involved in the management of the Company’s day-to-day operations, including all of its executive officers, became employees of the Company. Following the Initial Closing, the Company had approximately 25 full-time employees. The staff at the Company’s hotels are employed by the Company's third-party hotel managers. The Company now conducts its operations independently of the Former Advisor and its affiliates. See Note 3 - Brookfield Investment and Related Transactions for additional information regarding the terms of the SPA and the Framework Agreement and the other transactions and agreements contemplated thereby, as well as the Redeemable Preferred Share and the Class C Units, including conversion rights, distribution rights, approval rights and redemption rights associated therewith. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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 United States Generally Accepted Accounting Principles ("GAAP"). The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature. Principles of Consolidation and Basis of Presentation 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. Certain amounts in prior periods have been reclassified in order to conform to current period presentation, specifically, the Company changed the presentation of its Consolidated Statements of Operations and Comprehensive Income (Loss) with respect to "general and administrative" expenses and "acquisition and transaction related costs". The change in presentation was to reclassify these line items so that they are included as a component of Operating income (loss). The Company made this change in presentation for all periods presented. 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 long-lived 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 assessment of the risk associated with the leases acquired (See Note 5 - 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 and Investments in Unconsolidated Entities When circumstances indicate the carrying amount 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 impairment exists due to the inability to recover the carrying amount of a property, an impairment loss will be recorded to the extent that the carrying amount exceeds the estimated fair value of the property. An impairment loss results in an immediate negative adjustment reflected in net income. An aggregate impairment loss on long-lived assets of $1.4 million was recorded on two hotels during the quarter ended June 30, 2017 and an impairment loss of $2.4 million was recorded on one other hotel during the quarter ended June 30, 2016 (See Note 16 - Impairments). The Company also recognized an impairment loss on the sale of three of the four hotels classified as assets held for sale as of September 30, 2017, totaling $5.4 million , which includes the costs to sell those assets (See Note 17 - Assets Held for Sale). 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 and the Company's board of directors have 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. Any such adjustment to the carrying amount is recorded as an impairment loss. The Company had four hotels that qualified to be treated as an asset held for sale as of September 30, 2017 . The Company recognized an impairment loss on the sale of three of the four hotels, totaling $5.4 million , which includes the costs to sell those assets (See Note 17 - Assets Held for Sale). Goodwill The Company allocates goodwill to each reporting unit. For the Company’s purposes, each of its wholly-owned hotels is considered a reporting unit. The Company tests goodwill for impairment at least annually, or upon the occurrence of any "triggering events" if sooner, and has elected to test for goodwill impairment during the quarter ended June 30 of each year. During the second quarter ended June 30, 2017 , the Company adopted ASU 2017-04, Intangibles – Goodwill and Other, which simplified the measurement of goodwill by eliminating Step 2 from the goodwill impairment test in the event that there is evidence of an impairment based on any "triggering events." The Company chose to adopt ASU 2017-04 in the second quarter ended June 30, 2017 , as this was the first time it was required to test goodwill for impairment. Upon the occurrence of any "triggering events," the Company is required to compare the fair value of each reporting unit to which goodwill has been allocated, to the carrying amount of such reporting unit including the allocation of goodwill. As required by Accounting Standards Codification section 350 - Intangibles - Goodwill and Other (ASC 350), as amended by ASU 2017-04, if the carrying amount of a reporting unit exceeds its fair value, the Company applies a one-step quantitative test and records the amount of goodwill impairment as the excess of the reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to such reporting unit. During the three months ended March 31, 2017 , the Company recognized $31.6 million as goodwill (See Note 4 - Business Combinations). During the three months ended June 30, 2017 , the Company recorded an impairment of its goodwill of $16.1 million (See Note 16 - Impairments). 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. Unamortized deferred financing fees are expensed in full when the associated debt is refinanced or repaid before maturity. 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. 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 elected and qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "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 gain, 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 taxes and federal income and excise taxes on its undistributed income. The Company's hotels are leased to taxable REIT subsidiaries which are owned by the OP. The taxable REIT subsidiaries 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, unvested restricted shares of common stock ("restricted shares") and unvested restricted share units in respect of shares of common stock ("RSUs"), except when doing so would be anti-dilutive. For distributions payable with respect to April 1, 2016 through January 13, 2017 (the date distributions to stockholders were suspended), the Company has paid cumulative distributions of 2,047,877 shares of common stock and has adjusted at each reporting date, retroactively for all periods presented its computation of loss per share in order to reflect this as a change in capital structure (See Note 10 - Common Stock). The Company currently has outstanding restricted shares whose holders are entitled to participate in dividends when and if paid on shares of common stock. Holders of RSUs are credited with dividend or other distribution equivalents when and if paid on shares of common stock. These dividends or other distribution equivalents will be regarded as having been reinvested in RSUs. Holders of RSUs are not deemed to be entitled to participate in dividends for accounting purposes. To the extent the Company were to have distributions in the future, it would be required to calculate earnings per share using the two-class method, whereby earnings or losses are reduced by distributed earnings as well as any available undistributed earnings allocable to holders of restricted shares. Fair Value Measurements In accordance with Accounting Standards Codification section 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. Class C Units The Company initially measured the Class C Units at fair value net of issuance costs. The Company is required to accrete the carrying value of the Class C Units to the liquidation preference using the effective interest method over the five year period prior to the holder's redemption option becoming exercisable. However, if it becomes probable that the Class C Units will become redeemable prior to such date, the Company will adjust the carrying value of the Class C Units to the maximum liquidation preference. Pursuant to the SPA with the Brookfield Investor, the Company may become obligated to issue additional Class C Units to the Brookfield Investor and this obligation is considered a contingent forward contract under Accounting Standards Codification section 480 - Distinguishing Liabilities from Equity, and accounted for as a liability. The fair value of the contingent forward liability was initially recognized at zero since the contingent forward contract was executed at fair market value. The Company has determined the value has not changed from the issuance date of March 31, 2017 . The Company will measure the contingent forward liability on a recurring basis until the underlying Class C Units are issued and any changes in fair value will be recognized through earnings. At the time that the underlying Class C Units are issued, the corresponding liability will be extinguished. Advertising Costs The Company expenses advertising costs for hotel operations as incurred. These costs were $5.0 million for the three months ended September 30, 2017 , and $4.6 million for the three months ended September 30, 2016 . Advertising costs were $14.2 million for the nine months ended September 30, 2017 and $13.2 million for the nine months ended September 30, 2016 . 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, 2017 December 31, 2016 Trade receivables $ 7,609 $ 6,238 Allowance for doubtful accounts (377 ) (434 ) Trade receivables, net of allowance $ 7,232 $ 5,804 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, and therefore each property is considered a reporting unit. Each of the Company's reporting units are also considered to be operating segments, but none of these individual operating segments represents a reportable segment as they meet the criteria in GAAP to aggregate all properties into one 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, 2017 , 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 months and nine months ended September 30, 2017 , was immaterial to the consolidated financial statements. Pursuant to the SPA with the Brookfield Investor, the Company may become obligated to issue additional Class C Units to the Brookfield Investor and this obligation is considered a contingent forward contract under Accounting Standards Codification section 480 - Distinguishing Liabilities from Equity, and accounted for as a liability. The fair value of the contingent forward liability was initially recognized at zero since the contingent forward contract was executed at fair market value. The Company has determined the value has not changed from the issuance date of March 31, 2017 . The Company will measure the contingent forward liability on a recurring basis until the underlying Class C Units are issued and any changes in fair value will be recognized through earnings. At the time that the underlying Class C Units are issued, the corresponding liability will be extinguished. 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. Based on the Company's assessment of this standard, it will not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales; however, it may allow for earlier gain recognition for future asset sale transactions pursuant to which the Company has continuing involvement with the asset. The Company anticipates adopting this standard on January 1, 2018 and is evaluating new disclosure requirements. Upon adoption, the Company expects to implement these standards using a modified retrospective approach with a cumulative effect recognized with no restatements of prior period amounts. 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 with respect to the Georgia Tech Hotel & Conference Center and nine ground leases, under which it is the lessee, as liabilities on the Consolidated Balance Sheets. 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 became effective for the Company beginning January 1, 2017. The adoption of ASU 2016-07 did not 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 became effective for the Company beginning January 1, 2017. The adoption of ASU 2016-09 did not 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 Company adopted ASU 2016-15 in the quarter ended June 30, 2017. The adoption of this ASU did not have a material effect on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Additionally, this update also narrows the definition of an output. ASU 2017-01 requires that when substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business, thus reducing the number of transactions that need to be further evaluated. ASU 2017-01 is effective for the Company for fiscal years beginning after December 15, 2018, and early adoption is permitted. The adoption of this ASU is not expected to have a material effect on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments to this update are effective for the Company for fiscal years beginning after December 15, 2017, and early adoption is permitted. ASU 2017-09 is required to be adopted prospectively to an award modified on or after the adoption date. The adoption of this ASU is not expected to have a material effect on the Company's consolidated financial statements. |
Brookfield Investment and Relat
Brookfield Investment and Related Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Brookfield Investment and Related Transactions | Brookfield Investment and Related Transactions Securities Purchase, Voting and Standstill Agreement On January 12, 2017 , the Company and the OP entered into the SPA with the Brookfield Investor, as well as related guarantee agreements with certain affiliates of the Brookfield Investor. Pursuant to the terms of the SPA, at the Initial Closing, the Brookfield Investor agreed to purchase (i) the Redeemable Preferred Share, for a nominal purchase price, and (ii) 9,152,542.37 Class C Units, for a purchase price of $14.75 per Class C Unit, or $135.0 million in the aggregate. The Initial Closing occurred on March 31, 2017 . The Redeemable Preferred Share has been classified as permanent equity on the Consolidated Balance Sheets, and the Class C Units have been classified as temporary equity due to the contingent redemption features described in more detail below. The Company measured the Class C Units issued at fair value, or $135.0 million , representing the gross proceeds of the issuance of the Class C Units at the Initial Closing. As discussed below, the Class C Units include conversion rights. Because the effective conversion price of the Class C Units under GAAP of $14.09 as of March 31, 2017 (which is calculated on a net investment basis after transaction fees and costs payable to the Brookfield Investor as $129.0 million divided by 9,152,542.37 Class C Units issued) is less than the fair value of the Company’s common stock of $14.59 on such date (See Note 10 - Common Stock), the conversion rights represent a “beneficial conversion feature” under GAAP. The Company measured the beneficial conversion feature at $4.5 million , and has recognized the beneficial conversion feature as a deemed dividend as of March 31, 2017 , reducing income available to common stockholders for purposes of calculating earnings per share. As of September 30, 2017 , the Class C Units are reflected on the Consolidated Balance Sheets at $125.7 million . The value of the Class C Units as of September 30, 2017 , is derived by reducing the $135.0 million in gross proceeds by the $13.8 million in costs directly attributable to the issuance of Class C Units at the Initial Closing, including $6.0 million paid directly to Brookfield at the Initial Closing in the form of expense reimbursements and a commitment fee, and increased by $3.5 million in distributions payable to holders of Class C Units in the form of additional Class C Units ("PIK Distributions") and $1.1 million in the accretion of the carrying value to the liquidation preference through September 30, 2017 . Following the Initial Closing, subject to the terms and conditions of the SPA, the Company also has the right to sell, and the Brookfield Investor has agreed to purchase, additional Class C Units at the same price per unit as at the Initial Closing upon 15 business days’ prior written notice and in an aggregate amount not to exceed $265.0 million at Subsequent Closings as follows: • On or prior to February 27, 2018 , but no earlier than January 3, 2018 , up to an amount that would be sufficient to reduce the outstanding amount of the Grace Preferred Equity Interests (as defined in Note 8 below) to approximately $223.5 million (the "First Subsequent Closing"). Proceeds from the First Subsequent Closing must be used by the OP exclusively to, concurrently with the closing of the First Subsequent Closing, redeem then outstanding Grace Preferred Equity Interests. • On or prior to February 27, 2019 , but no earlier than January 3, 2019 , up to the then outstanding amount of the Grace Preferred Equity Interests (the "Second Subsequent Closing"). Proceeds from the Second Subsequent Closing must be used by the OP exclusively to, concurrently with the closing of the Second Subsequent Closing, redeem all then outstanding Grace Preferred Equity Interests. • On or prior to February 27, 2019 , in one or more transactions, up to an amount equal to the difference between the then unfunded portion of the Brookfield Investor’s $400.0 million funding commitment and the outstanding amount of the Grace Preferred Equity Interests. Proceeds from these Subsequent Closings must be used by the OP exclusively to fund brand-mandated property improvement plans ("PIPs") and related lender reserves, repay amounts then outstanding with respect to mortgage debt principal and interest and working capital. Consummation of any Subsequent Closing is subject to the satisfaction of certain conditions, and there can be no assurance they will be completed on their current terms, or at all. In addition, from February 27, 2018 through February 27, 2019 , the Brookfield Investor will have the right to purchase, and the OP has agreed to sell, in one or more transactions, the then unfunded portion of the Brookfield Investor’s $400.0 million funding commitment in transactions of no less than $25.0 million each. The SPA also contains certain standstill and voting restrictions applicable to the Brookfield Investor and certain of its affiliates. The Redeemable Preferred Share The Redeemable Preferred Share ranks on parity with the Company’s common stock, with the same rights with respect to preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, terms and conditions of redemption and other terms and conditions as the Company’s common stock, except as provided therein. For so long as the Brookfield Investor holds the Redeemable Preferred Share, (i) the Brookfield Investor has the right to elect two Redeemable Preferred Directors (neither of whom may be subject to an event that would require disclosure pursuant to Item 401(f) of Regulation S-K, which relates to involvement in certain legal proceedings, in any definitive proxy statement filed by the Company), as well as to approve (such approval not to be unreasonably withheld, conditioned or delayed) two additional independent directors (each, an “Approved Independent Director”) to be recommended and nominated by the Company's board of directors for election by the stockholders at each annual meeting, (ii) each committee of the Company’s board of directors, except any committee formed with authority and jurisdiction over the review and approval of conflicts of interest involving the Brookfield Investor and its affiliates, on the one hand, and the Company, on the other hand (a “Conflicts Committee”), is required to include at least one of the Redeemable Preferred Directors as selected by the holder of the Redeemable Preferred Share (or, if neither of the Redeemable Preferred Directors satisfies all requirements applicable to such committee, with respect to independence and otherwise, of the Company’s charter, the SEC and any national securities exchange on which any shares of the Company’s stock are then listed, at least one of the Approved Independent Directors as selected by the Company's board of directors), and (iii) the Company will not make a general delegation of the powers of the Company’s board of directors to any committee thereof which does not include as a member a Redeemable Preferred Director, other than to a Conflicts Committee. If the OP fails to redeem Class C Units when required to do so, beginning three months after such failure and until all Class C Units requested to be redeemed have been redeemed, the holder of the Redeemable Preferred Share will have the right to increase the size of the Company’s board of directors by a number of directors that would result in the holder of the Redeemable Preferred Share being entitled to nominate and elect a majority of the Company’s board of directors and fill the vacancies created by the expansion of the Company’s board of directors, subject to compliance with the provisions of the Company’s charter requiring at least a majority of the Company’s directors to be Independent Directors (as defined in the Company's charter). The Brookfield Investor is not permitted to transfer the Redeemable Preferred Share, except to an affiliate of the Brookfield Investor. The holder of the Redeemable Preferred Share generally votes together as a single class with the holders of the Company’s common stock at any annual or special meeting of stockholders of the Company. However, any action that would alter the terms of the Redeemable Preferred Share or the rights of its holder (including any amendment to the Company's charter, including the Articles Supplementary with respect to the Redeemable Preferred Share (the "Articles Supplementary")) is subject to a separate class vote of the Redeemable Preferred Share. In addition, the Redeemable Preferred Directors have the Brookfield Approval Rights. At its election and subject to notice requirements, the Company may redeem the Redeemable Preferred Share for a cash amount equal to par value upon the occurrence of any of the following: (i) the first date on which no Class C Units remain outstanding; (ii) the date the liquidation preference applicable to all Class C Units held by the Brookfield Investor and its affiliates is reduced to $100.0 million or less due to the exercise by holders of Class C Units of their redemption rights under the amendment and restatement of the OP's existing agreement of limited partnership ( the "A&R LPA"); or (iii) in connection with a failure of the Brookfield Investor to consummate the applicable purchase of Class C Units at any Subsequent Closing (subject to the terms set forth in the SPA, a “Funding Failure”), the 11th business day after the date the Company obtains a final, non-appealable judgment of a court of competent jurisdiction in connection with such Funding Failure. Under the circumstances described in clause (iii) in the foregoing sentence, in addition, (i) the Brookfield Approval Rights would be permanently terminated, (ii) the OP would be entitled to redeem all or any portion of the then outstanding Class C Units in cash for their liquidation preference, (iii) all Class C Units received in respect of all PIK Distributions accrued from the date of the Initial Closing would be forfeited, and (iv) the Brookfield Investor would be required to cause each of the Redeemable Preferred Directors to resign from the Company’s board of directors. Class C Units At the Initial Closing, the Brookfield Investor, the Special General Partner and the Company, in its capacity as general partner of the OP, entered into the A&R LPA, which established the terms, rights, obligations and preferences of the Class C Units as set forth in more detail below. Rank The Class C Units rank senior to the OP Units and all other equity interests in the OP with respect to priority in payment of distributions and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the OP, whether voluntary or involuntary, or any other distribution of the assets of the OP among its equity holders for the purpose of winding up its affairs. Distributions Commencing on June 30, 2017 , holders of Class C Units are entitled to receive, with respect to each Class C Unit, fixed, quarterly cumulative cash distributions at a rate of 7.50% per annum from legally available funds. If the Company fails to pay these cash distributions when due, the per annum rate will increase to 10% until all accrued and unpaid distributions required to be paid in cash are reduced to zero . Commencing on June 30, 2017 and subject to the occurrence of a Funding Failure if one were to occur, holders of Class C Units are also entitled to receive, with respect to each Class C Unit, a fixed, quarterly, cumulative PIK Distribution at a rate of 5% per annum ("PIK Distributions"). If the Company fails to redeem the Brookfield Investor when required to do so pursuant to the A&R LPA, the 5% per annum PIK Distribution rate will increase to a per annum rate of 7.50% , and would further increase by 1.25% per annum for the next four quarterly periods thereafter, up to a maximum per annum rate of 12.5% . The number of Class C Units delivered in respect of the PIK Distributions on any distribution payment date will be equal to the number obtained by dividing the amount of PIK Distribution by $14.75 . The Brookfield Investor is also entitled to receive tax distributions under certain limited circumstances. Liquidation Preference The liquidation preference with respect to each Class C Unit as of a particular date is the original purchase price paid under the SPA or the value upon issuance of any Class C Unit received as a PIK Distribution, plus, with respect to such Class C Unit up to but not including such date, (i) any accrued and unpaid cash distributions and (ii) any accrued and unpaid PIK Distributions. Conversion Rights At any time and subject to the occurrence of a Funding Failure, the Class C Units are convertible into OP Units at any time at the option of the holder thereof at an initial conversion price of $14.75 (the "Conversion Price"). The Conversion Price is subject to anti-dilution and other adjustments upon the occurrence of certain events and transactions. Notwithstanding the foregoing, the convertibility of certain Class C Units may be restricted in certain circumstances described in the A&R LPA, and, to the extent any Class C Units submitted for conversion are not converted as a result of these restrictions, the holder will instead be entitled to receive an amount in cash equal to two times the liquidation preference of any unconverted Class C Units. OP Units, in turn, are generally redeemable for shares of the Company’s common stock on a one-for-one-basis or the cash value of a corresponding number of shares, at the election of the Company, in accordance with the terms of the A&R LPA. Notwithstanding the foregoing, with respect to any redemptions in exchange for shares of the Company’s common stock that would result in the converting holder owning 49.9% or more of the shares of the Company’s common stock then outstanding after giving effect to the redemption, for the number of shares of the Company’s common stock exceeding the 49.9% threshold, the redeeming holder may elect to retain OP Units or to request delivery in cash of the cash value of a corresponding number of shares. Mandatory Redemption If the OP consummates any liquidation, sale of all or substantially all of the assets, dissolution or winding-up, whether voluntary or involuntary, sale, merger, reorganization, reclassification or recapitalization or other similar event (a “Fundamental Sale Transaction”) prior to March 31, 2022 , the fifth anniversary of the Initial Closing, the holders of Class C Units will be entitled to receive, prior to and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of any other limited partnership interests in the OP: • in the case of a Fundamental Sale Transaction consummated on or prior to February 27, 2019 , an amount per Class C Unit in cash equal to such Class C Unit’s pro rata share (determined based on the respective liquidation preferences of all Class C Units) of an amount equal to (I) $800.0 million less (II) the sum of (i) the difference between (A) $400.0 million and (B) the aggregate purchase price paid under the SPA of all outstanding Class C Units (with the purchase price for Class C Units issued as PIK Distributions being zero for these purposes) and (ii) all cash distributions actually paid to date; • in the case of a Fundamental Sale Transaction consummated after February 27, 2019 and prior to January 1, 2022 , the date that is 57 months and one day after the date of the Initial Closing, an amount per Class C Unit in cash equal to (x) two times the purchase price under the SPA of such Class C Unit (with the purchase price for Class C Units issued as PIK Distributions being zero for these purposes), less (y) all cash distributions actually paid to date; and • in the case of a Fundamental Sale Transaction consummated on or after January 1, 2022 , an amount per Class C Unit in cash equal to the liquidation preference of such Class C Unit plus a make whole premium for such Class C Unit calculated based on a discount rate of 5% and the assumption that such Class C Unit had not been redeemed until March 31, 2022 , the fifth anniversary of the Initial Closing (the "Make Whole Premium"). Holder Redemptions In the event of the occurrence of a REIT Event (as defined and more fully described in the A&R LPA, the Company’s failure to satisfy any of the requirements for qualification and taxation as a REIT under certain circumstances) or a Material Breach (as defined and more fully described in the A&R LPA, generally a breach by the Company of certain material obligations under the A&R LPA), in each case, subject to certain notice and cure rights, holders of Class C Units have the right to require the Company to redeem any Class C Units submitted for redemption for an amount equivalent to what the holders of Class C Units would have been entitled to receive in a Fundamental Sale Transaction if the date of redemption were the date of the consummation of the Fundamental Sale Transaction. From time to time on or after March 31, 2022 , the fifth anniversary of the Initial Closing, and at any time following the rendering of a judgment enjoining or otherwise preventing the holders of Class C Units, the Brookfield Investor or the Special General Partner from exercising their respective rights under the A&R LPA or the Articles Supplementary, any holder of Class C Units may, at its election, require the Company to redeem any or all of its Class C Units for an amount in cash equal to the liquidation preference. The OP is not required to make any redemption of less than all of the Class C Units held by any holder requiring a payment of less than $15.0 million . If any redemption request would result in the total liquidation preference of Class C Units remaining outstanding being equal to less than $35.0 million , the OP has the right to redeem all then outstanding Class C Units in full. Remedies Upon Failure to Redeem If the OP fails to redeem Class C Units when required to do so pursuant to the terms of the A&R LPA, beginning three months after such failure the Special General Partner has the exclusive right, power and authority to sell the assets or properties of the OP for cash at such time or times as the Special General Partner may determine, upon engaging a reputable, national third party sales broker or investment bank reasonably acceptable to holders of a majority of the then outstanding Class C Units to conduct an auction or similar process designed to maximize the sales price. The proceeds from sales of assets or properties by the Special General Partner must be used first to make any and all payments or distributions due or past due with respect to the Class C Units, regardless of the impact of such payments or distributions on the Company or the OP. In addition and as described elsewhere herein, if the OP fails to redeem Class C Units when required to do so pursuant to the terms of the A&R LPA, beginning three months after such failure and until all Class C Units requested to be redeemed have been redeemed: • the holder of the Redeemable Preferred Share would have the right to increase the size of the Company’s board of directors by a number of directors that would result in the holder of the Redeemable Preferred Share being entitled to nominate and elect a majority of the Company’s board of directors and fill the vacancies created thereby subject to compliance with provisions of the Company's charter requiring at least a majority of the Company’s directors to be Independent Directors (as defined in the Company's charter); and • the 5% per annum PIK Distribution rate would increase to a per annum rate of 7.50% , and would further increase by 1.25% per annum for the next four quarterly periods thereafter, up to a maximum per annum rate of 12.5% . Company Liquidation Preference Reduction Upon Listing In the event a listing of the Company’s common stock on a national stock exchange occurs prior to March 31, 2022 , the fifth anniversary of the Initial Closing, the OP would also have certain rights to redeem all but $0.10 of the liquidation preference of each issued and outstanding Class C Unit for cash subject to payment of a make whole premium and certain rights of the Class C Unit holders to convert their retained liquidation preference into OP Units prior to March 31, 2024 . Company Redemption After Five Years At any time and from time to time on or after March 31, 2022 , the fifth anniversary of the Initial Closing, the Company has the right to elect to redeem all or any part of the issued and outstanding Class C Units for an amount in cash equal to the liquidation preference. Transfer Restrictions Subject to certain exceptions, the Brookfield Investor is generally permitted to make transfers of Class C Units without the prior consent of the Company, provided that any transferee must customarily invest in these types of securities or real estate investments of any type or have in excess of $100.0 million of assets. Preemptive Rights Subject to the occurrence of a Funding Failure, if the Company or the OP proposes to issue additional equity securities, subject to certain exceptions and in accordance with the procedures in the A&R LPA, any holder of Class C Units that owns Class C Units representing more than 5% of the outstanding shares of the Company’s common stock on an as-converted basis has certain preemptive rights. Brookfield Approval Rights The Articles Supplementary restrict the Company from taking certain actions without the prior approval of at least one of the Redeemable Preferred Directors, and the A&R LPA restricts the OP from taking certain actions without the prior approval of the majority of the then outstanding Class C Units. Subject to certain limitations, both sets of rights are subject to temporary and permanent suspension in connection with any Funding Failure and no longer apply if the liquidation preference applicable to all Class C Units held by the Brookfield Investor and its affiliates is reduced to $100.0 million or less due to the exercise by holders of Class C Units of their redemption rights under the A&R LPA. In general, subject to certain exceptions, prior approval is required before the Company or its subsidiaries (including the OP) are permitted to take any of the following actions: equity issuances; organizational document amendments; debt incurrences; affiliate transactions; sale of all or substantially all assets; bankruptcy or insolvency declarations; declarations or payments of dividends or other distributions; redemptions or repurchases of securities; adoption of, and amendments to, the Annual Business Plan; hiring and compensation decisions related to certain key personnel (including executive officers); property acquisitions and property sales and dispositions that do not meet transaction-size limits and other defined criteria and would be outside of the OP’s normal course of business; entry into new lines of business; settlement of material litigation; changes to material agreements; increasing or decreasing the number of directors on the Company’s board of directors; nominating or appointing a director (other than a Redeemable Preferred Director) who is not independent; nominating or appointing the chairperson of the Company’s board of directors; and certain other matters. After December 31, 2021 , the 57-month anniversary of the Initial Closing, no prior approval will be required for debt incurrences, equity issuances and asset sales if the proceeds therefrom are used to redeem the then outstanding Class C Units in full. Framework Agreement On January 12, 2017 , the Company and the OP, entered into the Framework Agreement with the Former Advisor, the Former Property Manager, Crestline, the Former Special Limited Partner, and, for certain limited purposes, the Brookfield Investor. The Framework Agreement provides for the Company transitioning from an externally managed company with no employees of its own that is dependent on the Former Advisor and its affiliates to manage its day-to-day operations to a self-managed company. The transactions contemplated by the Framework Agreement generally were consummated at, and as a condition to, the Initial Closing, and the Framework Agreement would have terminated automatically upon the termination of the SPA in accordance with its terms prior to the Initial Closing. At the Initial Closing, pursuant to the Framework Agreement, the Advisory Agreement was terminated. The Framework Agreement also provided for the extension or renewal of the Advisory Agreement on specified terms under certain circumstances, none of which occurred. Until the expiration without renewal or termination of the Advisory Agreement, the Former Advisor and its affiliates agreed to use their respective commercially reasonable efforts to assist the Company and its subsidiaries to take such actions as the Company and its subsidiaries reasonably deemed necessary to transition to self-management, including, but not limited to providing books and records, accounting systems, software and office equipment. In addition, the Former Advisor also granted the Company the right to hire certain of employees of the Former Advisor or its affiliates who were then involved in the management of the Company’s day-to-day operations, including all of the Company’s current executive officers, and made other agreements in order to promote retention of these individuals which relate to the compensation payable to them and other terms of their employment by the Former Advisor and its affiliates prior to the Initial Closing. Pursuant to the Framework Agreement, at the Initial Closing, the Company and the Former Advisor and/or certain of its affiliates, as applicable, entered into a series of agreements to facilitate the transition to self-management, including the agreements described in more detail below. Property Management Transactions Prior to the Initial Closing, the Company, directly or indirectly through its taxable REIT subsidiaries, had entered into agreements with the Former Property Manager, which, in turn, engaged Crestline or a third-party sub-property manager to manage the Company’s hotel properties. These agreements were intended to be coterminous, meaning that the term of the agreement with the Former Property Manager was the same as the term of the Former Property Manager’s agreement with the applicable sub-property manager for the applicable hotel properties, with certain exceptions. At the Initial Closing, as contemplated by and pursuant to the Framework Agreement, the Company, through its taxable REIT subsidiaries, the Former Property Manager, Crestline and the Company’s third-party sub-property managers entered into a series of amendments, assignments and terminations with respect to the then existing property management arrangements (collectively, the "Property Management Transactions") pursuant to the Framework Agreement. At the consummation of the Property Management Transactions, among other things: • property management agreements for a total of 69 hotels then sub-managed by Crestline (collectively, the "Crestline Agreements") were assigned by the Former Property Manager to Crestline; • property management agreements for a total of five additional hotels (together with the Crestline Agreements, the "Long-Term Agreements") were being transitioned to Crestline and the sub-property management agreements with Interstate Management Company, LLC related to these properties were terminated effective April 3, 2017 ; • in connection with the assignment of the Long-Term Agreements to Crestline, they were amended as follows: • the total property management fee of up to 4.0% of the monthly gross receipts from the properties was reduced to 3.0% ; • no change to the remaining term (generally 18 to 19 years), which will renew automatically for three five year terms unless either party provides advance notice of non-renewal; • the termination provisions were changed from being generally only terminable by the Company prior to expiration for cause and not in connection with a sale such that, beginning on April 1, 2021 , the first day of the 49th month following the Initial Closing, the Company will have an "on-sale" termination right upon payment of a fee in an amount equal to two and one half times the property management fee in the trailing 12 months, subject to customary adjustments; and • if, prior to March 31, 2023 , the six-year anniversary of the Initial Closing, the Company sells a hotel managed pursuant to a Long-Term Agreement, the Company has the right to terminate the applicable Long-Term Agreement with respect to any property that is being sold and concurrently replace it with a comparable hotel owned by the Company and managed pursuant to a short-term agreement, by terminating that hotel’s existing property manager and retaining Crestline on the same terms as the Long-Term Agreement being replaced; and • the property management agreements with the Former Property Manager for the Company’s 65 other hotels were terminated and the sub-property managers managing these hotels prior to the Initial Closing continued to do so following the Initial Closing in accordance with property management agreements with the Company’s taxable REIT subsidiaries under the property management terms in effect prior to the Initial Closing. As consideration for the Property Management Transactions, the Company and the OP: • paid a one-time cash amount equal to $10.0 million to the Former Property Manager; • have made and will continue to make a monthly cash payment in the amount of $333,333.33 , $4.0 million in the aggregate, to the Former Property Manager on the 15th day of each month for the 12 months following the Initial Closing (See Note 7 - Promissory Notes Payable); • issued 279,329 shares of the Company’s common stock to the Former Property Manager, for which the fair value on the date of grant has been determined to be $14.59 per share (See Note 10 - Common Stock); • waived any and all obligations of the Former Advisor to refund or otherwise repay any Organization or Offering Expenses (as defined in the Advisory Agreement) to the Company in an amount acknowledged to be $5,821,988 , which amount had been reflected as a reduction in offering proceeds due to it being directly related to issuing shares of common stock in prior periods; and • converted all 524,956 units of limited partnership in the OP entitled “Class B Units” (“Class B Units") held by the Former Advisor into 524,956 OP Units, and, immediately following such conversion, redeemed such 524,956 OP Units for 524,956 shares of the Company’s common stock. The foregoing consideration aggregates to $31.6 million and was recorded as goodwill on the Company’s Consolidated Balance Sheets (See Note 4 - Business Combinations). Assignment and Assumption Agreement At the Initial Closing, as contemplated by the Framework Agreement, the Company, the Former Advisor and AR Global entered into an assignment and assumption agreement, pursuant to which the Former Advisor and AR Global assigned to the Company all right, title and interest in the following assets that are relevant to the Company and the OP: (i) accounting systems, (ii) IT equipment and (iii) certain office furniture and equipment. Facilities Use Agreement The Framework Agreement contemplates that the Company would enter into a Facilities Use Agreement with Crestline at the Initial Closing in the form attached to the Framework Agreement (the “Facilities Use Agreement”), pursuant to which the OP would sublease office space at Crestline’s principal place of business, 3950 University Drive, Fairfax, Virginia 22030, and would pay a portion of the total rent equivalent to the portion of the total space used. The term of the sublease would continue through December 31, 2019 , automatically renewing for successive one -year periods unless either party delivered written notice to the other at least 120 days prior the expiration of the initial term or any renewal term. While the Facilities Use Agreement was not entered into at the Initial Closing, the Company commenced its occupation of the space at the Initial Closing on the terms contemplated by the Facilities Use Agreement and continued to do so through June 30, 2017 . Effective as of July 1, 2017 , the Company and Crestline entered into a new annually renewable joint occupancy agreement which replaces the Facilities Use Agreement contemplated pursuant to the Framework Agreement and the Company continued its |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Summit Acquisition: On 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. 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 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 (as defined below) (See Note 6 - Mortgage Notes Payable). On December 29, 2015 , 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 7 - Promissory Notes 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. 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 was re-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 had 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. For any hotel sold in this manner, the Reinstatement Agreement terminated with respect to such hotel and the purchase price was reduced by the amount allocated to such hotel. 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 . On January 12, 2017 , the Company, through a wholly-owned subsidiary of the OP, entered into an amendment (the “Summit Amendment”) to the Reinstatement Agreement. Under the Summit Amendment, the closing date for the purchase of seven of the hotels remaining to be purchased under the Reinstatement Agreement for an aggregate purchase price of $66.8 million was extended from January 12, 2017 to April 27, 2017 , following an amendment entered into on December 30, 2016 to extend the closing date from December 30, 2016 to January 10, 2017 , and an amendment entered into on January 10, 2017 to extend the closing date from January 10, 2017 to January 12, 2017 . The closing date for the purchase of an eighth hotel to be purchased under the Reinstatement Agreement for an aggregate purchase price of $10.5 million was extended from January 12, 2017 to October 24, 2017 . Concurrent with the Company’s entry into the Summit Amendment, the Company entered into an amendment to the Summit Loan (the “Loan Amendment”) and the Summit Sellers agreed to loan the Company an additional $3.0 million (the "Additional Loan Agreement") as consideration for the Summit Amendment. For additional discussion see Note 7 - Promissory Notes Payable. On April 27, 2017 , the Company, through the OP, completed the acquisition of seven hotels in the Second Summit Closing from the Summit Sellers ( the "April Acquisition") pursuant to the Reinstatement Agreement for an aggregate purchase price of $66.8 million . The acquisition was immaterial to the consolidated financial statements. Additionally, during the quarter ended June 30, 2017 , the Summit Sellers informed the Company that the eighth hotel was sold by the Summit Sellers to a third party, in connection with which Company’s right and obligation to purchase this hotel was terminated in accordance with the terms of the Reinstatement Agreement. Framework Agreement: The Company has determined that the consummation of the transactions contemplated by the Framework Agreement and the transfer of consideration in exchange for an in-place workforce, intellectual property and infrastructure assets represent a business combination as defined by FASB Accounting Standard Codifications 805 - Business Combinations. The Company anticipates an increased economic return to its investors in the form of reduced advisory and property management fees as a result of the transactions completed at the Initial Closing pursuant to the Framework Agreement. The acquisition of the foregoing assets at the Initial Closing was immaterial to the consolidated financial statements. The Company determined total consideration remitted as a result of the transactions completed at the Initial Closing pursuant to the Framework Agreement was $31.6 million , comprised of a cash payment of $10.0 million , a non-interest bearing short-term note payable of $4.0 million , a waiver of repayment by the Former Advisor of Organization or Offering Expenses owed to the Company of $5.8 million , newly issued common stock of $4.1 million , and common stock issued upon conversion and redemption of Class B Units of $7.7 million (See Note 3 - Brookfield Investment and Related Transactions). The Company determined the fair value on the date of grant of the Company's common stock to be $14.59 per share (See Note 10 - Common Stock). The Company determined this value by utilizing income and market based approaches further adjusted for fair value of debt and the Class C Units, and applied a discount for lack of marketability. As part of the process, the Company made the determination after consulting with a nationally recognized third party advisor. In applying the acquisition method of accounting, the Company recognized all consideration transferred of $31.6 million as goodwill since no value was allocated to the immaterial infrastructure fixed assets and immaterial intellectual property. The recognized goodwill balance is representative of employees acquired and the synergies expected to be achieved through reduced fees. During the three months ended June 30, 2017 , the Company recorded an impairment of its goodwill of $16.1 million (See Note 16 - Impairments). |
Leases
Leases | 9 Months Ended |
Sep. 30, 2017 | |
Leases [Abstract] | |
Leases | Leases In connection with its acquisitions the Company has assumed various lease agreements. These lease agreements primarily comprise one operating lease with respect to 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, 2017 $ 1,303 $ 100 Year ending December 31, 2018 5,217 398 Year ending December 31, 2019 5,227 398 Year ending December 31, 2020 5,265 398 Year ending December 31, 2021 5,271 398 Thereafter 81,743 7,836 Total $ 104,026 $ 9,528 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 and nine months ended September 30, 2017 and September 30, 2016 , 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, 2017 and September 30, 2016 and the nine months ended September 30, 2017 and September 30, 2016 , was $1.5 million and $1.8 million and $4.6 million and $4.7 million , respectively. |
Mortgage Notes Payable
Mortgage Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | Mortgage Notes Payable The Company’s mortgage notes payable as of September 30, 2017 and December 31, 2016 consist of the following, respectively (in thousands): Outstanding Mortgage Notes Payable Encumbered Properties September 30, 2017 December 31, 2016 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 87-Pack Mortgage Loan - 87 properties in Grace Portfolio 805,000 793,647 (1 ) One-month LIBOR plus 2.56% Interest Only, Principal paid at Maturity May 2019, subject to three, one year extension rights 87-Pack Mezzanine Loan - 87 properties in Grace Portfolio 110,000 101,794 (1 ) One-month LIBOR plus 6.50% Interest Only, Principal paid at Maturity May 2019, subject to three, 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 Refinanced Term Loan - 27 properties in Summit and Noble Portfolios and one additional property 310,000 235,484 (1 ) One-month LIBOR plus 3.00% Interest Only, Principal paid at Maturity May 2019, subject to three, one year extension rights Total Mortgage Notes Payable $ 1,513,000 $ 1,418,925 Less: Deferred Financing Fees, Net $ 20,134 $ 8,000 Total Mortgage Notes Payable, Net $ 1,492,866 $ 1,410,925 (1) These loans were refinanced in April 2017 on different terms with respect to interest rate, principal amount and maturity. Interest expense related to the Company's mortgage notes payable for the three months ended September 30, 2017 and for the three months ended September 30, 2016 , was $16.8 million and $15.2 million , respectively. Interest expense related to the Company's mortgage notes payable for the nine months ended September 30, 2017 and the nine months ended September 30, 2016 , was $49.8 million and $44.7 million . 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. 87-Pack Loans 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. In connection with this acquisition, the Company assumed existing mortgage and mezzanine indebtedness encumbering those hotels (comprising the "Assumed Grace Mortgage Loan" and the "Assumed Grace Mezzanine Loan", collectively, the "Assumed Grace Indebtedness"). The Assumed Grace Mortgage Loan carried an interest rate of London Interbank Offered Rate ("LIBOR") plus 3.31% , and the Assumed Grace Mezzanine Loan carried an interest rate of LIBOR plus 4.77% , for a combined weighted average interest rate of LIBOR plus 3.47% . On April 28, 2017 , the Company and the OP through certain wholly-owned subsidiaries of the OP, entered into a mortgage loan agreement (the “87-Pack Mortgage Loan”) and a mezzanine loan agreement (the “87-Pack Mezzanine Loan” and, collectively with the 87-Pack Mortgage Loan, the “87-Pack Loans”) with an aggregate principal balance of $915.0 million to refinance the Assumed Grace Mortgage Loan and the Assumed Grace Mezzanine Loan. The principal amount of the 87-Pack Mortgage Loan is $805.0 million and the 87-Pack Mortgage Loan is secured by 87 of the Company’s hotel properties, all of which served as collateral for the Assumed Grace Mortgage Loan (each, a “87-Pack Collateral Property”). The principal amount of the 87-Pack Mezzanine Loan is $110.0 million and the 87-Pack Mezzanine Loan is secured by the ownership interest in the entities which own the 87-Pack Collateral Properties and the related operating lessees. At the closing of the 87-Pack Loans, the net proceeds after accrued interest and closing costs were used to repay the $895.4 million principal amount then outstanding under the Assumed Grace Indebtedness and pay $1.0 million into the Reserve Funds (as defined below). The 87-Pack Loans mature on May 1, 2019 , subject to three one -year extension rights which, if all three extension rights are exercised, would result in a fully extended maturity date of May 1, 2022 . Loans issued under the 87-Pack Loans are fully prepayable with certain prepayment fees applicable on or prior to November 1, 2018 , after which each loan made under the 87-Pack Loans is prepayable without any prepayment fee or any other fee or penalty. Prepayments under the 87-Pack Mortgage Loan are generally conditioned on a pro-rata prepayment being made under the 87-Pack Mezzanine Loan. The 87-Pack Mortgage Loan requires monthly interest payments at a variable rate equal to one-month LIBOR plus 2.56% , and the 87-Pack Mezzanine Loan requires monthly interest payments at a variable rate equal to one-month LIBOR plus 6.50% , for a combined weighted average interest rate of LIBOR plus 3.03% . Pursuant to an interest rate cap agreement, the LIBOR portions of the interest rates due under the 87-Pack Loans are effectively capped at the greater of (i) 4.0% and (ii) a rate that would result in a debt service coverage ratio specified in the loan documents. In connection with a sale or disposition to a third party of an individual 87-Pack Collateral Property, such 87-Pack Collateral Property may be released from the 87-Pack Loans, subject to certain conditions and limitations, by prepayment of a portion of the 87-Pack Loans at a release price calculated in accordance with the terms of the 87-Pack Loans. At closing, the 87-Pack Mortgage Loan borrowers deposited $30.0 million to fund a reserve (the “87-Pack PIP Reserve”) in order to fund expenditures for work required to be performed under PIPs required by franchisors of the 87-Pack Collateral Properties. The 87-Pack PIP Reserve was funded with a portion of the proceeds of the Refinanced Term Loan (as defined below). The 87-Pack Loans also provides for certain additional amounts to be deposited in reserve accounts (collectively with the 87-Pack PIP Reserve, the “Reserve Funds”). The 87-Pack Loans (i) are non-recourse except for certain environmental indemnities and certain so-called “bad boy” events and (ii) are fully recourse (subject in certain cases to a specified cap) upon the occurrence of certain other “bad boy” events. For the term of the 87-Pack Loans, the Company and the OP are required to maintain, on a consolidated basis, a net worth of $250.0 million (excluding accumulated depreciation and amortization). As of September 30, 2017 , the Company was in compliance with this financial covenant. Refinanced Additional Grace Mortgage Loan A portion of the purchase price of the Grace Portfolio was financed 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”). 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, 2017 , the Company was in compliance with these financial covenants. Refinanced 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"). Draws under the SN Term Loan were used to finance approximately $235.5 million of the approximately $366 million purchase price with respect to a total of 20 of the Company’s hotels, including the hotels acquired in the First Summit Closing and the Third Summit Closing. On February 11, 2016, the SN Term Loan was amended 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 . Upon such expiration, no additional amounts were 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. On April 27, 2017 , the Company and the OP, as guarantors, and certain wholly-owned subsidiaries of the OP (each a “Term Loan Borrower” and collectively the “Term Loan Borrowers”), as borrowers, entered into a Second Amended and Restated Term Loan Agreement (the “Refinanced Term Loan”) in an aggregate principal amount of $310.0 million to amend, restate and refinance the SN Term Loan. The Refinanced Term Loan is collateralized by 28 of the Company’s hotel properties, 20 of which served as collateral for the SN Term Loan, the seven hotels acquired on the same date as the refinancing pursuant to the April Acquisition, and one unencumbered hotel from Company’s existing portfolio (each, a “Term Loan Collateral Property”). At the closing of the Refinanced Term Loan, the net proceeds after accrued interest and closing costs were used (i) to repay the $235.5 million principal amount then outstanding under the SN Term Loan; (ii) to fund $33.4 million of the purchase price of the hotels purchased in the April Acquisition; (iii) to deposit $30.0 million to fund the 87-Pack PIP Reserve; and (iv) to pay in full the contingent consideration payable to the seller as part of an acquisition of hotels by the Company during March 2014 of $4.6 million . The Refinanced Term Loan matures on May 1, 2019 , subject to three one -year extension rights which, if all three extension rights are exercised, would result in an outside maturity date of May 1, 2022 . The Refinanced Term Loan is prepayable in whole or in part at any time, subject to payment of (i) LIBOR breakage, if any, and (ii) except for the first $99.1 million pay-down of the loan balance, certain fees applicable prior to May 1, 2018. The Refinanced Term Loan requires monthly interest payments at a variable rate of one-month LIBOR plus 3.00% . Pursuant to an interest rate cap agreement, the LIBOR portions of the interest rates due under the Refinanced Term Loan is capped at 4.00% during the initial term, and a rate based on a debt service coverage ratio during any extension term. In connection with a sale or disposition to a third party of an individual Term Loan Collateral Property, such Term Loan Collateral Property may be released from the Refinanced Term Loan, subject to certain prepayment fees and conditions. The Refinanced Term Loan also provides for certain amounts to be deposited into reserve accounts, including with respect to all costs associated with the PIPs required pursuant to any franchise agreement related to any Term Loan Collateral Property. The Refinanced Term Loan (i) is non-recourse except for certain environmental indemnities and certain so-called “bad boy” events and (ii) is fully recourse (subject in certain cases to a specified cap) upon the occurrence of certain other “bad boy” events. For the term of the Refinanced Term Loan, the Company, the OP and the Term Loan Borrowers are required to maintain, on a consolidated basis, a net worth of $250.0 million (excluding accumulated depreciation and amortization). As of September 30, 2017 , the Company was in compliance with this financial covenant. |
Promissory Notes Payable
Promissory Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Promissory Notes Payable | Promissory Notes Payable The Company’s promissory notes payable as of September 30, 2017 and December 31, 2016 were as follows (in thousands): Outstanding Promissory Notes Payable Notes Payable September 30, 2017 December 31, 2016 Interest Rate Summit Loan Promissory Note $ — $ 23,405 14.0 % Note Payable to Former Property Manager $ 2,000 $ — — % Less: Deferred Financing Fees, Net — $ 25 Promissory Notes Payable, Net $ 2,000 $ 23,380 Interest expense related to the Company's promissory notes payable for the three months ended September 30, 2017 was zero and for the three months ended September 30, 2016 was $0.8 million . Interest expense related to the Company's notes payable for the nine months ended September 30, 2017 and the nine months ended September 30, 2016 , was $0.9 million and $2.2 million , respectively. Summit Loan Promissory Note 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. On January 12, 2017 , the Company entered into the Loan Amendment, amending the Summit Loan. See Note 4 - Business Combinations. The interest rate on the Summit Loan, as amended, included 9.0% paid in cash monthly and an additional 4% , which accrued and was compounded monthly and added to the outstanding principal balance at maturity unless otherwise paid in cash by the Company. The Summit Loan, as amended, had a maturity date of February 11, 2018, however, if the closing of the April Acquisition occurred prior to February 11, 2018, then the outstanding principal of the Summit Loan and any accrued interest thereon would become immediately due and payable in full. The Company was also permitted to pre-pay the Summit Loan in whole or in part without penalty at any time. On January 12, 2017 , the Company and the Summit Sellers entered into the Additional Loan Agreement pursuant to which the Summit Sellers agreed to loan the Company an additional $3.0 million as consideration for the Summit Amendment described in Note 4. The maturity date of the Additional Loan under the Additional Loan Agreement was July 31, 2017, however, if the sale of the seven hotels to be sold pursuant to the Reinstatement Agreement on April 27, 2017 was completed on that date, the entire principal amount of the Additional Loan would be deemed paid in full and the interest accrued thereon would become immediately due and payable. On March 31, 2017, at the Initial Closing and using a portion of the proceeds therefrom, the Company paid in full the Summit Loan. On April 27, 2017, the Company completed the acquisition of seven of the hotels remaining to be purchased under the Reinstatement Agreement, and as a result, the Additional Loan was deemed paid in full (See Note 4 - Business Combinations). Note Payable to Former Property Manager As part of the consideration for the Property Management Transactions, the Company and the OP agreed pursuant to the Framework Agreement to make certain cash payments to the Former Property Manager, which agreement is classified under GAAP as a short-term note payable with the Former Property Manager. The note payable is non-interest bearing and is required to be repaid in twelve monthly installments of $333,333.33 , with the final payment in March 2018 (See Note 3 - Brookfield Investment and Related Transactions). |
Mandatorily Redeemable Preferre
Mandatorily Redeemable Preferred Securities | 9 Months Ended |
Sep. 30, 2017 | |
Temporary Equity Disclosure [Abstract] | |
Mandatorily Redeemable Preferred Securities | Mandatorily Redeemable Preferred Securities In February 2015, approximately $447.1 million of the contract purchase price for the Grace Portfolio was satisfied by the issuance to the sellers of the Grace Portfolio of preferred equity interests (the "Grace Preferred Equity Interests") in two newly-formed Delaware limited liability companies, HIT Portfolio I Holdco, LLC and HIT Portfolio II Holdco, LLC (formerly known as ARC Hospitality Portfolio I Holdco, LLC and ARC Hospitality Portfolio II Holdco, LLC, respectively, and, together, the "Holdco entities"), each of which is an indirect subsidiary of the Company and an indirect owner of the 115 hotels currently comprising the Grace Portfolio. The two Holdco entities correspond, respectively, to the pool of hotels encumbered by the 87-Pack Loan (plus eight additional otherwise unencumbered hotels) and the pool of hotels encumbered by the Refinanced Additional Grace Mortgage Loan. 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 are entitled to 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, 2017 , the Company has redeemed $204.2 million of the Grace Preferred Equity Interests, resulting in $242.9 million of liquidation value remaining outstanding under the Grace Preferred Equity Interests. The Company is required to redeem 50.0% of the Grace Preferred Equity Interests originally issued, or an additional $19.4 million by February 27, 2018 , and is required to redeem the remaining $223.5 million by February 27, 2019 . 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. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 December 31, 2016 Trade accounts payable and accrued expenses $ 56,553 $ 55,489 Contingent consideration from Barceló Portfolio (See Note 13 - Commitments and Contingencies) — 4,619 Hotel accrued salaries and related liabilities 13,758 8,411 Total $ 70,311 $ 68,519 |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company had 39,618,833 shares and 38,493,430 shares of common stock outstanding as of September 30, 2017 and December 31, 2016 , respectively. The shares of common stock outstanding include shares issued as distributions through March 2017, 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. Common Stock Issuances At the Initial Closing the Company issued 279,329 shares of the Company’s common stock to the Former Property Manager, and converted all 524,956 Class B Units held by the Former Advisor into 524,956 OP Units, and, immediately following such conversion, redeemed such 524,956 OP Units for 524,956 shares of the Company’s common stock. The Company determined the fair value on the date of issuance of the Company's common stock to be $14.59 per share. The Company determined this value by utilizing income and market based approaches further adjusted for fair value of debt and the Class C Units, and applied a discount for lack of marketability. As part of the process, the Company made the determination after consulting with a nationally recognized third party advisor. Distributions On February 3, 2014 , the Company's board of directors declared distributions payable to stockholders of record each day during the applicable month at a rate 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. To date, the Company has funded all of its cash distributions with proceeds from the Offering, which was suspended as of December 31, 2015 and terminated in accordance with its terms in January 2017. 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 to all stockholders, and not at the election of each stockholder. Accordingly, the Company paid a cash distribution to stockholders of record each day during the quarter ended March 31, 2016, but any distributions for subsequent periods were 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 initial 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 initial 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 at that time. 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 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 . On January 13, 2017 , in connection with its approval of the Company’s entry into the SPA, the Company’s board of directors suspended paying distributions to the Company's stockholders entirely. Currently, under the Brookfield Approval Rights, prior approval is required before the Company can declare or pay any distributions or dividends to its common stockholders, except for cash distributions equal to or less than $0.525 per annum per share. Share Repurchase Program The Company’s board of directors adopted a share repurchase program (“SRP”) in connection with the IPO that enabled the Company’s stockholders to sell their shares back to the Company after having held them for at least one year , subject to significant conditions and limitations. In connection with the Company’s entry into the SPA, the Company's board of directors suspended the SRP effective as of January 23, 2017 . In connection with the Initial Closing, the Company's board of directors terminated the SRP, effective as of April 30, 2017 . The Company did not make any repurchase of common stock during the year ended December 31, 2016 , or during the period between January 1, 2017 and the effectiveness of the termination of the SRP. 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. Commencing with distributions paid with respect to April 2016, the Company paid distributions in shares of common stock instead of cash. Shares are only issued pursuant to the DRIP in connection with distributions paid in cash. On January 13, 2017 , as authorized by the Company’s board of directors, the DRIP was suspended effective as of February 12, 2017 . |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Payments | Share-Based Payments The Company has adopted an employee and director incentive restricted share plan (as amended and/or restated, the “RSP”), which provides it with the ability to grant awards of restricted shares and, following an amendment and restatement in connection with the Initial Closing, RSUs to the Company’s directors, officers and employees, as well as the directors and employees of entities that provide services to the Company. The total number of shares of common stock that may be granted under the RSP may not exceed 5% of the authorized shares of common stock at any time and in any event may not exceed 4,000,000 shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events). Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash or stock distributions when and if paid prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares. The fair value of the restricted shares is expensed over the applicable vesting period. The Company recognizes the impact of forfeited restricted share awards as they occur. RSUs represent a contingent right to receive shares of common stock at a future settlement date, subject to satisfaction of applicable vesting conditions and/or other restrictions, as set forth in the RSP and an award agreement evidencing the grant of RSUs. RSUs may not, in general, be sold or otherwise transferred until restrictions are removed and the rights to the shares of common stock have vested. Holders of RSUs do not have or receive any voting rights with respect to the RSUs or any shares underlying any award of RSUs, but such holders are credited with dividend or other distribution equivalents that are regarded as having been reinvested in RSUs which are subject to the same restrictions as the underlying RSUs. The fair value of the RSUs is expensed over the applicable vesting period. The Company recognizes the impact of forfeited RSUs as they occur. Restricted Share Awards A summary of the Company's restricted share awards for the nine months ended September 30, 2017 is presented below. Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested December 31, 2016 11,387 $ 22.12 $ 252 Granted 7,576 $ 14.59 $ 111 Vested 4,862 $ 22.21 $ 108 Forfeitures 6,525 $ 22.06 $ 144 Non-vested September 30, 2017 7,576 $ 14.59 $ 111 Prior to the Initial Closing, the Company made annual restricted share awards to its independent directors that vested annually over a five -year period following the date of grant, subject to continued service. In connection with the Initial Closing, the Company implemented a new director compensation program. Following the Initial Closing, restricted share awards are generally made to an affiliate of the Brookfield Investor in respect of the Redeemable Preferred Directors’ service on the board of directors and vest no later than the date of the next annual meeting of the board of directors following the date of grant, subject to the continued service of the applicable Redeemable Preferred Director. As of September 30, 2017 , the Company anticipates that all unvested restricted share awards will vest in accordance with their terms. The compensation expense related to restricted shares for the three months ended September 30, 2017 was less than $0.1 million , and compensation expense related to the nine months ended September 30, 2017 was $ 0.1 million . As of September 30, 2017 , there was less than $0.1 million of unrecognized compensation expense remaining. RSU Awards A summary of the Company's RSU awards for the nine months ended September 30, 2017 is presented below: Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested December 31, 2016 — $ — $ — Granted 100,398 $ 15.08 $ 1,514 Vested — $ — $ — Forfeited — $ — $ — Non-vested September 30, 2017 100,398 $ 15.08 $ 1,514 RSU awards to the Company’s executive officers and other employees generally vest annually over a four -year vesting period following the date of grant, subject to continued service. RSU awards to directors other than Redeemable Preferred Directors vest no later than the date of the next annual meeting of the board of directors following the date of grant, subject to the continued service of the applicable director. In addition, during the three months ended September 30, 2017 , certain RSU awards to directors other than Redeemable Preferred Directors were issued in connection with the simultaneous forfeiture of an equal number of restricted shares. These RSU awards have the same vesting terms as the restricted shares which were forfeited (i.e., annually over a five -year period following the date of grant). Vested RSUs may only be settled in shares of common stock and such settlement generally will be on the earliest of (i) in the calendar year in which the third anniversary of each applicable vesting date occurs, (ii) termination of the recipient’s services to the Company and (iii) a change in control event. As of September 30, 2017 , the Company anticipates that all unvested RSUs will vest in accordance with their terms. The compensation expense related to RSUs for the three and nine months ended September 30, 2017 was approximately $0.2 million . As of September 30, 2017 there was $1.3 million of unrecognized compensation expense remaining. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
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 amounts and the fair values of material liabilities, excluding deferred financing fees, that qualify as financial instruments (in thousands): September 30, 2017 Carrying Amount Fair Value Mortgage notes payable $ 1,513,000 $ 1,512,280 Mandatorily redeemable preferred securities 242,912 223,686 Total $ 1,755,912 $ 1,735,966 The fair value of the mortgage notes payable and mandatorily redeemable preferred securities were determined using the discounted cash flow method and applying current market rates and is classified as level 3 under the fair value hierarchy. Market rates take into consideration general market conditions and maturity. The Company is subject to a contingent forward contract which was recognized at zero as of September 30, 2017 (See Note 3 - Brookfield Investment and Related Transactions). The Company recognized an impairment loss of $5.4 million on three hotels during the three months ended September 30, 2017. The aggregate fair value of these hotels as of September 30, 2017, was $15.0 million . The fair value was determined using level two measurements, which were agreed upon sales prices with third party buyers (See Note 16 - Impairments of Long-Lived Assets and Note 17 - Assets Held for Sale). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
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 Company's March 2014 acquisition of interests in six hotels through fee simple, leasehold and joint venture interests (the "Barceló Portfolio") was a contingent consideration payable to the seller based on the future operating results of three of the six hotels: 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 was 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 would not be less than $4.1 million or exceed $4.6 million . The Company paid the contingent consideration of $4.6 million in April 2017 with proceeds used from the Refinanced Term Loan (See Note 6 - Mortgage Notes Payable). |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2017 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Prior to the Initial Closing, under various agreements, the Company had engaged the Former 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 was dependent upon the Former Advisor and its affiliates. At the Initial Closing, the Advisory Agreement was terminated and certain employees of the Former Advisor or its affiliates (including Crestline) who had been involved in the management of the Company’s day-to-day operations, including all of its executive officers, became employees of the Company. As a result of the Company becoming self-managed, the Company now leases office space, has its own communications and information systems and directly employs a staff. The Company also terminated all of its other agreements with then current affiliates of the Former Advisor except for hotel-level property management agreements with Crestline and entered into a transition services agreement with each of the Former Advisor and Crestline, pursuant to which the Company would receive their assistance in connection with investor relations/shareholder services and support services for pending transactions in the case of the Former Advisor and accounting and tax related services in the case of Crestline until not later than June 29, 2017 . Following sale of AR Global's membership interest in Crestline and the expiration of the transition services agreement with the Former Advisor, the transition services agreement with Crestline was terminated effective as of July 1, 2017 , and the Company entered into a new annually renewable shared services agreement with Crestline pursuant to which Crestline now provides the Company with accounting, tax related, treasury, information technology and other administrative services. Until the Initial Closing, the Former Advisor and its affiliates used their respective commercially reasonable efforts to assist the Company and its subsidiaries to take such actions as the Company and its subsidiaries reasonably deemed necessary to transition to self-management, including, but not limited to providing books and records, accounting systems, software and office equipment. The Company expects to generate additional liquidity through the sale of Class C Units to the Brookfield Investor at Subsequent Closings (See Note 3 - Brookfield Investment and Related Transactions). |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Brookfield Investment and Related Transactions Securities Purchase, Voting and Standstill Agreement On January 12, 2017 , the Company and the OP entered into the SPA with the Brookfield Investor, as well as related guarantee agreements with certain affiliates of the Brookfield Investor. Pursuant to the terms of the SPA, at the Initial Closing, the Brookfield Investor agreed to purchase (i) the Redeemable Preferred Share, for a nominal purchase price, and (ii) 9,152,542.37 Class C Units, for a purchase price of $14.75 per Class C Unit, or $135.0 million in the aggregate. The Initial Closing occurred on March 31, 2017 . The Redeemable Preferred Share has been classified as permanent equity on the Consolidated Balance Sheets, and the Class C Units have been classified as temporary equity due to the contingent redemption features described in more detail below. The Company measured the Class C Units issued at fair value, or $135.0 million , representing the gross proceeds of the issuance of the Class C Units at the Initial Closing. As discussed below, the Class C Units include conversion rights. Because the effective conversion price of the Class C Units under GAAP of $14.09 as of March 31, 2017 (which is calculated on a net investment basis after transaction fees and costs payable to the Brookfield Investor as $129.0 million divided by 9,152,542.37 Class C Units issued) is less than the fair value of the Company’s common stock of $14.59 on such date (See Note 10 - Common Stock), the conversion rights represent a “beneficial conversion feature” under GAAP. The Company measured the beneficial conversion feature at $4.5 million , and has recognized the beneficial conversion feature as a deemed dividend as of March 31, 2017 , reducing income available to common stockholders for purposes of calculating earnings per share. As of September 30, 2017 , the Class C Units are reflected on the Consolidated Balance Sheets at $125.7 million . The value of the Class C Units as of September 30, 2017 , is derived by reducing the $135.0 million in gross proceeds by the $13.8 million in costs directly attributable to the issuance of Class C Units at the Initial Closing, including $6.0 million paid directly to Brookfield at the Initial Closing in the form of expense reimbursements and a commitment fee, and increased by $3.5 million in distributions payable to holders of Class C Units in the form of additional Class C Units ("PIK Distributions") and $1.1 million in the accretion of the carrying value to the liquidation preference through September 30, 2017 . Following the Initial Closing, subject to the terms and conditions of the SPA, the Company also has the right to sell, and the Brookfield Investor has agreed to purchase, additional Class C Units at the same price per unit as at the Initial Closing upon 15 business days’ prior written notice and in an aggregate amount not to exceed $265.0 million at Subsequent Closings as follows: • On or prior to February 27, 2018 , but no earlier than January 3, 2018 , up to an amount that would be sufficient to reduce the outstanding amount of the Grace Preferred Equity Interests (as defined in Note 8 below) to approximately $223.5 million (the "First Subsequent Closing"). Proceeds from the First Subsequent Closing must be used by the OP exclusively to, concurrently with the closing of the First Subsequent Closing, redeem then outstanding Grace Preferred Equity Interests. • On or prior to February 27, 2019 , but no earlier than January 3, 2019 , up to the then outstanding amount of the Grace Preferred Equity Interests (the "Second Subsequent Closing"). Proceeds from the Second Subsequent Closing must be used by the OP exclusively to, concurrently with the closing of the Second Subsequent Closing, redeem all then outstanding Grace Preferred Equity Interests. • On or prior to February 27, 2019 , in one or more transactions, up to an amount equal to the difference between the then unfunded portion of the Brookfield Investor’s $400.0 million funding commitment and the outstanding amount of the Grace Preferred Equity Interests. Proceeds from these Subsequent Closings must be used by the OP exclusively to fund brand-mandated property improvement plans ("PIPs") and related lender reserves, repay amounts then outstanding with respect to mortgage debt principal and interest and working capital. Consummation of any Subsequent Closing is subject to the satisfaction of certain conditions, and there can be no assurance they will be completed on their current terms, or at all. In addition, from February 27, 2018 through February 27, 2019 , the Brookfield Investor will have the right to purchase, and the OP has agreed to sell, in one or more transactions, the then unfunded portion of the Brookfield Investor’s $400.0 million funding commitment in transactions of no less than $25.0 million each. The SPA also contains certain standstill and voting restrictions applicable to the Brookfield Investor and certain of its affiliates. The Redeemable Preferred Share The Redeemable Preferred Share ranks on parity with the Company’s common stock, with the same rights with respect to preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, terms and conditions of redemption and other terms and conditions as the Company’s common stock, except as provided therein. For so long as the Brookfield Investor holds the Redeemable Preferred Share, (i) the Brookfield Investor has the right to elect two Redeemable Preferred Directors (neither of whom may be subject to an event that would require disclosure pursuant to Item 401(f) of Regulation S-K, which relates to involvement in certain legal proceedings, in any definitive proxy statement filed by the Company), as well as to approve (such approval not to be unreasonably withheld, conditioned or delayed) two additional independent directors (each, an “Approved Independent Director”) to be recommended and nominated by the Company's board of directors for election by the stockholders at each annual meeting, (ii) each committee of the Company’s board of directors, except any committee formed with authority and jurisdiction over the review and approval of conflicts of interest involving the Brookfield Investor and its affiliates, on the one hand, and the Company, on the other hand (a “Conflicts Committee”), is required to include at least one of the Redeemable Preferred Directors as selected by the holder of the Redeemable Preferred Share (or, if neither of the Redeemable Preferred Directors satisfies all requirements applicable to such committee, with respect to independence and otherwise, of the Company’s charter, the SEC and any national securities exchange on which any shares of the Company’s stock are then listed, at least one of the Approved Independent Directors as selected by the Company's board of directors), and (iii) the Company will not make a general delegation of the powers of the Company’s board of directors to any committee thereof which does not include as a member a Redeemable Preferred Director, other than to a Conflicts Committee. If the OP fails to redeem Class C Units when required to do so, beginning three months after such failure and until all Class C Units requested to be redeemed have been redeemed, the holder of the Redeemable Preferred Share will have the right to increase the size of the Company’s board of directors by a number of directors that would result in the holder of the Redeemable Preferred Share being entitled to nominate and elect a majority of the Company’s board of directors and fill the vacancies created by the expansion of the Company’s board of directors, subject to compliance with the provisions of the Company’s charter requiring at least a majority of the Company’s directors to be Independent Directors (as defined in the Company's charter). The Brookfield Investor is not permitted to transfer the Redeemable Preferred Share, except to an affiliate of the Brookfield Investor. The holder of the Redeemable Preferred Share generally votes together as a single class with the holders of the Company’s common stock at any annual or special meeting of stockholders of the Company. However, any action that would alter the terms of the Redeemable Preferred Share or the rights of its holder (including any amendment to the Company's charter, including the Articles Supplementary with respect to the Redeemable Preferred Share (the "Articles Supplementary")) is subject to a separate class vote of the Redeemable Preferred Share. In addition, the Redeemable Preferred Directors have the Brookfield Approval Rights. At its election and subject to notice requirements, the Company may redeem the Redeemable Preferred Share for a cash amount equal to par value upon the occurrence of any of the following: (i) the first date on which no Class C Units remain outstanding; (ii) the date the liquidation preference applicable to all Class C Units held by the Brookfield Investor and its affiliates is reduced to $100.0 million or less due to the exercise by holders of Class C Units of their redemption rights under the amendment and restatement of the OP's existing agreement of limited partnership ( the "A&R LPA"); or (iii) in connection with a failure of the Brookfield Investor to consummate the applicable purchase of Class C Units at any Subsequent Closing (subject to the terms set forth in the SPA, a “Funding Failure”), the 11th business day after the date the Company obtains a final, non-appealable judgment of a court of competent jurisdiction in connection with such Funding Failure. Under the circumstances described in clause (iii) in the foregoing sentence, in addition, (i) the Brookfield Approval Rights would be permanently terminated, (ii) the OP would be entitled to redeem all or any portion of the then outstanding Class C Units in cash for their liquidation preference, (iii) all Class C Units received in respect of all PIK Distributions accrued from the date of the Initial Closing would be forfeited, and (iv) the Brookfield Investor would be required to cause each of the Redeemable Preferred Directors to resign from the Company’s board of directors. Class C Units At the Initial Closing, the Brookfield Investor, the Special General Partner and the Company, in its capacity as general partner of the OP, entered into the A&R LPA, which established the terms, rights, obligations and preferences of the Class C Units as set forth in more detail below. Rank The Class C Units rank senior to the OP Units and all other equity interests in the OP with respect to priority in payment of distributions and in the distribution of assets in the event of the liquidation, dissolution or winding-up of the OP, whether voluntary or involuntary, or any other distribution of the assets of the OP among its equity holders for the purpose of winding up its affairs. Distributions Commencing on June 30, 2017 , holders of Class C Units are entitled to receive, with respect to each Class C Unit, fixed, quarterly cumulative cash distributions at a rate of 7.50% per annum from legally available funds. If the Company fails to pay these cash distributions when due, the per annum rate will increase to 10% until all accrued and unpaid distributions required to be paid in cash are reduced to zero . Commencing on June 30, 2017 and subject to the occurrence of a Funding Failure if one were to occur, holders of Class C Units are also entitled to receive, with respect to each Class C Unit, a fixed, quarterly, cumulative PIK Distribution at a rate of 5% per annum ("PIK Distributions"). If the Company fails to redeem the Brookfield Investor when required to do so pursuant to the A&R LPA, the 5% per annum PIK Distribution rate will increase to a per annum rate of 7.50% , and would further increase by 1.25% per annum for the next four quarterly periods thereafter, up to a maximum per annum rate of 12.5% . The number of Class C Units delivered in respect of the PIK Distributions on any distribution payment date will be equal to the number obtained by dividing the amount of PIK Distribution by $14.75 . The Brookfield Investor is also entitled to receive tax distributions under certain limited circumstances. Liquidation Preference The liquidation preference with respect to each Class C Unit as of a particular date is the original purchase price paid under the SPA or the value upon issuance of any Class C Unit received as a PIK Distribution, plus, with respect to such Class C Unit up to but not including such date, (i) any accrued and unpaid cash distributions and (ii) any accrued and unpaid PIK Distributions. Conversion Rights At any time and subject to the occurrence of a Funding Failure, the Class C Units are convertible into OP Units at any time at the option of the holder thereof at an initial conversion price of $14.75 (the "Conversion Price"). The Conversion Price is subject to anti-dilution and other adjustments upon the occurrence of certain events and transactions. Notwithstanding the foregoing, the convertibility of certain Class C Units may be restricted in certain circumstances described in the A&R LPA, and, to the extent any Class C Units submitted for conversion are not converted as a result of these restrictions, the holder will instead be entitled to receive an amount in cash equal to two times the liquidation preference of any unconverted Class C Units. OP Units, in turn, are generally redeemable for shares of the Company’s common stock on a one-for-one-basis or the cash value of a corresponding number of shares, at the election of the Company, in accordance with the terms of the A&R LPA. Notwithstanding the foregoing, with respect to any redemptions in exchange for shares of the Company’s common stock that would result in the converting holder owning 49.9% or more of the shares of the Company’s common stock then outstanding after giving effect to the redemption, for the number of shares of the Company’s common stock exceeding the 49.9% threshold, the redeeming holder may elect to retain OP Units or to request delivery in cash of the cash value of a corresponding number of shares. Mandatory Redemption If the OP consummates any liquidation, sale of all or substantially all of the assets, dissolution or winding-up, whether voluntary or involuntary, sale, merger, reorganization, reclassification or recapitalization or other similar event (a “Fundamental Sale Transaction”) prior to March 31, 2022 , the fifth anniversary of the Initial Closing, the holders of Class C Units will be entitled to receive, prior to and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of any other limited partnership interests in the OP: • in the case of a Fundamental Sale Transaction consummated on or prior to February 27, 2019 , an amount per Class C Unit in cash equal to such Class C Unit’s pro rata share (determined based on the respective liquidation preferences of all Class C Units) of an amount equal to (I) $800.0 million less (II) the sum of (i) the difference between (A) $400.0 million and (B) the aggregate purchase price paid under the SPA of all outstanding Class C Units (with the purchase price for Class C Units issued as PIK Distributions being zero for these purposes) and (ii) all cash distributions actually paid to date; • in the case of a Fundamental Sale Transaction consummated after February 27, 2019 and prior to January 1, 2022 , the date that is 57 months and one day after the date of the Initial Closing, an amount per Class C Unit in cash equal to (x) two times the purchase price under the SPA of such Class C Unit (with the purchase price for Class C Units issued as PIK Distributions being zero for these purposes), less (y) all cash distributions actually paid to date; and • in the case of a Fundamental Sale Transaction consummated on or after January 1, 2022 , an amount per Class C Unit in cash equal to the liquidation preference of such Class C Unit plus a make whole premium for such Class C Unit calculated based on a discount rate of 5% and the assumption that such Class C Unit had not been redeemed until March 31, 2022 , the fifth anniversary of the Initial Closing (the "Make Whole Premium"). Holder Redemptions In the event of the occurrence of a REIT Event (as defined and more fully described in the A&R LPA, the Company’s failure to satisfy any of the requirements for qualification and taxation as a REIT under certain circumstances) or a Material Breach (as defined and more fully described in the A&R LPA, generally a breach by the Company of certain material obligations under the A&R LPA), in each case, subject to certain notice and cure rights, holders of Class C Units have the right to require the Company to redeem any Class C Units submitted for redemption for an amount equivalent to what the holders of Class C Units would have been entitled to receive in a Fundamental Sale Transaction if the date of redemption were the date of the consummation of the Fundamental Sale Transaction. From time to time on or after March 31, 2022 , the fifth anniversary of the Initial Closing, and at any time following the rendering of a judgment enjoining or otherwise preventing the holders of Class C Units, the Brookfield Investor or the Special General Partner from exercising their respective rights under the A&R LPA or the Articles Supplementary, any holder of Class C Units may, at its election, require the Company to redeem any or all of its Class C Units for an amount in cash equal to the liquidation preference. The OP is not required to make any redemption of less than all of the Class C Units held by any holder requiring a payment of less than $15.0 million . If any redemption request would result in the total liquidation preference of Class C Units remaining outstanding being equal to less than $35.0 million , the OP has the right to redeem all then outstanding Class C Units in full. Remedies Upon Failure to Redeem If the OP fails to redeem Class C Units when required to do so pursuant to the terms of the A&R LPA, beginning three months after such failure the Special General Partner has the exclusive right, power and authority to sell the assets or properties of the OP for cash at such time or times as the Special General Partner may determine, upon engaging a reputable, national third party sales broker or investment bank reasonably acceptable to holders of a majority of the then outstanding Class C Units to conduct an auction or similar process designed to maximize the sales price. The proceeds from sales of assets or properties by the Special General Partner must be used first to make any and all payments or distributions due or past due with respect to the Class C Units, regardless of the impact of such payments or distributions on the Company or the OP. In addition and as described elsewhere herein, if the OP fails to redeem Class C Units when required to do so pursuant to the terms of the A&R LPA, beginning three months after such failure and until all Class C Units requested to be redeemed have been redeemed: • the holder of the Redeemable Preferred Share would have the right to increase the size of the Company’s board of directors by a number of directors that would result in the holder of the Redeemable Preferred Share being entitled to nominate and elect a majority of the Company’s board of directors and fill the vacancies created thereby subject to compliance with provisions of the Company's charter requiring at least a majority of the Company’s directors to be Independent Directors (as defined in the Company's charter); and • the 5% per annum PIK Distribution rate would increase to a per annum rate of 7.50% , and would further increase by 1.25% per annum for the next four quarterly periods thereafter, up to a maximum per annum rate of 12.5% . Company Liquidation Preference Reduction Upon Listing In the event a listing of the Company’s common stock on a national stock exchange occurs prior to March 31, 2022 , the fifth anniversary of the Initial Closing, the OP would also have certain rights to redeem all but $0.10 of the liquidation preference of each issued and outstanding Class C Unit for cash subject to payment of a make whole premium and certain rights of the Class C Unit holders to convert their retained liquidation preference into OP Units prior to March 31, 2024 . Company Redemption After Five Years At any time and from time to time on or after March 31, 2022 , the fifth anniversary of the Initial Closing, the Company has the right to elect to redeem all or any part of the issued and outstanding Class C Units for an amount in cash equal to the liquidation preference. Transfer Restrictions Subject to certain exceptions, the Brookfield Investor is generally permitted to make transfers of Class C Units without the prior consent of the Company, provided that any transferee must customarily invest in these types of securities or real estate investments of any type or have in excess of $100.0 million of assets. Preemptive Rights Subject to the occurrence of a Funding Failure, if the Company or the OP proposes to issue additional equity securities, subject to certain exceptions and in accordance with the procedures in the A&R LPA, any holder of Class C Units that owns Class C Units representing more than 5% of the outstanding shares of the Company’s common stock on an as-converted basis has certain preemptive rights. Brookfield Approval Rights The Articles Supplementary restrict the Company from taking certain actions without the prior approval of at least one of the Redeemable Preferred Directors, and the A&R LPA restricts the OP from taking certain actions without the prior approval of the majority of the then outstanding Class C Units. Subject to certain limitations, both sets of rights are subject to temporary and permanent suspension in connection with any Funding Failure and no longer apply if the liquidation preference applicable to all Class C Units held by the Brookfield Investor and its affiliates is reduced to $100.0 million or less due to the exercise by holders of Class C Units of their redemption rights under the A&R LPA. In general, subject to certain exceptions, prior approval is required before the Company or its subsidiaries (including the OP) are permitted to take any of the following actions: equity issuances; organizational document amendments; debt incurrences; affiliate transactions; sale of all or substantially all assets; bankruptcy or insolvency declarations; declarations or payments of dividends or other distributions; redemptions or repurchases of securities; adoption of, and amendments to, the Annual Business Plan; hiring and compensation decisions related to certain key personnel (including executive officers); property acquisitions and property sales and dispositions that do not meet transaction-size limits and other defined criteria and would be outside of the OP’s normal course of business; entry into new lines of business; settlement of material litigation; changes to material agreements; increasing or decreasing the number of directors on the Company’s board of directors; nominating or appointing a director (other than a Redeemable Preferred Director) who is not independent; nominating or appointing the chairperson of the Company’s board of directors; and certain other matters. After December 31, 2021 , the 57-month anniversary of the Initial Closing, no prior approval will be required for debt incurrences, equity issuances and asset sales if the proceeds therefrom are used to redeem the then outstanding Class C Units in full. Framework Agreement On January 12, 2017 , the Company and the OP, entered into the Framework Agreement with the Former Advisor, the Former Property Manager, Crestline, the Former Special Limited Partner, and, for certain limited purposes, the Brookfield Investor. The Framework Agreement provides for the Company transitioning from an externally managed company with no employees of its own that is dependent on the Former Advisor and its affiliates to manage its day-to-day operations to a self-managed company. The transactions contemplated by the Framework Agreement generally were consummated at, and as a condition to, the Initial Closing, and the Framework Agreement would have terminated automatically upon the termination of the SPA in accordance with its terms prior to the Initial Closing. At the Initial Closing, pursuant to the Framework Agreement, the Advisory Agreement was terminated. The Framework Agreement also provided for the extension or renewal of the Advisory Agreement on specified terms under certain circumstances, none of which occurred. Until the expiration without renewal or termination of the Advisory Agreement, the Former Advisor and its affiliates agreed to use their respective commercially reasonable efforts to assist the Company and its subsidiaries to take such actions as the Company and its subsidiaries reasonably deemed necessary to transition to self-management, including, but not limited to providing books and records, accounting systems, software and office equipment. In addition, the Former Advisor also granted the Company the right to hire certain of employees of the Former Advisor or its affiliates who were then involved in the management of the Company’s day-to-day operations, including all of the Company’s current executive officers, and made other agreements in order to promote retention of these individuals which relate to the compensation payable to them and other terms of their employment by the Former Advisor and its affiliates prior to the Initial Closing. Pursuant to the Framework Agreement, at the Initial Closing, the Company and the Former Advisor and/or certain of its affiliates, as applicable, entered into a series of agreements to facilitate the transition to self-management, including the agreements described in more detail below. Property Management Transactions Prior to the Initial Closing, the Company, directly or indirectly through its taxable REIT subsidiaries, had entered into agreements with the Former Property Manager, which, in turn, engaged Crestline or a third-party sub-property manager to manage the Company’s hotel properties. These agreements were intended to be coterminous, meaning that the term of the agreement with the Former Property Manager was the same as the term of the Former Property Manager’s agreement with the applicable sub-property manager for the applicable hotel properties, with certain exceptions. At the Initial Closing, as contemplated by and pursuant to the Framework Agreement, the Company, through its taxable REIT subsidiaries, the Former Property Manager, Crestline and the Company’s third-party sub-property managers entered into a series of amendments, assignments and terminations with respect to the then existing property management arrangements (collectively, the "Property Management Transactions") pursuant to the Framework Agreement. At the consummation of the Property Management Transactions, among other things: • property management agreements for a total of 69 hotels then sub-managed by Crestline (collectively, the "Crestline Agreements") were assigned by the Former Property Manager to Crestline; • property management agreements for a total of five additional hotels (together with the Crestline Agreements, the "Long-Term Agreements") were being transitioned to Crestline and the sub-property management agreements with Interstate Management Company, LLC related to these properties were terminated effective April 3, 2017 ; • in connection with the assignment of the Long-Term Agreements to Crestline, they were amended as follows: • the total property management fee of up to 4.0% of the monthly gross receipts from the properties was reduced to 3.0% ; • no change to the remaining term (generally 18 to 19 years), which will renew automatically for three five year terms unless either party provides advance notice of non-renewal; • the termination provisions were changed from being generally only terminable by the Company prior to expiration for cause and not in connection with a sale such that, beginning on April 1, 2021 , the first day of the 49th month following the Initial Closing, the Company will have an "on-sale" termination right upon payment of a fee in an amount equal to two and one half times the property management fee in the trailing 12 months, subject to customary adjustments; and • if, prior to March 31, 2023 , the six-year anniversary of the Initial Closing, the Company sells a hotel managed pursuant to a Long-Term Agreement, the Company has the right to terminate the applicable Long-Term Agreement with respect to any property that is being sold and concurrently replace it with a comparable hotel owned by the Company and managed pursuant to a short-term agreement, by terminating that hotel’s existing property manager and retaining Crestline on the same terms as the Long-Term Agreement being replaced; and • the property management agreements with the Former Property Manager for the Company’s 65 other hotels were terminated and the sub-property managers managing these hotels prior to the Initial Closing continued to do so following the Initial Closing in accordance with property management agreements with the Company’s taxable REIT subsidiaries under the property management terms in effect prior to the Initial Closing. As consideration for the Property Management Transactions, the Company and the OP: • paid a one-time cash amount equal to $10.0 million to the Former Property Manager; • have made and will continue to make a monthly cash payment in the amount of $333,333.33 , $4.0 million in the aggregate, to the Former Property Manager on the 15th day of each month for the 12 months following the Initial Closing (See Note 7 - Promissory Notes Payable); • issued 279,329 shares of the Company’s common stock to the Former Property Manager, for which the fair value on the date of grant has been determined to be $14.59 per share (See Note 10 - Common Stock); • waived any and all obligations of the Former Advisor to refund or otherwise repay any Organization or Offering Expenses (as defined in the Advisory Agreement) to the Company in an amount acknowledged to be $5,821,988 , which amount had been reflected as a reduction in offering proceeds due to it being directly related to issuing shares of common stock in prior periods; and • converted all 524,956 units of limited partnership in the OP entitled “Class B Units” (“Class B Units") held by the Former Advisor into 524,956 OP Units, and, immediately following such conversion, redeemed such 524,956 OP Units for 524,956 shares of the Company’s common stock. The foregoing consideration aggregates to $31.6 million and was recorded as goodwill on the Company’s Consolidated Balance Sheets (See Note 4 - Business Combinations). Assignment and Assumption Agreement At the Initial Closing, as contemplated by the Framework Agreement, the Company, the Former Advisor and AR Global entered into an assignment and assumption agreement, pursuant to which the Former Advisor and AR Global assigned to the Company all right, title and interest in the following assets that are relevant to the Company and the OP: (i) accounting systems, (ii) IT equipment and (iii) certain office furniture and equipment. Facilities Use Agreement The Framework Agreement contemplates that the Company would enter into a Facilities Use Agreement with Crestline at the Initial Closing in the form attached to the Framework Agreement (the “Facilities Use Agreement”), pursuant to which the OP would sublease office space at Crestline’s principal place of business, 3950 University Drive, Fairfax, Virginia 22030, and would pay a portion of the total rent equivalent to the portion of the total space used. The term of the sublease would continue through December 31, 2019 , automatically renewing for successive one -year periods unless either party delivered written notice to the other at least 120 days prior the expiration of the initial term or any renewal term. While the Facilities Use Agreement was not entered into at the Initial Closing, the Company commenced its occupation of the space at the Initial Closing on the terms contemplated by the Facilities Use Agreement and continued to do so through June 30, 2017 . Effective as of July 1, 2017 , the Company and Crestline entered into a new annually renewable joint occupancy agreement which replaces the Facilities Use Agreement contemplated pursuant to the Framework Agreement and the Company continued its |
Impairments
Impairments | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairments | Impairments Impairments of Long-Lived Assets On June 19, 2017 , the Company's board of directors approved the 2017 NAV, which was included in a Current Report on Form 8-K filed on the same day. The 2017 NAV was determined based in part on appraisals of each of the Company’s hotels as performed by an independent valuation firm. As a result of this process, certain reporting units (i.e. individual wholly-owned hotels) exhibited indicators of impairment as the carrying amount (inclusive of the allocation of goodwill) was greater than the appraised value used in connection with the 2017 NAV. Upon identification of this impairment "triggering event," the Company performed a recoverability test in accordance with the provisions of Accounting Standards Codification section 360 - Property, Plant and Equipment. Based on the probability weighted undiscounted cash flows anticipated to be generated from each reporting unit from its operation and ultimate disposition over the intended holding periods, the Company determined that the carrying amount of all but two reporting units were recoverable. The Company determined the aggregate fair values of these two hotels using market and discounted cash flow based methods to be $17.0 million , approximately $1.4 million less than the aggregate carrying amount of the hotels at June 30, 2017 , of $18.4 million and recorded the impairment loss in the Consolidated Statements of Operations and Comprehensive Income (Loss). In connection with the Company’s publishing of its initial Estimated Per-Share NAV during 2016, which was also a “triggering event,” the Company recorded an impairment in the second quarter ended June 30, 2016 , of $2.4 million at one of its other hotels. In August and September 2017, hurricanes Harvey and Irma made landfall in the United States, primarily impacting Texas and Florida, where 22 of the Company’s hotels are located. The Company evaluated the effects of these hurricanes on the Company’s hotels to determine if indicators of impairment were present in accordance with the provisions of Accounting Standards Codification section 360 - Property, Plant and Equipment, and did not identify any indicators of impairment. The Company recognized an expense of $1.8 million in other property-level operating expenses on the Consolidated Statements of Operations and Comprehensive Income (Loss) for repair costs during the three months ended September 30, 2017 , net of $0.5 million recorded as a receivable for anticipated insurance recoveries in excess of the deductible. The Company also recognized an impairment loss on the sale of three of the four hotels classified as assets held for sale as of September 30, 2017, totaling $5.4 million , which includes the costs to sell those assets (See Note 17 - Assets Held for Sale). Impairment of Goodwill As described in Note 4 - Business Combinations, the Company determined that the consummation of the transactions contemplated by the Framework Agreement on March 31, 2017 represented a business combination as defined by Accounting Standards Codification section 805 - Business Combinations. In applying the acquisition method of accounting, the Company recognized $31.6 million of goodwill as a result of the transaction. The Company allocated the goodwill recognized to each of its wholly-owned hotels based on its determination that each hotel is a reporting unit as defined in US GAAP. Management determined that the performance of the recoverability test of the Company's reporting units (as described above in Impairments of Long-Lived Assets) represented a "triggering event" under ASC 350. As a result, an evaluation of impairment of the goodwill allocated to each reporting unit for which a fair value was less than the carrying amount was necessary. The Company determined the fair values of each reporting unit using market and discounted cash flow based methods. The assumptions utilized in the income approach include, but are not limited to, revenue growth rates, future cash flows and a discount rate. The assumptions utilized in the market approach include, but are not limited to, future cash flows, the selection of comparable companies and measures of operating results and pricing multiples. In performing this evaluation, the Company compared the fair value of the reporting unit to the carrying amount of such reporting unit including the allocation of goodwill. As required by ASC 350, as amended by ASU 2017-04, if the carrying amount of the reporting unit exceeds its fair value, the Company will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to such reporting unit. As a result of the process described above, the Company has determined that approximately $16.1 million of goodwill allocated to 70 reporting units for which the fair value was less than the carrying amount is impaired. The range of goodwill impairment recorded by each reporting unit was from less than $0.1 million to $1.3 million , with an average impairment of $0.2 million . The Company has recorded a charge as a component of impairment of goodwill and long-lived assets in the Consolidated Statement of Operations and Comprehensive Income (Loss) for the three-months ended June 30, 2017 . |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Assets Held for Sale | Assets Held for Sale During the quarter ended September 30, 2017 , the Company entered into purchase and sale agreements to sell four non-core hotels. If completed, these sales will allow the Company to avoid re-flagging certain of the hotels and generate proceeds that will be used to redeem Grace Preferred Equity Interests in accordance with their terms and meet liquidity requirements. These sales also generate additional liquidity through the elimination of any future PIP obligations associated with the hotels sold. As of September 30, 2017 , the Company classified these four hotels as held for sale. During the period ended September 30, 2017 , the Company recognized an impairment loss on the sale of three of the four hotels, totaling $5.4 million , which includes the costs to sell those assets. These sales are subject to conditions, and there can be no assurance they will be completed on their current terms, or at all. The aggregate contract purchase price of these sales is $17.4 million , which are expected to generate net proceeds of approximately $5.0 million to the Company after the redemption of the amount of Grace Preferred Equity Interests required in accordance with their terms and payment of transaction costs. The sale of these hotels 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 these properties are included in income from continuing operations for the three months ended and nine months ended September 30, 2017 . Assets held for sale as of September 30, 2017 consisted of the following (in thousands): September 30, 2017 Property, Plant & Equipment, less accumulated depreciation 17,311 Less: Costs to Sell (281 ) Assets Held for Sale $ 17,030 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
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 consolidated financial statements. On October 25, 2017 , the Company commenced a self-tender offer (the “Company Offer”) for up to 1,000,000 shares of common stock at a price of $6.50 per share. Shares purchased in the Company Offer will be paid for in cash, less the withholding of any applicable taxes and without interest, as further described in the Offer to Purchase, the Letter of Transmittal and other related materials that were filed with the SEC as exhibits to an issuer tender offer statement on Schedule TO on October 25, 2017 . Unless extended or withdrawn, the Company Offer will expire at 5:00 p.m., New York City time, on December 11, 2017 . |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements of the Company included herein were prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP"). The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These adjustments are considered to be of a normal, recurring nature. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation 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. Certain amounts in prior periods have been reclassified in order to conform to current period presentation, specifically, the Company changed the presentation of its Consolidated Statements of Operations and Comprehensive Income (Loss) with respect to "general and administrative" expenses and "acquisition and transaction related costs". The change in presentation was to reclassify these line items so that they are included as a component of Operating income (loss). The Company made this change in presentation for all periods presented. |
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 long-lived 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 assessment of the risk associated with the leases acquired (See Note 5 - 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 and Investments in Unconsolidated Entities | Impairment of Long-Lived Assets and Investments in Unconsolidated Entities When circumstances indicate the carrying amount 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 impairment exists due to the inability to recover the carrying amount of a property, an impairment loss will be recorded to the extent that the carrying amount 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 and the Company's board of directors have 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. |
Goodwill | Goodwill The Company allocates goodwill to each reporting unit. For the Company’s purposes, each of its wholly-owned hotels is considered a reporting unit. The Company tests goodwill for impairment at least annually, or upon the occurrence of any "triggering events" if sooner, and has elected to test for goodwill impairment during the quarter ended June 30 of each year. During the second quarter ended June 30, 2017 , the Company adopted ASU 2017-04, Intangibles – Goodwill and Other, which simplified the measurement of goodwill by eliminating Step 2 from the goodwill impairment test in the event that there is evidence of an impairment based on any "triggering events." The Company chose to adopt ASU 2017-04 in the second quarter ended June 30, 2017 , as this was the first time it was required to test goodwill for impairment. Upon the occurrence of any "triggering events," the Company is required to compare the fair value of each reporting unit to which goodwill has been allocated, to the carrying amount of such reporting unit including the allocation of goodwill. As required by Accounting Standards Codification section 350 - Intangibles - Goodwill and Other (ASC 350), as amended by ASU 2017-04, if the carrying amount of a reporting unit exceeds its fair value, the Company applies a one-step quantitative test and records the amount of goodwill impairment as the excess of the reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to such reporting unit. |
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. Unamortized deferred financing fees are expensed in full when the associated debt is refinanced or repaid before maturity. 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. |
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 elected and qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "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 gain, 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 taxes and federal income and excise taxes on its undistributed income. The Company's hotels are leased to taxable REIT subsidiaries which are owned by the OP. The taxable REIT subsidiaries 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, unvested restricted shares of common stock ("restricted shares") and unvested restricted share units in respect of shares of common stock ("RSUs"), except when doing so would be anti-dilutive. For distributions payable with respect to April 1, 2016 through January 13, 2017 (the date distributions to stockholders were suspended), the Company has paid cumulative distributions of 2,047,877 shares of common stock and has adjusted at each reporting date, retroactively for all periods presented its computation of loss per share in order to reflect this as a change in capital structure (See Note 10 - Common Stock). The Company currently has outstanding restricted shares whose holders are entitled to participate in dividends when and if paid on shares of common stock. Holders of RSUs are credited with dividend or other distribution equivalents when and if paid on shares of common stock. These dividends or other distribution equivalents will be regarded as having been reinvested in RSUs. Holders of RSUs are not deemed to be entitled to participate in dividends for accounting purposes. To the extent the Company were to have distributions in the future, it would be required to calculate earnings per share using the two-class method, whereby earnings or losses are reduced by distributed earnings as well as any available undistributed earnings allocable to holders of restricted shares. |
Fair Value Measurements | Fair Value Measurements In accordance with Accounting Standards Codification section 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. |
Class C Units | Class C Units The Company initially measured the Class C Units at fair value net of issuance costs. The Company is required to accrete the carrying value of the Class C Units to the liquidation preference using the effective interest method over the five year period prior to the holder's redemption option becoming exercisable. However, if it becomes probable that the Class C Units will become redeemable prior to such date, the Company will adjust the carrying value of the Class C Units to the maximum liquidation preference. Pursuant to the SPA with the Brookfield Investor, the Company may become obligated to issue additional Class C Units to the Brookfield Investor and this obligation is considered a contingent forward contract under Accounting Standards Codification section 480 - Distinguishing Liabilities from Equity, and accounted for as a liability. The fair value of the contingent forward liability was initially recognized at zero since the contingent forward contract was executed at fair market value. The Company has determined the value has not changed from the issuance date of March 31, 2017 . The Company will measure the contingent forward liability on a recurring basis until the underlying Class C Units are issued and any changes in fair value will be recognized through earnings. At the time that the underlying Class C Units are issued, the corresponding liability will be extinguished. |
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, and therefore each property is considered a reporting unit. Each of the Company's reporting units are also considered to be operating segments, but none of these individual operating segments represents a reportable segment as they meet the criteria in GAAP to aggregate all properties into one 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, 2017 , 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 months and nine months ended September 30, 2017 , was immaterial to the consolidated financial statements. Pursuant to the SPA with the Brookfield Investor, the Company may become obligated to issue additional Class C Units to the Brookfield Investor and this obligation is considered a contingent forward contract under Accounting Standards Codification section 480 - Distinguishing Liabilities from Equity, and accounted for as a liability. The fair value of the contingent forward liability was initially recognized at zero since the contingent forward contract was executed at fair market value. The Company has determined the value has not changed from the issuance date of March 31, 2017 . The Company will measure the contingent forward liability on a recurring basis until the underlying Class C Units are issued and any changes in fair value will be recognized through earnings. At the time that the underlying Class C Units are issued, the corresponding liability will be extinguished. |
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. Based on the Company's assessment of this standard, it will not materially affect the amount or timing of revenue recognition for revenues from room, food and beverage, and other hotel level sales; however, it may allow for earlier gain recognition for future asset sale transactions pursuant to which the Company has continuing involvement with the asset. The Company anticipates adopting this standard on January 1, 2018 and is evaluating new disclosure requirements. Upon adoption, the Company expects to implement these standards using a modified retrospective approach with a cumulative effect recognized with no restatements of prior period amounts. 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 with respect to the Georgia Tech Hotel & Conference Center and nine ground leases, under which it is the lessee, as liabilities on the Consolidated Balance Sheets. 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 became effective for the Company beginning January 1, 2017. The adoption of ASU 2016-07 did not 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 became effective for the Company beginning January 1, 2017. The adoption of ASU 2016-09 did not 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 Company adopted ASU 2016-15 in the quarter ended June 30, 2017. The adoption of this ASU did not have a material effect on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business, with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Additionally, this update also narrows the definition of an output. ASU 2017-01 requires that when substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business, thus reducing the number of transactions that need to be further evaluated. ASU 2017-01 is effective for the Company for fiscal years beginning after December 15, 2018, and early adoption is permitted. The adoption of this ASU is not expected to have a material effect on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless all the following are met: the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments to this update are effective for the Company for fiscal years beginning after December 15, 2017, and early adoption is permitted. ASU 2017-09 is required to be adopted prospectively to an award modified on or after the adoption date. The adoption of this ASU is not expected to have a material effect on the Company's consolidated financial statements. |
Share-based Payments | Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash or stock distributions when and if paid prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares. The fair value of the restricted shares is expensed over the applicable vesting period. The Company recognizes the impact of forfeited restricted share awards as they occur. RSUs represent a contingent right to receive shares of common stock at a future settlement date, subject to satisfaction of applicable vesting conditions and/or other restrictions, as set forth in the RSP and an award agreement evidencing the grant of RSUs. RSUs may not, in general, be sold or otherwise transferred until restrictions are removed and the rights to the shares of common stock have vested. Holders of RSUs do not have or receive any voting rights with respect to the RSUs or any shares underlying any award of RSUs, but such holders are credited with dividend or other distribution equivalents that are regarded as having been reinvested in RSUs which are subject to the same restrictions as the underlying RSUs. The fair value of the RSUs is expensed over the applicable vesting period. The Company recognizes the impact of forfeited RSUs as they occur. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 December 31, 2016 Trade receivables $ 7,609 $ 6,238 Allowance for doubtful accounts (377 ) (434 ) Trade receivables, net of allowance $ 7,232 $ 5,804 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 $ 1,303 $ 100 Year ending December 31, 2018 5,217 398 Year ending December 31, 2019 5,227 398 Year ending December 31, 2020 5,265 398 Year ending December 31, 2021 5,271 398 Thereafter 81,743 7,836 Total $ 104,026 $ 9,528 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s mortgage notes payable as of September 30, 2017 and December 31, 2016 consist of the following, respectively (in thousands): Outstanding Mortgage Notes Payable Encumbered Properties September 30, 2017 December 31, 2016 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 87-Pack Mortgage Loan - 87 properties in Grace Portfolio 805,000 793,647 (1 ) One-month LIBOR plus 2.56% Interest Only, Principal paid at Maturity May 2019, subject to three, one year extension rights 87-Pack Mezzanine Loan - 87 properties in Grace Portfolio 110,000 101,794 (1 ) One-month LIBOR plus 6.50% Interest Only, Principal paid at Maturity May 2019, subject to three, 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 Refinanced Term Loan - 27 properties in Summit and Noble Portfolios and one additional property 310,000 235,484 (1 ) One-month LIBOR plus 3.00% Interest Only, Principal paid at Maturity May 2019, subject to three, one year extension rights Total Mortgage Notes Payable $ 1,513,000 $ 1,418,925 Less: Deferred Financing Fees, Net $ 20,134 $ 8,000 Total Mortgage Notes Payable, Net $ 1,492,866 $ 1,410,925 (1) These loans were refinanced in April 2017 on different terms with respect to interest rate, principal amount and maturity. |
Promissory Notes Payable (Table
Promissory Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Promissory Notes | The Company’s promissory notes payable as of September 30, 2017 and December 31, 2016 were as follows (in thousands): Outstanding Promissory Notes Payable Notes Payable September 30, 2017 December 31, 2016 Interest Rate Summit Loan Promissory Note $ — $ 23,405 14.0 % Note Payable to Former Property Manager $ 2,000 $ — — % Less: Deferred Financing Fees, Net — $ 25 Promissory Notes Payable, Net $ 2,000 $ 23,380 |
Accounts Payable and Accrued 30
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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, 2017 December 31, 2016 Trade accounts payable and accrued expenses $ 56,553 $ 55,489 Contingent consideration from Barceló Portfolio (See Note 13 - Commitments and Contingencies) — 4,619 Hotel accrued salaries and related liabilities 13,758 8,411 Total $ 70,311 $ 68,519 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Shares and Units Awards | RSU Awards A summary of the Company's RSU awards for the nine months ended September 30, 2017 is presented below: Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested December 31, 2016 — $ — $ — Granted 100,398 $ 15.08 $ 1,514 Vested — $ — $ — Forfeited — $ — $ — Non-vested September 30, 2017 100,398 $ 15.08 $ 1,514 A summary of the Company's restricted share awards for the nine months ended September 30, 2017 is presented below. Number of Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested December 31, 2016 11,387 $ 22.12 $ 252 Granted 7,576 $ 14.59 $ 111 Vested 4,862 $ 22.21 $ 108 Forfeitures 6,525 $ 22.06 $ 144 Non-vested September 30, 2017 7,576 $ 14.59 $ 111 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table shows the carrying amounts and the fair values of material liabilities, excluding deferred financing fees, that qualify as financial instruments (in thousands): September 30, 2017 Carrying Amount Fair Value Mortgage notes payable $ 1,513,000 $ 1,512,280 Mandatorily redeemable preferred securities 242,912 223,686 Total $ 1,755,912 $ 1,735,966 |
Related Party Transactions an33
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The table below shows the management fees (including incentive fees described above) and reimbursable expenses incurred by the Company pursuant to the property management agreements (and not payable to a third party sub-property manager) during three months ended September 30, 2017 and 2016 , respectively, and the associated payable as of September 30, 2017 and December 31, 2016 (in thousands): Three Months Ended Nine Months Ended Payable as of 2017 2016 2017 2016 September 30, 2017 December 31, 2016 Total management fees and reimbursable expenses incurred from Crestline $ — $ 4,134 $ 4,291 $ 12,305 $ — $ 1,306 Total management fees incurred from Former Property Manager $ — $ 2,262 $ 2,035 $ 6,501 $ — $ 532 Total $ — $ 6,396 $ 6,326 $ 18,806 $ — $ 1,838 The table below represents reimbursements to the Former Advisor for the three months ended September 30, 2017 and 2016 , the nine months ended September 30, 2017 and 2016 and the associated payable as of September 30, 2017 and December 31, 2016 , 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 2017 2016 2017 2016 September 30, 2017 December 31, 2016 Total general and administrative expense reimbursement for services provided by the Former Advisor $ — $ 574 $ 869 $ 1,702 $ — $ 522 The table below presents the asset management fees, acquisition fees, acquisition cost reimbursements and financing coordination fees charged by the Former Advisor in connection with the operations of the Company for the three months ended September 30, 2017 and 2016 , the nine months ended September 30, 2017 and 2016 and the associated payable as of September 30, 2017 and December 31, 2016 , 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 2017 2016 2017 2016 September 30, 2017 December 31, 2016 Asset management fees $ — $ 4,469 $ 4,581 $ 13,446 $ — $ 8 Acquisition fees $ — $ — $ — $ 1,624 $ — $ — Acquisition cost reimbursements $ — $ — $ — $ 108 $ — $ — Financing coordination fees $ — $ — $ — $ 206 $ — $ — $ — $ 4,469 $ 4,581 $ 15,384 $ — $ 8 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of Assets Held for Sale | Assets held for sale as of September 30, 2017 consisted of the following (in thousands): September 30, 2017 Property, Plant & Equipment, less accumulated depreciation 17,311 Less: Costs to Sell (281 ) Assets Held for Sale $ 17,030 |
Organization - Narrative (Detai
Organization - Narrative (Details) | Mar. 31, 2017USD ($)$ / sharesshares | Jan. 13, 2017$ / shares | Jan. 12, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Sep. 30, 2017directorhotelstatehotel_room$ / sharesshares | Jun. 19, 2017$ / shares | Apr. 30, 2017employee | Mar. 30, 2017employee | Dec. 31, 2016$ / sharesshares | Jul. 31, 2016$ / shares | Jul. 01, 2016$ / shares | Jun. 30, 2016$ / shares | Mar. 31, 2016shares | Jan. 07, 2014$ / sharesshares |
Class of Stock [Line Items] | ||||||||||||||
Number of properties owned (hotel) | 148 | |||||||||||||
Number of real estate properties held for sale (hotel) | 4 | |||||||||||||
Number of guest rooms (hotel room) | hotel_room | 17,846 | |||||||||||||
Number of states in which entity operates (state) | state | 33 | |||||||||||||
Shares authorized (in shares) | shares | 300,000,000 | 300,000,000 | 80,000,000 | |||||||||||
Par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||
Denominator for common stock equivalent of dividends declared (in dollars per share) | $ / shares | $ 13.20 | $ 21.48 | $ 21.48 | $ 23.75 | ||||||||||
Common stock, outstanding (in shares) | shares | 39,617,676 | 39,618,833 | 38,493,430 | 36,636,016 | ||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||
Number of directors with approval rights (director) | director | 1 | |||||||||||||
Number of full time employees (employee) | employee | 25 | 0 | ||||||||||||
Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of directors eligible for election by investors (director) | director | 2 | |||||||||||||
Securities Purchase, Voting and Standstill Agreement | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Cash dividends per share declared (in dollars per share) | $ / shares | $ 0.525 | $ 0.525 | ||||||||||||
Securities Purchase, Voting and Standstill Agreement | Class C Units | Initial Closing | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares sold (in shares) | shares | 9,152,542.37 | 9,152,542.37 | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 14.75 | $ 14.75 | ||||||||||||
Consideration received from sale of stock | $ | $ 135,000,000 | $ 135,000,000 | $ 138,500,000 | |||||||||||
Securities Purchase, Voting and Standstill Agreement | Class C Units | Follow-On Funding | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Consideration received from sale of stock | $ | $ 265,000,000 | $ 265,000,000 | ||||||||||||
Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 14.59 | $ 25 | ||||||||||||
Distribution Reinvestment Plan | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares authorized (in shares) | shares | 21,052,631 | |||||||||||||
Redeemable Preferred Stock | Securities Purchase, Voting and Standstill Agreement | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of shares sold (in shares) | shares | 1 | |||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Affiliated Entity | Crestline Hotels and Resorts, LLC | United States | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of hotels managed by related party (hotel) | 80 | |||||||||||||
Sub-Property Managers | United States | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of hotels managed by third-party (hotel) | 68 | |||||||||||||
Sub-Property Managers | Hampton Inns Management LLC and Homewood Suites Management LLC | United States | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of hotels managed by third-party (hotel) | 41 | |||||||||||||
Sub-Property Managers | InnVentures IVI, LP | United States | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of hotels managed by third-party (hotel) | 2 | |||||||||||||
Sub-Property Managers | McKibbon Hotel Management, Inc. | United States | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of hotels managed by third-party (hotel) | 21 | |||||||||||||
Sub-Property Managers | Interstate Management Company, LLC | United States | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of hotels managed by third-party (hotel) | 4 | |||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of real estate properties held for sale (hotel) | 4 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2017USD ($)hotellease | Jun. 30, 2017USD ($)hotel | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($)hotel | Jun. 30, 2017USD ($)hotel | Sep. 30, 2017USD ($)segmenthotelleaseproperty | Jan. 13, 2017shares | Sep. 30, 2016USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Number of real estate properties held for sale (hotel) | hotel | 4 | 4 | ||||||||
Impairment of long-lived assets | $ 1,400,000 | $ 2,400,000 | $ 1,400,000 | |||||||
Number of impaired hotels (hotel) | hotel | 2 | 1 | 2 | |||||||
Goodwill | $ 15,282,000 | $ 15,282,000 | $ 0 | |||||||
Impairment of goodwill | $ 16,100,000 | |||||||||
Advertising expense | $ 5,000,000 | $ 4,600,000 | $ 14,200,000 | $ 13,200,000 | ||||||
Number of reportable segments (segment) | segment | 1 | |||||||||
Number of operating leases (lease) | lease | 1 | 1 | ||||||||
Number of ground leases (lease) | lease | 9 | 9 | ||||||||
Forward Contracts | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Derivative liability | $ 0 | $ 0 | ||||||||
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 | 30 days | |||||||||
Maximum | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Period after which receivables are due | 90 days | |||||||||
Class C Units | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Required period to accrete carrying value of Class C Units | 5 years | |||||||||
Change in EPS Calculation from Change in Capital Structure | Common Stock | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Distributions paid (in shares) | shares | 2,047,877 | |||||||||
Series of Individually Immaterial Business Acquisitions | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Goodwill | $ 31,600,000 | $ 31,600,000 | $ 31,600,000 | |||||||
Impairment of goodwill | $ 16,100,000 | |||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Number of real estate properties held for sale (hotel) | hotel | 4 | 4 | ||||||||
Number of impaired hotels (hotel) | property | 3 | |||||||||
Number of impaired hotels (hotel) | hotel | 3 | 3 | ||||||||
Impairment loss on the sale real estate properties | $ 5,400,000 | |||||||||
Building | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Useful life | 40 years | |||||||||
Land Improvements | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Useful life | 15 years | |||||||||
Furniture, Fixtures and Equipment | ||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||
Useful life | 5 years |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Trade receivables | $ 7,609 | $ 6,238 |
Allowance for doubtful accounts | (377) | (434) |
Trade receivables, net of allowance | $ 7,232 | $ 5,804 |
Brookfield Investment and Rel38
Brookfield Investment and Related Transactions - Securities Purchase, Voting and Standstill Agreement (Details) - USD ($) | Mar. 31, 2017 | Jan. 12, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jan. 07, 2014 |
Related Party Transaction [Line Items] | ||||||||||
Deemed dividend | $ 4,369,000 | $ 0 | $ 8,681,000 | $ 0 | ||||||
Class C Units carrying value | 125,704,000 | 125,704,000 | $ 0 | |||||||
Class C Units issuance costs | 0 | 73,000 | ||||||||
Increase in PIK distributions | 3,473,000 | $ 0 | ||||||||
Accretion of the carrying value to the liquidation preference | 1,097,000 | |||||||||
Common Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Share price (in dollars per share) | $ 14.59 | $ 14.59 | $ 25 | |||||||
Class C Units | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Increase in PIK distributions | $ 0 | |||||||||
Securities Purchase, Voting and Standstill Agreement | Follow-On Funding | Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Funding commitment | 400,000,000 | |||||||||
Funding commitment per transaction | $ 25,000,000 | |||||||||
Securities Purchase, Voting and Standstill Agreement | Class C Units | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Increase in PIK distributions | 3,500,000 | |||||||||
Accretion of the carrying value to the liquidation preference | 1,100,000 | |||||||||
Securities Purchase, Voting and Standstill Agreement | Class C Units | Initial Closing | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares sold (in shares) | 9,152,542.37 | 9,152,542.37 | ||||||||
Share price (in dollars per share) | $ 14.75 | $ 14.75 | 14.75 | |||||||
Consideration received from sale of stock | $ 135,000,000 | $ 135,000,000 | $ 138,500,000 | |||||||
Class C Units fair value | 135,000,000 | |||||||||
Conversion price (in dollars per share) | $ 14.09 | $ 14.09 | ||||||||
Net investment basis after transaction fees and costs payable | 129,000,000 | 129,000,000 | ||||||||
Deemed dividend | $ 4,500,000 | |||||||||
Class C Units carrying value | $ 125,700,000 | $ 125,700,000 | ||||||||
Class C Units issuance costs | $ 13,800,000 | |||||||||
Expense reimbursements and fees | $ 6,000,000 | |||||||||
Securities Purchase, Voting and Standstill Agreement | Class C Units | Follow-On Funding | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Consideration received from sale of stock | $ 265,000,000 | $ 265,000,000 | ||||||||
Period of written notice to sell additional units | 15 days | |||||||||
Securities Purchase, Voting and Standstill Agreement | Class C Units | First Follow-On Funding | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Consideration received from sale of stock | $ 223,500,000 |
Brookfield Investment and Rel39
Brookfield Investment and Related Transactions - The Redeemable Preferred Share (Details) $ in Millions | Mar. 31, 2017USD ($)shares | Sep. 30, 2017director |
Related Party Transaction [Line Items] | ||
Number of directors with approval rights (director) | 1 | |
Class C Units | ||
Related Party Transaction [Line Items] | ||
Period after which holders of redeemable stock has right to increase number of board of directors | 3 months | |
Number of units remaining outstanding to allow redemption (in shares) | shares | 0 | |
Liquidation preference | $ | $ 100 | |
Brookfield Strategic Real Estate Partners II Hospitality REIT II LLC | ||
Related Party Transaction [Line Items] | ||
Number of directors eligible for election by investors (director) | 2 | |
Number of additional directors eligible for election by investors (director) | 2 |
Brookfield Investment and Rel40
Brookfield Investment and Related Transactions - Class C Units (Details) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($)period$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) |
Related Party Transaction [Line Items] | ||||
Cash dividend | $ 5,208,000 | |||
PIK distributions on Class C Units | $ 3,473,000 | $ 0 | ||
Amount excluded from rights to redeem issued and outstanding shares (in dollars per share) | $ / shares | $ 0.10 | |||
Minimum percent of Class C Units to outstanding common stock to trigger preemptive rights | 5.00% | |||
Class C Units | ||||
Related Party Transaction [Line Items] | ||||
Cash distribution per annum | 7.50% | |||
Cash distribution potential increased rate | 10.00% | |||
Cash dividend | $ 0 | |||
PIK distribution per annum | 5.00% | |||
PIK distribution potential increased rate | 7.50% | |||
PIK distribution potential additional increased rate | 1.25% | |||
PIK distribution, number of quarterly periods (period) | period | 4 | |||
PIK maximum percent per year | 12.50% | |||
Denominator for PIK distribution (in dollars per share) | $ / shares | $ 14.75 | |||
Distribution base amount | $ 800,000,000 | |||
Distribution amount subtracted from base | 400,000,000 | |||
PIK distributions on Class C Units | $ 0 | |||
Consummation period after initial closing | 57 months 1 day | |||
Distribution multiple | 2 | |||
Distribution discount rate assumption | 5.00% | |||
Payment amount (less than) | $ 15,000,000 | |||
Liquidation preference for right to redeem outstanding units (less than) | 35,000,000 | |||
Class C Units | Investor | ||||
Related Party Transaction [Line Items] | ||||
Minimum amount of assets for transfer without consent | $ 100,000,000 | |||
OP Units | ||||
Related Party Transaction [Line Items] | ||||
Conversion price (in dollars per share) | $ / shares | $ 14.75 | |||
Ownership percentage for election of OP units or cash | 49.90% |
Brookfield Investment and Rel41
Brookfield Investment and Related Transactions - Brookfield Approval Rights (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Liquidation preference | $ 138,472 | $ 138,472 |
Class C Units | Investor | ||
Related Party Transaction [Line Items] | ||
Liquidation preference | $ 100,000 |
Brookfield Investment and Rel42
Brookfield Investment and Related Transactions - Property Management Transactions (Details) | Mar. 31, 2017USD ($)termhotel$ / sharesshares | Mar. 30, 2017 | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares |
Related Party Transaction [Line Items] | |||||||
Automatic renewal period | 5 years | ||||||
Common stock, issued (in shares) | 39,618,833 | 39,618,833 | 38,493,430 | ||||
Goodwill | $ | $ 15,282,000 | $ 15,282,000 | $ 0 | ||||
Series of Individually Immaterial Business Acquisitions | |||||||
Related Party Transaction [Line Items] | |||||||
Goodwill | $ | $ 31,600,000 | 31,600,000 | 31,600,000 | ||||
Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock, fair value (in dollars per share) | $ / shares | $ 14.59 | ||||||
Property Manager | |||||||
Related Party Transaction [Line Items] | |||||||
Property management fee | 4.00% | ||||||
Fees incurred with the offering | $ | 0 | $ 6,396,000 | 6,326,000 | $ 18,806,000 | |||
Common stock, issued (in shares) | 279,329 | ||||||
Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Fees incurred with the offering | $ | $ 0 | $ 4,469,000 | $ 4,581,000 | $ 15,384,000 | |||
Common stock, issued (in shares) | 524,956 | ||||||
Advisor | Class B Units | |||||||
Related Party Transaction [Line Items] | |||||||
Conversion of stock (in shares) | 524,956 | ||||||
Advisor | OP Units | |||||||
Related Party Transaction [Line Items] | |||||||
Conversion of stock (in shares) | 524,956 | ||||||
Shares issued in conversion (in shares) | 524,956 | ||||||
Advisor | Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Shares issued in conversion (in shares) | 524,956 | ||||||
Property Management Transactions | |||||||
Related Party Transaction [Line Items] | |||||||
Number of hotels assigned to related party (hotel) | hotel | 69 | ||||||
Number of additional hotels transitioned to related party (hotel) | hotel | 5 | ||||||
Property management fee | 3.00% | 4.00% | |||||
Number of automatic renewal periods (term) | term | 3 | ||||||
Percent fee multiple | 2.5 | ||||||
Number of hotels with terminated property management agreements (hotel) | hotel | 65 | ||||||
Property Management Transactions | Property Manager | |||||||
Related Party Transaction [Line Items] | |||||||
Fees incurred with the offering | $ | $ 10,000,000 | ||||||
Cash payment per month | $ | 333,333.33 | ||||||
Aggregate cash payments | $ | $ 4,000,000 | ||||||
Period of monthly cash payments | 12 months | ||||||
Common stock, issued (in shares) | 279,329 | ||||||
Property Management Transactions | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Fees incurred with the offering | $ | $ 5,821,988 | ||||||
Property Management Transactions | Advisor | Class B Units | |||||||
Related Party Transaction [Line Items] | |||||||
Conversion of stock (in shares) | 524,956 | ||||||
Property Management Transactions | Advisor | OP Units | |||||||
Related Party Transaction [Line Items] | |||||||
Conversion of stock (in shares) | 524,956 | ||||||
Shares issued in conversion (in shares) | 524,956 | ||||||
Property Management Transactions | Advisor | Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Shares issued in conversion (in shares) | 524,956 | ||||||
Property Management Transactions | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Term of agreement | 18 years | ||||||
Property Management Transactions | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Term of agreement | 19 years |
Brookfield Investment and Rel43
Brookfield Investment and Related Transactions - Facilities Use Agreement (Details) | Mar. 31, 2017 |
Related Party Transaction [Line Items] | |
Automatic renewal period | 5 years |
Facilities Use Agreement | |
Related Party Transaction [Line Items] | |
Automatic renewal period | 1 year |
Written notice to cancel automatic renewal | 120 days |
Brookfield Investment and Rel44
Brookfield Investment and Related Transactions - Transition Services Agreements (Details) - USD ($) $ in Thousands | May 15, 2017 | Mar. 31, 2017 | May 15, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Fees incurred with the offering | $ 0 | $ 4,469 | $ 4,581 | $ 15,384 | |||
Transition Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Fees incurred with the offering | $ 25 | ||||||
Transition Services Agreement | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Fees incurred with the offering | $ 75 | $ 150 | $ 225 |
Brookfield Investment and Rel45
Brookfield Investment and Related Transactions - Registration Rights Agreement (Details) - shares | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |||
Common stock, issued (in shares) | 39,618,833 | 38,493,430 | |
Advisor | |||
Related Party Transaction [Line Items] | |||
Common stock, issued (in shares) | 524,956 | ||
Property Manager | |||
Related Party Transaction [Line Items] | |||
Common stock, issued (in shares) | 279,329 |
Business Combinations - Summit
Business Combinations - Summit Acquisition (Details) $ in Thousands | Apr. 27, 2017USD ($)hotel | Jan. 12, 2017USD ($)hotel | Feb. 11, 2016USD ($)hotel | Dec. 29, 2015USD ($)hotel | Oct. 15, 2015USD ($)hotel | Jun. 02, 2015USD ($)hotelclosing_transaction | Jun. 30, 2016USD ($)hotel | Sep. 30, 2017USD ($)hotel | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | ||||||||||
Number of properties owned (hotel) | hotel | 148 | |||||||||
Proceeds from issuance of common stock, net | $ 0 | $ 678 | ||||||||
Acquisition deposits | 0 | $ 7,500 | ||||||||
Additional Summit Loan Agreement | Loan | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from loan | $ 3,000 | |||||||||
Secured Debt | Deutsche Bank Term Loan | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from issuance of long term debt | $ 235,500 | |||||||||
Summit Portfolio | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of real estate properties expected to be acquired (hotel) | hotel | 26 | |||||||||
Number of closing transactions (closing transaction) | closing_transaction | 3 | |||||||||
Business combination purchase price | $ 150,100 | $ 347,400 | ||||||||
Number of properties owned (hotel) | 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 | Summit Loan Promissory Note | Loan | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from loan | $ 20,000 | |||||||||
Acquisition deposits | $ 7,500 | |||||||||
Summit Portfolio | Secured Debt | Deutsche Bank Term Loan | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from issuance of long term debt | $ 96,900 | |||||||||
Summit Portfolio, Second Closing | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of real estate properties expected to be acquired (hotel) | 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 Promissory Note | ||||||||||
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 | |||||||||
Summit Portfolio, Summit Amendment, First Seven Hotels | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of real estate properties expected to be acquired (hotel) | hotel | 7 | |||||||||
Business combination purchase price | $ 66,800 | |||||||||
Summit Portfolio, Summit Amendment, Eighth Hotel | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination purchase price | $ 10,500 | |||||||||
April Acquisition | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination purchase price | $ 66,800 | |||||||||
Number of properties owned (hotel) | hotel | 7 |
Business Combinations - Framewo
Business Combinations - Framework Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jan. 07, 2014 |
Business Acquisition [Line Items] | |||||||
Purchase price settled in cash | $ 12,000 | $ 0 | |||||
Goodwill | 15,282 | $ 0 | |||||
Impairment of goodwill | $ 16,100 | ||||||
Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Share price (in dollars per share) | $ 14.59 | $ 25 | |||||
Series of Individually Immaterial Business Acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Business combination purchase price | $ 31,600 | ||||||
Purchase price settled in cash | 10,000 | ||||||
Liabilities incurred | 4,000 | ||||||
Waiver of repayment | 5,800 | ||||||
Goodwill | 31,600 | $ 31,600 | |||||
Impairment of goodwill | $ 16,100 | ||||||
Series of Individually Immaterial Business Acquisitions | Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Value of common stock | $ 4,100 | ||||||
Share price (in dollars per share) | $ 14.59 | ||||||
Series of Individually Immaterial Business Acquisitions | Common Stock | Conversion and Redemption of Class B Units to Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Value of common stock | $ 7,700 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)lease | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)lease | Sep. 30, 2016USD ($) | |
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 | $ 0.3 | $ 0.1 | $ 0.3 |
Rent expense | $ | $ 1.5 | $ 1.8 | $ 4.6 | $ 4.7 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments for Operating Leases (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Minimum Rental Commitments | |
For the three months ending December 31, 2017 | $ 1,303 |
Year ending December 31, 2018 | 5,217 |
Year ending December 31, 2019 | 5,227 |
Year ending December 31, 2020 | 5,265 |
Year ending December 31, 2021 | 5,271 |
Thereafter | 81,743 |
Total | 104,026 |
Amortization of Above and Below Market Lease Intangibles to Rent Expense | |
For the three months ending December 31, 2017 | 100 |
Year ending December 31, 2018 | 398 |
Year ending December 31, 2019 | 398 |
Year ending December 31, 2020 | 398 |
Year ending December 31, 2021 | 398 |
Thereafter | 7,836 |
Total | $ 9,528 |
Mortgage Notes Payable - Schedu
Mortgage Notes Payable - Schedule of Long-term Debt Instruments (Details) $ in Thousands | Feb. 27, 2015hotel | Sep. 30, 2017USD ($)hotelextensionproperty | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 1,513,000 | $ 1,418,925 | |
Less: Deferred Financing Fees, Net | 20,134 | 8,000 | |
Mortgage notes payable, net | $ 1,492,866 | 1,410,925 | |
Number of encumbered properties (property) | hotel | 148 | ||
The Grace Acquisition | |||
Debt Instrument [Line Items] | |||
Number of encumbered properties (property) | hotel | 116 | 115 | |
The Grace Acquisition | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.47% | ||
Mortgage notes payable | HIT REIT 87-Pack Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 805,000 | 793,647 | |
Number of extension rights (extension) | extension | 3 | ||
Extension right | 1 year | ||
Number of encumbered properties (property) | property | 87 | ||
Mortgage notes payable | HIT REIT 87-Pack Mortgage Loan | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.56% | ||
Mortgage notes payable | HIT REIT 87-Pack Mezzanine Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 110,000 | 101,794 | |
Number of extension rights (extension) | extension | 3 | ||
Extension right | 1 year | ||
Number of encumbered properties (property) | property | 87 | ||
Mortgage notes payable | HIT REIT 87-Pack Mezzanine Loan | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 6.50% | ||
Mortgage notes payable | New Additional Grace Mortgage Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 232,000 | 232,000 | |
Interest Rate | 4.96% | ||
Number of encumbered properties (property) | property | 1 | ||
Mortgage notes payable | New Additional Grace Mortgage Loan | The Grace Acquisition | |||
Debt Instrument [Line Items] | |||
Number of encumbered properties (property) | property | 20 | ||
Mortgage notes payable | HIT REIT Term Loan | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 310,000 | 235,484 | |
Number of extension rights (extension) | extension | 3 | ||
Extension right | 1 year | ||
Number of encumbered properties (property) | property | 1 | ||
Mortgage notes payable | HIT REIT Term Loan | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.00% | ||
Mortgage notes payable | HIT REIT Term Loan | Summit And Nobel Portfolios | |||
Debt Instrument [Line Items] | |||
Number of encumbered properties (property) | property | 27 | ||
Mortgage notes payable | Baltimore Courtyard & Providence Courtyard | |||
Debt Instrument [Line Items] | |||
Outstanding mortgage notes payable | $ 45,500 | 45,500 | |
Interest Rate | 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 | 4.31% |
Mortgage Notes Payable - Narrat
Mortgage Notes Payable - Narrative (Details) | Apr. 28, 2017USD ($)extensionproperty | Apr. 27, 2017USD ($)hotelextensionproperty | Feb. 11, 2016USD ($) | Feb. 27, 2015hotel | Sep. 30, 2017USD ($)hotelproperty | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)hotelextensionproperty | Sep. 30, 2016USD ($) | Jul. 01, 2016USD ($) | Oct. 31, 2015 | Oct. 15, 2015USD ($) | Mar. 31, 2014hotel |
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | hotel | 148 | 148 | ||||||||||
Payments to acquire real estate | $ 366,000,000 | |||||||||||
Number of hotels financed with term loan (hotel) | hotel | 20 | |||||||||||
General and administrative | $ 4,389,000 | $ 5,128,000 | $ 14,230,000 | $ 12,623,000 | ||||||||
HIT REIT 87-Pack Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Deposit to fund a reserve | $ 30,000,000 | |||||||||||
Minimum required net worth | 250,000,000 | |||||||||||
Assumed Grace Indebtedness | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of secured debt | 895,400,000 | |||||||||||
The Grace Acquisition | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | hotel | 116 | 115 | 115 | |||||||||
The Grace Acquisition | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.47% | |||||||||||
April Acquisition | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | hotel | 7 | |||||||||||
Reserve deposits | $ 66,800,000 | |||||||||||
The Barcelo Acquisition | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | hotel | 6 | |||||||||||
Mortgage notes payable | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest expense | $ 16,800,000 | $ 15,200,000 | $ 49,800,000 | $ 44,700,000 | ||||||||
Mortgage notes payable | HIT REIT 87-Pack Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 87 | 87 | ||||||||||
Number of extension rights (extension) | extension | 3 | |||||||||||
Extension right | 1 year | |||||||||||
Mortgage notes payable | HIT REIT 87-Pack Mezzanine Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 87 | 87 | ||||||||||
Number of extension rights (extension) | extension | 3 | |||||||||||
Extension right | 1 year | |||||||||||
Mortgage notes payable | New Additional Grace Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest Rate | 4.96% | 4.96% | ||||||||||
Number of properties owned (hotel) | property | 1 | 1 | ||||||||||
Mortgage notes payable | HIT REIT Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 1 | 1 | ||||||||||
Number of extension rights (extension) | extension | 3 | |||||||||||
Extension right | 1 year | |||||||||||
Mortgage notes payable | London Interbank Offered Rate (LIBOR) | HIT REIT 87-Pack Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.56% | |||||||||||
Mortgage notes payable | London Interbank Offered Rate (LIBOR) | HIT REIT 87-Pack Mezzanine Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 6.50% | |||||||||||
Mortgage notes payable | London Interbank Offered Rate (LIBOR) | HIT REIT Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||
Mortgage notes payable | The Grace Acquisition | New Additional Grace Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 20 | 20 | ||||||||||
Mortgage notes payable | Baltimore Courtyard & Providence Courtyard | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest Rate | 4.30% | 4.30% | ||||||||||
Mortgage notes payable | Hilton Garden Inn Blacksburg Joint Venture | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest Rate | 4.31% | 4.31% | ||||||||||
Secured Debt | HIT REIT 87-Pack Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount of loan | 915,000,000 | |||||||||||
Reserve deposits | $ 1,000,000 | |||||||||||
Number of extension rights (extension) | extension | 3 | |||||||||||
Extension right | 1 year | |||||||||||
Secured Debt | HIT REIT 87-Pack Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 87 | |||||||||||
Amount of loan | $ 805,000,000 | |||||||||||
Secured Debt | HIT REIT 87-Pack Mezzanine Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount of loan | $ 110,000,000 | |||||||||||
Secured Debt | New Additional Grace Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest Rate | 4.96% | |||||||||||
Secured Debt | Deutsche Bank Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount of loan | $ 293,400,000 | $ 235,500,000 | $ 450,000,000 | |||||||||
Repayments of secured debt | $ 235,500,000 | |||||||||||
Draws under SN Term Loan | $ 235,500,000 | |||||||||||
Additional amounts available to be drawn | $ 0 | |||||||||||
General and administrative | $ 3,000,000 | |||||||||||
Secured Debt | HIT REIT Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 28 | |||||||||||
Amount of loan | $ 310,000,000 | |||||||||||
Reserve deposits | $ 30,000,000 | |||||||||||
Number of extension rights (extension) | extension | 3 | |||||||||||
Extension right | 1 year | |||||||||||
Minimum required net worth | $ 250,000,000 | |||||||||||
Number of unencumbered properties (property) | property | 1 | |||||||||||
Pay down of loan balance | $ 99,100,000 | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | HIT REIT 87-Pack Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.03% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | HIT REIT 87-Pack Loans | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 4.00% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | HIT REIT 87-Pack Mortgage Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.56% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | HIT REIT 87-Pack Mezzanine Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 6.50% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | HIT REIT Term Loan | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 4.00% | |||||||||||
Secured Debt | London Interbank Offered Rate (LIBOR) | HIT REIT Term Loan | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||
Secured Debt | Eurodollar | Deutsche Bank Term Loan | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.75% | |||||||||||
Secured Debt | Eurodollar | Deutsche Bank Term Loan | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.25% | |||||||||||
Secured Debt | Base Rate | Deutsche Bank Term Loan | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.75% | |||||||||||
Secured Debt | Base Rate | Deutsche Bank Term Loan | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.25% | |||||||||||
Secured Debt | The Grace Acquisition | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.31% | |||||||||||
Secured Debt | SWN Acquisitions | HIT REIT Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 20 | |||||||||||
Secured Debt | April Acquisition | HIT REIT Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of properties owned (hotel) | property | 7 | |||||||||||
Reserve deposits | $ 33,400,000 | |||||||||||
Secured Debt | The Barcelo Acquisition | HIT REIT Term Loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Payment of contingent consideration payable | $ 4,600,000 | |||||||||||
Mezzanine Mortgage | The Grace Acquisition | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 4.77% |
Promissory Notes Payable - Sche
Promissory Notes Payable - Schedule of Promissory Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Notes Payable | $ 1,513,000 | $ 1,418,925 |
Less: Deferred Financing Fees, Net | 20,134 | 8,000 |
Loan | ||
Debt Instrument [Line Items] | ||
Less: Deferred Financing Fees, Net | 0 | 25 |
Promissory Notes Payable, Net | 2,000 | 23,380 |
Loan | Summit Loan Promissory Note | ||
Debt Instrument [Line Items] | ||
Notes Payable | $ 0 | 23,405 |
Interest Rate | 14.00% | |
Loan | Note Payable to Former Property Manager | ||
Debt Instrument [Line Items] | ||
Notes Payable | $ 2,000 | $ 0 |
Interest Rate | 0.00% |
Promissory Notes Payable - Narr
Promissory Notes Payable - Narrative (Details) | Jan. 12, 2017USD ($)hotel | Feb. 11, 2016USD ($)hotel | Sep. 30, 2017USD ($)hotel | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)hotel | Sep. 30, 2016USD ($) | Apr. 27, 2017hotel | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 15, 2015hotel |
Debt Instrument [Line Items] | ||||||||||
Acquisition deposits | $ 0 | $ 0 | $ 7,500,000 | |||||||
Number of properties owned (hotel) | hotel | 148 | 148 | ||||||||
Property Management Transactions | Property Manager | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Cash payment per month | $ 333,333.33 | |||||||||
Summit Portfolio | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of properties owned (hotel) | hotel | 6 | 10 | ||||||||
April Acquisition | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of properties owned (hotel) | hotel | 7 | |||||||||
Additional Summit Loan Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate, percent paid in cash | 9.00% | |||||||||
Additional interest rate | 4.00% | |||||||||
Number of real estate properties expected to be sold (hotel) | hotel | 7 | |||||||||
Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest expense | $ 0 | $ 800,000 | $ 900,000 | $ 2,200,000 | ||||||
Loan | Summit Loan Promissory Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount of loan | $ 27,500,000 | |||||||||
Loan | Summit Loan Promissory Note | Summit Portfolio | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from loan | 20,000,000 | |||||||||
Acquisition deposits | $ 7,500,000 | |||||||||
Loan | Additional Summit Loan Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from loan | $ 3,000,000 | |||||||||
Loan | Note Payable to Former Property Manager | Property Management Transactions | Property Manager | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Cash payment per month | $ 333,333.33 | $ 333,333.33 |
Mandatorily Redeemable Prefer54
Mandatorily Redeemable Preferred Securities - Narrative (Details) | 1 Months Ended | 9 Months Ended | ||||
Apr. 30, 2015USD ($) | Feb. 28, 2015USD ($)company | Sep. 30, 2017USD ($)hotel | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Feb. 27, 2015hotel | |
Business Acquisition [Line Items] | ||||||
Number of properties owned (hotel) | hotel | 148 | |||||
Mandatorily redeemable preferred securities redemptions | $ 47,275,000 | $ 2,270,000 | ||||
Mandatorily redeemable preferred securities, net | $ 241,620,000 | $ 288,265,000 | ||||
The Grace Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Number of newly formed LLCs (company) | company | 2 | |||||
Number of properties owned (hotel) | hotel | 115 | 116 | ||||
Number of additional unencumbered real estate properties (hotel) | hotel | 8 | |||||
The Grace Acquisition | Redeemable Preferred Stock | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from issuance of preferred limited partner units | $ 447,100,000 | |||||
Distribution period | 18 months | |||||
Percent of equity offering proceeds to redeem preferred equity interests at par | 35.00% | |||||
Maximum offering proceeds used to redeem preferred equity interests at par | $ 350,000,000 | |||||
Period for maximum equity offering proceeds used to redeem preferred equity interests at par | 12 months | |||||
Mandatorily redeemable preferred securities redemptions | $ 204,200,000 | |||||
Mandatorily redeemable preferred securities, net | $ 242,900,000 | |||||
Percentage of preferred equity interests required to be redeemed by 2018 | 50.00% | |||||
Amount of preferred equity interests required to be redeemed by 2018 | $ 19,400,000 | |||||
Percentage of preferred equity interests required to be redeemed by 2019 | $ 223,500,000 | |||||
The Grace Acquisition | Redeemable Preferred Stock | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Distribution rate | 7.50% | |||||
The Grace Acquisition | Redeemable Preferred Stock | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Distribution rate | 8.00% |
Accounts Payable and Accrued 55
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Trade accounts payable and accrued expenses | $ 56,553 | $ 55,489 |
Contingent consideration from Barceló Portfolio (See Note 13 - Commitments and Contingencies) | 0 | 4,619 |
Hotel accrued salaries and related liabilities | 13,758 | 8,411 |
Total | $ 70,311 | $ 68,519 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - $ / shares | Mar. 31, 2017 | Jan. 13, 2017 | Jan. 12, 2017 | Jul. 01, 2016 | Feb. 03, 2014 | Jul. 31, 2016 | Jun. 30, 2016 | Apr. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 19, 2017 | Mar. 31, 2016 |
Class of Stock [Line Items] | ||||||||||||
Common stock, outstanding (in shares) | 39,617,676 | 39,618,833 | 38,493,430 | 36,636,016 | ||||||||
Common stock, issued (in shares) | 39,618,833 | 38,493,430 | ||||||||||
Dividends declared per day (in dollars per share) | $ 0.00465753425 | $ 0.000185792 | ||||||||||
Dividends declared per day if leap year (in dollars per share) | 0.00464480874 | |||||||||||
Dividends declared per year (in dollars per share) | $ 1.7 | 1.46064 | $ 1.70 | |||||||||
Denominator for common stock equivalent of dividends declared (in dollars per share) | $ 21.48 | $ 21.48 | $ 23.75 | $ 13.20 | ||||||||
Annual distribution rate | 6.80% | |||||||||||
Period shares have been held before a repurchase request can be made | 1 year | |||||||||||
Share Repurchase Program | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Repurchase of common stock (in shares) | 0 | 0 | ||||||||||
Securities Purchase, Voting and Standstill Agreement | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Cash dividends per share declared (in dollars per share) | $ 0.525 | $ 0.525 | ||||||||||
Property Manager | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, issued (in shares) | 279,329 | |||||||||||
Advisor | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, issued (in shares) | 524,956 | |||||||||||
Advisor | Class B Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of stock (in shares) | 524,956 | |||||||||||
Advisor | OP Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of stock (in shares) | 524,956 | |||||||||||
Shares issued in conversion (in shares) | 524,956 | |||||||||||
Property Management Transactions | Property Manager | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, issued (in shares) | 279,329 | |||||||||||
Property Management Transactions | Advisor | Class B Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of stock (in shares) | 524,956 | |||||||||||
Property Management Transactions | Advisor | OP Units | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Conversion of stock (in shares) | 524,956 | |||||||||||
Shares issued in conversion (in shares) | 524,956 | |||||||||||
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, fair value (in dollars per share) | $ 14.59 | |||||||||||
Common Stock | Advisor | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued in conversion (in shares) | 524,956 | |||||||||||
Common Stock | Property Management Transactions | Advisor | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Shares issued in conversion (in shares) | 524,956 | |||||||||||
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, outstanding (in shares) | 39,618,833 | 38,493,430 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($)shares | Sep. 30, 2017USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of granted shares allowed | 5.00% | |
Number of shares authorized (in shares) | shares | 4,000,000 | 4,000,000 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards vesting period | 5 years | |
Compensation expense | $ 0.1 | $ 0.1 |
Unrecognized compensation expense remaining | 0.1 | $ 0.1 |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards vesting period | 4 years | |
Compensation expense | $ 0.2 | |
Unrecognized compensation expense remaining | $ 1.3 | $ 1.3 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Restricted Shares Awards (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares | |
Non-vested, beginning of period (in shares) | shares | 11,387 |
Granted (in shares) | shares | 7,576 |
Vested (in shares) | shares | 4,862 |
Forfeitures (in shares) | shares | 6,525 |
Non-vested, end of period (in shares) | shares | 7,576 |
Weighted Average Grant Date Fair Value (per share) | |
Non-vested, beginning of period (in dollars per share) | $ 22.12 |
Granted (in dollars per share) | 14.59 |
Vested (in dollars per share) | 22.21 |
Forfeitures (in dollars per share) | 22.06 |
Non-vested, end of period (in dollars per share) | 14.59 |
Aggregate Intrinsic Value (in thousands) | |
Non-vested, beginning of period | 252,000 |
Granted | 111,000 |
Vested | 108,000 |
Forfeitures | 144,000 |
Non-vested, end of period | $ 111,000 |
Equity-Based Compensation - S59
Equity-Based Compensation - Summary of Restricted Units Awards (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares | |
Non-vested, beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 100,398 |
Vested (in shares) | shares | 0 |
Forfeitures (in shares) | shares | 0 |
Non-vested, end of period (in shares) | shares | 100,398 |
Weighted Average Grant Date Fair Value (per share) | |
Non-vested, beginning of period (in dollars per share) | $ 0 |
Granted (in dollars per share) | 15.08 |
Vested (in dollars per share) | 0 |
Forfeitures (in dollars per share) | 0 |
Non-vested, end of period (in dollars per share) | 15.08 |
Aggregate Intrinsic Value (in thousands) | |
Non-vested, beginning of period | 0 |
Granted | 1,514,000 |
Vested | 0 |
Forfeitures | 0 |
Non-vested, end of period | $ 1,514,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, by Balance Sheet Grouping (Details) - Level 3 $ in Thousands | Sep. 30, 2017USD ($) |
Carrying Amount | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Mortgage notes payable | $ 1,513,000 |
Mandatorily redeemable preferred securities | 242,912 |
Total | 1,755,912 |
Fair Value | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |
Mortgage notes payable | 1,512,280 |
Mandatorily redeemable preferred securities | 223,686 |
Total | $ 1,735,966 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended | ||
Sep. 30, 2017USD ($)hotel | Jun. 30, 2017hotel | Jun. 30, 2016hotel | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of impaired hotels (hotel) | hotel | 2 | 1 | |
Forward Contracts | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative liability | $ 0 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment loss on the sale real estate properties | $ 5,400,000 | ||
Number of impaired hotels (hotel) | hotel | 3 | ||
Fair Value, Inputs, Level 2 [Member] | Hotel | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Aggregate fair value of assets held for sale | $ 15,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | 1 Months Ended | 9 Months Ended | |||
Apr. 30, 2017USD ($) | Sep. 30, 2017USD ($)hotel | Sep. 30, 2016USD ($) | Aug. 31, 2016USD ($) | Mar. 31, 2014hotel | |
Other Commitments [Line Items] | |||||
Number of properties owned (hotel) | hotel | 148 | ||||
Payments for contingent consideration | $ 4,620,000 | $ 0 | |||
The Barcelo Acquisition | |||||
Other Commitments [Line Items] | |||||
Number of properties owned (hotel) | hotel | 6 | ||||
Business combination, contingent consideration arrangements, minimum | $ 4,100,000 | ||||
Business combination, contingent consideration arrangements, maximum | $ 4,600,000 | ||||
Payments for contingent consideration | $ 4,600,000 | ||||
Baltimore Courtyard, Providence Courtyard And Stratford Homewood Suites | |||||
Other Commitments [Line Items] | |||||
Number of real estate properties with contingent consideration payable based on future operating results (hotel) | hotel | 3 |
Related Party Transactions an63
Related Party Transactions and Arrangements - Relationships with the Brookfield Investor and its Affiliates (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jan. 12, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Related Party Transaction [Line Items] | |||||
Cash paid for dividends | $ 5,567 | $ 11,500 | |||
Securities Purchase, Voting and Standstill Agreement | Class C Units | |||||
Related Party Transaction [Line Items] | |||||
Cash paid for dividends | $ 2,600 | $ 5,200 | |||
Paid in kind distributions (in shares) | 118,443.50 | 235,392.65 | |||
Securities Purchase, Voting and Standstill Agreement | Class C Units | Initial Closing | |||||
Related Party Transaction [Line Items] | |||||
Number of shares sold (in shares) | 9,152,542.37 | 9,152,542.37 | |||
Cumulative cash distributions | 7.50% | ||||
Paid in king distributions payable | 5.00% |
Related Party Transactions an64
Related Party Transactions and Arrangements - Fees Paid in Connection with the Offering (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Related Party Transactions [Abstract] | |
Liability for initial public offering costs (percent) | 2.00% |
Offering and related costs in excess of gross proceeds form the offering limit | $ 5.8 |
Related Party Transactions an65
Related Party Transactions and Arrangements - Fees Paid in Connection With the Operations of the Company (Details) | Mar. 31, 2017shares | Mar. 30, 2017 | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($)hotel | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Nov. 11, 2015 |
Related Party Transaction [Line Items] | ||||||||
Quarterly asset management fee earned by related party, percent of benchmark | 0.0625% | |||||||
Number of real estate properties sold (hotel) | hotel | 1 | |||||||
Due to related parties | $ 0 | $ 0 | $ 2,879,000 | |||||
ARC Realty Finance Advisors, LLC | ||||||||
Related Party Transaction [Line Items] | ||||||||
Real estate acquisition fee | 1.50% | |||||||
Real estate acquisition fee reimbursement maximum | 0.10% | |||||||
Annual asset management fee lower of cost of assets or net asset value | 0.75% | |||||||
ARC Realty Finance Advisors, LLC | Real Estate Commissions | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | $ 300,000 | |||||||
Advisor | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 4,469,000 | 4,581,000 | $ 15,384,000 | ||||
Due to related parties | 0 | 0 | 8,000 | |||||
Advisor | Asset management fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 4,469,000 | 4,581,000 | 13,446,000 | ||||
Due to related parties | 0 | 0 | 8,000 | |||||
Advisor | Acquisition fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 0 | 0 | 1,624,000 | ||||
Due to related parties | 0 | 0 | 0 | |||||
Advisor | Acquisition cost reimbursements | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 0 | 0 | 108,000 | ||||
Due to related parties | 0 | 0 | 0 | |||||
Advisor | Financing coordination fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 0 | 0 | 206,000 | ||||
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 | 0 | 574,000 | 869,000 | 1,702,000 | ||||
Due to related parties | 0 | 0 | 522,000 | |||||
Advisor | Common Stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock issued for service (in shares) | shares | 25,454 | |||||||
Shares issued in conversion (in shares) | shares | 524,956 | |||||||
Advisor | Class B Units | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock issued for service (in shares) | shares | 524,956 | |||||||
Conversion of stock (in shares) | shares | 524,956 | |||||||
Advisor | OP Units | ||||||||
Related Party Transaction [Line Items] | ||||||||
Conversion of stock (in shares) | shares | 524,956 | |||||||
Shares issued in conversion (in shares) | shares | 524,956 | |||||||
Property Manager | ||||||||
Related Party Transaction [Line Items] | ||||||||
Cumulative capital investment return | 8.50% | |||||||
Fees incurred with the offering | 0 | 6,396,000 | 6,326,000 | 18,806,000 | ||||
Due to related parties | 0 | 0 | 1,838,000 | |||||
Property management fee | 4.00% | |||||||
Annual incentive fee | 15.00% | |||||||
Property Manager | Incentive Fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 100,000 | ||||||
Property Manager | Total management fees and reimbursable expenses incurred from Crestline | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | 4,134,000 | 4,291,000 | 12,305,000 | ||||
Due to related parties | 0 | 0 | 1,306,000 | |||||
Property Manager | Total management fees incurred from Former Property Manager | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fees incurred with the offering | 0 | $ 2,262,000 | 2,035,000 | $ 6,501,000 | ||||
Due to related parties | $ 0 | $ 0 | $ 532,000 |
Related Party Transactions an66
Related Party Transactions and Arrangements - Fees Paid in Connection with the Liquidation or Listing (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Due to related parties | $ 0 | $ 2,879 | |
ARC Realty Finance Advisors, LLC | Real Estate Commissions | |||
Related Party Transaction [Line Items] | |||
Fees incurred with the offering | $ 300 |
Impairments (Details)
Impairments (Details) $ in Thousands | Jun. 19, 2017hotel | Sep. 30, 2017USD ($)hotel | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($)hotel | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($)hotelproperty | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment [Line Items] | ||||||||
Number of hotels identified for impairment (hotel) | hotel | 2 | 70 | ||||||
Impairment of long-lived assets | $ 1,400 | $ 2,400 | $ 1,400 | |||||
Number of properties owned (hotel) | hotel | 148 | 148 | ||||||
Receivable for insurance recoveries | $ 500 | $ 500 | ||||||
Number of real estate properties held for sale (hotel) | hotel | 4 | 4 | ||||||
Goodwill | $ 15,282 | $ 15,282 | $ 0 | |||||
Implied fair value of the goodwill reporting unit | 16,100 | |||||||
Minimum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Goodwill impairment loss | 100 | |||||||
Maximum | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Goodwill impairment loss | 1,300 | |||||||
Weighted Average | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Goodwill impairment loss | $ 200 | |||||||
Series of Individually Immaterial Business Acquisitions | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Goodwill | $ 31,600 | $ 31,600 | $ 31,600 | |||||
Implied fair value of the goodwill reporting unit | $ 16,100 | |||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Number of impaired hotels (hotel) | property | 3 | |||||||
Number of real estate properties held for sale (hotel) | hotel | 4 | 4 | ||||||
Impairment loss on the sale real estate properties | $ 5,400 | |||||||
Texas and Florida | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Number of properties owned (hotel) | hotel | 22 | 22 | ||||||
Other property-level operating expenses | $ 1,800 | |||||||
Hotel | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Aggregate fair value of real estate property | 17,000 | $ 17,000 | ||||||
Net book value or real estate property | $ 18,400 | $ 18,400 |
Assets Held for Sale - Narrativ
Assets Held for Sale - Narrative (Details) $ in Millions | 3 Months Ended | ||
Sep. 30, 2017USD ($)hotel | Jun. 30, 2017hotel | Jun. 30, 2016hotel | |
Long Lived Assets Held-for-sale [Line Items] | |||
Number of real estate properties held for sale (hotel) | 4 | ||
Number of impaired hotels (hotel) | 2 | 1 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Number of real estate properties held for sale (hotel) | 4 | ||
Number of impaired hotels (hotel) | 3 | ||
Impairment loss on the sale real estate properties | $ | $ 5.4 | ||
Purchase price for sale of real estate properties | $ | 17.4 | ||
Proceeds from sale of real estate properties | $ | $ 5 |
Assets Held for Sale - Summary
Assets Held for Sale - Summary of Assets Held for Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Long Lived Assets Held-for-sale [Line Items] | ||
Assets Held for Sale | $ 17,030 | $ 0 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Assets held for sale, gross | 17,311 | |
Less: Costs to Sell | (281) | |
Assets Held for Sale | $ 17,030 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Company Offer - Subsequent Event | Oct. 25, 2017$ / sharesshares |
Subsequent Event [Line Items] | |
Number of shares sold (in shares) | shares | 1,000,000 |
Share price (in dollars per share) | $ / shares | $ 6.5 |