Moody National REIT II (MNRTII) 10-Q 14 Nov 23 2023 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 13, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-55778
Entity Registrant Name	MOODY NATIONAL REIT II, INC.
Entity Central Index Key	0001615222
Entity Tax Identification Number	47-1436295
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	9655 Katy Freeway
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77024
City Area Code	713
Local Phone Number	977-7500
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,640,429

CONSOLIDATED BALANCE SHEETS (un

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
ASSETS
Investment in hotel properties, net	$ 389,788	$ 399,477
Cash and cash equivalents	9,620	4,912
Restricted cash	15,547	16,291
Accounts receivable, net of allowance of $35 as of September 30, 2023 and December 31, 2022	1,662	802
Prepaid expenses and other assets	3,040	2,927
Deferred franchise costs, net of accumulated amortization of $499 and $466 at September 30, 2023 and December 31, 2022, respectively	613	676
Total Assets	420,270	425,085
Liabilities:
Note payable, net of unamortized debt issuance costs of $931 and $1,260 as of September 30, 2023 and December 31, 2022	231,182	235,060
Notes payable to related party	40,000	30,111
Accounts payable and accrued expenses	14,336	13,299
Due to related parties, net	13,642	11,701
Dividends payable	70	70
Total Liabilities	299,230	290,241
Special Limited Partnership Interests	1	1
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 100,000 shares authorized; no shares issued and outstanding
Common stock, $0.01 par value per share; 1,000,000 shares authorized, 13,640 shares issued and outstanding at September 30, 2023 and December 31, 2022	136	136
Additional paid-in capital	305,641	305,641
Accumulated deficit	(186,764)	(173,272)
Total stockholders’ equity	119,013	132,505
Noncontrolling interests in Operating Partnership	2,026	2,338
Total Equity	121,039	134,843
Total Liabilities and Equity	$ 420,270	$ 425,085

CONSOLIDATED BALANCE SHEETS (_2

CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 35	$ 35
Accumulated amortization, deferred franchise costs	499	466
Unamortized debt issuance costs, note payable	$ 931	$ 1,260
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized	100,000,000	100,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	1,000,000,000	1,000,000,000
Common stock, issued	13,640,000	13,640,000
Common stock, outstanding	13,640,000	13,640,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue
Total hotel revenue	$ 21,940	$ 20,799	$ 62,865	$ 58,468
Expenses
Hotel operating expenses	14,236	13,816	42,280	38,614
Property taxes, insurance and other	1,607	1,775	4,850	5,081
Depreciation and amortization	3,994	3,908	11,932	11,700
Corporate general and administrative	1,656	1,613	5,115	5,163
Total expenses	21,493	21,112	64,177	60,558
Operating income (loss)	447	(313)	(1,312)	(2,090)
Interest expense and amortization of debt issuance costs	4,289	3,672	12,362	10,869
Loss before income taxes	(3,842)	(3,985)	(13,674)	(12,959)
Income tax expense	24	18	130	109
Net loss	(3,866)	(4,003)	(13,804)	(13,068)
Loss attributable to noncontrolling interests in Operating Partnership	87	91	312	296
Net loss attributable to common stockholders	$ (3,779)	$ (3,912)	$ (13,492)	$ (12,772)
Net loss attributable to common stockholders - basic	$ (0.28)	$ (0.29)	$ (0.99)	$ (0.94)
Net loss attributable to common stockholders - diluted	$ (0.28)	$ (0.29)	$ (0.99)	$ (0.94)
Weighted average common shares outstanding - basic	13,640	13,640	13,640	13,640
Weighted average common shares outstanding - diluted	13,640	13,640	13,640	13,640
Occupancy [Member]
Revenue
Total hotel revenue	$ 20,459	$ 19,609	$ 58,856	$ 55,237
Hotel, Other [Member]
Revenue
Total hotel revenue	$ 1,481	$ 1,190	$ 4,009	$ 3,231

CONSOLIDATED STATEMENTS OF EQUI

CONSOLIDATED STATEMENTS OF EQUITY (unaudited) - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]
Beginning balance at Dec. 31, 2021	$ 153,477		$ 136	$ 305,562	$ (154,983)	$ 2,762
Beginning balance (in shares) at Dec. 31, 2021			13,640,000
Balance at beginning (in shares) at Dec. 31, 2021						316,000
Stock-based compensation	78			78
Net loss	(13,068)				(12,772)	(296)
Balance at end at Sep. 30, 2022	140,487		$ 136	305,640	(167,755)	$ 2,466
Balance at end (in shares) at Sep. 30, 2022			13,640,000
Balance at end (in shares) at Sep. 30, 2022						316,000
Beginning balance at Jun. 30, 2022	144,463		$ 136	305,613	(163,843)	$ 2,557
Beginning balance (in shares) at Jun. 30, 2022			13,640,000
Balance at beginning (in shares) at Jun. 30, 2022						316,000
Stock-based compensation	27			27
Net loss	(4,003)				(3,912)	(91)
Balance at end at Sep. 30, 2022	140,487		$ 136	305,640	(167,755)	$ 2,466
Balance at end (in shares) at Sep. 30, 2022			13,640,000
Balance at end (in shares) at Sep. 30, 2022						316,000
Beginning balance at Dec. 31, 2022	134,843		$ 136	305,641	(173,272)	$ 2,338
Beginning balance (in shares) at Dec. 31, 2022			13,640,000
Balance at beginning (in shares) at Dec. 31, 2022						316,000
Net loss	(13,804)				(13,492)	$ (312)
Balance at end at Sep. 30, 2023	$ 121,039		$ 136	305,641	(186,764)	$ 2,026
Balance at end (in shares) at Sep. 30, 2023			13,640,000
Balance at end (in shares) at Sep. 30, 2023	316,037					316,000
Beginning balance at Jun. 30, 2023	$ 124,905		$ 136	305,641	(182,985)	$ 2,113
Beginning balance (in shares) at Jun. 30, 2023			13,640,000
Balance at beginning (in shares) at Jun. 30, 2023						316,000
Net loss	(3,866)				(3,779)	$ (87)
Balance at end at Sep. 30, 2023	$ 121,039		$ 136	$ 305,641	$ (186,764)	$ 2,026
Balance at end (in shares) at Sep. 30, 2023			13,640,000
Balance at end (in shares) at Sep. 30, 2023	316,037					316,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (13,804)	$ (13,068)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	11,932	11,700
Amortization of debt issuance costs	474	507
Stock-based compensation		78
Changes in operating assets and liabilities
Accounts receivable	(860)	(779)
Prepaid expenses and other assets	(113)	(101)
Accounts payable and accrued expenses	1,037	1,497
Due to related parties	1,941	5,924
Net cash provided by operating activities	607	5,758
Cash flows from investing activities
Improvements and additions to hotel properties	(2,180)	(1,226)
Net cash used in investing activities	(2,180)	(1,226)
Cash flows from financing activities
Proceeds of note payable	5,900
Repayment of notes payable	(10,107)	(4,086)
Proceeds of notes payable to related party	9,889	3,752
Repayment of notes payable to related party		(1,700)
Payment of debt issuance costs	(145)
Net cash provided by (used in) financing activities	5,537	(2,034)
Net change in cash and cash equivalents and restricted cash	3,964	2,498
Cash and cash equivalents and restricted cash at beginning of period	21,203	19,281
Cash and cash equivalents and restricted cash at end of period	25,167	21,779
Supplemental Disclosure of Cash Flow Activity
Interest paid	8,546	8,975
Income tax refund received		$ 17

Organization

Organization	9 Months Ended
	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	1. Organization As discussed in Note 5, “Equity,” Moody National REIT II, Inc. (the “Company”) was initially capitalized by Moody National REIT Sponsor, LLC (the “Sponsor”). The Company’s fiscal year end is December 31. As of September 30, 2023, the Company owned interests in fifteen hotel properties located in six states comprising a total of 2,123 On January 20, 2015, the Securities and Exchange Commission (the “SEC”) declared the Company’s registration statement on Form S-11 effective, and the Company commenced its initial public offering of up to $ 1.1 1 100 On June 26, 2017, the Company reallocated the Company’s shares of common stock as Class A common stock, $ 0.01 0.01 0.01 0.01 provided, however On January 18, 2018, the Company filed a registration statement on Form S-11 (Registration No. 333-222610) registering $ 990 The Company’s follow-on public offering was terminated (including pursuant to the DRP) effective as of March 25, 2020 due to the impact that the spread of COVID-19, a disease caused by a novel strain of coronavirus, had and may have in the future, on the Company’s hotel properties. The Company accepted investors’ subscriptions for and issued an aggregate of 10.2 million 567,000 234.6 million 4.1 million 352,000 87.2 million The Company’s advisor is Moody National Advisor II, LLC (the “Advisor”), a Delaware limited liability company and an affiliate of the Sponsor. Pursuant to an advisory agreement among the Company, the OP (defined below) and the Advisor (the “Advisory Agreement”), and subject to certain restrictions and limitations therein, the Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company. Substantially all of the Company’s business is conducted through Moody National Operating Partnership II, LP, a Delaware limited partnership (the “OP”). The Company is the sole general partner of the OP. The initial limited partners of the OP were Moody OP Holdings II, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Moody Holdings II”), and Moody National LPOP II, LLC (“Moody LPOP II”), an affiliate of the Advisor. Moody Holdings II initially invested $ 1,000 1,000 COVID-19 Pandemic The global COVID-19 pandemic had, and may in the future continue to have, a significant adverse effect on the Company’s financial condition and operating results. Since its discovery in December 2019, COVID-19 has spread globally, including to every state in the United States. The spread of COVID-19 was declared a pandemic by the World Health Organization and in the United States the Health and Human Services Secretary declared a public health emergency with respect to COVID-19 The COVID-19 pandemic dramatically reduced travel, which has had an unprecedented adverse impact on the hotel industry. As a result, the COVID-19 pandemic had a significant adverse effect on the operating results of the Company’s hotel properties, which depend primarily upon revenues driven by business and leisure travel, and on the Company’s business, financial performance and operating results. Since March 2020, the Company experienced a significant decline in bookings, occupancy and revenues across the Company’s hotel properties. The Company’s hotel properties operated at a property net operating loss since the outbreak of COVID-19, which had an adverse impact on the Company’s results of operations and cash flow from operations. In addition, the Company reduced certain services and amenities at the Company’s hotel properties. Each of the Company’s hotel properties is subject to a mortgage loan secured by the Company’s ownership interest in the property. If the Company is unable to service the mortgage loan secured by a hotel property due to decreased revenues generated by such property, the lender with respect to such mortgage loan may initiate foreclosure procedures with respect to the property or initiate other available remedies. As of the date of this Quarterly Report, the Company is current with respect to the payments due under the mortgage loans secured by the Company’s hotel properties or is in compliance with the modified terms of certain mortgage loans as agreed to with the lenders and other accommodations. During 2021 certain lenders agreed to limited loan modifications, including temporary deferrals of interest and principal payments and agreements to forebear the enforcement of default remedies available under the terms of the loan documents. As of the date of this Quarterly Report, no lenders have accelerated the maturity of any of the loans secured by the Company’s properties or initiated foreclosure procedures with respect to any of the Company’s properties. In response to the COVID-19 pandemic, the Company terminated its public offering of common stock (including pursuant to the DRP), effective as of March 2020. The Company is not currently raising capital through the sale of its securities and the Company does not intend to begin to do so in the near term. The Company has also indefinitely suspended the payment of distributions to stockholders effective as of March 2020 and the operation of the Company’s share repurchase program effective as of April 2020. The Company’s board of directors (“Board”) and the Company’s management continue to evaluate the Company’s financial condition and the overall economic environment to determine if and when the Company will seek to resume raising capital, resume the payment of distributions and reinstate the Company’s share repurchase program. Specifically, the Board, in consultation with management, will continue to monitor the Company’s operations and intends to resume distributions at a time and level determined to be prudent in relation to the Company’s other cash requirements or in order to maintain the Company’s REIT status for federal income tax purposes. However, it is impossible to predict if or when the Company will be able to resume the payment of distributions or return to normal operations.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries over which it has control. All intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Organization and Offering Costs Organization and offering costs of the Company are paid directly by the Company or incurred by the Advisor on behalf of the Company. Pursuant to the Advisory Agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs incurred by the Advisor associated with each of the Company’s public offerings, provided that within 60 days of the last day of the month in which a public offering ends, the Advisor is obligated to reimburse the Company to the extent aggregate organization and offering costs incurred by the Company in connection with the completed public offering exceed 15 15 All offering costs, including selling commissions and dealer manager fees, are recorded as an offset to additional paid-in-capital, and all organization costs are recorded as an expense when the Company has an obligation to reimburse the Advisor. As of September 30, 2023, total offering costs for the initial public offering and the follow-on offering were $ 21.1 12.3 million 8.8 million 18.4 12.3 6.1 million 2.7 0 2.7 0 Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2016. The Company did not meet all of the qualifications to be a REIT under the Internal Revenue Code for the years ended December 31, 2015 and 2014, including not having 100 Provided that the Company continues to qualify as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 The Company accounts for income taxes of its TRS using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period prior to when the new rates become effective. The Company records a valuation allowance for net deferred tax assets that are not expected to be realized. The Company has reviewed tax positions under GAAP guidance that clarify the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the consolidated financial statements if it is more likely than not that the tax position will be sustained upon examination. The Company had no material uncertain tax positions as of September 30, 2023. The preparation of the Company’s various tax returns requires the use of estimates for federal and state income tax purposes. These estimates may be subjected to review by the respective taxing authorities. A revision to an estimate may result in an assessment of additional taxes, penalties and interest. At this time, a range in which the Company’s estimates may change is not expected to be material. The Company will account for interest and penalties relating to uncertain tax positions in the current period results of operations, if necessary. The Company has tax years 2018 through 2022 remaining subject to examination by various federal and state tax jurisdictions. For more information, see Note 10, “Income Taxes.” Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost approach: Amount required to replace the service capacity of an asset (replacement cost). Income approach: Techniques used to convert future income amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company has elected the fair value option in recording its investment in marketable securities whereby unrealized holding gains and losses on available-for-sale securities are included in earnings. With the exception of the Company’s fixed-rate notes payable, the carrying amounts of other financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, notes payable, and accounts payable and accrued expenses, approximate their fair values due to their short-term nature. For the fair value of the Company’s notes payable, see Note 4, “Debt.” Concentration of Risk As of September 30, 2023, the Company had cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. The Company diversifies its cash and cash equivalents with several banking institutions in an attempt to minimize exposure to any one of these institutions. The Company regularly monitors the financial stability of these financial institutions along with the balances on deposit at such institutions to minimize the Company’s potential risk and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash. The Company holds cash accounts at several institutions in excess of the Federal Deposit Insurance Corporations (the “FDIC”) protection limits of $ 250,000 5.2 12.1 The Company is exposed to geographic risk in that nine of its fifteen hotel properties are located in one state, Texas. Valuation and Allocation of Hotel Properties — Acquisition Upon acquisition, the purchase price of hotel properties is allocated to the tangible assets acquired, consisting of land, buildings and furniture, fixtures and equipment, any assumed debt, identified intangible assets and asset retirement obligations, if any, based on their fair values. Acquisition costs are charged to expense as incurred. Initial valuations are subject to change during the measurement period, but the measurement period ends as soon as the information is available. The measurement period shall not exceed one year from the acquisition date. Land values are derived from appraisals and building values are calculated as replacement cost less depreciation or estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. The value of furniture, fixtures and equipment is based on their fair value using replacement costs less depreciation. Any difference between the fair value of the hotel property acquired and the purchase price of the hotel property is recorded as goodwill or gain on acquisition of hotel property. The Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that the Company believes it could obtain at the date of acquisition. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan as a component of interest expense. In allocating the purchase price of each of the Company’s properties, the Company makes assumptions and uses various estimates, including, but not limited to, the estimated useful lives of the assets, the cost of replacing certain assets and discount rates used to determine present values. The Company uses Level 3 inputs to value acquired properties. Many of these estimates are obtained from independent third-party appraisals. However, the Company is responsible for the source and use of these estimates. These estimates require judgment and are subject to being imprecise; accordingly, if different estimates and assumptions were derived, the valuation of the various categories of the Company’s hotel properties or related intangibles could in turn result in a difference in the depreciation or amortization expense recorded in the Company’s consolidated financial statements. These variances could be material to the Company’s results of operations and financial condition. Valuation and Allocation of Hotel Properties — Ownership Investment in hotel properties is recorded at cost less accumulated depreciation. Major improvements that extend the life of an asset are capitalized and depreciated over a period equal to the shorter of the life of the improvement or the remaining useful life of the asset. The costs of ordinary repairs and maintenance are charged to expense when incurred. Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: Estimated Useful Lives (years) Buildings and improvements 39 40 Exterior improvements 10 20 Furniture, fixtures and equipment 5 10 Impairments The Company monitors events and changes in circumstances indicating that the carrying amount of a hotel property may not be recoverable. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing estimated future undiscounted cash flows expected to be generated over the life of the asset from operating activities and from its eventual disposition, to the carrying amount of the asset. In the event that the carrying amount exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss to adjust the carrying amount of the asset to estimated fair value for assets held for use and fair value less costs to sell for assets held for sale. There were no such impairment losses for the three and nine months ended September 30, 2023 and 2022. In evaluating a hotel property for impairment, the Company makes several estimates and assumptions, including, but not limited to, the projected date of disposition of the property, the estimated future cash flows of the property during the Company’s ownership and the projected sales price of the property. A change in these estimates and assumptions could result in a change in the estimated undiscounted cash flows or fair value of the Company’s hotel property which could then result in different conclusions regarding impairment and material changes to the Company’s consolidated financial statements. Revenue Recognition Hotel revenues, including room, food, beverage and other ancillary revenues, are recognized as the related services are delivered. Revenue is recorded net of any sales and other taxes collected from customers. Interest income is recognized when earned. Amounts received prior to guest arrival are recorded as advances from the customer and are recognized at the time of occupancy. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand or held in banks and short-term investments with an initial maturity of one year or less at the date of purchase. Restricted Cash Restricted cash includes reserves for property taxes, as well as reserves for property improvements, replacement of furniture, fixtures, and equipment and debt service, as required by certain management or mortgage and term debt agreements restrictions and provisions. The following is a reconciliation of the Company’s cash and cash equivalents and restricted cash to the total presented in the unaudited consolidated statement of cash flows as of September 30, 2023 and 2022 (in thousands): September 30, 2023 2022 Cash and cash equivalents $ 9,620 $ 6,507 Restricted cash 15,547 15,272 Total cash and cash equivalents and restricted cash $ 25,167 $ 21,779 Accounts Receivable The Company takes into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, payment history and financial strength of the customer, which, taken as a whole, determines the valuation. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. Deferred Franchise Costs Deferred franchise costs are recorded at cost and amortized over the term of the respective franchise contract on a straight-line basis. Accumulated amortization of deferred franchise costs was $ 499,000 466,000 Expected future amortization of deferred franchise costs as of September 30, 2023 is as follows (in thousands): Years Ending December 31, 2023 $ 21 2024 85 2025 85 2026 84 2027 75 Thereafter 263 Total $ 613 Debt Issuance Costs Debt issuance costs are presented as a direct deduction from the carrying value of the notes payable on the consolidated balance sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. Accumulated amortization of debt issuance costs was $ 6.5 million 6.1 million Expected future amortization of debt issuance costs as of September 30, 2023 is as follows (in thousands): Years Ending December 31, 2023 $ 169 2024 473 2025 184 2026 63 2027 29 Thereafter 13 Total $ 931 Earnings (Loss) per Share Earnings (loss) per share (“EPS”) is calculated based on the weighted average number of shares outstanding during each period. Basic and diluted EPS are the same for all periods presented. There were no

Investment in Hotel Properties

Investment in Hotel Properties	9 Months Ended
	Sep. 30, 2023
Real Estate [Abstract]
Investment in Hotel Properties	3. Investment in Hotel Properties The following table sets forth summary information regarding the Company’s investment in hotel properties as of September 30, 2023 (all $ amounts in thousands): Property Name Date Acquired Location Ownership Interest Original Purchase Price (1) Rooms Mortgage Debt Outstanding (2) Residence Inn Austin October 15, 2015 Austin, Texas 100 % $ 27,500 112 $ 15,238 Springhill Suites Seattle May 24, 2016 Seattle, Washington 100 % 74,100 234 41,173 Homewood Suites Woodlands September 27, 2017 (5) The Woodlands, Texas 100 % 17,356 91 8,285 Hyatt Place Germantown September 27, 2017 (5) Germantown, Tennessee 100 % 16,074 127 5,868 Hyatt Place North Charleston September 27, 2017 (5) North Charleston, South Carolina 100 % 13,806 113 6,439 Hampton Inn Austin September 27, 2017 (5) Austin, Texas 100 % 19,328 123 9,664 Residence Inn Grapevine September 27, 2017 (5) Grapevine, Texas 100 % 25,245 133 11,152 Marriott Courtyard Lyndhurst September 27, 2017 (5) Lyndhurst, New Jersey - (3 ) 39,547 227 17,648 Hilton Garden Inn Austin September 27, 2017 (5) Austin, Texas 100 % 29,288 138 16,740 Hampton Inn Great Valley September 27, 2017 (5) Frazer, Pennsylvania 100 % 15,285 125 7,310 Embassy Suites Nashville September 27, 2017 (5) Nashville, Tennessee 100 % 82,207 208 38,150 Homewood Suites Austin September 27, 2017 (5) Austin, Texas 100 % 18,835 96 9,863 Townplace Suites Fort Worth September 27, 2017 (5) Fort Worth, Texas - (4 ) 11,242 95 5,536 Hampton Inn Houston September 27, 2017 (5) Houston, Texas 100 % 9,958 119 3,950 Residence Inn Houston Medical Center April 29, 2019 Houston, Texas 100 % 52,000 182 27,597 Totals $ 451,771 2,123 $ 224,613 (1) Excludes closing costs and includes gain on acquisition. (2) As of September 30, 2023. (3) The Marriott Courtyard Lyndhurst is owned by MN Lyndhurst Venture, LLC, of which the OP is a member and holds 100 (4) The Townplace Suites Fort Worth is owned by MN Fort Worth Venture, LLC, of which the OP is a member and holds 100 (5) Property acquired on September 27, 2017 as a result of the merger of Moody National REIT I, Inc. (“Moody I”) with and into the Company (the “Merger”) and the merger of Moody National Operating Partnership I, L.P., the operating partnership of Moody I (“Moody I OP”), with and into the OP (the “Partnership Merger,” and together with the Merger, the “Mergers”). Investment in hotel properties consisted of the following at September 30, 2023 and December 31, 2022 (all amounts in thousands): September 30, 2023 December 31, 2022 Land $ 76,936 $ 76,936 Buildings and improvements 338,982 338,938 Furniture, fixtures and equipment 64,703 62,567 Total cost 480,621 478,441 Accumulated depreciation (90,833 ) (78,964 ) Investment in hotel properties, net $ 389,788 $ 399,477

Debt

Debt	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
Debt	4. Debt The Company’s aggregate borrowings are reviewed by the Board at least quarterly. Under the Company’s Articles of Amendment and Restatement (as amended, the “Charter”), the Company is prohibited from borrowing in excess of 300 300 300 As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): Loan Principal as of September 30, 2023 Principal as of December 31, 2022 Interest Rate at September 30, 2023 Maturity Date Residence Inn Austin $ 15,238 $ 15,465 4.580 % November 1, 2025 Springhill Suites Seattle 41,173 41,812 4.380 % October 1, 2026 Homewood Suites Woodlands 8,285 8,420 4.690 % April 11, 2025 Hyatt Place Germantown 5,868 6,342 7.250 % June 29, 2028 Hyatt Place North Charleston 6,439 6,553 5.193 % December 1, 2023 Hampton Inn Austin 9,664 9,844 5.426 % January 6, 2024 Residence Inn Grapevine 11,152 11,360 5.250 % April 6, 2024 Marriott Courtyard Lyndhurst 17,648 17,986 4.700 % September 27, 2024 Hilton Garden Inn Austin 16,740 17,026 4.530 % December 11, 2024 Hampton Inn Great Valley 7,310 7,429 4.700 % April 11, 2025 Embassy Suites Nashville 38,150 38,811 4.2123 % July 11, 2025 Homewood Suites Austin 9,863 10,022 4.650 % August 11, 2025 Townplace Suites Fort Worth 5,536 5,645 4.700 % September 27, 2024 Hampton Inn Houston 3,950 4,022 10.500 % April 28, 2028 Residence Inn Houston Medical Center 27,597 28,083 5.000 % October 1, 2024 U.S. Small Business Administration Economic Injury Disaster Loans 7,500 7,500 3.750 % November 2051 Total notes payable 232,113 236,320 Less unamortized debt issuance costs (931 ) (1,260 ) Total notes payable, net of unamortized debt issuance costs $ 231,182 $ 235,060 Monthly payments of principal and interest are due and payable until the maturity date, except that monthly installments of principal and interest begin two years from the dates of the U.S. Small Business Administration Economic Injury Disaster Loans. Each of the Company’s hotel properties is subject to a mortgage loan bearing interest at a fixed rate secured by the Company’s ownership interest in the property, except for the Hampton Inn Houston mortgage loan which bears interest at a floating rate. Scheduled maturities of the Company’s notes payable as of September 30, 2023 are as follows (all amounts in thousands): Years ending December 31, 2023 $ 7,724 2024 90,782 2025 77,845 2026 39,484 2027 522 Thereafter 15,756 Total $ 232,113 Economic Injury Disaster Loans The Company obtained fifteen Loans (“Loans”) of $500,000 30 3.75 $7.5 Notes Payable to Related Party On March 30, 2021, Moody National Capital, LLC (“Moody Capital”), an affiliate of the Company, loaned the Company $ 8 2 10 March 29, 2024 two years 4.75 6.75 10.08 10 From April 2021 to August 16, 2021, Moody Capital made a series of advances to the Company to meet specific cash flow needs of the Company. Effective June 30, 2021, these advances were memorialized in a promissory note (“Second Related Party Note”) with a total maximum aggregate loan amount of $ 10 June 30, 2024 two years 6.75 8.75 12.08 10 From August 20, 2021 to September 30, 2021, Moody Capital made a series of advances to the Company to meet specific cash flow needs. These advances were memorialized in a promissory note (“Third Related Party Note”) with a total maximum aggregate loan amount of $ 10 August 20, 2024 two years 7.75 9.75 13.08 10 From April 13, 2022 to September 30, 2023, Moody Capital made a series of advances to the Company to meet specific cash flow needs and has received repayments from the Company based on the Company’s specific available cash flow. These advances were memorialized in a promissory note (“Fourth Related Party Note”) with a total maximum aggregate loan amount of $ 10 April 13, 2025 two years 8.75 9.75 14.08 10 $110,500 Interest will be paid on the Related Party Note, the Second Related Party Note, the Third Related Party Note, and the Fourth Related Party Note as permitted by available cash flow of the Company, or from the excess proceeds following a sale of a property after the payment of expenses and amounts due to any senior lender, if applicable, and will be compounded semi-annually. The Company expects to enter into a mutually agreeable subordination agreement with any such senior lender. The Company may prepay the amounts due under the Related Party Note, the Second Related Party Note, the Third Related Party Note and the Fourth Related Party Note without any prepayment penalty. Accrued interest on notes payable to related party was $ 6.9 3.6 The estimated fair value of the Company’s notes payable as of September 30, 2023 and December 31, 2022, was $224 $236

Equity

Equity	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
Equity	5. Equity Capitalization Under its Charter, the Company has the authority to issue 1 100 $0.01 8,000 $25.00 $200,000 13.6 10.2 3.3 8,000 65,000 Schedule of shares outstanding Class Shares Outstanding as of September 30, Class A Shares 13,000 Class T Shares 481 Class I Shares 159 Total 13,640 The Board is authorized to amend the Charter without the approval of the stockholders to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. Distributions The Company first paid distributions on September 15, 2015. On March 24, 2020, the Board unanimously approved the suspension of (i) the payment of distributions to the Company’s stockholders, effective immediately, and (ii) the operation of the DRP, effective as of April 6, 2020, due to the impact that the COVID-19 pandemic had on the Company’s hotel properties. The payment of distributions and the operation of the DRP will remain suspended until such time as the Board approves their resumption. Noncontrolling Interest in Operating Partnership Noncontrolling interest in the OP at September 30, 2023 and December 31, 2022 was $ 2 2.3 316,037 $87,000 $91,000 $312,000 $296,000

Related Party Arrangements

Related Party Arrangements	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Arrangements	6. Related Party Arrangements Pursuant to the Advisory Agreement, the Advisor and certain affiliates of Advisor receive fees and compensation in connection with the Company’s public offering and the acquisition, management and sale of the Company’s real estate investments. In addition, in exchange for $1,000 Sales Commissions and Dealer Manager Fees From January 1, 2017 through June 12, 2017, the Company paid Moody Securities an up-front selling commission of up to 7.0 3.0 Beginning January 16, 2018, the Advisor assumed responsibility for the payment of all selling commissions, dealer manager fees and stockholder servicing fees paid in connection with the Company’s public offering; provided, however 7.0 6.0 3.0 2.5 9.7 8.5 Organization and Offering Expenses The Advisor will receive reimbursement for organizational and offering expenses incurred on the Company’s behalf, but only to the extent that such reimbursements do not exceed actual expenses incurred by Advisor and do not cause the cumulative selling commissions, dealer manager fees, stockholder servicing fees and other organization and offering expenses borne by the Company to exceed 15.0 As of September 30, 2023, total offering costs for the initial public offering and the follow-on offering were $21.1 $12.3 $8.8 $18.4 $12.3 $6.1 $2.7 $0 $2.7 $0 Acquisition Fees As of January 16, 2018, the Advisor assumed responsibility for the payment of all selling commissions, dealer manager fees and stockholder servicing fees in connection with the Company’s public offering. In connection therewith, as of January 16, 2018, the acquisition fee payable to the Advisor was increased from 1.5 3.85 allocable cost of investments acquired in a joint venture (including 3.85 1.5 2.35 1.5 Reimbursement of Acquisition Expenses The Advisor may also be reimbursed by the Company for actual expenses related to the evaluation, selection and acquisition of real estate investments, regardless of whether the Company actually acquires the related assets. The Company did not reimburse the Advisor for any acquisition expenses during the three and nine months ended September 30, 2023 and 2022. Financing Coordination Fee The Advisor also receives financing coordination fees of 1 0.75 Property Management Fee The Company pays Moody National Hospitality Management, LLC (“Property Manager”) a monthly hotel management fee equal to 4.0 ten years $877,000 $861,000 $113,000 $2.7 $2.6 $337,000 The Company pays an annual incentive fee to Property Manager. Such annual incentive fee is equal to 15 8.5 may pay some or all of this annual incentive fee to third-party sub-property managers for management services. Asset Management Fee The Company pays the Advisor a monthly asset management fee of one-twelfth of 1.0 $1.2 $3.6 Disposition Fee The Company also pays the Advisor or its affiliates a disposition fee in an amount of up to one-half of the brokerage commission paid on the sale of an asset, but in no event greater than 3 6 Operating Expense Reimbursement The Company will reimburse the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s aggregate operating expenses (including the asset management fee payable to the Advisor) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2 25 2 25 2 25 $6.9 $5 $1.9 $6.9 $0 2 25 $1.9 $671,000 Notes Payable to Related Party See Note 4, “Debt” to the consolidated financial statements for a description of notes payable to related party. The balance of notes payable to related party was $ 40 30.1 Due to Related Parties, Net The composition of the amounts due to related parties, net as of September 30, 2023 and December 31, 2022 is as follows (in thousands): September 30, 2023 December 31, 2022 Operating expense reimbursement $ 671 $ 252 Asset management fee 3,595 3,467 Accounts payable to Property Manager 2,466 4,425 Accrued interest on related party notes 6,910 3,557 Total due to related parties, net $ 13,642 $ 11,701

Incentive Award Plan

Incentive Award Plan	9 Months Ended
	Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]
Incentive Award Plan	7. Incentive Award Plan The Company has adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. Shares of common stock will be authorized and reserved for issuance under the Incentive Award Plan. The Company has also adopted an independent directors compensation plan (the “Independent Directors Compensation Plan”) pursuant to which each of the Company’s independent directors was entitled, subject to the Independent Directors Compensation Plan’s conditions and restrictions, to receive an initial grant of 5,000 $2,000,000 5,000 2,500 1,935,000 The Company recorded compensation expense related to such shares of restricted stock of $0 $28,000 $0 $78,000 no

Subordinated Participation Inte

Subordinated Participation Interest	9 Months Ended
	Sep. 30, 2023
Disclosure Subordinated Participation Interest [Abstract]
Subordinated Participation Interest	8. Subordinated Participation Interest Pursuant to the limited partnership agreement for the OP, Moody LPOP II, the holder of the Special Limited Partnership Interests, is entitled to receive distributions equal to 15.0 6.0 8.0

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	9. Commitments and Contingencies Restricted Cash Under certain management and debt agreements existing at September 30, 2023, the Company escrows payments required for real estate taxes, replacement of hotel furniture and fixtures, debt service and property improvement plans. The composition of the Company’s restricted cash as of September 30, 2023 and December 31, 2022 are as follows (all amounts in in thousands): September 30, December 31, 2023 2022 Real estate taxes $ 4,490 $ 4,499 Insurance 161 376 Hotel furniture and fixtures 7,431 8,053 Debt service 3,307 3,205 Property improvement plan 158 158 Total restricted cash $ 15,547 $ 16,291 Franchise Agreements As September 30, 2023, all of the Company’s hotel properties, including those acquired as part of the Moody I Portfolio, are operated under franchise agreements with initial terms ranging from 10 20 3.0 6.0 1.5 4.3 1.9 $5.5 $5.2

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	10. Income Taxes The Company has formed a TRS that is treated as a C-corporation for federal income tax purposes and uses the asset and liability method of accounting for income taxes. Tax return positions are recognized in the consolidated financial statements when they are “more-likely-than-not” to be sustained upon examination by the taxing authority. Deferred income tax assets and liabilities result from temporary differences. Temporary differences are differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future periods. A valuation allowance may be placed on deferred income tax assets, if it is determined that it is more likely than not that a deferred tax asset may not be realized. As of September 30, 2023, the Company had operating loss and capital loss carry-forwards of $15.9 $900,000 The Company had deferred tax assets of $2.3 $19.4 $17.3 $103.5 $8.3 The income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022 consisted of the following (in thousands): Three months ended Nine months ended 2023 2022 2023 2022 Current expense $ 24 $ 18 $ 130 $ 109 Deferred benefit (560 ) (579 ) (2,107 ) (1,925 ) Valuation provision for deferred benefit 560 579 2,107 1,925 Total expense $ 24 $ 18 $ 130 $ 109 Federal $ (560 ) $ (579 ) $ (2,107 ) $ (1,925 ) Valuation provision for federal taxes 560 579 2,107 1,925 State 24 18 130 109 Total tax expense $ 24 $ 18 $ 130 $ 109 On September 30, 2023, the Company had net deferred tax assets of $2.3 These loss carryforwards will generally expire in 2033 through 2038 if not utilized by then.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	11. Subsequent Events In preparing the consolidated financial statements, the Company has evaluated all subsequent events and transactions for potential recognition or disclosure through November 14, 2023, the date the consolidated financial statements were available for issuance.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries over which it has control. All intercompany balances and transactions are eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Organization and Offering Costs	Organization and Offering Costs Organization and offering costs of the Company are paid directly by the Company or incurred by the Advisor on behalf of the Company. Pursuant to the Advisory Agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs incurred by the Advisor associated with each of the Company’s public offerings, provided that within 60 days of the last day of the month in which a public offering ends, the Advisor is obligated to reimburse the Company to the extent aggregate organization and offering costs incurred by the Company in connection with the completed public offering exceed 15 15 All offering costs, including selling commissions and dealer manager fees, are recorded as an offset to additional paid-in-capital, and all organization costs are recorded as an expense when the Company has an obligation to reimburse the Advisor. As of September 30, 2023, total offering costs for the initial public offering and the follow-on offering were $ 21.1 12.3 million 8.8 million 18.4 12.3 6.1 million 2.7 0 2.7 0
Income Taxes	Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2016. The Company did not meet all of the qualifications to be a REIT under the Internal Revenue Code for the years ended December 31, 2015 and 2014, including not having 100 Provided that the Company continues to qualify as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 The Company accounts for income taxes of its TRS using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period prior to when the new rates become effective. The Company records a valuation allowance for net deferred tax assets that are not expected to be realized. The Company has reviewed tax positions under GAAP guidance that clarify the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the consolidated financial statements if it is more likely than not that the tax position will be sustained upon examination. The Company had no material uncertain tax positions as of September 30, 2023. The preparation of the Company’s various tax returns requires the use of estimates for federal and state income tax purposes. These estimates may be subjected to review by the respective taxing authorities. A revision to an estimate may result in an assessment of additional taxes, penalties and interest. At this time, a range in which the Company’s estimates may change is not expected to be material. The Company will account for interest and penalties relating to uncertain tax positions in the current period results of operations, if necessary. The Company has tax years 2018 through 2022 remaining subject to examination by various federal and state tax jurisdictions. For more information, see Note 10, “Income Taxes.”
Fair Value Measurement	Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost approach: Amount required to replace the service capacity of an asset (replacement cost). Income approach: Techniques used to convert future income amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company has elected the fair value option in recording its investment in marketable securities whereby unrealized holding gains and losses on available-for-sale securities are included in earnings. With the exception of the Company’s fixed-rate notes payable, the carrying amounts of other financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, notes payable, and accounts payable and accrued expenses, approximate their fair values due to their short-term nature. For the fair value of the Company’s notes payable, see Note 4, “Debt.”
Concentration of Risk	Concentration of Risk As of September 30, 2023, the Company had cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. The Company diversifies its cash and cash equivalents with several banking institutions in an attempt to minimize exposure to any one of these institutions. The Company regularly monitors the financial stability of these financial institutions along with the balances on deposit at such institutions to minimize the Company’s potential risk and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash. The Company holds cash accounts at several institutions in excess of the Federal Deposit Insurance Corporations (the “FDIC”) protection limits of $ 250,000 5.2 12.1 The Company is exposed to geographic risk in that nine of its fifteen hotel properties are located in one state, Texas.
Valuation and Allocation of Hotel Properties — Acquisition	Valuation and Allocation of Hotel Properties — Acquisition Upon acquisition, the purchase price of hotel properties is allocated to the tangible assets acquired, consisting of land, buildings and furniture, fixtures and equipment, any assumed debt, identified intangible assets and asset retirement obligations, if any, based on their fair values. Acquisition costs are charged to expense as incurred. Initial valuations are subject to change during the measurement period, but the measurement period ends as soon as the information is available. The measurement period shall not exceed one year from the acquisition date. Land values are derived from appraisals and building values are calculated as replacement cost less depreciation or estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. The value of furniture, fixtures and equipment is based on their fair value using replacement costs less depreciation. Any difference between the fair value of the hotel property acquired and the purchase price of the hotel property is recorded as goodwill or gain on acquisition of hotel property. The Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that the Company believes it could obtain at the date of acquisition. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan as a component of interest expense. In allocating the purchase price of each of the Company’s properties, the Company makes assumptions and uses various estimates, including, but not limited to, the estimated useful lives of the assets, the cost of replacing certain assets and discount rates used to determine present values. The Company uses Level 3 inputs to value acquired properties. Many of these estimates are obtained from independent third-party appraisals. However, the Company is responsible for the source and use of these estimates. These estimates require judgment and are subject to being imprecise; accordingly, if different estimates and assumptions were derived, the valuation of the various categories of the Company’s hotel properties or related intangibles could in turn result in a difference in the depreciation or amortization expense recorded in the Company’s consolidated financial statements. These variances could be material to the Company’s results of operations and financial condition.
Valuation and Allocation of Hotel Properties — Ownership	Valuation and Allocation of Hotel Properties — Ownership Investment in hotel properties is recorded at cost less accumulated depreciation. Major improvements that extend the life of an asset are capitalized and depreciated over a period equal to the shorter of the life of the improvement or the remaining useful life of the asset. The costs of ordinary repairs and maintenance are charged to expense when incurred. Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: Estimated Useful Lives (years) Buildings and improvements 39 40 Exterior improvements 10 20 Furniture, fixtures and equipment 5 10
Impairments	Impairments The Company monitors events and changes in circumstances indicating that the carrying amount of a hotel property may not be recoverable. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing estimated future undiscounted cash flows expected to be generated over the life of the asset from operating activities and from its eventual disposition, to the carrying amount of the asset. In the event that the carrying amount exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss to adjust the carrying amount of the asset to estimated fair value for assets held for use and fair value less costs to sell for assets held for sale. There were no such impairment losses for the three and nine months ended September 30, 2023 and 2022. In evaluating a hotel property for impairment, the Company makes several estimates and assumptions, including, but not limited to, the projected date of disposition of the property, the estimated future cash flows of the property during the Company’s ownership and the projected sales price of the property. A change in these estimates and assumptions could result in a change in the estimated undiscounted cash flows or fair value of the Company’s hotel property which could then result in different conclusions regarding impairment and material changes to the Company’s consolidated financial statements.
Revenue Recognition	Revenue Recognition Hotel revenues, including room, food, beverage and other ancillary revenues, are recognized as the related services are delivered. Revenue is recorded net of any sales and other taxes collected from customers. Interest income is recognized when earned. Amounts received prior to guest arrival are recorded as advances from the customer and are recognized at the time of occupancy.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents represent cash on hand or held in banks and short-term investments with an initial maturity of one year or less at the date of purchase.
Restricted Cash	Restricted Cash Restricted cash includes reserves for property taxes, as well as reserves for property improvements, replacement of furniture, fixtures, and equipment and debt service, as required by certain management or mortgage and term debt agreements restrictions and provisions. The following is a reconciliation of the Company’s cash and cash equivalents and restricted cash to the total presented in the unaudited consolidated statement of cash flows as of September 30, 2023 and 2022 (in thousands): September 30, 2023 2022 Cash and cash equivalents $ 9,620 $ 6,507 Restricted cash 15,547 15,272 Total cash and cash equivalents and restricted cash $ 25,167 $ 21,779
Accounts Receivable	Accounts Receivable The Company takes into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, payment history and financial strength of the customer, which, taken as a whole, determines the valuation. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible.
Deferred Franchise Costs	Deferred Franchise Costs Deferred franchise costs are recorded at cost and amortized over the term of the respective franchise contract on a straight-line basis. Accumulated amortization of deferred franchise costs was $ 499,000 466,000 Expected future amortization of deferred franchise costs as of September 30, 2023 is as follows (in thousands): Years Ending December 31, 2023 $ 21 2024 85 2025 85 2026 84 2027 75 Thereafter 263 Total $ 613
Debt Issuance Costs	Debt Issuance Costs Debt issuance costs are presented as a direct deduction from the carrying value of the notes payable on the consolidated balance sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. Accumulated amortization of debt issuance costs was $ 6.5 million 6.1 million Expected future amortization of debt issuance costs as of September 30, 2023 is as follows (in thousands): Years Ending December 31, 2023 $ 169 2024 473 2025 184 2026 63 2027 29 Thereafter 13 Total $ 931
Earnings (Loss) per Share	Earnings (Loss) per Share Earnings (loss) per share (“EPS”) is calculated based on the weighted average number of shares outstanding during each period. Basic and diluted EPS are the same for all periods presented. There were no

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2023
Accounting Policies [Abstract]
Depreciation expense is computed using the straight-line method based upon the following estimated useful lives:	Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: Estimated Useful Lives (years) Buildings and improvements 39 40 Exterior improvements 10 20 Furniture, fixtures and equipment 5 10
The following is a reconciliation of the Company’s cash and cash equivalents and restricted cash to the total presented in the unaudited consolidated statement of cash flows as of September 30, 2023 and 2022 (in thousands):	The following is a reconciliation of the Company’s cash and cash equivalents and restricted cash to the total presented in the unaudited consolidated statement of cash flows as of September 30, 2023 and 2022 (in thousands): September 30, 2023 2022 Cash and cash equivalents $ 9,620 $ 6,507 Restricted cash 15,547 15,272 Total cash and cash equivalents and restricted cash $ 25,167 $ 21,779
Expected future amortization of deferred franchise costs as of September 30, 2023 is as follows (in thousands):	Expected future amortization of deferred franchise costs as of September 30, 2023 is as follows (in thousands): Years Ending December 31, 2023 $ 21 2024 85 2025 85 2026 84 2027 75 Thereafter 263 Total $ 613
Expected future amortization of debt issuance costs as of September 30, 2023 is as follows (in thousands):	Debt issuance costs are presented as a direct deduction from the carrying value of the notes payable on the consolidated balance sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. Accumulated amortization of debt issuance costs was $ 6.5 million 6.1 million Expected future amortization of debt issuance costs as of September 30, 2023 is as follows (in thousands): Years Ending December 31, 2023 $ 169 2024 473 2025 184 2026 63 2027 29 Thereafter 13 Total $ 931

Investment in Hotel Properties

Investment in Hotel Properties (Tables)	9 Months Ended
	Sep. 30, 2023
Real Estate [Abstract]
The following table sets forth summary information regarding the Company’s investment in hotel properties as of September 30, 2023 (all $ amounts in thousands):	The following table sets forth summary information regarding the Company’s investment in hotel properties as of September 30, 2023 (all $ amounts in thousands): Property Name Date Acquired Location Ownership Interest Original Purchase Price (1) Rooms Mortgage Debt Outstanding (2) Residence Inn Austin October 15, 2015 Austin, Texas 100 % $ 27,500 112 $ 15,238 Springhill Suites Seattle May 24, 2016 Seattle, Washington 100 % 74,100 234 41,173 Homewood Suites Woodlands September 27, 2017 (5) The Woodlands, Texas 100 % 17,356 91 8,285 Hyatt Place Germantown September 27, 2017 (5) Germantown, Tennessee 100 % 16,074 127 5,868 Hyatt Place North Charleston September 27, 2017 (5) North Charleston, South Carolina 100 % 13,806 113 6,439 Hampton Inn Austin September 27, 2017 (5) Austin, Texas 100 % 19,328 123 9,664 Residence Inn Grapevine September 27, 2017 (5) Grapevine, Texas 100 % 25,245 133 11,152 Marriott Courtyard Lyndhurst September 27, 2017 (5) Lyndhurst, New Jersey - (3 ) 39,547 227 17,648 Hilton Garden Inn Austin September 27, 2017 (5) Austin, Texas 100 % 29,288 138 16,740 Hampton Inn Great Valley September 27, 2017 (5) Frazer, Pennsylvania 100 % 15,285 125 7,310 Embassy Suites Nashville September 27, 2017 (5) Nashville, Tennessee 100 % 82,207 208 38,150 Homewood Suites Austin September 27, 2017 (5) Austin, Texas 100 % 18,835 96 9,863 Townplace Suites Fort Worth September 27, 2017 (5) Fort Worth, Texas - (4 ) 11,242 95 5,536 Hampton Inn Houston September 27, 2017 (5) Houston, Texas 100 % 9,958 119 3,950 Residence Inn Houston Medical Center April 29, 2019 Houston, Texas 100 % 52,000 182 27,597 Totals $ 451,771 2,123 $ 224,613 (1) Excludes closing costs and includes gain on acquisition. (2) As of September 30, 2023. (3) The Marriott Courtyard Lyndhurst is owned by MN Lyndhurst Venture, LLC, of which the OP is a member and holds 100 (4) The Townplace Suites Fort Worth is owned by MN Fort Worth Venture, LLC, of which the OP is a member and holds 100 (5) Property acquired on September 27, 2017 as a result of the merger of Moody National REIT I, Inc. (“Moody I”) with and into the Company (the “Merger”) and the merger of Moody National Operating Partnership I, L.P., the operating partnership of Moody I (“Moody I OP”), with and into the OP (the “Partnership Merger,” and together with the Merger, the “Mergers”).
Investment in hotel properties consisted of the following at September 30, 2023 and December 31, 2022 (all amounts in thousands):	Investment in hotel properties consisted of the following at September 30, 2023 and December 31, 2022 (all amounts in thousands): September 30, 2023 December 31, 2022 Land $ 76,936 $ 76,936 Buildings and improvements 338,982 338,938 Furniture, fixtures and equipment 64,703 62,567 Total cost 480,621 478,441 Accumulated depreciation (90,833 ) (78,964 ) Investment in hotel properties, net $ 389,788 $ 399,477

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2023
Debt Disclosure [Abstract]
As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands):	As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): Loan Principal as of September 30, 2023 Principal as of December 31, 2022 Interest Rate at September 30, 2023 Maturity Date Residence Inn Austin $ 15,238 $ 15,465 4.580 % November 1, 2025 Springhill Suites Seattle 41,173 41,812 4.380 % October 1, 2026 Homewood Suites Woodlands 8,285 8,420 4.690 % April 11, 2025 Hyatt Place Germantown 5,868 6,342 7.250 % June 29, 2028 Hyatt Place North Charleston 6,439 6,553 5.193 % December 1, 2023 Hampton Inn Austin 9,664 9,844 5.426 % January 6, 2024 Residence Inn Grapevine 11,152 11,360 5.250 % April 6, 2024 Marriott Courtyard Lyndhurst 17,648 17,986 4.700 % September 27, 2024 Hilton Garden Inn Austin 16,740 17,026 4.530 % December 11, 2024 Hampton Inn Great Valley 7,310 7,429 4.700 % April 11, 2025 Embassy Suites Nashville 38,150 38,811 4.2123 % July 11, 2025 Homewood Suites Austin 9,863 10,022 4.650 % August 11, 2025 Townplace Suites Fort Worth 5,536 5,645 4.700 % September 27, 2024 Hampton Inn Houston 3,950 4,022 10.500 % April 28, 2028 Residence Inn Houston Medical Center 27,597 28,083 5.000 % October 1, 2024 U.S. Small Business Administration Economic Injury Disaster Loans 7,500 7,500 3.750 % November 2051 Total notes payable 232,113 236,320 Less unamortized debt issuance costs (931 ) (1,260 ) Total notes payable, net of unamortized debt issuance costs $ 231,182 $ 235,060
Scheduled maturities of the Company’s notes payable as of September 30, 2023 are as follows (all amounts in thousands):	Scheduled maturities of the Company’s notes payable as of September 30, 2023 are as follows (all amounts in thousands): Years ending December 31, 2023 $ 7,724 2024 90,782 2025 77,845 2026 39,484 2027 522 Thereafter 15,756 Total $ 232,113

Equity (Tables)

Equity (Tables)	9 Months Ended
	Sep. 30, 2023
Equity [Abstract]
Schedule of shares outstanding	Schedule of shares outstanding Class Shares Outstanding as of September 30, Class A Shares 13,000 Class T Shares 481 Class I Shares 159 Total 13,640

Related Party Arrangements (Tab

Related Party Arrangements (Tables)	9 Months Ended
	Sep. 30, 2023
Related Party Transactions [Abstract]
The composition of the amounts due to related parties, net as of September 30, 2023 and December 31, 2022 is as follows (in thousands):	The composition of the amounts due to related parties, net as of September 30, 2023 and December 31, 2022 is as follows (in thousands): September 30, 2023 December 31, 2022 Operating expense reimbursement $ 671 $ 252 Asset management fee 3,595 3,467 Accounts payable to Property Manager 2,466 4,425 Accrued interest on related party notes 6,910 3,557 Total due to related parties, net $ 13,642 $ 11,701

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
The composition of the Company’s restricted cash as of September 30, 2023 and December 31, 2022 are as follows (all amounts in in thousands):	Under certain management and debt agreements existing at September 30, 2023, the Company escrows payments required for real estate taxes, replacement of hotel furniture and fixtures, debt service and property improvement plans. The composition of the Company’s restricted cash as of September 30, 2023 and December 31, 2022 are as follows (all amounts in in thousands): September 30, December 31, 2023 2022 Real estate taxes $ 4,490 $ 4,499 Insurance 161 376 Hotel furniture and fixtures 7,431 8,053 Debt service 3,307 3,205 Property improvement plan 158 158 Total restricted cash $ 15,547 $ 16,291

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
The income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022 consisted of the following (in thousands):	The income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022 consisted of the following (in thousands): Three months ended Nine months ended 2023 2022 2023 2022 Current expense $ 24 $ 18 $ 130 $ 109 Deferred benefit (560 ) (579 ) (2,107 ) (1,925 ) Valuation provision for deferred benefit 560 579 2,107 1,925 Total expense $ 24 $ 18 $ 130 $ 109 Federal $ (560 ) $ (579 ) $ (2,107 ) $ (1,925 ) Valuation provision for federal taxes 560 579 2,107 1,925 State 24 18 130 109 Total tax expense $ 24 $ 18 $ 130 $ 109

Organization (Details Narrative

Organization (Details Narrative)		9 Months Ended
	Jan. 18, 2018 USD ($)	Sep. 30, 2023 USD ($) Number $ / shares shares	Dec. 31, 2022 USD ($) $ / shares	Jun. 26, 2017 $ / shares	Jan. 20, 2015 USD ($)
Number of rooms | Number		2,123
Common stock, par value (in dollars per share) | $ / shares		$ 0.01	$ 0.01
Value of shares issuable under registration statement	$ 990,000,000
Special limited partnership interests		$ 1,000	$ 1,000
Moody Holdings II [Member]
Special limited partnership interests		1,000
Moody LPOP II [Member]
Special limited partnership interests		$ 1,000
Common Class A [Member]
Common stock, par value (in dollars per share) | $ / shares				$ 0.01
Common Class D [Member]
Common stock, par value (in dollars per share) | $ / shares				0.01
Common Class I [Member]
Common stock, par value (in dollars per share) | $ / shares				0.01
Common Class T [Member]
Common stock, par value (in dollars per share) | $ / shares				$ 0.01
IPO [Member]
Common stock, authorized, value					$ 1,000,000,000
Common stock authorized in distribution reinvestment plan, value					100,000,000
IPO [Member] | Maximum [Member]
Common stock, authorized, value					$ 1,100,000,000
Initial Public Offering and Follow on Offering [Member]
Issuance of common stock, net of offering costs (in shares) | shares		10,200,000
Issuance of common stock pursuant to dividend reinvestment plan (in shares) | shares		567,000
Proceeds from stock and DRIP offering		$ 234,600,000
Follow-on offering [Member]
Issuance of common stock, net of offering costs (in shares) | shares		4,100,000
Issuance of common stock pursuant to dividend reinvestment plan (in shares) | shares		352,000
Proceeds from stock and DRIP offering		$ 87,200,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details Narrative)	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) Number shares	Dec. 31, 2022 USD ($) shares
Minimum number of shareholders to qualify as REIT | Number	100
Minimum percentage of taxable income to be distributed	90%
Federal deposit insurance corporation protection limits	$ 250,000
Exceeded federally insured limits	5,200,000
Accumulated amortization, deferred franchise costs	499,000	$ 466,000
Debt issuance costs, accumulated amortization	$ 6,500,000	$ 6,100,000
Nonvested restricted stock | shares	0	0
Restricted Cash [Member]
Exceeded federally insured limits	$ 12,100,000
Affiliated Entity [Member]
Percentage of organization and offering costs	15%
Total offering costs	$ 21,100,000
Offering cost directly incurred by company	12,300,000
Offering cost reimbursed to advisor	8,800,000
Due to Advisor for reimbursable offering costs	0
Affiliated Entity [Member] | Follow-on offering [Member]
Total offering costs	2,700,000
Offering cost directly incurred by company	0
Offering cost reimbursed to advisor	2,700,000
Affiliated Entity [Member] | IPO [Member]
Total offering costs	18,400,000
Offering cost directly incurred by company	12,300,000
Offering cost reimbursed to advisor	$ 6,100,000

Depreciation expense is compute

Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: (Details)	Sep. 30, 2023
Building and Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	39 years
Building and Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Exterior Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Exterior Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	20 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years

The following is a reconciliati

The following is a reconciliation of the Company’s cash and cash equivalents and restricted cash to the total presented in the unaudited consolidated statement of cash flows as of September 30, 2023 and 2022 (in thousands): (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 9,620	$ 4,912	$ 6,507
Restricted cash	15,547		15,272
Total cash and cash equivalents and restricted cash	$ 25,167	$ 21,203	$ 21,779	$ 19,281

Expected future amortization of

Expected future amortization of deferred franchise costs as of September 30, 2023 is as follows (in thousands): (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Years Ending December 31,
Total	$ 613	$ 676
Franchise Rights [Member]
Years Ending December 31,
2023	21
2024	85
2025	85
2026	84
2027	75
Thereafter	263
Total	$ 613

Expected future amortization _2

Expected future amortization of debt issuance costs as of September 30, 2023 is as follows (in thousands): (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Years Ending December 31,
2023	$ 169
2024	473
2025	184
2026	63
2027	29
Thereafter	13
Total	$ 931	$ 1,260

The following table sets forth

The following table sets forth summary information regarding the Company’s investment in hotel properties as of September 30, 2023 (all $ amounts in thousands): (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) Number
Real Estate Properties [Line Items]
Original Purchase Price	$ 451,771
Rooms | Number	2,123
Mortgage Debt Outstanding	$ 224,613
Residence Inn Austin Hotel [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Residence Inn Austin
Date Acquired	Oct. 15, 2015
Location	Austin, Texas
Ownership Percentage	100%
Original Purchase Price	$ 27,500	[1]
Rooms | Number	112
Mortgage Debt Outstanding	$ 15,238	[2]
Springhill Suites Seattle [Member] | WASHINGTON
Real Estate Properties [Line Items]
Property Name	Springhill Suites Seattle
Date Acquired	May 24, 2016
Location	Seattle, Washington
Ownership Percentage	100%
Original Purchase Price	$ 74,100	[1]
Rooms | Number	234
Mortgage Debt Outstanding	$ 41,173	[2]
Homewood Suites Woodlands [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Homewood Suites Woodlands
Date Acquired	Sep. 27, 2017	[3]
Location	The Woodlands, Texas
Ownership Percentage	100%
Original Purchase Price	$ 17,356	[1]
Rooms | Number	91
Mortgage Debt Outstanding	$ 8,285	[2]
Hyatt Place Germantown [Member] | TENNESSEE
Real Estate Properties [Line Items]
Property Name	Hyatt Place Germantown
Date Acquired	Sep. 27, 2017	[3]
Location	Germantown, Tennessee
Ownership Percentage	100%
Original Purchase Price	$ 16,074	[1]
Rooms | Number	127
Mortgage Debt Outstanding	$ 5,868	[2]
Hyatt Place North Charleston [Member] | SOUTH CAROLINA
Real Estate Properties [Line Items]
Property Name	Hyatt Place North Charleston
Date Acquired	Sep. 27, 2017	[3]
Location	North Charleston, South Carolina
Ownership Percentage	100%
Original Purchase Price	$ 13,806	[1]
Rooms | Number	113
Mortgage Debt Outstanding	$ 6,439	[2]
Hampton Inn Austin [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Hampton Inn Austin
Date Acquired	Sep. 27, 2017	[3]
Location	Austin, Texas
Ownership Percentage	100%
Original Purchase Price	$ 19,328	[1]
Rooms | Number	123
Mortgage Debt Outstanding	$ 9,664	[2]
Residence Inn Grapevine [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Residence Inn Grapevine
Date Acquired	Sep. 27, 2017	[3]
Location	Grapevine, Texas
Ownership Percentage	100%
Original Purchase Price	$ 25,245	[1]
Rooms | Number	133
Mortgage Debt Outstanding	$ 11,152	[2]
Marriott Courtyard Inn Lyndhurst [Member] | MN Lyndhurst Venture, LLC [Member]
Real Estate Properties [Line Items]
Ownership Percentage	100%
Marriott Courtyard Inn Lyndhurst [Member] | NEW JERSEY
Real Estate Properties [Line Items]
Property Name	Marriott Courtyard Lyndhurst
Date Acquired	Sep. 27, 2017	[3]
Location	Lyndhurst, New Jersey
Ownership Percentage		[4]
Original Purchase Price	$ 39,547	[1]
Rooms | Number	227
Mortgage Debt Outstanding	$ 17,648	[2]
Hilton Garden Inn Austin [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Hilton Garden Inn Austin
Date Acquired	Sep. 27, 2017	[3]
Location	Austin, Texas
Ownership Percentage	100%
Original Purchase Price	$ 29,288	[1]
Rooms | Number	138
Mortgage Debt Outstanding	$ 16,740	[2]
Hampton Inn Great Valley [Member] | PENNSYLVANIA
Real Estate Properties [Line Items]
Property Name	Hampton Inn Great Valley
Date Acquired	Sep. 27, 2017	[3]
Location	Frazer, Pennsylvania
Ownership Percentage	100%
Original Purchase Price	$ 15,285	[1]
Rooms | Number	125
Mortgage Debt Outstanding	$ 7,310	[2]
Embassy Suites Nashville [Member] | TENNESSEE
Real Estate Properties [Line Items]
Property Name	Embassy Suites Nashville
Date Acquired	Sep. 27, 2017	[3]
Location	Nashville, Tennessee
Ownership Percentage	100%
Original Purchase Price	$ 82,207	[1]
Rooms | Number	208
Mortgage Debt Outstanding	$ 38,150	[2]
Homewood Suites Austin [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Homewood Suites Austin
Date Acquired	Sep. 27, 2017	[3]
Location	Austin, Texas
Ownership Percentage	100%
Original Purchase Price	$ 18,835	[1]
Rooms | Number	96
Mortgage Debt Outstanding	$ 9,863	[2]
Townplace Suites Fort Worth [Member] | MN Fort Worth Venture, LLC [Member]
Real Estate Properties [Line Items]
Ownership Percentage	100%
Townplace Suites Fort Worth [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Townplace Suites Fort Worth
Date Acquired	Sep. 27, 2017	[3]
Location	Fort Worth, Texas
Ownership Percentage		[5]
Original Purchase Price	$ 11,242	[1]
Rooms | Number	95
Mortgage Debt Outstanding	$ 5,536	[2]
Hampton Inn Houston [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Hampton Inn Houston
Date Acquired	Sep. 27, 2017	[3]
Location	Houston, Texas
Ownership Percentage	100%
Original Purchase Price	$ 9,958	[1]
Rooms | Number	119
Mortgage Debt Outstanding	$ 3,950	[2]
Residence Inn Houston Medical Center [Member] | TEXAS
Real Estate Properties [Line Items]
Property Name	Residence Inn Houston Medical Center
Date Acquired	Apr. 29, 2019
Location	Houston, Texas
Ownership Percentage	100%
Original Purchase Price	$ 52,000	[1]
Rooms | Number	182
Mortgage Debt Outstanding	$ 27,597	[2]
[1]Excludes closing costs and includes gain on acquisition.[2]As of September 30, 2023.[3]Property acquired on September 27, 2017 as a result of the merger of Moody National REIT I, Inc. (“Moody I”) with and into the Company (the “Merger”) and the merger of Moody National Operating Partnership I, L.P., the operating partnership of Moody I (“Moody I OP”), with and into the OP (the “Partnership Merger,” and together with the Merger, the “Mergers”).[4]The Marriott Courtyard Lyndhurst is owned by MN Lyndhurst Venture, LLC, of which the OP is a member and holds 100 100

Investment in hotel propertie_2

Investment in hotel properties consisted of the following at September 30, 2023 and December 31, 2022 (all amounts in thousands): (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Real Estate [Abstract]
Land	$ 76,936	$ 76,936
Buildings and improvements	338,982	338,938
Furniture, fixtures and equipment	64,703	62,567
Total cost	480,621	478,441
Accumulated depreciation	(90,833)	(78,964)
Investment in hotel properties, net	$ 389,788	$ 399,477

Debt (Details Narrative)

Debt (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2021	Aug. 16, 2021	Mar. 30, 2021
Debt Instrument [Line Items]
Borrowings maximum percentage of net assets	300%
Loan balance	$ 232,113,000	$ 236,320,000
Related party note	231,182,000	235,060,000
Accrued interest - related party notes	6,910,000	3,557,000
Fair value of notes payable	224,000,000	236,000,000
Affiliated Entity [Member]
Debt Instrument [Line Items]
Accrued interest - related party notes	6,900,000	3,600,000
US Small Business Administration [Member]
Debt Instrument [Line Items]
Principal amount	$ 500,000
Debt maturity period	30 years
Interest rate	3.75%
Loan balance	$ 7,500,000	7,500,000
Promissory Note [Member] | Moody National Capital LLC [Member]
Debt Instrument [Line Items]
Principal amount					$ 8,000,000
Line of credit facility, remaining borrowing capacity					2,000,000
Line of credit facility, maximum borrowing capacity					$ 10,000,000
Maturity date	Mar. 29, 2024
Extend maturity date	2 years
Promissory Note [Member] | Moody National Capital LLC [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	4.75%
Promissory Note [Member] | Moody National Capital LLC [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	6.75%
Related Party Note [Member] | Moody National Capital LLC [Member]
Debt Instrument [Line Items]
Interest rate	10.08%
Related party note	$ 10,000,000	10,000,000
Second Related Party Note [Member] | Moody National Capital LLC [Member]
Debt Instrument [Line Items]
Principal amount				$ 10,000,000
Maturity date	Jun. 30, 2024
Extend maturity date	2 years
Interest rate	12.08%
Related party note	$ 10,000,000	10,000,000
Second Related Party Note [Member] | Moody National Capital LLC [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	6.75%
Second Related Party Note [Member] | Moody National Capital LLC [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	8.75%
Third Related Party Note [Member] | Moody National Capital LLC [Member]
Debt Instrument [Line Items]
Principal amount			$ 10,000,000
Maturity date	Aug. 20, 2024
Extend maturity date	2 years
Interest rate	13.08%
Related party note	$ 10,000,000	10,000,000
Third Related Party Note [Member] | Moody National Capital LLC [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	7.75%
Third Related Party Note [Member] | Moody National Capital LLC [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	9.75%
Fourth Related Party Note [Member] | Moody National Capital LLC [Member]
Debt Instrument [Line Items]
Principal amount	$ 10,000,000
Maturity date	Apr. 13, 2025
Extend maturity date	2 years
Interest rate	14.08%
Related party note	$ 10,000,000	$ 110,500
Fourth Related Party Note [Member] | Moody National Capital LLC [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	8.75%
Fourth Related Party Note [Member] | Moody National Capital LLC [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread interest rate	9.75%

As of September 30, 2023 and De

As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total notes payable	$ 232,113	$ 236,320
Less unamortized debt issuance costs	(931)	(1,260)
Total notes payable, net of unamortized debt issuance costs	231,182	235,060
Residence Inn Austin Hotel [Member]
Debt Instrument [Line Items]
Total notes payable	$ 15,238	15,465
Interest rate	4.58%
Debt instrument, maturity date	Nov. 01, 2025
Springhill Suites Seattle [Member]
Debt Instrument [Line Items]
Total notes payable	$ 41,173	41,812
Interest rate	4.38%
Debt instrument, maturity date	Oct. 01, 2026
Homewood Suites Woodlands [Member]
Debt Instrument [Line Items]
Total notes payable	$ 8,285	8,420
Interest rate	4.69%
Debt instrument, maturity date	Apr. 11, 2025
Hyatt Place Germantown [Member]
Debt Instrument [Line Items]
Total notes payable	$ 5,868	6,342
Interest rate	7.25%
Debt instrument, maturity date	Jun. 29, 2028
Hyatt Place North Charleston [Member]
Debt Instrument [Line Items]
Total notes payable	$ 6,439	6,553
Interest rate	5.193%
Debt instrument, maturity date	Dec. 01, 2023
Hampton Inn Austin [Member]
Debt Instrument [Line Items]
Total notes payable	$ 9,664	9,844
Interest rate	5.426%
Debt instrument, maturity date	Jan. 06, 2024
Residence Inn Grapevine [Member]
Debt Instrument [Line Items]
Total notes payable	$ 11,152	11,360
Interest rate	5.25%
Debt instrument, maturity date	Apr. 06, 2024
Marriott Courtyard Lyndhurst [Member]
Debt Instrument [Line Items]
Total notes payable	$ 17,648	17,986
Interest rate	4.70%
Debt instrument, maturity date	Sep. 27, 2024
Hilton Garden Inn Austin [Member]
Debt Instrument [Line Items]
Total notes payable	$ 16,740	17,026
Interest rate	4.53%
Debt instrument, maturity date	Dec. 11, 2024
Hampton Inn Great Valley [Member]
Debt Instrument [Line Items]
Total notes payable	$ 7,310	7,429
Interest rate	4.70%
Debt instrument, maturity date	Apr. 11, 2025
Embassy Suites Nashville [Member]
Debt Instrument [Line Items]
Total notes payable	$ 38,150	38,811
Interest rate	4.2123%
Debt instrument, maturity date	Jul. 11, 2025
Homewood Suites Austin [Member]
Debt Instrument [Line Items]
Total notes payable	$ 9,863	10,022
Interest rate	4.65%
Debt instrument, maturity date	Aug. 11, 2025
Townplace Suites Fort Worth [Member]
Debt Instrument [Line Items]
Total notes payable	$ 5,536	5,645
Interest rate	4.70%
Debt instrument, maturity date	Sep. 27, 2024
Hampton Inn Houston [Member]
Debt Instrument [Line Items]
Total notes payable	$ 3,950	4,022
Interest rate	10.50%
Debt instrument, maturity date	Apr. 28, 2028
Residence Inn Houston Medical Center [Member]
Debt Instrument [Line Items]
Total notes payable	$ 27,597	28,083
Interest rate	5%
Debt instrument, maturity date	Oct. 01, 2024
US Small Business Administration [Member]
Debt Instrument [Line Items]
Total notes payable	$ 7,500	$ 7,500
Interest rate	3.75%
Debt instrument, maturity date	2051-11

Scheduled maturities of the Com

Scheduled maturities of the Company’s notes payable as of September 30, 2023 are as follows (all amounts in thousands): (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Years ending December 31,
2023	$ 7,724
2024	90,782
2025	77,845
2026	39,484
2027	522
Thereafter	15,756
Total	$ 232,113

Equity (Details Narrative)

Equity (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Aug. 15, 2014	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Class of Stock [Line Items]
Common stock, shares authorized		1,000,000,000		1,000,000,000		1,000,000,000
Preferred stock, shares authorized		100,000,000		100,000,000		100,000,000
Preferred stock, par value (in dollars per share)		$ 0.01		$ 0.01		$ 0.01
Common stock, par value (in dollars per share)		$ 0.01		$ 0.01		$ 0.01
Common stock, shares, issued		13,640,000		13,640,000		13,640,000
Share-based compensation arrangement by share-based payment award, non-option equity instruments, outstanding, number		65,000		65,000
Noncontrolling interests in operating partnership		$ 2,026,000		$ 2,026,000		$ 2,338,000
Partners' capital account, units		316,037		316,037
Net income (loss) attributable to noncontrolling interest		$ 87,000	$ 91,000	$ 312,000	$ 296,000
Public Offerings [Member]
Class of Stock [Line Items]
Common stock, shares, issued		10,200,000		10,200,000
Mergers [Member]
Class of Stock [Line Items]
Common stock, shares, issued		3,300,000		3,300,000
Sponsor [Member]
Class of Stock [Line Items]
Shares sold	8,000
Share price	$ 25
Aggregate purchase price	$ 200,000
Common stock, shares, issued		8,000		8,000

Schedule of shares outstanding

Schedule of shares outstanding (Details) - shares shares in Thousands	Sep. 30, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	13,640	13,640
Common Class A [Member]
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	13,000
Common Class T [Member]
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	481
Common Class I [Member]
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	159

The composition of the amounts

The composition of the amounts due to related parties, net as of September 30, 2023 and December 31, 2022 is as follows (in thousands): (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Related Party Transactions [Abstract]
Operating expense reimbursement	$ 671	$ 252
Asset management fee	3,595	3,467
Accounts payable to Property Manager	2,466	4,425
Accrued interest on related party notes	6,910	3,557
Total due to related parties, net	$ 13,642	$ 11,701

Related Party Arrangements (Det

Related Party Arrangements (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		5 Months Ended	9 Months Ended
	Jan. 16, 2018	Sep. 30, 2023	Sep. 30, 2022	Jun. 12, 2017	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Special Limited Partnership Interests		$ 1,000			$ 1,000		$ 1,000
Operating expenses					6,900,000
Operating expenses incurred by Advisor					1,900,000
Operating expenses reimbursed					1,900,000
Due to Advisor for operating expense reimbursement		671,000			671,000		252,000
Notes payable, related parties		$ 40,000,000			40,000,000		$ 30,111,000
Parent Company [Member]
Related Party Transaction [Line Items]
Operating expenses					5,000,000
Moody Securities LLC [Member]
Related Party Transaction [Line Items]
Percentage of selling commissions on gross offering	6%			7%
Percentage of dealers manager fee on gross offering	2.50%			3%
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Payments for commissions					9,700,000
Dealer manager fees					$ 8,500,000
Percentage of organization and offering costs		15%			15%
Total offering costs		$ 21,100,000			$ 21,100,000
Total offering costs		12,300,000			12,300,000
Reimbursed offering cost		8,800,000			8,800,000
Offering Costs Payables		$ 0			$ 0
Previous percentage of acquisition fee		1.50%			1.50%
Percentage of acquisition fee		3.85%			3.85%
Percentage of base acquisition fee		1.50%			1.50%
Percentage of contingent advisor payment		2.35%			2.35%
Debt financing fee percentage		1%			1%
Debt financing fee refinanced percentage		0.75%			0.75%
Asset Management Fee Percentage		1%			1%
Maximum contract sales price percentage for disposition fee		3%			3%
Maximum contract sales price percentage paid to unaffiliated parties		6%			6%
Advisor expense reimbursement - alternative 1		2%			2%
Advisor expense reimbursement - alternative 2		25%			25%
Operating expenses exceeding limitation					$ 0
Affiliated Entity [Member] | Asset Management [Member]
Related Party Transaction [Line Items]
Property manager property management fees		$ 877,000	$ 861,000		2,700,000	$ 2,600,000
Accounting fees		113,000	113,000		337,000	337,000
Affiliated Entity [Member] | IPO [Member]
Related Party Transaction [Line Items]
Total offering costs		18,400,000			18,400,000
Total offering costs		12,300,000			12,300,000
Reimbursed offering cost		6,100,000			6,100,000
Affiliated Entity [Member] | Follow-on offering [Member]
Related Party Transaction [Line Items]
Total offering costs		2,700,000			2,700,000
Total offering costs		0			0
Reimbursed offering cost		$ 2,700,000			$ 2,700,000
Moody National Hospitality Management LLC [Member]
Related Party Transaction [Line Items]
Monthly hotel management fee percentage		4%			4%
Agreement term					10 years
Annual incentive fee fee percentage					15%
Annual incentive fee in excess of percentage of investment in properties		8.50%			8.50%
Moody National Hospitality Management LLC [Member] | Investment Advisory, Management and Administrative Service [Member]
Related Party Transaction [Line Items]
Asset management fees		$ 1,200,000	$ 1,200,000		$ 3,600,000	$ 3,600,000

Incentive Award Plan (Details N

Incentive Award Plan (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based payment arrangement, expense	$ 0	$ 28,000	$ 0	$ 78,000
Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | Management [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, nonvested, number	0		0
Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | Management [Member] | IPO [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Entitlement deferred compensation arrangement with individual shares issued			5,000
Minimum offering amount threshold			$ 2,000,000
Deferred compensation arrangement with individual shares issued 1			5,000
Deferred compensation arrangement with individual shares issued 2			2,500
Incentive Award Plan and Independent Directors Compensation Plan [Member] | Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Issuance under the Incentive Award Plan	1,935,000		1,935,000

Subordinated Participation In_2

Subordinated Participation Interest (Details Narrative)	Sep. 30, 2023
Disclosure Subordinated Participation Interest [Abstract]
Maximum percentage of income received to special unit holders	15%
Percentage of additional operating income received	6%
Percentage of cumulative annual return received	8%

The composition of the Company_

The composition of the Company’s restricted cash as of September 30, 2023 and December 31, 2022 are as follows (all amounts in in thousands): (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Real estate taxes	$ 4,490	$ 4,499
Insurance	161	376
Hotel furniture and fixtures	7,431	8,053
Debt service	3,307	3,205
Property improvement plan	158	158
Total restricted cash	$ 15,547	$ 16,291

Commitments and Contingencies_2

Commitments and Contingencies (Details Narrative) - Moody National REIT I, Inc. [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Loss Contingencies [Line Items]
Franchise fees	$ 1.9	$ 1.9	$ 5.5	$ 5.2
Minimum [Member]
Loss Contingencies [Line Items]
Term of franchise agreements			10 years
Royalty fees on room revenue			3%
Additional franchise fees on room revenue			1.50%
Maximum [Member]
Loss Contingencies [Line Items]
Term of franchise agreements			20 years
Royalty fees on room revenue			6%
Additional franchise fees on room revenue			4.30%

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Net operating loss carry-forwards	$ 15,900,000
Deferred tax assets	2,300,000	$ 2,300,000
Deferred tax assets, valuation allowance	$ 19,400,000	$ 17,300,000
Description of loss carryforwards expiration	These loss carryforwards will generally expire in 2033 through 2038 if not utilized by then.
Subsidiaries [Member]
Net operating loss carry-forwards	$ 103,500,000
Subsidiaries [Member] | Moody National REIT I, Inc. [Member]
Net operating loss carry-forwards	8,300,000
Capital Loss Carryforward [Member]
Capital loss carry-forward	$ 900,000

The income tax expense (benefit

The income tax expense (benefit) for the three and nine months ended September 30, 2023 and 2022 consisted of the following (in thousands): (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Current expense	$ 24	$ 18	$ 130	$ 109
Deferred benefit	(560)	(579)	(2,107)	(1,925)
Valuation provision for deferred benefit	560	579	2,107	1,925
Total tax expense	24	18	130	109
Federal	(560)	(579)	(2,107)	(1,925)
Valuation provision for federal taxes	560	579	2,107	1,925
State	$ 24	$ 18	$ 130	$ 109