Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Aug. 11, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2024 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
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 | Jun. 30, 2024 | Dec. 31, 2023 |
ASSETS | ||
Investment in hotel properties, net | $ 357,384 | $ 386,297 |
Cash and cash equivalents | 11,024 | 7,286 |
Restricted cash | 16,972 | 17,778 |
Accounts receivable, net of allowance of $35 as of June 30, 2024 and December 31, 2023 | 1,342 | 915 |
Prepaid expenses and other assets | 2,992 | 2,991 |
Deferred franchise costs, net of accumulated amortization of $562 and $520 at June 30, 2024 and December 31, 2023, respectively | 549 | 591 |
Total Assets | 390,263 | 415,858 |
Liabilities: | ||
Notes payable, net of unamortized debt issuance costs of $668 and $839 as of June 30, 2024 and December 31, 2023 | 226,594 | 229,005 |
Notes payable to related party | 50,000 | 40,000 |
Accounts payable and accrued expenses | 14,611 | 14,076 |
Due to related parties, net | 17,291 | 18,300 |
Dividends payable | 70 | 70 |
Total Liabilities | 308,566 | 301,451 |
Special Limited Partnership Interests | 1 | 1 |
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 June 30, 2024 and December 31, 2023 | 136 | 136 |
Additional paid-in capital | 305,641 | 305,641 |
Accumulated deficit | (225,216) | (193,247) |
Total stockholders’ equity | 80,561 | 112,530 |
Noncontrolling interests in Operating Partnership | 1,135 | 1,876 |
Total Equity | 81,696 | 114,406 |
Total Liabilities and Equity | $ 390,263 | $ 415,858 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 35 | $ 35 |
Accumulated amortization, deferred franchise costs | 562 | 520 |
Unamortized debt issuance costs, note payable | $ 668 | $ 839 |
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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue | ||||
Total hotel revenue | $ 22,766 | $ 22,489 | $ 40,928 | $ 40,925 |
Expenses | ||||
Hotel operating expenses | 14,185 | 14,671 | 27,114 | 28,044 |
Property taxes, insurance and other | 1,774 | 1,673 | 3,537 | 3,242 |
Depreciation and amortization | 4,032 | 3,977 | 8,058 | 7,938 |
Corporate general and administrative | 1,754 | 1,712 | 3,616 | 3,459 |
Loss on impairment of hotel properties | 21,833 | 21,833 | ||
Total expenses | 43,578 | 22,033 | 64,158 | 42,683 |
Operating income (loss) | (20,812) | 456 | (23,230) | (1,758) |
Interest expense and amortization of debt issuance costs | 4,886 | 4,281 | 9,384 | 8,073 |
Loss before income taxes | (25,698) | (3,825) | (32,614) | (9,831) |
Income tax expense | 84 | 82 | 96 | 107 |
Net loss | (25,782) | (3,907) | (32,710) | (9,938) |
Loss attributable to noncontrolling interests in Operating Partnership | 584 | 88 | 741 | 225 |
Net loss attributable to common stockholders | $ (25,198) | $ (3,819) | $ (31,969) | $ (9,713) |
Per-share information – basic and diluted: | ||||
Net loss attributable to common stockholders - basic | $ (1.85) | $ (0.28) | $ (2.34) | $ (0.71) |
Net loss attributable to common stockholders - diluted | $ (1.85) | $ (0.28) | $ (2.34) | $ (0.71) |
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 | $ 21,362 | $ 21,164 | $ 38,245 | $ 38,397 |
Hotel, Other [Member] | ||||
Revenue | ||||
Total hotel revenue | $ 1,404 | $ 1,325 | $ 2,683 | $ 2,528 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2022 | $ 136 | $ 305,641 | $ (173,272) | $ 2,338 | $ 134,843 | |
Balance at beginning (in shares) at Dec. 31, 2022 | 13,640,000 | |||||
Balance at beginning (in shares) at Dec. 31, 2022 | 316,000 | |||||
Net loss | (9,713) | $ (225) | (9,938) | |||
Ending balance, value at Jun. 30, 2023 | $ 136 | 305,641 | (182,985) | $ 2,113 | 124,905 | |
Balance at end (in shares) at Jun. 30, 2023 | 13,640,000 | |||||
Balance at end (in shares) at Jun. 30, 2023 | 316,000 | |||||
Beginning balance, value at Mar. 31, 2023 | $ 136 | 305,641 | (179,166) | $ 2,201 | 128,812 | |
Balance at beginning (in shares) at Mar. 31, 2023 | 13,640,000 | |||||
Balance at beginning (in shares) at Mar. 31, 2023 | 316,000 | |||||
Net loss | (3,819) | $ (88) | (3,907) | |||
Ending balance, value at Jun. 30, 2023 | $ 136 | 305,641 | (182,985) | $ 2,113 | 124,905 | |
Balance at end (in shares) at Jun. 30, 2023 | 13,640,000 | |||||
Balance at end (in shares) at Jun. 30, 2023 | 316,000 | |||||
Beginning balance, value at Dec. 31, 2023 | $ 136 | 305,641 | (193,247) | $ 1,876 | 114,406 | |
Balance at beginning (in shares) at Dec. 31, 2023 | 13,640,000 | |||||
Balance at beginning (in shares) at Dec. 31, 2023 | 316,000 | |||||
Net loss | (31,969) | $ (741) | (32,710) | |||
Ending balance, value at Jun. 30, 2024 | $ 136 | 305,641 | (225,216) | $ 1,135 | $ 81,696 | |
Balance at end (in shares) at Jun. 30, 2024 | 13,640,000 | |||||
Balance at end (in shares) at Jun. 30, 2024 | 316,000 | 316,037 | ||||
Beginning balance, value at Mar. 31, 2024 | $ 136 | 305,641 | (200,018) | $ 1,719 | $ 107,478 | |
Balance at beginning (in shares) at Mar. 31, 2024 | 13,640,000 | |||||
Balance at beginning (in shares) at Mar. 31, 2024 | 316,000 | |||||
Net loss | (25,198) | $ (584) | (25,782) | |||
Ending balance, value at Jun. 30, 2024 | $ 136 | $ 305,641 | $ (225,216) | $ 1,135 | $ 81,696 | |
Balance at end (in shares) at Jun. 30, 2024 | 13,640,000 | |||||
Balance at end (in shares) at Jun. 30, 2024 | 316,000 | 316,037 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (32,710) | $ (9,938) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 8,058 | 7,938 |
Amortization of debt issuance costs | 286 | 316 |
Loss on impairment of hotel properties | 21,833 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (427) | (518) |
Prepaid expenses and other assets | (1) | (168) |
Accounts payable and accrued expenses | 535 | 2,302 |
Due to related parties | (1,009) | (3,191) |
Net cash used in operating activities | (3,435) | (3,259) |
Cash flows from investing activities | ||
Improvements and additions to hotel properties | (935) | (1,534) |
Net cash used in investing activities | (935) | (1,534) |
Cash flows from financing activities | ||
Proceeds of note payable | 5,900 | |
Repayment of notes payable | (2,583) | (8,833) |
Proceeds of notes payable to related party | 10,000 | 9,611 |
Payment of debt issuance costs | (115) | (145) |
Net cash provided by financing activities | 7,302 | 6,533 |
Net change in cash and cash equivalents and restricted cash | 2,932 | 1,740 |
Cash and cash equivalents and restricted cash at beginning of period | 25,064 | 21,203 |
Cash and cash equivalents and restricted cash at end of period | 27,996 | 22,943 |
Supplemental Disclosure of Cash Flow Activity | ||
Interest paid | $ 5,608 | $ 5,734 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization
Organization | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, 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 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 a significant adverse effect on the Company’s financial condition and operating results. The COVID-19 pandemic dramatically reduced travel, which 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 | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, 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 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 June 30, 2024. 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 2019 through 2023 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. 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 hotel properties, see Note 3, “Investment in Hotel Properties.” For the fair value of the Company’s notes payable, see Note 4, “Debt.” Concentration of Risk As of June 30, 2024, 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 7.3 13.4 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 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. Losses on impairment of hotel properties were $21.8 million and $0 for the three and six months ended June 30, 2024 and 2023. 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. The Company has recorded an impairment based on management’s best estimate of fair value at June 30, 2024. This is a significant estimate that could materially change within one year. For loss on impairment of the Company’s hotel properties, see Note 3, “Investment in Hotel Properties.” 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. 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 90 days 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 June 30, 2024 and 2023 (in thousands): June 30, 2024 2023 Cash and cash equivalents $ 11,024 $ 9,511 Restricted cash 16,972 13,432 Total cash and cash equivalents and restricted cash $ 27,996 $ 22,943 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 $ 562,000 520,000 Expected future amortization of deferred franchise costs as of June 30, 2024 is as follows (in thousands): Years Ending December 31, 2024 $ 42 2025 85 2026 84 2027 75 2028 75 Thereafter 188 Total $ 549 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 $ 7 6.7 Expected future amortization of debt issuance costs as of December 31, 2023 is as follows (in thousands): Years Ending December 31, 2024 $ 235 2025 222 2026 102 2027 68 2028 41 Thereafter — Total $ 668 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 non-vested shares of restricted common stock as of June 30, 2024 and December 31, 2023 held by the Company’s independent directors. Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” which requires entities to expand disclosures regarding the reconciliation of income tax rate and the amount of income taxes paid, net of refunds received, disaggregated by federal state and foreign jurisdiction. Other recently issued accounting standards or pronouncements not disclosed in the foregoing paragraph have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on the Company’s consolidated financial statements. |
Investment in Hotel Properties
Investment in Hotel Properties | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 (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 $ 15,003 Springhill Suites Seattle May 24, 2016 Seattle, Washington 100 % 74,100 234 40,513 Homewood Suites Woodlands September 27, 2017 (5) The Woodlands, Texas 100 % 17,356 91 8,145 Hyatt Place Germantown September 27, 2017 (5) Germantown, Tennessee 100 % 16,074 127 5,766 Hyatt Place North Charleston September 27, 2017 (5) North Charleston, 100 % 13,806 113 5,412 Hampton Inn Austin September 27, 2017 (5) Austin, Texas 100 % 19,328 123 9,477 Residence Inn Grapevine September 27, 2017 (5) Grapevine, Texas 100 % 25,245 133 10,983 Marriott Courtyard Lyndhurst September 27, 2017 (5) Lyndhurst, New Jersey - ) 39,547 227 17,298 Hilton Garden Inn Austin September 27, 2017 (5) Austin, Texas 100 % 29,288 138 16,443 Hampton Inn Great Valley September 27, 2017 (5) Frazer, Pennsylvania 100 % 15,285 125 7,187 Embassy Suites Nashville September 27, 2017 (5) Nashville, Tennessee 100 % 82,207 208 37,468 Homewood Suites Austin September 27, 2017 (5) Austin, Texas 100 % 18,835 96 9,700 Townplace Suites Fort Worth September 27, 2017 (5) Fort Worth, Texas - ) 11,242 95 5,424 Hampton Inn Houston September 27, 2017 (5) Houston, Texas 100 % 9,958 119 3,851 Residence Inn Houston Medical Center April 29, 2019 Houston, Texas 100 % 52,000 182 27,092 Totals $ 451,771 2,123 $ 219,762 (1) Excludes closing costs and includes gain on acquisition. (2) As of June 30, 2024. (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 June 30, 2024 and December 31, 2023 (all amounts in thousands): June 30, 2024 December 31, 2023 Land $ 73,436 $ 76,936 Buildings and improvements 323,804 338,982 Furniture, fixtures and equipment 62,978 65,197 Total cost 460,218 481,115 Accumulated depreciation (102,834 ) (94,818 ) Investment in hotel properties, net $ 357,384 $ 386,297 Based on unobservable inputs in which there is little or no market data, the Company developed its own assumptions in determining the fair value of and an aggregate loss on impairment of $ 21.8 million for the Marriott Courtyard Lyndhurst, Townplace Suites Fort Worth and Residence Inn Houston Medical Center. Such loss on impairment was allocated pro-rata among land, buildings and improvements and furniture, fixtures and equipment. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): Loan Principal Principal Interest Maturity Date Residence Inn Austin $ 15,003 $ 15,160 4.580 % November 1, 2025 Springhill Suites Seattle 40,513 40,954 4.380 % October 1, 2026 Homewood Suites Woodlands 8,145 8,239 4.690 % April 11, 2025 Hyatt Place Germantown 5,766 5,834 7.250 % June 29, 2028 Hyatt Place North Charleston 5,412 5,456 10.000 % November 29, 2028 Hampton Inn Austin (1) 9,477 9,602 10.426 % January 6, 2024 Residence Inn Grapevine (1) 10,983 11,080 10.250 % April 6, 2024 Marriott Courtyard Lyndhurst 17,298 17,531 4.700 % September 27, 2024 Hilton Garden Inn Austin 16,443 16,641 4.530 % December 11, 2024 Hampton Inn Great Valley 7,187 7,269 4.700 % April 11, 2025 Embassy Suites Nashville 37,468 37,924 4.2123 % July 11, 2025 Homewood Suites Austin 9,700 9,809 4.650 % August 11, 2025 Townplace Suites Fort Worth 5,424 5,499 4.700 % September 27, 2024 Hampton Inn Houston 3,851 3,915 10.500 % April 28, 2028 Residence Inn Houston Medical Center 27,092 27,431 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 227,262 229,844 Less unamortized debt issuance costs (668 ) (839 ) Total notes payable, net of unamortized debt issuance costs $ 226,594 $ 229,005 (1) The current lenders for the mortgage loans on the Hampton Inn Austin property, which matured on January 6, 2024, and the Residence Inn Grapevine property, which matured on April 6, 2024, have agreed to temporarily forbear on any of their remedies while the Company finalizes the terms of new replacement loans with new lenders. 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 are subject to a mortgage loan bearing interest at a fixed rate secured by the Company’s ownership interest in the property, except for Hyatt Place North Charleston and the Hampton Inn Houston mortgage loans which bear interest at a floating rate. Scheduled maturities of the Company’s notes payable as of June 30, 2024 are as follows (all amounts in thousands): Years ending December 31, 2024 $ 88,282 2025 77,944 2026 39,594 2027 643 2028 13,654 Thereafter 7,145 Total $ 227,262 Economic Injury Disaster Loans The Company obtained fifteen Loans (“Loans”) of $ 500,000 7.5 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. 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 From January 1, 2024 to June 30, 2024, Moody Capital made a series of advances to the Company to meet specific cash flow needs. These advances were memorialized in a promissory note (“Fifth Related Party Note”) with a total maximum aggregate loan amount of $ 10 January 1, 2026 two years 8.75 9.75 14.08 10 Interest will be paid on the Related Party Note, the Second Related Party Note, the Third Related Party Note, the Fourth Related Party Note, and the Fifth 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, the Fourth Related Party Note, and the Fifth Related Party Note without any prepayment penalty. The estimated fair value of the Company’s notes payable as of June 30, 2024 and December 31, 2023, was $ 227 230 |
Equity
Equity | 6 Months Ended |
Jun. 30, 2024 | |
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 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 June 30, 2024 and December 31, 2023 was $ 1.1 1.9 316,037 584,000 88,000 741,000 225,000 |
Related Party Arrangements
Related Party Arrangements | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, 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 six months ended June 30, 2024 and 2023. 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 911,000 900,000 113,000 1.6 1.8 225,000 The Company may pay 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 2.4 Disposition Fee The Company may also pay 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 7.1 5.1 2 7.1 0 2 25 2 606,000 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 $ 50 40 Due to Related Parties, Net The composition of the amounts due to related parties, net as of June 30, 2024 and December 31, 2023 is as follows (in thousands) June 30, 2024 December 31, 2023 Operating expense reimbursement $ 606 $ 309 Asset management fee 2,408 4,797 Accounts payable to Property Manager 2,911 4,986 Accrued interest on related party notes 11,366 8,208 Total due to related parties, net $ 17,291 $ 18,300 |
Incentive Award Plan
Incentive Award Plan | 6 Months Ended |
Jun. 30, 2024 | |
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 For the three months ended June 30, 2024 and 2023, and for the six months ended June 30, 2024 and 2023, no compensation expense was recorded by the Company related to such shares of restricted stock. As of June 30, 2024, there were no |
Subordinated Participation Inte
Subordinated Participation Interest | 6 Months Ended |
Jun. 30, 2024 | |
Subordinated Participation Interest | |
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 | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Restricted Cash Under certain management and debt agreements existing at June 30, 2024, the Company escrows payments required for real estate taxes, insurance, replacement of hotel furniture and fixtures, debt service and property improvement plans. The composition of the Company’s restricted cash as of June 30, 2024 and December 31, 2023 are as follows (all amounts in thousands): June 30, 2024 December 31, 2023 Real estate taxes $ 4,285 $ 4,893 Insurance 22 135 Hotel furniture and fixtures 8,629 8,248 Debt service 3,878 4,344 Property improvement plan 158 158 Total restricted cash $ 16,972 $ 17,778 Franchise Agreements As June 30, 2024, 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 2 3.6 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, the Company had operating loss and capital loss carry-forwards of $ 15.9 900,000 The Company had deferred tax assets of $ 2.3 21.5 20.3 107.6 8.3 The income tax expense (benefit) for the three and six months ended June 30, 2024 and 2023 consisted of the following (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Current expense $ 84 $ 82 $ 96 $ 107 Deferred benefit (411 ) (536 ) (1,251 ) (1,548 ) Valuation provision for deferred benefit 411 536 1,251 1,548 Total expense $ 84 $ 82 $ 96 $ 107 Federal $ (411 ) $ (536 ) $ (1,251 ) $ (1,548 ) Valuation provision for federal taxes 411 536 1,251 1,548 State 84 82 96 107 Total tax expense $ 84 $ 82 $ 96 $ 107 On June 30, 2024, 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 | 6 Months Ended |
Jun. 30, 2024 | |
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 August 16, 2024, the date the consolidated financial statements were available for issuance. Townplace Suites Fort Worth On July 31, 2024, a subsidiary of the OP (“Seller”) entered into a purchase and sale agreement for the sale of the Townplace Suites Fort Worth property (the “Sale Agreement”). Pursuant to the Sale Agreement, Seller agreed to sell the Townplace Suites Fort Worth property to an unaffiliated purchaser for an aggregate purchase price, subject to offsets and credits as set forth in the Sale Agreement, of $ 9,100,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, 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 |
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 June 30, 2024. 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 2019 through 2023 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. 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 hotel properties, see Note 3, “Investment in Hotel Properties.” For the fair value of the Company’s notes payable, see Note 4, “Debt.” |
Concentration of Risk | Concentration of Risk As of June 30, 2024, 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 7.3 13.4 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 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. Losses on impairment of hotel properties were $21.8 million and $0 for the three and six months ended June 30, 2024 and 2023. 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. The Company has recorded an impairment based on management’s best estimate of fair value at June 30, 2024. This is a significant estimate that could materially change within one year. For loss on impairment of the Company’s hotel properties, see Note 3, “Investment in Hotel Properties.” |
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. 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 90 days 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 June 30, 2024 and 2023 (in thousands): June 30, 2024 2023 Cash and cash equivalents $ 11,024 $ 9,511 Restricted cash 16,972 13,432 Total cash and cash equivalents and restricted cash $ 27,996 $ 22,943 |
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 $ 562,000 520,000 Expected future amortization of deferred franchise costs as of June 30, 2024 is as follows (in thousands): Years Ending December 31, 2024 $ 42 2025 85 2026 84 2027 75 2028 75 Thereafter 188 Total $ 549 |
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 $ 7 6.7 Expected future amortization of debt issuance costs as of December 31, 2023 is as follows (in thousands): Years Ending December 31, 2024 $ 235 2025 222 2026 102 2027 68 2028 41 Thereafter — Total $ 668 |
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 non-vested shares of restricted common stock as of June 30, 2024 and December 31, 2023 held by the Company’s independent directors. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” which requires entities to expand disclosures regarding the reconciliation of income tax rate and the amount of income taxes paid, net of refunds received, disaggregated by federal state and foreign jurisdiction. Other recently issued accounting standards or pronouncements not disclosed in the foregoing paragraph have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 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 June 30, 2024 and 2023 (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 June 30, 2024 and 2023 (in thousands): June 30, 2024 2023 Cash and cash equivalents $ 11,024 $ 9,511 Restricted cash 16,972 13,432 Total cash and cash equivalents and restricted cash $ 27,996 $ 22,943 |
Expected future amortization of deferred franchise costs as of June 30, 2024 is as follows (in thousands): | Expected future amortization of deferred franchise costs as of June 30, 2024 is as follows (in thousands): Years Ending December 31, 2024 $ 42 2025 85 2026 84 2027 75 2028 75 Thereafter 188 Total $ 549 |
Expected future amortization of debt issuance costs as of December 31, 2023 is as follows (in thousands): | Expected future amortization of debt issuance costs as of December 31, 2023 is as follows (in thousands): Years Ending December 31, 2024 $ 235 2025 222 2026 102 2027 68 2028 41 Thereafter — Total $ 668 |
Investment in Hotel Properties
Investment in Hotel Properties (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Real Estate [Abstract] | |
The following table sets forth summary information regarding the Company’s investment in hotel properties as of June 30, 2024 (all $ amounts in thousands): | The following table sets forth summary information regarding the Company’s investment in hotel properties as of June 30, 2024 (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 $ 15,003 Springhill Suites Seattle May 24, 2016 Seattle, Washington 100 % 74,100 234 40,513 Homewood Suites Woodlands September 27, 2017 (5) The Woodlands, Texas 100 % 17,356 91 8,145 Hyatt Place Germantown September 27, 2017 (5) Germantown, Tennessee 100 % 16,074 127 5,766 Hyatt Place North Charleston September 27, 2017 (5) North Charleston, 100 % 13,806 113 5,412 Hampton Inn Austin September 27, 2017 (5) Austin, Texas 100 % 19,328 123 9,477 Residence Inn Grapevine September 27, 2017 (5) Grapevine, Texas 100 % 25,245 133 10,983 Marriott Courtyard Lyndhurst September 27, 2017 (5) Lyndhurst, New Jersey - ) 39,547 227 17,298 Hilton Garden Inn Austin September 27, 2017 (5) Austin, Texas 100 % 29,288 138 16,443 Hampton Inn Great Valley September 27, 2017 (5) Frazer, Pennsylvania 100 % 15,285 125 7,187 Embassy Suites Nashville September 27, 2017 (5) Nashville, Tennessee 100 % 82,207 208 37,468 Homewood Suites Austin September 27, 2017 (5) Austin, Texas 100 % 18,835 96 9,700 Townplace Suites Fort Worth September 27, 2017 (5) Fort Worth, Texas - ) 11,242 95 5,424 Hampton Inn Houston September 27, 2017 (5) Houston, Texas 100 % 9,958 119 3,851 Residence Inn Houston Medical Center April 29, 2019 Houston, Texas 100 % 52,000 182 27,092 Totals $ 451,771 2,123 $ 219,762 (1) Excludes closing costs and includes gain on acquisition. (2) As of June 30, 2024. (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 June 30, 2024 and December 31, 2023 (all amounts in thousands): | Investment in hotel properties consisted of the following at June 30, 2024 and December 31, 2023 (all amounts in thousands): June 30, 2024 December 31, 2023 Land $ 73,436 $ 76,936 Buildings and improvements 323,804 338,982 Furniture, fixtures and equipment 62,978 65,197 Total cost 460,218 481,115 Accumulated depreciation (102,834 ) (94,818 ) Investment in hotel properties, net $ 357,384 $ 386,297 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
As of June 30, 2024 and December 31, 2023, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): | As of June 30, 2024 and December 31, 2023, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): Loan Principal Principal Interest Maturity Date Residence Inn Austin $ 15,003 $ 15,160 4.580 % November 1, 2025 Springhill Suites Seattle 40,513 40,954 4.380 % October 1, 2026 Homewood Suites Woodlands 8,145 8,239 4.690 % April 11, 2025 Hyatt Place Germantown 5,766 5,834 7.250 % June 29, 2028 Hyatt Place North Charleston 5,412 5,456 10.000 % November 29, 2028 Hampton Inn Austin (1) 9,477 9,602 10.426 % January 6, 2024 Residence Inn Grapevine (1) 10,983 11,080 10.250 % April 6, 2024 Marriott Courtyard Lyndhurst 17,298 17,531 4.700 % September 27, 2024 Hilton Garden Inn Austin 16,443 16,641 4.530 % December 11, 2024 Hampton Inn Great Valley 7,187 7,269 4.700 % April 11, 2025 Embassy Suites Nashville 37,468 37,924 4.2123 % July 11, 2025 Homewood Suites Austin 9,700 9,809 4.650 % August 11, 2025 Townplace Suites Fort Worth 5,424 5,499 4.700 % September 27, 2024 Hampton Inn Houston 3,851 3,915 10.500 % April 28, 2028 Residence Inn Houston Medical Center 27,092 27,431 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 227,262 229,844 Less unamortized debt issuance costs (668 ) (839 ) Total notes payable, net of unamortized debt issuance costs $ 226,594 $ 229,005 (1) The current lenders for the mortgage loans on the Hampton Inn Austin property, which matured on January 6, 2024, and the Residence Inn Grapevine property, which matured on April 6, 2024, have agreed to temporarily forbear on any of their remedies while the Company finalizes the terms of new replacement loans with new lenders. |
Scheduled maturities of the Company’s notes payable as of June 30, 2024 are as follows (all amounts in thousands): | Scheduled maturities of the Company’s notes payable as of June 30, 2024 are as follows (all amounts in thousands): Years ending December 31, 2024 $ 88,282 2025 77,944 2026 39,594 2027 643 2028 13,654 Thereafter 7,145 Total $ 227,262 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of shares outstanding | Schedule of shares outstanding Class Shares Class A Shares 13,000 Class T Shares 481 Class I Shares 159 Total 13,640 |
Related Party Arrangements (Tab
Related Party Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
The composition of the amounts due to related parties, net as of June 30, 2024 and December 31, 2023 is as follows (in thousands) | The composition of the amounts due to related parties, net as of June 30, 2024 and December 31, 2023 is as follows (in thousands) June 30, 2024 December 31, 2023 Operating expense reimbursement $ 606 $ 309 Asset management fee 2,408 4,797 Accounts payable to Property Manager 2,911 4,986 Accrued interest on related party notes 11,366 8,208 Total due to related parties, net $ 17,291 $ 18,300 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
The composition of the Company’s restricted cash as of June 30, 2024 and December 31, 2023 are as follows (all amounts in thousands): | Under certain management and debt agreements existing at June 30, 2024, the Company escrows payments required for real estate taxes, insurance, replacement of hotel furniture and fixtures, debt service and property improvement plans. The composition of the Company’s restricted cash as of June 30, 2024 and December 31, 2023 are as follows (all amounts in thousands): June 30, 2024 December 31, 2023 Real estate taxes $ 4,285 $ 4,893 Insurance 22 135 Hotel furniture and fixtures 8,629 8,248 Debt service 3,878 4,344 Property improvement plan 158 158 Total restricted cash $ 16,972 $ 17,778 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
The income tax expense (benefit) for the three and six months ended June 30, 2024 and 2023 consisted of the following (in thousands): | The income tax expense (benefit) for the three and six months ended June 30, 2024 and 2023 consisted of the following (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Current expense $ 84 $ 82 $ 96 $ 107 Deferred benefit (411 ) (536 ) (1,251 ) (1,548 ) Valuation provision for deferred benefit 411 536 1,251 1,548 Total expense $ 84 $ 82 $ 96 $ 107 Federal $ (411 ) $ (536 ) $ (1,251 ) $ (1,548 ) Valuation provision for federal taxes 411 536 1,251 1,548 State 84 82 96 107 Total tax expense $ 84 $ 82 $ 96 $ 107 |
Organization (Details Narrative
Organization (Details Narrative) | 6 Months Ended | ||||
Jan. 18, 2018 USD ($) | Jun. 30, 2024 USD ($) Number $ / shares shares | Dec. 31, 2023 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) | 6 Months Ended | |
Jun. 30, 2024 USD ($) Number | Dec. 31, 2023 USD ($) | |
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 | |
Cash accounts exceeded federally insured limits | 7,300,000 | |
Restricted cash accounts exceeded federally insured limits | 13,400,000 | |
Accumulated amortization, deferred franchise costs | 562,000 | $ 520,000 |
Debt issuance costs, accumulated amortization | $ 7,000,000 | $ 6,700,000 |
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) | Jun. 30, 2024 |
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 June 30, 2024 and 2023 (in thousands): (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 11,024 | $ 7,286 | $ 9,511 | |
Restricted cash | 16,972 | 13,432 | ||
Total cash and cash equivalents and restricted cash | $ 27,996 | $ 25,064 | $ 22,943 | $ 21,203 |
Expected future amortization of
Expected future amortization of deferred franchise costs as of June 30, 2024 is as follows (in thousands): (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Years Ending December 31, | ||
Total | $ 549 | $ 591 |
Franchise Rights [Member] | ||
Years Ending December 31, | ||
2024 | 42 | |
2025 | 85 | |
2026 | 84 | |
2027 | 75 | |
2028 | 75 | |
Thereafter | 188 | |
Total | $ 549 |
Expected future amortization _2
Expected future amortization of debt issuance costs as of December 31, 2023 is as follows (in thousands): (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
2024 | $ 235 | |
2025 | 222 | |
2026 | 102 | |
2027 | 68 | |
2028 | 41 | |
Thereafter | ||
Total | $ 668 | $ 839 |
The following table sets forth
The following table sets forth summary information regarding the Company’s investment in hotel properties as of June 30, 2024 (all $ amounts in thousands): (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 USD ($) Number | ||
Real Estate Properties [Line Items] | ||
Original Purchase Price | $ 451,771 | [1] |
Rooms | Number | 2,123 | |
Mortgage Debt Outstanding | $ 219,762 | [2] |
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 | $ 15,003 | [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 | $ 40,513 | [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 | $ 8,145 | [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 | $ 5,766 | [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 | $ 5,412 | [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 | $ 9,477 | [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 | $ 10,983 | [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 | $ 17,298 | [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 | $ 16,443 | [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 | $ 7,187 | [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 | $ 37,468 | [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 | $ 9,700 | [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 | $ 5,424 | [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 | $ 3,851 | [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 | $ 27,092 | [2] |
[1]Excludes closing costs and includes gain on acquisition.[2]As of June 30, 2024.[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 June 30, 2024 and December 31, 2023 (all amounts in thousands): (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Real Estate [Abstract] | ||
Land | $ 73,436 | $ 76,936 |
Buildings and improvements | 323,804 | 338,982 |
Furniture, fixtures and equipment | 62,978 | 65,197 |
Total cost | 460,218 | 481,115 |
Accumulated depreciation | (102,834) | (94,818) |
Investment in hotel properties, net | $ 357,384 | $ 386,297 |
Investment in Hotel Propertie_3
Investment in Hotel Properties (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Line Items] | ||||
Aggregate loss on impairment | $ 21,833 | $ 21,833 | ||
Hotel Properties [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Aggregate loss on impairment | $ 21,800 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 18 Months Ended | 27 Months Ended | |||
Sep. 30, 2021 | Jun. 30, 2024 | Jun. 30, 2021 | Sep. 30, 2023 | Jun. 30, 2024 | Dec. 31, 2023 | Mar. 30, 2021 | |
Debt Instrument [Line Items] | |||||||
Borrowings maximum percentage of net assets | 300% | ||||||
Loan payable | $ 7,500,000 | $ 7,500,000 | $ 7,500,000 | ||||
Related party note | 226,594,000 | 226,594,000 | 229,005,000 | ||||
Fair value of notes payable | $ 227,000,000 | 227,000,000 | 230,000,000 | ||||
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 | 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 | 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 | ||||||
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 | 10,000,000 | |||||
Maturity date | Apr. 13, 2025 | ||||||
Extend maturity date | 2 years | ||||||
Interest rate | 14.08% | ||||||
Related party note | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||||
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% | ||||||
Fifth Related Party Note [Member] | Moody National Capital LLC [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 10,000,000 | $ 10,000,000 | |||||
Maturity date | Jan. 01, 2026 | ||||||
Extend maturity date | 2 years | ||||||
Interest rate | 14.08% | ||||||
Related party note | $ 10,000,000 | 10,000,000 | |||||
Fifth Related Party Note [Member] | Moody National Capital LLC [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread interest rate | 8.75% | ||||||
Fifth Related Party Note [Member] | Moody National Capital LLC [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread interest rate | 9.75% | ||||||
US Small Business Administration [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 7,500,000 | 7,500,000 | |||||
Extend maturity date | 30 years | ||||||
Basis spread interest rate | 3.75% | ||||||
US Small Business Administration [Member] | Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 500,000 | $ 500,000 |
As of June 30, 2024 and Decembe
As of June 30, 2024 and December 31, 2023, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Dec. 31, 2023 | ||
Debt Instrument [Line Items] | |||
Total notes payable | $ 227,262 | $ 229,844 | |
Less unamortized debt issuance costs | (668) | (839) | |
Total notes payable, net of unamortized debt issuance costs | 226,594 | 229,005 | |
Residence Inn Austin Hotel [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 15,003 | 15,160 | |
Interest rate | 4.58% | ||
Debt instrument, maturity date | Nov. 01, 2025 | ||
Springhill Suites Seattle [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 40,513 | 40,954 | |
Interest rate | 4.38% | ||
Debt instrument, maturity date | Oct. 01, 2026 | ||
Homewood Suites Woodlands [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 8,145 | 8,239 | |
Interest rate | 4.69% | ||
Debt instrument, maturity date | Apr. 11, 2025 | ||
Hyatt Place Germantown [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 5,766 | 5,834 | |
Interest rate | 7.25% | ||
Debt instrument, maturity date | Jun. 29, 2028 | ||
Hyatt Place North Charleston [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 5,412 | 5,456 | |
Interest rate | 10% | ||
Debt instrument, maturity date | Nov. 29, 2028 | ||
Hampton Inn Austin [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [1] | $ 9,477 | 9,602 |
Interest rate | [1] | 10.426% | |
Debt instrument, maturity date | [1] | Jan. 06, 2024 | |
Residence Inn Grapevine [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | [1] | $ 10,983 | 11,080 |
Interest rate | [1] | 10.25% | |
Debt instrument, maturity date | [1] | Apr. 06, 2024 | |
Marriott Courtyard Lyndhurst [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 17,298 | 17,531 | |
Interest rate | 4.70% | ||
Debt instrument, maturity date | Sep. 27, 2024 | ||
Hilton Garden Inn Austin [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 16,443 | 16,641 | |
Interest rate | 4.53% | ||
Debt instrument, maturity date | Dec. 11, 2024 | ||
Hampton Inn Great Valley [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 7,187 | 7,269 | |
Interest rate | 4.70% | ||
Debt instrument, maturity date | Apr. 11, 2025 | ||
Embassy Suites Nashville [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 37,468 | 37,924 | |
Interest rate | 4.2123% | ||
Debt instrument, maturity date | Jul. 11, 2025 | ||
Homewood Suites Austin [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 9,700 | 9,809 | |
Interest rate | 4.65% | ||
Debt instrument, maturity date | Aug. 11, 2025 | ||
Townplace Suites Fort Worth [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 5,424 | 5,499 | |
Interest rate | 4.70% | ||
Debt instrument, maturity date | Sep. 27, 2024 | ||
Hampton Inn Houston [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 3,851 | 3,915 | |
Interest rate | 10.50% | ||
Debt instrument, maturity date | Apr. 28, 2028 | ||
Residence Inn Houston Medical Center1 [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 27,092 | 27,431 | |
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 | ||
[1]The current lenders for the mortgage loans on the Hampton Inn Austin property, which matured on January 6, 2024, and the Residence Inn Grapevine property, which matured on April 6, 2024, have agreed to temporarily forbear on any of their remedies while the Company finalizes the terms of new replacement loans with new lenders. |
Scheduled maturities of the Com
Scheduled maturities of the Company’s notes payable as of June 30, 2024 are as follows (all amounts in thousands): (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 88,282 |
2025 | 77,944 |
2026 | 39,594 |
2027 | 643 |
2028 | 13,654 |
Thereafter | 7,145 |
Total | $ 227,262 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Aug. 15, 2014 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
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 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock, 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 | $ 1,135,000 | $ 1,135,000 | $ 1,876,000 | |||
Partners' capital account, units | 316,037 | 316,037 | ||||
Net income (loss) attributable to noncontrolling interest | $ 584,000 | $ 88,000 | $ 741,000 | $ 225,000 | ||
Public Offerings [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock, issued | 10,200,000 | 10,200,000 | ||||
Mergers [Member] | ||||||
Class of Stock [Line Items] | ||||||
Common stock, 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, issued | 8,000 | 8,000 |
Schedule of shares outstanding
Schedule of shares outstanding (Details) - shares | Jun. 30, 2024 | Dec. 31, 2023 |
Class of Stock [Line Items] | ||
Common Stock, Shares, Outstanding | 13,640,000 | 13,640,000 |
Common Class A [Member] | ||
Class of Stock [Line Items] | ||
Common Stock, Shares, Outstanding | 13,000,000 | |
Common Class T [Member] | ||
Class of Stock [Line Items] | ||
Common Stock, Shares, Outstanding | 481,000 | |
Common Class I [Member] | ||
Class of Stock [Line Items] | ||
Common Stock, Shares, Outstanding | 159,000 |
The composition of the amounts
The composition of the amounts due to related parties, net as of June 30, 2024 and December 31, 2023 is as follows (in thousands) (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Related Party Transactions [Abstract] | ||
Operating expense reimbursement | $ 606,000 | $ 309,000 |
Asset management fee | 2,408,000 | 4,797,000 |
Accounts payable to Property Manager | 2,911,000 | 4,986,000 |
Accrued interest on related party notes | 11,366,000 | 8,208,000 |
Total due to related parties, net | $ 17,291,000 | $ 18,300,000 |
Related Party Arrangements (Det
Related Party Arrangements (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |||
Jan. 16, 2018 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 12, 2017 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | |||||||
Special Limited Partnership Interests | $ 1,000 | $ 1,000 | $ 1,000 | ||||
Operating expenses | 7,100,000 | ||||||
Operating expenses incurred by Advisor | 2,000,000 | ||||||
Operating expenses reimbursed | 2,000,000 | ||||||
Due to Advisor for operating expense reimbursement | 606,000 | 606,000 | 309,000 | ||||
Notes payable, related parties | 50,000,000 | 50,000,000 | 40,000,000 | ||||
Debt [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Notes payable, related parties | $ 50,000,000 | 50,000,000 | $ 40,000,000 | ||||
Parent Company [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Operating expenses | 5,100,000 | ||||||
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 | $ 911,000 | $ 900,000 | 1,600,000 | $ 1,800,000 | |||
Accounting fees | 113,000 | 113,000 | 225,000 | 225,000 | |||
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% | ||||||
Asset Management Fee Percentage | 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 | $ 2,400,000 | $ 2,400,000 |
Incentive Award Plan (Details N
Incentive Award Plan (Details Narrative) - Restricted Stock [Member] | 6 Months Ended |
Jun. 30, 2024 USD ($) shares | |
Independent Directors Compensation Plan [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 |
Independent Directors Compensation Plan [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] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Issuance under the Incentive Award Plan | 1,935,000 |
Subordinated Participation In_2
Subordinated Participation Interest (Details Narrative) | Jun. 30, 2024 |
Subordinated Participation Interest | |
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 June 30, 2024 and December 31, 2023 are as follows (all amounts in thousands): (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Real estate taxes | $ 4,285 | $ 4,893 |
Insurance | 22 | 135 |
Hotel furniture and fixtures | 8,629 | 8,248 |
Debt service | 3,878 | 4,344 |
Property improvement plan | 158 | 158 |
Total restricted cash | $ 16,972 | $ 17,778 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - Moody National REIT I, Inc. [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Loss Contingencies [Line Items] | ||||
Franchise fees | $ 2 | $ 2 | $ 3.6 | $ 3.6 |
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 ($) | 6 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Net operating loss carry-forwards | $ 15,900,000 | |
Net deferred tax assets | 2,300,000 | $ 2,300,000 |
Deferred tax assets, valuation allowance | $ 21,500,000 | $ 20,300,000 |
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 | $ 107,600,000 | |
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 six months ended June 30, 2024 and 2023 consisted of the following (in thousands): (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Current expense | $ 84 | $ 82 | $ 96 | $ 107 |
Deferred benefit | (411) | (536) | (1,251) | (1,548) |
Valuation provision for deferred benefit | 411 | 536 | 1,251 | 1,548 |
Total tax expense | 84 | 82 | 96 | 107 |
Federal | (411) | (536) | (1,251) | (1,548) |
Valuation provision for federal taxes | 411 | 536 | 1,251 | 1,548 |
State | $ 84 | $ 82 | $ 96 | $ 107 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jul. 31, 2024 USD ($) |
Townplace Suites Fort Worth Sale Agreement [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Sale price | $ 9,100,000 |