UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): September 13, 2024
STIRLING HOTELS & RESORTS, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 000-56623 | 93-3514045 | ||||||||||||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS employer identification number) | ||||||||||||
| 14185 Dallas Parkway, Suite 1200 | ||||||||||||||
| Dallas | ||||||||||||||
| Texas | 75254 | |||||||||||||
| (Address of principal executive offices) | (Zip code) | |||||||||||||
Registrant’s telephone number, including area code: (972) 490-9600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
ITEM 8.01 OTHER EVENTS.
October 1, 2024 Transaction Price
The transaction price for each share class of our common stock for subscriptions accepted as of October 1, 2024 (and repurchases as of September 30, 2024) is as follows:
| Transaction Price (per share) | ||||||||
| Class D | $ | 26.0067 | ||||||
| Class I | $ | 26.1112 | ||||||
| Class S | $ | 26.0451 | ||||||
| Class T | $ | 26.0451 | ||||||
August 31, 2024 NAV per Share
Our board of directors, including a majority of our independent directors, has adopted valuation guidelines, as amended from time to time, that contain a comprehensive set of methodologies to be used by our Advisor and our independent valuation advisor in connection with estimating the values of our assets and liabilities for purposes of our NAV calculation. Our NAV per share, which is updated as of the last calendar day of each month, is made available on our toll-free, automated telephone line at (833) 591-3088. Please refer to “Net Asset Value Calculation and Valuation Guidelines” in the Form 10 for how our NAV is determined. The Advisor is ultimately responsible for determining our NAV. All our property investments are appraised annually by third-party appraisal firms in accordance with our valuation guidelines and such appraisals are reviewed by our independent valuation advisor. We have included a breakdown of the components of total NAV and NAV per share for August 31, 2024.
Our total NAV presented in the following tables includes the NAV of all of our outstanding common stock as well as partnership units in the Operating Partnership held by parties other than us. The following table provides a breakdown of the major components of our total NAV as of August 31, 2024 ($ and shares in thousands, except per share/unit data):
| Components of NAV | ||||||||
| Investments in real properties | $ | 64,300 | ||||||
| Cash and cash equivalents | 4,168 | |||||||
| Restricted cash | 2,238 | |||||||
| Other assets | 1,003 | |||||||
| Mortgage notes, term loans, and revolving credit facilities, net | (31,462) | |||||||
| Other liabilities | (2,121) | |||||||
| Management fee payable | (82) | |||||||
| Non-controlling interests in joint ventures | — | |||||||
| Net asset value | $ | 38,044 | ||||||
| Number of outstanding shares/units | 1,457 | |||||||
| NAV per share/unit | $ | 26.1140 | ||||||
The following table provides a breakdown of our total NAV and NAV per share/unit by class as of August 31, 2024 ($ and shares in thousands, expect per share/unit data):
| Class D Shares | Class S Shares | Class T Shares | Class I Shares | Third Party Operating Partnership Units1 | Total | |||||||||||||||||||||||||||||||||
| As of August 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Net Asset Value | $ | 1 | $ | 1 | $ | 1 | $ | 36 | $ | 38,005 | $ | 38,044 | ||||||||||||||||||||||||||
| Number of outstanding shares/units | — | — | — | 1 | 1,456 | 1,457 | ||||||||||||||||||||||||||||||||
| NAV per share/unit | $ | 26.0067 | $ | 26.0451 | $ | 26.0451 | $ | 26.1112 | $ | 26.1140 | $ | 26.1140 | ||||||||||||||||||||||||||
_____________
(1) Includes the partnership interest of the Operating Partnership held by the Special Limited Partner, if any.
Set forth below are the weighted averages of the key assumptions in the discounted cash flow methodology used in the August 31, 2024 valuations:
| Discount Rate | Exit Capitalization Rate | |||||||||||||
| Hotel properties | 10.89 | % | 8.62 | % | ||||||||||
A change in these assumptions would impact the calculation of the value of our hotel properties. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our property values:
| Sensitivities | Change | Asset Values | ||||||||||||
| Discount rate | 0.25% decrease | $ | 65,300 | |||||||||||
| 0.25% increase | $ | 63,300 | ||||||||||||
| Exit capitalization rate | 0.25% decrease | $ | 65,200 | |||||||||||
| 0.25% increase | $ | 63,500 | ||||||||||||
July 31, 2024 NAV per Share
Our total NAV presented in the following tables includes the NAV of all of our outstanding common stock as well as partnership units in the Operating Partnership held by parties other than us. The following table provides a breakdown of the major components of our total NAV as of July 31, 2024 ($ and shares in thousands, except per share/unit data):
| Components of NAV | ||||||||
| Investments in real properties | $ | 63,500 | ||||||
| Cash and cash equivalents | 4,678 | |||||||
| Restricted cash | 2,058 | |||||||
| Other assets | 812 | |||||||
| Mortgage notes, term loans, and revolving credit facilities, net | (31,216) | |||||||
| Other liabilities | (2,034) | |||||||
| Management fee payable | (78) | |||||||
| Non-controlling interests in joint ventures | — | |||||||
| Net asset value | $ | 37,720 | ||||||
| Number of outstanding shares/units | 1,451 | |||||||
| NAV per share/unit | $ | 25.9954 | ||||||
The following table provides a breakdown of our total NAV and NAV per share/unit by class as of July 31, 2024 ($ and shares in thousands, expect per share/unit data):
| Class D Shares | Class S Shares | Class T Shares | Class I Shares | Third Party Operating Partnership Units1 | Total | |||||||||||||||||||||||||||||||||
| As of July 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Net Asset Value | $ | 1 | $ | 1 | $ | 1 | $ | 35 | $ | 37,682 | $ | 37,720 | ||||||||||||||||||||||||||
| Number of outstanding shares/units | — | — | — | 1 | 1,450 | 1,451 | ||||||||||||||||||||||||||||||||
| NAV per share/unit | $ | 25.8796 | $ | 25.9053 | $ | 25.9053 | $ | 25.9929 | $ | 25.9954 | $ | 25.9954 | ||||||||||||||||||||||||||
_____________
(1) Includes the partnership interest of the Operating Partnership held by the Special Limited Partner, if any.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STIRLING HOTELS & RESORTS, INC. | ||||||||
| Dated: September 13, 2024 | By: | /s/ Stephen Zsigray | ||||||
| Stephen Zsigray | ||||||||
| Chief Financial Officer | ||||||||