Cover page
Cover page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-14765 | |
Entity Registrant Name | HERSHA HOSPITALITY TRUST | |
Entity Incorporation, State | MD | |
Entity Tax Identification Number | 25-1811499 | |
Entity Address, Street | 44 Hersha Drive | |
Entity Address, City | Harrisburg | |
Entity Address, State | PA | |
Entity Address, Postal Zip Code | 17102 | |
City Area Code | 717 | |
Local Phone Number | 236-4400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001063344 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Shares | ||
Entity Information | ||
Title of each class | Class A Common Shares of Beneficial Interest, par value $.01 per share | |
Trading Symbol(s) | HT | |
Name of each exchange on which registered | NYSE | |
Entity Common Stock, Shares Outstanding (in shares) | 39,354,893 | |
Series C | ||
Entity Information | ||
Title of each class | 6.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per share | |
Trading Symbol(s) | HT-PC | |
Name of each exchange on which registered | NYSE | |
Series D | ||
Entity Information | ||
Title of each class | 6.500% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per share | |
Trading Symbol(s) | HT-PD | |
Name of each exchange on which registered | NYSE | |
Series E | ||
Entity Information | ||
Title of each class | 6.500% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest, par $.01 per share | |
Trading Symbol(s) | HT-PE | |
Name of each exchange on which registered | NYSE | |
Class B Common Shares | ||
Entity Information | ||
Entity Common Stock, Shares Outstanding (in shares) | 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Investment in Hotel Properties, Net of Accumulated Depreciation | $ 1,650,180 | $ 1,665,097 |
Investment in Unconsolidated Joint Ventures | 5,130 | 5,580 |
Cash and Cash Equivalents | 77,447 | 72,238 |
Escrow Deposits | 10,997 | 12,707 |
Hotel Accounts Receivable | 7,121 | 8,491 |
Due from Related Parties | 153 | 2,495 |
Intangible Assets, Net of Accumulated Amortization of $7,010 and $6,944 | 1,269 | 1,335 |
Right of Use Assets | 43,211 | 43,442 |
Other Assets | 29,366 | 21,759 |
Total Assets | 1,824,874 | 1,833,144 |
Liabilities and Equity: | ||
Line of Credit | 118,684 | 118,684 |
Term Loans, Net of Unamortized Deferred Financing Costs (Note 5) | 496,306 | 496,085 |
Unsecured Notes Payable, Net of Unamortized Discount and Unamortized Deferred Financing Costs (Note 5) | 200,855 | 198,490 |
Mortgages Payable, Net of Unamortized Premium and Unamortized Deferred Financing Costs | 304,248 | 304,614 |
Lease Liabilities | 53,592 | 53,691 |
Accounts Payable, Accrued Expenses and Other Liabilities | 39,119 | 43,207 |
Dividends and Distributions Payable | 6,044 | 6,044 |
Due to Related Parties | 439 | 1,723 |
Total Liabilities | 1,219,287 | 1,222,538 |
Redeemable Noncontrolling Interests - Consolidated Joint Venture (Note 1) | 4,583 | 2,310 |
Shareholders' Equity: | ||
Preferred Shares: $.01 Par Value, 29,000,000 Shares Authorized, 3,000,000 Series C, 7,701,700 Series D and 4,001,514 Series E Shares Issued and Outstanding at March 31, 2022 and December 31, 2021, with Liquidation Preferences of $25.00 Per Share (Note 1) | 147 | 147 |
Accumulated Other Comprehensive Income (Loss) | 10,908 | (2,747) |
Additional Paid-in Capital | 1,153,486 | 1,155,034 |
Distributions in Excess of Net Income | (615,740) | (595,454) |
Total Shareholders' Equity | 549,195 | 557,374 |
Noncontrolling Interests (Note 1) | 51,809 | 50,922 |
Total Equity | 601,004 | 608,296 |
Total Liabilities and Equity | 1,824,874 | 1,833,144 |
Class A Common Shares | ||
Shareholders' Equity: | ||
Common Shares | 394 | 394 |
Class B Common Shares | ||
Shareholders' Equity: | ||
Common Shares | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Intangible assets, accumulated amortization | $ 7,010 | $ 6,944 |
Shareholders' Equity: | ||
Preferred shares - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares - authorized (in shares) | 29,000,000 | 29,000,000 |
Preferred shares - outstanding (in shares) | 14,703,214 | 14,703,214 |
Series C, D and E Preferred Shares | ||
Shareholders' Equity: | ||
Preferred shares - liquidation preference value (in dollars per share) | $ 25 | $ 25 |
Series C | ||
Shareholders' Equity: | ||
Preferred shares - issued (in shares) | 3,000,000 | 3,000,000 |
Preferred shares - outstanding (in shares) | 3,000,000 | 3,000,000 |
Series D | ||
Shareholders' Equity: | ||
Preferred shares - issued (in shares) | 7,701,700 | 7,701,700 |
Preferred shares - outstanding (in shares) | 7,701,700 | 7,701,700 |
Series E | ||
Shareholders' Equity: | ||
Preferred shares - issued (in shares) | 4,001,514 | 4,001,514 |
Preferred shares - outstanding (in shares) | 4,001,514 | 4,001,514 |
Class A Common Shares | ||
Shareholders' Equity: | ||
Common shares - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares - authorized (in shares) | 104,000,000 | 104,000,000 |
Common shares - issued (in shares) | 39,354,893 | 39,325,025 |
Common shares - outstanding (in shares) | 39,354,893 | 39,325,025 |
Class B Common Shares | ||
Shareholders' Equity: | ||
Common shares - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares - authorized (in shares) | 1,000,000 | 1,000,000 |
Common shares - issued (in shares) | 0 | 0 |
Common shares - outstanding (in shares) | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Revenue: | |||
Other Revenues | $ 41 | $ 12 | |
Total Revenues | 81,868 | 47,165 | |
Operating Expenses: | |||
Property Losses in Excess of Insurance Recoveries | 25 | 0 | |
Hotel Ground Rent | 1,090 | 1,100 | |
Real Estate and Personal Property Taxes and Property Insurance | 8,483 | 10,071 | |
General and Administrative (including Share Based Payments of $2,541 and $2,169 for the three months ended March 31, 2022 and 2021, respectively) | 5,318 | 4,944 | |
Terminated Transaction Costs | 0 | 354 | |
Depreciation and Amortization | 19,276 | 21,802 | |
Total Operating Expenses | 83,542 | 70,451 | |
Operating Loss | (1,674) | (23,286) | |
Interest Income | 1 | 1 | |
Interest Expense | (14,237) | (13,429) | |
Other (Expense) Income | (99) | 461 | |
Gain on Disposition of Hotel Properties | 0 | 48,352 | |
Loss on Debt Extinguishment | 0 | (2,940) | |
(Loss) Income Before Results from Unconsolidated Joint Venture Investments and Income Taxes | (16,009) | 9,159 | |
Loss from Unconsolidated Joint Ventures | (936) | (658) | |
(Loss) Income Before Income Taxes | (16,945) | 8,501 | |
Income Tax (Expense) Benefit | (21) | 589 | |
Net (Loss) Income | (16,966) | 9,090 | |
(Income) Loss Allocated to Noncontrolling Interests | 2,724 | (322) | |
(Income) Loss Allocated to Noncontrolling Interests - Consolidated Joint Venture | (2,273) | 158 | |
Preferred Distributions | (6,044) | (6,043) | |
Net (Loss) Income Applicable to Common Shareholders | $ (22,559) | $ 2,883 | |
BASIC | |||
(Loss) Income from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (0.58) | $ 0.07 | |
DILUTED | |||
(Loss) Income from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (0.58) | $ 0.07 | |
Weighted Average Common Shares Outstanding: | |||
Basic (in shares) | 39,231,550 | 38,970,893 | |
Diluted (in shares) | [1] | 39,231,550 | 39,840,474 |
Noncontrolling Interest | Common Shares | |||
Operating Expenses: | |||
Net (Loss) Income | $ (2,724) | $ 322 | |
Room | |||
Revenue: | |||
Hotel Operating Revenues: | 65,132 | 39,350 | |
Operating Expenses: | |||
Hotel Operating Expenses | 14,590 | 9,198 | |
Food & Beverage | |||
Revenue: | |||
Hotel Operating Revenues: | 9,056 | 3,074 | |
Operating Expenses: | |||
Hotel Operating Expenses | 8,404 | 2,873 | |
Other Operating | |||
Revenue: | |||
Hotel Operating Revenues: | 7,639 | 4,729 | |
Operating Expenses: | |||
Hotel Operating Expenses | $ 26,356 | $ 20,109 | |
[1] | (Loss) Income allocated to noncontrolling interest in Hersha Hospitality Limited Partnership (the “Operating Partnership” or “HHLP”) has been excluded from the numerator and the Class A common shares issuable upon any redemption of the Operating Partnership’s common units of limited partnership interest (“Common Units”) and the Operating Partnership’s vested LTIP units (“Vested LTIP Units”) have been omitted from the denominator for the purpose of computing diluted earnings per share because the effect of including these shares and units in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to (loss) income applicable to common shareholders. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share based payments | $ 2,541 | $ 2,169 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 6,244,565 | 4,349,730 |
Common Units and Vested LTIP Units | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,267,258 | 4,349,730 |
Unvested Stock Awards and LTIP Units Outstanding | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 681,150 | 0 |
Contingently Issuable Share Awards | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 296,157 | 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net (Loss) Income | $ (16,966) | $ 9,090 |
Other Comprehensive Income | ||
Change in Fair Value of Derivative Instruments | 15,489 | 6,465 |
Reclassification Adjustment for Change in Fair Value of Derivative Instruments Included in Net Income | 0 | 301 |
Total Other Comprehensive Income | 15,489 | 6,766 |
Comprehensive (Loss) Income | (1,477) | 15,856 |
Less: Comprehensive Loss (Income) Attributable to Noncontrolling Interests - Common Units | 890 | (1,001) |
Less: Comprehensive (Income) Loss Attributable to Noncontrolling Interests - Consolidated Joint Venture | (2,273) | 158 |
Preferred Distributions | (6,044) | (6,043) |
Comprehensive (Loss) Income Attributable to Common Shareholders | $ (8,904) | $ 8,970 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Shares | Common SharesClass A Common Shares | Common SharesClass B Common Shares | Preferred Shares | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Distributions in Excess of Net Income | Total Shareholders' Equity | Noncontrolling InterestCommon Shares | Total Equity |
Beginning Balance at Dec. 31, 2020 | $ 0 | ||||||||||
Ending Balance at Mar. 31, 2021 | 0 | ||||||||||
Balance at Dec. 31, 2020 | $ 389 | $ 0 | $ 147 | $ 1,150,985 | $ (19,275) | $ (509,243) | $ 623,003 | $ 49,246 | $ 672,249 | ||
Balance (in shares) at Dec. 31, 2020 | 38,843,482 | 14,703,214 | 5,392,808 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Unit Conversion | 2 | 2,870 | 2,872 | $ (2,872) | |||||||
Unit Conversion (in shares) | 225,000 | (225,000) | |||||||||
Dividends and Distributions declared: | |||||||||||
Preferred Shares | (30,218) | (30,218) | (30,218) | ||||||||
Share Based Compensation: | |||||||||||
Grants | (9) | (9) | $ 1,614 | 1,605 | |||||||
Grants (in shares) | 63,825 | 775,206 | |||||||||
Amortization | 733 | 733 | $ 862 | 1,595 | |||||||
Change in Fair Value of Derivative Instruments | 6,766 | 6,766 | 6,766 | 6,766 | |||||||
Net (loss) income | 9,090 | 8,926 | 8,926 | 322 | 9,248 | ||||||
Balance at Mar. 31, 2021 | 391 | 0 | $ 147 | 1,154,579 | (12,509) | (530,535) | 612,073 | $ 49,172 | 661,245 | ||
Balance (in shares) at Mar. 31, 2021 | 39,132,307 | 14,703,214 | 5,943,014 | ||||||||
Beginning Balance at Dec. 31, 2021 | 2,310 | ||||||||||
Increase (Decrease) in Temporary Equity | |||||||||||
Equity Contribution to Consolidated Joint Venture | 158 | ||||||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | 2,273 | ||||||||||
Net Income | (158) | ||||||||||
Ending Balance at Mar. 31, 2022 | 4,583 | ||||||||||
Balance at Dec. 31, 2021 | 608,296 | 394 | 0 | $ 147 | 1,155,034 | (2,747) | (595,454) | 557,374 | $ 50,922 | 608,296 | |
Balance (in shares) at Dec. 31, 2021 | 39,325,025 | 14,703,214 | 6,926,253 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||
Issuance Costs/Other | (39) | (39) | (39) | ||||||||
Dividends and Distributions declared: | |||||||||||
Preferred Shares | (6,044) | (6,044) | (6,044) | ||||||||
Share Based Compensation: | |||||||||||
Grants | 0 | 0 | 0 | ||||||||
Grants (in shares) | 29,868 | ||||||||||
Amortization | 764 | 764 | $ 1,777 | 2,541 | |||||||
Change in Fair Value of Derivative Instruments | 15,489 | 13,655 | 13,655 | 1,834 | 15,489 | ||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | (2,273) | (2,273) | (2,273) | ||||||||
Net (loss) income | (16,966) | (14,242) | (14,242) | (2,724) | (16,966) | ||||||
Balance at Mar. 31, 2022 | $ 601,004 | $ 394 | $ 0 | $ 147 | $ 1,153,486 | $ 10,908 | $ (615,740) | $ 549,195 | $ 51,809 | $ 601,004 | |
Balance (in shares) at Mar. 31, 2022 | 39,354,893 | 14,703,214 | 6,926,253 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities: | ||
Net (Loss) Income | $ (16,966) | $ 9,090 |
Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities: | ||
Gain on Disposition of Hotel Properties | 0 | (48,352) |
Property Losses in Excess of Insurance Recoveries | 25 | 0 |
Junior Note PIK Interest Added to Principal | 1,855 | 0 |
Deferred Taxes | 0 | (606) |
Depreciation | 19,195 | 21,708 |
Amortization | 1,484 | 1,330 |
Loss on Debt Extinguishment | 0 | 634 |
Equity in Loss of Unconsolidated Joint Ventures | 936 | 658 |
Loss Recognized on Change in Fair Value of Derivative Instrument | 0 | 301 |
Share Based Compensation Expense | 2,541 | 2,169 |
(Increase) Decrease in: | ||
Hotel Accounts Receivable | 1,370 | (629) |
Other Assets | 194 | (3,063) |
Due from Related Parties | 2,342 | 688 |
Increase (Decrease) in: | ||
Due to Related Parties | (1,284) | 0 |
Accounts Payable, Accrued Expenses and Other Liabilities | 3,304 | 2,279 |
Net Cash Provided by (Used in) Operating Activities | 14,996 | (13,793) |
Investing Activities: | ||
Capital Expenditures | (4,219) | (2,731) |
Proceeds from Disposition of Hotel Properties | 0 | 149,384 |
Contributions to Unconsolidated Joint Ventures | (485) | (275) |
Net Cash (Used in) Provided by Investing Activities | (4,704) | 146,378 |
Financing Activities: | ||
Repayments on Line of Credit | 0 | (11,634) |
Payments on Term Loans | 0 | (175,559) |
Proceeds from Mortgages and Notes Payable | 0 | 144,750 |
Principal Repayment of Mortgages | (553) | (704) |
Deferred Financing Costs | (196) | (5,529) |
Dividends Paid on Preferred Shares | (6,044) | (24,172) |
Net Cash Used in Financing Activities | (6,793) | (72,848) |
Net Increase in Cash, Cash Equivalents, and Restricted Cash | 3,499 | 59,737 |
Cash, Cash Equivalents, and Restricted Cash - Beginning of Period | 84,945 | 23,607 |
Cash, Cash Equivalents, and Restricted Cash - End of Period | $ 88,444 | $ 83,344 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Hersha Hospitality Trust (“we,” “us,” “our” or the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial information and with the general instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals), considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or any future period. Accordingly, readers of these consolidated interim financial statements should refer to the Company’s audited financial statements prepared in accordance with US GAAP, and the related notes thereto, for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as certain footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted from this report pursuant to the rules of the Securities and Exchange Commission. We are a self-administered Maryland real estate investment trust that was organized in May 1998 and completed our initial public offering in January 1999. Our common shares are traded on the New York Stock Exchange (the “NYSE”) under the symbol “HT.” We own our hotels and our investments in joint ventures through our operating partnership, Hersha Hospitality Limited Partnership (“HHLP” or “the Partnership”), for which we serve as the sole general partner. As of March 31, 2022, we owned an approximate 85.0% partnership interest in HHLP, including a 1.0% general partnership interest. Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with US GAAP and include all of our accounts as well as accounts of the Partnership, subsidiary partnerships and our wholly owned Taxable REIT Subsidiary Lessee (“TRS Lessee”), 44 New England Management Company. All significant inter-company amounts have been eliminated. Consolidated properties are either wholly owned or owned less than 100% by the Partnership and are controlled by the Company as general partner of the Partnership. Properties owned in joint ventures are also consolidated if the determination is made that we are the primary beneficiary in a variable interest entity (“VIE”) or we maintain control of the asset through our voting interest in the entity. Variable Interest Entities We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. To determine if we are the primary beneficiary of a VIE, we evaluate whether we have a controlling financial interest in that VIE. An enterprise is deemed to have a controlling financial interest if it has i) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the rights to receive benefits from the VIE that could be significant to the VIE. Control can also be demonstrated by the ability of a member to manage day-to-day operations, refinance debt and sell the assets of the partnerships without the consent of the other member and the inability of the members to replace the managing member. Based on our examination, there have been no changes to the operating structure of our legal entities during the three months ended March 31, 2022 and, therefore, there are no changes to our evaluation of VIE's as presented within our annual report presented on Form 10-K for the year ended December 31, 2021. NOTE 1 - BASIS OF PRESENTATION (CONTINUED) Noncontrolling Interest We classify the noncontrolling interests of our common units of limited partnership interest in HHLP (“Common Units”), and Long Term Incentive Plan Units (“LTIP Units”) as equity. LTIP Units are a separate class of limited partnership interest in the Operating Partnership that are convertible into Common Units under certain circumstances. The noncontrolling interest of Common Units and LTIP Units totaled $51,809 as of March 31, 2022 and $50,922 as of December 31, 2021. As of March 31, 2022, there w ere 6,926,253 Common Units and LTIP Units outstanding with a fair market value of $62,890 , based on the price per share of our common shares on the NYSE on such date. In accordance with the partnership agreement of HHLP, holders of these Common Units may redeem them for cash unless we, in our sole and absolute discretion, elect to issue common shares on a one-for-one basis in lieu of paying cash. Net income or loss attributed to Common Units and LTIP Units is included in net income or loss but excluded from net income or loss applicable to common shareholders in the consolidated statements of operations. We are party to a joint venture that owns the Ritz-Carlton Coconut Grove, FL, in which our joint venture partner has a noncontrolling equity interest of 15% in the property. Hersha Holding RC Owner, LLC, the owner entity of the Ritz-Carlton Coconut Grove joint venture ("Ritz Coconut Grove"), will distribute income based on cash available for distribution which will be distributed as follows: (1) to us until we receive a cumulative return on our contributed senior common equity interest, currently at 8%, and (2) then to the owner of the noncontrolling interest until they receive a cumulative return on their contributed junior common equity interest, currently at 8%, and (3) then 75% to us and 25% to the owner of the noncontrolling interest until we both receive a cumulative return on our contributed senior common equity interest, currently at 12%, and (4) finally, any remaining operating profit shall be distributed 70% to us and 30% to the owner of the noncontrolling interest. Additionally, the noncontrolling interest in the Ritz Coconut Grove has the right to put their ownership interest to us for cash consideration at any time during the life of the venture. The balance sheets and financial results of the Ritz Coconut Grove are included in our consolidated financial statements and the book value of the noncontrolling interest in the Ritz Coconut Grove is classified as temporary equity within our Consolidated Balance Sheets. For Ritz Coconut Grove, income or loss is allocated using Hypothetical Liquidation at Book Value ("HLBV method") as the liquidation rights and priorities, as defined by the venture's governing agreement, differs from the underlying percentage ownership in the venture. The Company applies the HLBV method using a balance sheet approach. A calculation is prepared at each balance sheet date to determine the amount that we would receive if the venture entity were to liquidate all of its assets at carrying value and distribute that cash to the joint venture based on the contractually defined liquidation priorities. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is our share of the earnings or losses and the remainder is allocated to noncontrolling interest. The noncontrolling interest in the Ritz Coconut Grove is measured at the greater of historical cost or the put option redemption value. For the three months ended March 31, 2022 and 2021, based on the income allocation methodology described above, the noncontrolling interest in this joint venture was allocated losses of $0 and $158, respectively. This is recorded as part of the Loss (Income) Allocated to Noncontrolling Interests line item within the Consolidated Statements of Operations. During the three months ended March 31, 2022, we reclassified $2,273 from Additional Paid in Capital to Redeemable Noncontrolling Interests - Consolidated Joint Venture to value the noncontrolling interest at the put option redemption value of $4,583. NOTE 1 - BASIS OF PRESENTATION (CONTINUED) Shareholders’ Equity Terms of the Series C, Series D, and Series E Preferred Shares outstanding at March 31, 2022 and December 31, 2021 are summarized as follows: Dividend Per Share (1) Shares Outstanding Three Months Ended March 31, Series March 31, 2022 December 31, 2021 Aggregate Liquidation Preference Distribution Rate 2022 2021 Series C 3,000,000 3,000,000 $ 75,000 6.875 % $ 0.4297 $ 2.1485 Series D 7,701,700 7,701,700 $ 192,500 6.500 % $ 0.4063 $ 2.0313 Series E 4,001,514 4,001,514 $ 100,000 6.500 % $ 0.4063 $ 2.0313 Total 14,703,214 14,703,214 During the three months ended March 31, 2021, the Company paid cash dividends on the Company's Series C, Series D and Series E cumulative redeemable preferred stock reflecting accrued and unpaid dividends for the dividend periods ended April 15, 2020, July 15, 2020, October 15, 2020 and January 15, 2021. In addition, the Company declared a cash dividend for the first dividend period ending April 15, 2021, which was paid on April 15, 2021 to holders of record as of April 1, 2021. Liquidity and Management's Plan Due to the COVID-19 pandemic and the effects of travel restrictions both globally and in the United States, the hospitality industry has experienced drastic drops in demand as a result of government mandates, health official recommendations, corporate policy changes and individual responses. We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have a material negative impact on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. In February of 2021, we entered into an unsecured notes facility that provided net proceeds of $144,750. The proceeds, along with a portion of the proceeds from asset sales, were used to repay amounts outstanding under our senior secured credit facility and our secured term loans and allowed us to negotiate amendments to this senior facility. The amendments to the senior secured credit facility and secured term loans eliminated term loan maturities until August of 2022, waived all financial covenants through March 31, 2022, established accommodative covenant testing methodology through December 31, 2022, enabled the Company to pay down the accrual of the Company's preferred dividends, allow the ongoing preferred dividend accrual to be kept current, and provided additional liquidity to be used at the Company's discretion. Two of our secured term loans totaling $218,635, as well as our Line of Credit (as defined below in Note 5, “Debt—Credit Facilities”), which has $118,684 drawn as of March 31, 2022, will mature in August of 2022. In addition, it is possible that we could breach certain of our Credit Agreement (as defined below in Note 5, “Debt—Credit Facilities”) covenants in 2022, which could lead to potential acceleration of amounts due under our Credit Agreements. Management is exploring options including, but not limited to, additional asset sales, the refinancing of debt and the offering of equity or equity-linked securities prior to the maturity of these term loans in August of 2022, or an event of default. The Company believes that we will be able to refinance this debt, obtain a waiver, or generate the cash necessary to pay off the debt through asset sales or an equity offering prior to a default. However, given the unpredictable nature of the recovery from the impact of COVID-19, there can be no assurance that we will be able to obtain a waiver or amendment in a timely manner, or on acceptable terms, if at all, or generate the cash necessary to pay off this debt through an equity offering or asset sales prior to the debt maturity. The failure to obtain a waiver or amendment, or otherwise repay the debt, could lead to an event of default, which would have a material adverse effect on our financial condition, which gives rise to substantial doubt about our ability to continue as a going concern. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because the lodging industry has not previously experienced such an abrupt and drastic reduction in hotel demand, and as a consequence, our ability to be predictive is uncertain. In addition, the magnitude, duration, and speed of the pandemic is uncertain and we cannot estimate when travel demand will recover. NOTE 1 - BASIS OF PRESENTATION (CONTINUED) Investment in Hotel Properties Investments in hotel properties are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of up to 40 years for buildings and improvements, two These assessments have a direct impact on our net income because if we were to shorten the expected useful lives of our investments in hotel properties we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis. Identifiable assets, liabilities, and noncontrolling interests related to hotel properties acquired are recorded at fair value. Estimating techniques and assumptions used in determining fair values involve significant estimates and judgments. These estimates and judgments have a direct impact on the carrying value of our assets and liabilities which can directly impact the amount of depreciation expense recorded on an annual basis and could have an impact on our assessment of potential impairment of our investment in hotel properties. We consider a hotel to be held for sale when management and our independent trustees commit to a plan to sell the property, the property is available for sale, management engages in an active program to locate a buyer for the property and it is probable the sale will be completed within a year of the initiation of the plan to sell. We evaluate each disposition to determine whether we need to classify the disposition as discontinued operations. We generally include the operations of a hotel that was sold or a hotel that has been classified as held for sale in continuing operations unless the sale represents a strategic shift that will have a major impact on our future operations and financial results. We anticipate that most of our hotel dispositions will not be classified as discontinued operations as most will not fit this definition. Based on the occurrence of certain events or changes in circumstances, we review the recoverability of the property’s carrying value. Such events or changes in circumstances include the following: • a significant decrease in the market price of a long-lived asset; • a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; • a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; • an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; • a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and • a current expectation that, it is more likely than not that, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We review our portfolio on an ongoing basis to evaluate the existence of any of the aforementioned events or changes in circumstances that would require us to test for recoverability. In general, our review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value expected, as well as the effects of hotel demand, competition and other factors. Other assumptions used in the review of recoverability include the holding period and expected terminal capitalization rate. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are required to make subjective assessments as to whether there are impairments in the values of our investments in hotel properties. As of March 31, 2022, based on our analysis, we have determined that the estimated future cash flow of each of the properties in our portfolio is sufficient to recover its respective carrying value. NOTE 1 - BASIS OF PRESENTATION (CONTINUED) New Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued 2021-01, Reference Rate Reform (Topic 848), Scope, which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. As a result of identified structural risks of interbank offered rates, in particular, the London Interbank Offered Rate (LIBOR), reference rate reform is underway to identify alternative reference rates that are more observable or transaction based. The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The optional expedients and exceptions contained within these updates, in general, only apply to contract amendments and modifications entered into prior to January 1, 2023. The provisions of these updates that will most likely affect our financial reporting process related to modifications of contracts with lenders and the related hedging contracts associated with each respective modified borrowing contract. In general, the provisions of these updates would impact the Company by allowing, among other things, the following: • Allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 470 to be accounted for as a non-substantial modification and not be considered a debt extinguishment. • Allowing a change to contractual terms of a hedging instrument in conjunction with reference rate reform to not require a dedesignation of the hedging relationship. • Allowing a change to the interest rate used for margining, discounting, or contract price alignment for a derivative that is a cash flow hedge to not be considered a change to the critical terms of the hedge and will not require a dedesignation of the hedging relationship. We have not entered into any contract modifications yet, as it directly relates to reference rate reform but we anticipate having to undertake such modifications in the future as a majority of our contracts with lenders and hedging counterparties are indexed to LIBOR. Some debt contract modifications will occur in the normal course of business and will include other changes in the terms, for which we do not anticipate that this accounting relief will be applicable. However, we anticipate that other debt contract modifications will occur prior to the phase out of LIBOR on June 30, 2023 specifically to address the LIBOR transition, for which we will be able to apply the accounting relief. |
INVESTMENT IN HOTEL PROPERTIES
INVESTMENT IN HOTEL PROPERTIES | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
INVESTMENT IN HOTEL PROPERTIES | INVESTMENT IN HOTEL PROPERTIES Investment in hotel properties consists of the following at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Land $ 478,412 $ 478,412 Buildings and Improvements 1,562,851 1,560,768 Furniture, Fixtures and Equipment 276,974 274,802 Construction in Progress 1,739 1,784 2,319,976 2,315,766 Less Accumulated Depreciation (669,796) (650,669) Total Investment in Hotel Properties * $ 1,650,180 $ 1,665,097 * The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $38,939 and $39,577 at March 31, 2022 and December 31, 2021, respectively. Acquisitions For the three months ended March 31, 2022 and 2021, we acquired no hotel properties. Hotel Dispositions For the three months ended March 31, 2022, we had no hotel dispositions. During the three months ended March 31, 2021, we had the following hotel dispositions: Hotel Acquisition Disposition Consideration Gain on Courtyard San Diego, CA 05/30/2013 02/19/2021 $ 64,500 $ 5,032 The Capitol Hill Hotel Washington, DC 04/15/2011 03/09/2021 51,000 12,975 Holiday Inn Express Cambridge, MA 05/03/2006 03/09/2021 32,000 20,280 Residence Inn Miami Coconut Grove, FL 06/12/2013 03/10/2021 31,000 9,996 2021 Total $ 48,283 On April 27, 2022, we entered into a purchase and sale agreement to sell the Courtyard Brookline, MA, the Hampton Inn Washington, DC, Hilton Garden Inn M Street, DC, Hampton Inn - Philadelphia, PA, Courtyard Sunnyvale, CA, TownePlace Suites Sunnyvale, CA and the Courtyard Los Angeles Westside, CA to an unaffiliated buyer for a purchase price of $505,000. The transaction is expected to close in the third quarter of 2022, subject to customary closing conditions. Assets Held For Sale |
INVESTMENT IN UNCONSOLIDATED JO
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of March 31, 2022 and December 31, 2021, our investment in unconsolidated joint ventures consisted of the following: Joint Venture Hotel Properties Percent Owned March 31, 2022 December 31, 2021 Hiren Boston, LLC Courtyard by Marriott, South Boston, MA 50 % 106 189 SB Partners, LLC Holiday Inn Express, South Boston, MA 50 % — — SB Partners Three, LLC Home2 Suites, South Boston, MA 50 % 5,024 5,391 $ 5,130 $ 5,580 Income/Loss Allocation For SB Partners, LLC, Hiren Boston, LLC, and SB Partners Three, LLC, income or loss is allocated to us and our joint venture partners consistent with the allocation of cash distributions in accordance with the joint venture agreements. This results in an income allocation consistent with our percentage of ownership interests. When we absorb cumulative losses equal to our accounting basis in the joint venture, our investment balance is $0 as presented in the table above. Any difference between the carrying amount of any of our investments noted above and the underlying equity in net assets is amortized over the expected useful lives of the properties and other intangible assets. Loss recognized during the three months ended March 31, 2022 and 2021, for our investments in unconsolidated joint ventures is as follows: Three Months Ended March 31, 2022 2021 Hiren Boston, LLC $ (258) $ (335) SB Partners, LLC (310) — SB Partners Three, LLC (368) (323) Loss from Unconsolidated Joint Venture Investments $ (936) $ (658) The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021. Balance Sheets March 31, 2022 December 31, 2021 Assets Investment in Hotel Properties, Net $ 62,860 $ 64,096 Other Assets 15,186 15,649 Total Assets $ 78,046 $ 79,745 Liabilities and Equity Mortgages and Notes Payable $ 65,622 $ 65,723 Other Liabilities 15,481 15,656 Equity: Hersha Hospitality Trust 2,679 3,328 Joint Venture Partner(s) (5,736) (4,962) Accumulated Other Comprehensive Loss — — Total Equity (3,057) (1,634) Total Liabilities and Equity $ 78,046 $ 79,745 Statements of Operations Three Months Ended March 31, 2022 2021 Room Revenue $ 2,647 $ 2,255 Other Revenue 186 117 Operating Expenses (2,455) (1,864) Lease Expense (257) (270) Property Taxes and Insurance (572) (1,565) General and Administrative (20) (222) Depreciation and Amortization (1,253) (2,312) Interest Expense (668) (2,692) Loss on Dissolution of Joint Venture — (112,429) Income Tax Benefit 125 54 Net Loss $ (2,267) $ (118,928) The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of March 31, 2022 and December 31, 2021. March 31, 2022 December 31, 2021 Our share of equity recorded on the joint ventures' financial statements $ 2,679 $ 3,328 Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures (1) 2,451 2,252 Investment in Unconsolidated Joint Ventures $ 5,130 $ 5,580 (1) Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following: • the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements; • accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Loss from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and |
OTHER ASSETS
OTHER ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | OTHER ASSETS Other Assets Other Assets consisted of the following at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Derivative Asset $ 8,232 $ 92 Deferred Financing Costs 736 1,070 Prepaid Expenses 11,390 11,632 Investment in Statutory Trusts 1,548 1,548 Investment in Non-Hotel Property and Inventories 2,108 2,193 Deposits with Unaffiliated Third Parties 2,668 2,663 Deferred Tax Asset, Net of Valuation Allowance of $22,259 and $21,612, respectively — — Property Insurance Receivable 575 693 Other 2,109 1,868 $ 29,366 $ 21,759 Derivative Asset - This category represents the Company’s gross asset fair value of interest rate swaps and interest rate caps. Any swaps and caps resulting in a liability to the Company are accounted for separately within Other Liabilities on the Balance Sheet. Deferred Financing Costs – This category represents financing costs paid by the Company to establish our Line of Credit. These costs have been capitalized and will amortize to interest expense over the term of the Line of Credit. Prepaid Expenses – Prepaid expenses include amounts paid for property tax, insurance and other expenditures that will be expensed in the next twelve months. Investment in Statutory Trusts – We have an investment in the common stock of Hersha Statutory Trust I and Hersha Statutory Trust II. Investment in Non-Hotel Property and Inventories – This category represents the costs paid and capitalized by the Company for items such as office leasehold improvements, furniture and equipment, and property inventories. Deposits with Unaffiliated Third Parties – These deposits represent deposits made by the Company with unaffiliated third parties for items such as lease security deposits, utility deposits, and deposits with unaffiliated third party management companies. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Mortgages Mortgages payable at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Mortgage Indebtedness $ 305,525 $ 306,078 Net Unamortized Premium 11 13 Net Unamortized Deferred Financing Costs (1,288) (1,477) Mortgages Payable $ 304,248 $ 304,614 Net Unamortized Deferred Financing Costs associated with entering into mortgage indebtedness are deferred and amortized over the life of the mortgages. Net Unamortized Premiums are also amortized over the remaining life of the loans. Mortgage indebtedness balances are subject to fixed and variable interest rates, which ranged from 3.10% to 5.05% as of March 31, 2022. Our mortgage indebtedness contains various financial and non-financial covenants customarily found in secured, non-recourse financing arrangements. Our mortgage loans typically require that specified debt service coverage ratios be maintained with respect to the financed properties before we can exercise certain rights under the loan agreements relating to such properties. If the specified criteria are not satisfied, the lender may be able to escrow cash flow generated by the property securing the applicable mortgage loan. We have determined that all debt covenants contained in the loan agreements securing our consolidated hotel properties with the exception of one mortgage was met as of March 31, 2022. The lender has elected its right to escrow property level cash flow for the purpose of meeting future payment obligations. As of March 31, 2022, the maturity dates for the outstanding mortgage loans ranged from December 2022 to September 2025. Credit Facilities We maintain three secured credit arrangements which aggregate to $747,481 with Citigroup Global Markets Inc., Wells Fargo Bank, Inc. and various other lenders. One credit agreement provides for a $442,404 senior secured credit facility (“Credit Facility”). The Credit Facility consists of a $250,000 senior secured revolving line of credit (“Line of Credit”) and a $192,404 senior secured term loan ("First Term Loan"), and expires on August 10, 2022. We maintain another credit agreement which provides for a $278,846 senior secured term loan agreement (“Second Term Loan”) and expires on September 10, 2024. A separate credit agreement provides for a $26,231 senior secured term loan agreement (“Third Term Loan” and collectively with the Credit Facility and the Second Term Loan, the "Credit Agreements") and expires on August 10, 2022. Management intends to explore options including, but not limited to, additional asset sales, the refinancing of debt and the offering of equity or equity-linked securities prior to the maturity of the First Term Loan and the Third Term Loan on August 10, 2022. On February 17, 2021, the Company signed amendments to the Credit Agreements which resulted in debt extinguishment expense $2,977. Debt extinguishment expense consists of $635 of debt extinguishment losses and $2,342 of debt modification losses. The signed amendments to the Credit Agreements, among other things, provide for: • an extension of the maturity date of the Third Term Loan to August 10, 2022; • a limited waiver of financial covenants through March 31, 2022; and • the ability to borrow up to $174,729, inclusive of amounts already outstanding, under the Line of Credit, the proceeds of which may only be used to fund certain costs and expenses. Certain conditions, such as minimum liquid assets in an aggregate amount of at least $30,000, and certain negative covenants and restrictions that are considered normal and customary, must be met on a recurring basis as outlined within the amendments. The amendments to the Credit Agreements make certain other amendments to financial covenants in place beginning in the second quarter of 2022: • a fixed charge coverage ratio of not less than 1.20 to 1.00 (was 1.50 to 1.00); • a maximum leverage ratio of not more than 65% (was 60%); and • a new financial covenant that requires the borrowing base leverage ratio to not exceed 60% at any time. The amount that we can borrow at any given time under our Line of Credit, and the individual term loans (each a “Term Loan” and together the “Term Loans”) is governed by certain operating metrics of designated hotel properties known as borrowing base assets. As of March 31, 2022, the following hotel properties secured the amended facilities under the Credit Agreements: - Courtyard by Marriott Brookline, Brookline, MA - Hampton Inn, Washington, DC - The Envoy Boston Seaport, Boston, MA - Ritz-Carlton Georgetown, Washington, DC - The Boxer, Boston, MA - Hilton Garden Inn, M Street, Washington, DC - Hampton Inn Seaport, Seaport, New York, NY - The Winter Haven Hotel Miami Beach, Miami, FL - Holiday Inn Express Chelsea, 29th Street, New York, NY - The Blue Moon Hotel Miami Beach, Miami, FL - Gate Hotel JFK Airport, New York, NY - Cadillac Hotel & Beach Club, Miami, FL - Hilton Garden Inn JFK Airport, New York, NY - The Parrot Key Hotel & Villas, Key West, FL - NU Hotel, Brooklyn, New York, NY - TownePlace Suites, Sunnyvale, CA - Hyatt House White Plains, White Plains, NY - The Ambrose Hotel, Santa Monica, CA - Hampton Inn Center City/ Convention Center, Philadelphia, PA - The Pan Pacific Hotel Seattle, Seattle, WA - The Rittenhouse, Philadelphia, PA - Mystic Marriott Hotel & Spa, Groton, CT - Philadelphia Westin, Philadelphia, PA The interest rate for borrowings under the Line of Credit and Term Loans are based on a pricing grid with a range of one month U.S. LIBOR plus a spread. The following table summarizes the balances outstanding and interest rate spread for each borrowing: Outstanding Balance Borrowing Spread March 31, 2022 December 31, 2021 Line of Credit 1.50% to 2.25% $ 118,684 $ 118,684 Term Loans: First Term Loan 1.45% to 2.20% $ 192,404 $ 192,404 Second Term Loan 1.35% to 2.00% 278,846 278,846 Third Term Loan 1.45% to 2.20% 26,231 26,231 Deferred Loan Costs (1,175) (1,396) Total Term Loans $ 496,306 $ 496,085 The weighted average interest rate on our credit facilities was 3.55% and 3.58% for the three months ended March 31, 2022 and 2021, respectively. Notes Payable Notes payable at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Statutory Trust I and Statutory Trust II Notes Payable Indebtedness $ 51,548 $ 51,548 Net Unamortized Deferred Financing Costs (693) (706) Statutory Trust I and Statutory Trust II Notes Payable 50,855 50,842 Junior Notes Payable Indebtedness 158,094 156,239 Net Unamortized Deferred Financing Costs (3,970) (4,209) Net Unamortized Discount (4,124) (4,382) Junior Notes Payable 150,000 147,648 Total Notes Payable $ 200,855 $ 198,490 Statutory Trust I and Statutory Trust II Notes Payable We have two junior subordinated notes payable in the aggregate amount of $51,548 related to the Hersha Statutory Trusts pursuant to indenture agreements which will mature on July 30, 2035, but may be redeemed at our option, in whole or in part, prior to maturity in accordance with the provisions of the indenture agreements. The $25,774 of notes issued to each of Hersha Statutory Trust I and Hersha Statutory Trust II bear interest at a variable rate of LIBOR plus 3% per annum. This rate resets 2 business days prior to each quarterly payment. The related deferred financing costs are amortized over the life of the notes payable. The weighted average interest rate on our two junior subordinated notes payable was 3.17% and 3.21% for the three months ended March 31, 2022 and 2021, respectively. Junior Notes Payable On February 17, 2021, the Company entered into a note purchase agreement with several purchasers (the “Purchasers”). The Company issued and sold to the Purchasers $150,000 aggregate principal amount of the Company’s 9.50% Unsecured PIK Toggle Notes due 2026 (the “Notes”) on February 23, 2021. The Notes will mature on February 23, 2026. The Notes bear interest at a rate of 9.50% per year, payable in arrears on June 30, September 30, December 31 and March 31 of each year, beginning on June 30, 2021. For any interest period ending on or prior to March 31, 2022, the Issuer, in its sole discretion may elect to pay interest (a) in cash at a rate per annum equal to 4.75% per annum, and (b) in kind at a rate per annum equal to 4.75% per annum (“PIK Interest”). Any PIK Interest will be paid by increasing the principal amount of the Notes at the end of the applicable interest period by the amount of such PIK Interest. We elected the PIK Interest option for the interest periods ended June 30, 2021, September 30, 2021, December 31, 2021, and March 31, 2022, increasing the total principal balance by $8,094 to $158,094 as of March 31, 2022. The notes may be redeemed during the 12 month period beginning February 23, 2022 and the 12 month period beginning February 23, 2023, at a redemption price equal to 104% and 102% of the principal amount of the Notes being redeemed, respectively. After February 23, 2024, the notes may be redeemed at the principal amount. The Notes are subject to representations, warranties, covenants, terms and conditions customary for transactions of this type, including limitations on liens, incurrence of new debt, investments, mergers and asset dispositions, covenants to preserve corporate existence and comply with laws and default provisions. The Company may only use the net proceeds from the issuance of the Notes in accordance with the mandatory prepayment waterfalls, which includes the repayment of outstanding borrowings under the Credit Agreements and use for certain other general corporate purposes. Interest Expense The table below shows the interest expense incurred by the Company during the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Mortgage Loans Payable $ 2,529 $ 2,833 Interest Rate Swap Contracts on Mortgages 565 603 Unsecured Notes Payable 4,406 1,838 Credit Facility and Term Loans 3,649 4,368 Interest Rate Swap Contracts on Credit Agreements 1,822 2,424 Deferred Financing Costs Amortization 1,191 1,293 Other 75 70 Total Interest Expense $ 14,237 $ 13,429 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES We own five hotels within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms with extension options that range from May 2062 to October 2103. We also have two additional office space leases with terms ranging from March 2023 to December 2027. Lease costs for our office spaces are included in General and Administrative expense. The components of lease costs for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 1,050 $ 88 $ 1,138 $ 1,076 $ 121 $ 1,197 Variable lease costs 40 70 110 24 80 104 Total lease costs $ 1,090 $ 158 $ 1,248 $ 1,100 $ 201 $ 1,301 Other information related to leases as of and for the three months ended March 31, 2022 and 2021 is as follows: March 31, 2022 March 31, 2021 Cash paid from operating cash flow for operating leases $ 1,085 $ 1,072 Weighted average remaining lease term (in years) 63.4 64.2 Weighted average discount rate 7.86 % 7.86 % |
LEASES | LEASES We own five hotels within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms with extension options that range from May 2062 to October 2103. We also have two additional office space leases with terms ranging from March 2023 to December 2027. Lease costs for our office spaces are included in General and Administrative expense. The components of lease costs for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 1,050 $ 88 $ 1,138 $ 1,076 $ 121 $ 1,197 Variable lease costs 40 70 110 24 80 104 Total lease costs $ 1,090 $ 158 $ 1,248 $ 1,100 $ 201 $ 1,301 Other information related to leases as of and for the three months ended March 31, 2022 and 2021 is as follows: March 31, 2022 March 31, 2021 Cash paid from operating cash flow for operating leases $ 1,085 $ 1,072 Weighted average remaining lease term (in years) 63.4 64.2 Weighted average discount rate 7.86 % 7.86 % |
COMMITMENTS AND CONTINGENCIES A
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2022 | |
Commitments And Contingencies And Related Party Transactions [Abstract] | |
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS | COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS Management Agreements Our wholly-owned TRS, 44 New England Management Company, and certain of our joint venture entities engage eligible independent contractors in accordance with the requirements for qualification as a REIT under the Internal Revenue Code of 1986, as amended, including Hersha Hospitality Management Limited Partnership (“HHMLP”), as the property managers for hotels it leases from us pursuant to management agreements. Certain executives and trustees of the Company own a minority interest in HHMLP. Our management agreements with HHMLP provide for a term of five years and are subject to early termination upon the occurrence of defaults and certain other events described therein. As required under the REIT qualification rules, HHMLP must qualify as an “eligible independent contractor” during the term of the management agreements. Under the management agreements, HHMLP generally pays the operating expenses of our hotels. All operating expenses or other expenses incurred by HHMLP in performing its authorized duties are reimbursed or borne by our TRS to the extent the operating expenses or other expenses are incurred within the limits of the applicable approved hotel operating budget. HHMLP is not obligated to advance any of its own funds for operating expenses of a hotel or to incur any liability in connection with operating a hotel. Management agreements with other unaffiliated hotel management companies have similar terms. For its services, HHMLP receives a base management fee and, if a hotel exceeds certain thresholds, an incentive management fee. The base management fee for a hotel is due monthly and is equal to 3% of gross revenues associated with each hotel managed for the related month. The incentive management fee, if any, for a hotel is due annually in arrears on the ninetieth day following the end of each fiscal year and is based upon the financial performance of the hotels. For the three months ended March 31, 2022 and 2021, base management fees incurred to HHMLP totaled $1,999 and $1,180, respectively, and are recorded as Hotel Operating Expenses. For the three months ended March 31, 2022 and 2021, we did not incur incentive management fees. Franchise Agreements Our branded hotel properties that are not managed by the brand are operated under franchise agreements assumed by the hotel property lessee. The franchise agreements have 10 to 20 year terms, but may be terminated by either the franchisee or franchisor on certain anniversary dates specified in the agreements. The franchise agreements require annual payments for franchise royalties, reservation, advertising services and certain other charges, and such payments are primarily based upon percentages of gross room revenue. These payments are paid by the hotels and charged to expense as incurred. Franchise fee expenses for the three months ended March 31, 2022 and 2021 were $3,052 and $1,823, respectively, and are recorded in Hotel Operating Expenses. The initial fees incurred to enter into the franchise agreements are amortized over the life of the franchise agreements. Accounting, Revenue Management and Information Technology Fees Each of the wholly-owned hotels and consolidated joint venture hotel properties managed by HHMLP incurs a monthly accounting and information technology fee. Monthly fees for accounting services are between $2 and $3 per property and monthly information technology fees range from $1 to $2 per property. For the three months ended March 31, 2022 and 2021, the Company incurred accounting fees of $277 and $313, respectively. For the three months ended March 31, 2022 and 2021, the Company incurred information technology fees of $87 and $102, respectively. For the three months ended March 31, 2022 and 2021, the Company incurred revenue management service fees of $574 and $438. Accounting fees, revenue management fees and information technology fees are included in Hotel Operating Expenses under Other. Capital Expenditure Fees HHMLP charges fees between 3% and 5% on certain capital expenditures and pending renovation projects at the properties as compensation for procurement services related to capital expenditures and for project management of renovation projects. For the three months ended March 31, 2022 and 2021, we incurred fees of $83 and $119, respectively, which were capitalized with the cost of capital expenditures. Acquisitions from Affiliates We have entered into an option agreement with certain of our officers and trustees such that we obtain a right of first refusal to purchase any hotel owned or developed in the future by these individuals or entities controlled by them at fair market value. This right of first refusal would apply to each party until one year after such party ceases to be an officer or trustee of the Company. Our Acquisition Committee of the Board of Trustees is comprised solely of independent trustees, and the purchase prices and all material terms of the purchase of hotels from related parties are approved by the Acquisition Committee. Hotel Supplies For the three months ended March 31, 2022 and 2021, we incurred charges for hotel supplies of $0 and $1, respectively. For the three months ended March 31, 2022 and 2021, we incurred charges for capital expenditure purchases of $889 and $134, respectively. These purchases were made from Hersha Purchasing and Design, a hotel supply company owned, in part, by certain executives and trustees of the Company. Hotel supplies are expensed and included in Hotel Operating Expenses on our consolidated statements of operations, and capital expenditure purchases are included in investment in hotel properties on our consolidated balance sheets. Insurance Services The Company utilizes the services of HHMLP to provide risk management services to the Company related to the placement of property and casualty insurance, placement of general liability insurance and claims handling for our hotel properties. The fees incurred for these risk management services for the three months ended March 31, 2022 and 2021 were $30 and $42, respectively. Restaurant Lease Agreements with Independent Restaurant Group The Company has entered into management agreements with Independent Restaurant Group (“IRG”), subject to the supervision of HHMLP, as property manager, for restaurants at two of its hotel properties. Jay H. Shah and Neil H. Shah, executive officers and/or trustees of the Company, collectively own a 70.0% interest in IRG. For the three months ended March 31, 2022 and 2021, management fees incurred to IRG totaled $43 and $13, respectively. Due From Related Parties The due from related parties balance as of March 31, 2022 and December 31, 2021 was approximately $153 and $2,495, respectively. The balances primarily consisted of working capital deposits made to HHMLP and other entities owned, in part, by certain executives and trustees of the Company. Due to Related Parties |
FAIR VALUE MEASUREMENTS AND DER
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS Fair Value Measurements Our determination of fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we utilize a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liabilities, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As of March 31, 2022, the Company’s derivative instruments represented the only financial instruments measured at fair value. Currently, the Company uses derivative instruments, such as interest rate swaps and caps, to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counter-party’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and the counter-parties. However, as of March 31, 2022 we have assessed the significance of the effect of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Derivative Instruments The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps designated as cash flow hedges limit the Company’s exposure to increased cash payments due to increases in variable interest rates. The table on the following page presents our derivative instruments as of March 31, 2022 and December 31, 2021. Estimated Fair Value (Liability) Asset Balance Hedged Debt Type Strike Rate Index Effective Date Derivative Contract Maturity Date Notional Amount March 31, 2022 December 31, 2021 Term Loan Instruments: Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 $ (324) $ (970) Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 (324) (970) Credit Facility Swap 1.460 % 1-Month LIBOR + 2.00% September 10, 2019 September 10, 2024 300,000 6,997 (3,729) Mortgages: Hyatt, Union Square, New York, NY Swap 1.870 % 1-Month LIBOR + 2.30% June 7, 2019 June 7, 2023 56,000 57 (987) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 339 (460) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 339 (460) Hilton Garden Inn 52nd Street, New York, NY Swap 1.540 % 1-Month LIBOR + 2.30% December 4, 2019 December 4, 2022 44,325 (36) (458) Courtyard, LA Westside, Culver City, CA Cap 2.500 % 1-Month LIBOR August 1, 2021 August 1, 2024 35,000 499 92 $ 7,547 $ (7,942) The fair value of the interest rate swaps and cap with an asset balance are included in Other Assets and the fair value of the interest rate swaps with a liability balance are included in Accounts Payable, Accrued Expenses and Other Liabilities at March 31, 2022 and December 31, 2021. The net change related to derivative instruments designated as cash flow hedges recognized as unrealized gains and losses reflected on our consolidated balance sheet in accumulated other comprehensive income was a gain of $15,489 and $6,766 for the three months ended March 31, 2022 and 2021, respectively. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate derivatives. The change in net unrealized losses on cash flow hedges reflects a reclassification of $0 and $301 of net unrealized gains from accumulated other comprehensive income as an increase to interest expense for the three months ended March 31, 2022 and 2021, respectively. For the next twelve months ending March 31, 2023, we estimate that an additional $204 will be reclassified as a decrease to interest expense. Fair Value of Debt We estimate the fair value of our fixed rate debt and the credit spreads over variable market rates on our variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. As of March 31, 2022, the carrying value and estimated fair value of our debt was $1,120,093 and $1,148,059 respectively. As of December 31, 2021, the carrying value and estimated fair value of our debt was $1,117,873 and $1,146,699, respectively. |
SHARE BASED PAYMENTS
SHARE BASED PAYMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE BASED PAYMENTS | SHARE BASED PAYMENTS Our shareholders approved the Hersha Hospitality Trust 2012 Equity Incentive Plan, as amended, for the purpose of attracting and retaining executive officers, employees, trustees and other persons and entities that provide services to the Company. A summary of our share based compensation activity from January 1, 2022 to March 31, 2022 is as follows: LTIP Unit Awards Restricted Share Awards Share Awards Number of Units Weighted Average Grant Date Fair Value Number of Restricted Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested Balance as of December 31, 2021 1,658,995 $ 10.73 170,740 $ 10.52 — Granted — N/A — N/A 29,868 9.60 Vested — N/A (49,153) 11.37 (29,868) 9.60 Unvested Balance as of March 31, 2022 1,658,995 $ 10.73 121,587 $ 10.17 — The following table summarizes share based compensation expense for the three months ended March 31, 2022 and 2021 and unearned compensation as of March 31, 2022 and December 31, 2021: Share Based Unearned For the Three Months Ended As of March 31, 2022 March 31, 2021 March 31, 2022 December 31, 2021 Issued Awards LTIP Unit Awards $ 1,777 $ 1,724 $ 9,567 $ 11,344 Restricted Share Awards 192 168 642 834 Share Awards 287 — — — Unissued Awards Market Based 285 277 1,944 2,230 Total $ 2,541 $ 2,169 $ 12,153 $ 14,408 The weighted-average period of which the unrecognized compensation expense will be recorded is approximately 1.6 years for LTIP Unit Awards and 1.1 years for Restricted Share Awards. The remaining unvested target units are expected to vest as follows: 2021 2022 2023 LTIP Unit Awards 616,047 1,042,948 — Restricted Share Awards 66,172 52,415 3,000 682,219 1,095,363 3,000 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table is a reconciliation of the income or loss (numerator) and the weighted average shares (denominator) used in the calculation of basic and diluted earnings per common share. The computation of basic and diluted earnings per share is presented below. Three Months Ended March 31, 2022 2021 NUMERATOR: Basic and Diluted* Net (loss) income $ (16,966) $ 9,090 Loss (Income) allocated to Noncontrolling Interests 451 (164) Distributions to Preferred Shareholders (6,044) (6,043) Net (loss) income applicable to Common Shareholders $ (22,559) $ 2,883 DENOMINATOR: Weighted average number of common shares - basic 39,231,550 38,970,893 Effect of dilutive securities: Restricted Stock Awards and LTIP Units (unvested) — 114,668 Contingently Issued Shares and Units — 754,913 Weighted average number of common shares - diluted 39,231,550 39,840,474 * Loss (Income) allocated to noncontrolling interest in HHLP has been excluded from the numerator and Common Units and Vested LTIP Units have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to (loss) income applicable to common shareholders. |
CASH FLOW DISCLOSURES AND NON C
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES | CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES Interest paid during the three months ended March 31, 2022 and 2021 totaled $8,390 and $8,056, respectively. Net cash paid on Interest Rate Derivative contracts during the three months ended March 31, 2022 and 2021 totaled $2,496 and $3,063, respectively. Cash paid for income taxes during the three months ended March 31, 2022 and 2021 totaled $32 and $13, respectively. The following non-cash investing and financing activities occurred during the three months ended March 31, 2022 and 2021: 2022 2021 Issuance of share based payments $ — $ 10,488 Accrued payables for capital expenditures placed into service 914 326 Adjustment to Record Noncontrolling Interest at Redemption Value 2,273 — The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the three months ended March 31, 2022 and 2021: 2022 2021 Cash and cash equivalents $ 77,447 $ 76,522 Escrowed cash 10,997 6,822 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 88,444 $ 83,344 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles Of Consolidation And Presentation | Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with US GAAP and include all of our accounts as well as accounts of the Partnership, subsidiary partnerships and our wholly owned Taxable REIT Subsidiary Lessee (“TRS Lessee”), 44 New England Management Company. All significant inter-company amounts have been eliminated. |
Variable Interest Entities | Variable Interest Entities We evaluate each of our investments and contractual relationships to determine whether they meet the guidelines for consolidation. To determine if we are the primary beneficiary of a VIE, we evaluate whether we have a controlling financial interest in that VIE. An enterprise is deemed to have a controlling financial interest if it has i) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the rights to receive benefits from the VIE that could be significant to the VIE. Control can also be demonstrated by the ability of a member to manage day-to-day operations, refinance debt and sell the assets of the partnerships without the consent of the other member and the inability of the members to replace the managing member. Based on our examination, there have been no changes to the operating structure of our legal entities during the three months ended March 31, 2022 and, therefore, there are no changes to our evaluation of VIE's as presented within our annual report presented on Form 10-K for the year ended December 31, 2021. |
Noncontrolling Interest | Noncontrolling InterestWe classify the noncontrolling interests of our common units of limited partnership interest in HHLP (“Common Units”), and Long Term Incentive Plan Units (“LTIP Units”) as equity. LTIP Units are a separate class of limited partnership interest in the Operating Partnership that are convertible into Common Units under certain circumstances. |
Investment in Hotel Properties | Investment in Hotel Properties Investments in hotel properties are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of up to 40 years for buildings and improvements, two These assessments have a direct impact on our net income because if we were to shorten the expected useful lives of our investments in hotel properties we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis. Identifiable assets, liabilities, and noncontrolling interests related to hotel properties acquired are recorded at fair value. Estimating techniques and assumptions used in determining fair values involve significant estimates and judgments. These estimates and judgments have a direct impact on the carrying value of our assets and liabilities which can directly impact the amount of depreciation expense recorded on an annual basis and could have an impact on our assessment of potential impairment of our investment in hotel properties. We consider a hotel to be held for sale when management and our independent trustees commit to a plan to sell the property, the property is available for sale, management engages in an active program to locate a buyer for the property and it is probable the sale will be completed within a year of the initiation of the plan to sell. We evaluate each disposition to determine whether we need to classify the disposition as discontinued operations. We generally include the operations of a hotel that was sold or a hotel that has been classified as held for sale in continuing operations unless the sale represents a strategic shift that will have a major impact on our future operations and financial results. We anticipate that most of our hotel dispositions will not be classified as discontinued operations as most will not fit this definition. Based on the occurrence of certain events or changes in circumstances, we review the recoverability of the property’s carrying value. Such events or changes in circumstances include the following: • a significant decrease in the market price of a long-lived asset; • a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; • a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; • an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; • a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and • a current expectation that, it is more likely than not that, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We review our portfolio on an ongoing basis to evaluate the existence of any of the aforementioned events or changes in circumstances that would require us to test for recoverability. In general, our review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value expected, as well as the effects of hotel demand, competition and other factors. Other assumptions used in the review of recoverability include the holding period and expected terminal capitalization rate. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are required to make subjective assessments as to whether there are impairments in the values of our investments in hotel properties. As of March 31, 2022, based on our analysis, we have determined that the estimated future cash flow of each of the properties in our portfolio is sufficient to recover its respective carrying value. |
New Accounting Pronouncements | New Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued 2021-01, Reference Rate Reform (Topic 848), Scope, which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. As a result of identified structural risks of interbank offered rates, in particular, the London Interbank Offered Rate (LIBOR), reference rate reform is underway to identify alternative reference rates that are more observable or transaction based. The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The optional expedients and exceptions contained within these updates, in general, only apply to contract amendments and modifications entered into prior to January 1, 2023. The provisions of these updates that will most likely affect our financial reporting process related to modifications of contracts with lenders and the related hedging contracts associated with each respective modified borrowing contract. In general, the provisions of these updates would impact the Company by allowing, among other things, the following: • Allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 470 to be accounted for as a non-substantial modification and not be considered a debt extinguishment. • Allowing a change to contractual terms of a hedging instrument in conjunction with reference rate reform to not require a dedesignation of the hedging relationship. • Allowing a change to the interest rate used for margining, discounting, or contract price alignment for a derivative that is a cash flow hedge to not be considered a change to the critical terms of the hedge and will not require a dedesignation of the hedging relationship. We have not entered into any contract modifications yet, as it directly relates to reference rate reform but we anticipate having to undertake such modifications in the future as a majority of our contracts with lenders and hedging counterparties are indexed to LIBOR. Some debt contract modifications will occur in the normal course of business and will include other changes in the terms, for which we do not anticipate that this accounting relief will be applicable. However, we anticipate that other debt contract modifications will occur prior to the phase out of LIBOR on June 30, 2023 specifically to address the LIBOR transition, for which we will be able to apply the accounting relief. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of preferred stock | Terms of the Series C, Series D, and Series E Preferred Shares outstanding at March 31, 2022 and December 31, 2021 are summarized as follows: Dividend Per Share (1) Shares Outstanding Three Months Ended March 31, Series March 31, 2022 December 31, 2021 Aggregate Liquidation Preference Distribution Rate 2022 2021 Series C 3,000,000 3,000,000 $ 75,000 6.875 % $ 0.4297 $ 2.1485 Series D 7,701,700 7,701,700 $ 192,500 6.500 % $ 0.4063 $ 2.0313 Series E 4,001,514 4,001,514 $ 100,000 6.500 % $ 0.4063 $ 2.0313 Total 14,703,214 14,703,214 During the three months ended March 31, 2021, the Company paid cash dividends on the Company's Series C, Series D and Series E cumulative redeemable preferred stock reflecting accrued and unpaid dividends for the dividend periods ended April 15, 2020, July 15, 2020, October 15, 2020 and January 15, 2021. In addition, the Company declared a cash dividend for the first dividend period ending April 15, 2021, which was paid on April 15, 2021 to holders of record as of April 1, 2021. |
INVESTMENT IN HOTEL PROPERTIES
INVESTMENT IN HOTEL PROPERTIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of investment in hotel properties | Investment in hotel properties consists of the following at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Land $ 478,412 $ 478,412 Buildings and Improvements 1,562,851 1,560,768 Furniture, Fixtures and Equipment 276,974 274,802 Construction in Progress 1,739 1,784 2,319,976 2,315,766 Less Accumulated Depreciation (669,796) (650,669) Total Investment in Hotel Properties * $ 1,650,180 $ 1,665,097 * The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $38,939 and $39,577 at March 31, 2022 and December 31, 2021, respectively. |
Schedule of real estate assets sold | For the three months ended March 31, 2022, we had no hotel dispositions. During the three months ended March 31, 2021, we had the following hotel dispositions: Hotel Acquisition Disposition Consideration Gain on Courtyard San Diego, CA 05/30/2013 02/19/2021 $ 64,500 $ 5,032 The Capitol Hill Hotel Washington, DC 04/15/2011 03/09/2021 51,000 12,975 Holiday Inn Express Cambridge, MA 05/03/2006 03/09/2021 32,000 20,280 Residence Inn Miami Coconut Grove, FL 06/12/2013 03/10/2021 31,000 9,996 2021 Total $ 48,283 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investment in unconsolidated joint ventures | As of March 31, 2022 and December 31, 2021, our investment in unconsolidated joint ventures consisted of the following: Joint Venture Hotel Properties Percent Owned March 31, 2022 December 31, 2021 Hiren Boston, LLC Courtyard by Marriott, South Boston, MA 50 % 106 189 SB Partners, LLC Holiday Inn Express, South Boston, MA 50 % — — SB Partners Three, LLC Home2 Suites, South Boston, MA 50 % 5,024 5,391 $ 5,130 $ 5,580 |
Schedule of income or loss from unconsolidated joint ventures | Loss recognized during the three months ended March 31, 2022 and 2021, for our investments in unconsolidated joint ventures is as follows: Three Months Ended March 31, 2022 2021 Hiren Boston, LLC $ (258) $ (335) SB Partners, LLC (310) — SB Partners Three, LLC (368) (323) Loss from Unconsolidated Joint Venture Investments $ (936) $ (658) |
Summary of financial information related to unconsolidated joint ventures | The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021. Balance Sheets March 31, 2022 December 31, 2021 Assets Investment in Hotel Properties, Net $ 62,860 $ 64,096 Other Assets 15,186 15,649 Total Assets $ 78,046 $ 79,745 Liabilities and Equity Mortgages and Notes Payable $ 65,622 $ 65,723 Other Liabilities 15,481 15,656 Equity: Hersha Hospitality Trust 2,679 3,328 Joint Venture Partner(s) (5,736) (4,962) Accumulated Other Comprehensive Loss — — Total Equity (3,057) (1,634) Total Liabilities and Equity $ 78,046 $ 79,745 Statements of Operations Three Months Ended March 31, 2022 2021 Room Revenue $ 2,647 $ 2,255 Other Revenue 186 117 Operating Expenses (2,455) (1,864) Lease Expense (257) (270) Property Taxes and Insurance (572) (1,565) General and Administrative (20) (222) Depreciation and Amortization (1,253) (2,312) Interest Expense (668) (2,692) Loss on Dissolution of Joint Venture — (112,429) Income Tax Benefit 125 54 Net Loss $ (2,267) $ (118,928) |
Reconciliation of share in unconsolidated joint ventures equity in investment In unconsolidated joint ventures | The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of March 31, 2022 and December 31, 2021. March 31, 2022 December 31, 2021 Our share of equity recorded on the joint ventures' financial statements $ 2,679 $ 3,328 Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures (1) 2,451 2,252 Investment in Unconsolidated Joint Ventures $ 5,130 $ 5,580 (1) Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following: • the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements; • accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Loss from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other assets | Other Assets consisted of the following at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Derivative Asset $ 8,232 $ 92 Deferred Financing Costs 736 1,070 Prepaid Expenses 11,390 11,632 Investment in Statutory Trusts 1,548 1,548 Investment in Non-Hotel Property and Inventories 2,108 2,193 Deposits with Unaffiliated Third Parties 2,668 2,663 Deferred Tax Asset, Net of Valuation Allowance of $22,259 and $21,612, respectively — — Property Insurance Receivable 575 693 Other 2,109 1,868 $ 29,366 $ 21,759 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of mortgages payable and interest expense | Mortgages payable at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Mortgage Indebtedness $ 305,525 $ 306,078 Net Unamortized Premium 11 13 Net Unamortized Deferred Financing Costs (1,288) (1,477) Mortgages Payable $ 304,248 $ 304,614 Notes payable at March 31, 2022 and December 31, 2021 consisted of the following: March 31, 2022 December 31, 2021 Statutory Trust I and Statutory Trust II Notes Payable Indebtedness $ 51,548 $ 51,548 Net Unamortized Deferred Financing Costs (693) (706) Statutory Trust I and Statutory Trust II Notes Payable 50,855 50,842 Junior Notes Payable Indebtedness 158,094 156,239 Net Unamortized Deferred Financing Costs (3,970) (4,209) Net Unamortized Discount (4,124) (4,382) Junior Notes Payable 150,000 147,648 Total Notes Payable $ 200,855 $ 198,490 The table below shows the interest expense incurred by the Company during the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 Mortgage Loans Payable $ 2,529 $ 2,833 Interest Rate Swap Contracts on Mortgages 565 603 Unsecured Notes Payable 4,406 1,838 Credit Facility and Term Loans 3,649 4,368 Interest Rate Swap Contracts on Credit Agreements 1,822 2,424 Deferred Financing Costs Amortization 1,191 1,293 Other 75 70 Total Interest Expense $ 14,237 $ 13,429 |
Summary of borrowing base assets | As of March 31, 2022, the following hotel properties secured the amended facilities under the Credit Agreements: - Courtyard by Marriott Brookline, Brookline, MA - Hampton Inn, Washington, DC - The Envoy Boston Seaport, Boston, MA - Ritz-Carlton Georgetown, Washington, DC - The Boxer, Boston, MA - Hilton Garden Inn, M Street, Washington, DC - Hampton Inn Seaport, Seaport, New York, NY - The Winter Haven Hotel Miami Beach, Miami, FL - Holiday Inn Express Chelsea, 29th Street, New York, NY - The Blue Moon Hotel Miami Beach, Miami, FL - Gate Hotel JFK Airport, New York, NY - Cadillac Hotel & Beach Club, Miami, FL - Hilton Garden Inn JFK Airport, New York, NY - The Parrot Key Hotel & Villas, Key West, FL - NU Hotel, Brooklyn, New York, NY - TownePlace Suites, Sunnyvale, CA - Hyatt House White Plains, White Plains, NY - The Ambrose Hotel, Santa Monica, CA - Hampton Inn Center City/ Convention Center, Philadelphia, PA - The Pan Pacific Hotel Seattle, Seattle, WA - The Rittenhouse, Philadelphia, PA - Mystic Marriott Hotel & Spa, Groton, CT - Philadelphia Westin, Philadelphia, PA |
Schedule of Line of Credit Facilities | The following table summarizes the balances outstanding and interest rate spread for each borrowing: Outstanding Balance Borrowing Spread March 31, 2022 December 31, 2021 Line of Credit 1.50% to 2.25% $ 118,684 $ 118,684 Term Loans: First Term Loan 1.45% to 2.20% $ 192,404 $ 192,404 Second Term Loan 1.35% to 2.00% 278,846 278,846 Third Term Loan 1.45% to 2.20% 26,231 26,231 Deferred Loan Costs (1,175) (1,396) Total Term Loans $ 496,306 $ 496,085 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of components of lease costs | The components of lease costs for the three months ended March 31, 2022 and 2021 were as follows: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Ground Lease Office Lease Total Ground Lease Office Lease Total Operating lease costs $ 1,050 $ 88 $ 1,138 $ 1,076 $ 121 $ 1,197 Variable lease costs 40 70 110 24 80 104 Total lease costs $ 1,090 $ 158 $ 1,248 $ 1,100 $ 201 $ 1,301 Other information related to leases as of and for the three months ended March 31, 2022 and 2021 is as follows: March 31, 2022 March 31, 2021 Cash paid from operating cash flow for operating leases $ 1,085 $ 1,072 Weighted average remaining lease term (in years) 63.4 64.2 Weighted average discount rate 7.86 % 7.86 % |
FAIR VALUE MEASUREMENTS AND D_2
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of interest rate swaps and caps | The table on the following page presents our derivative instruments as of March 31, 2022 and December 31, 2021. Estimated Fair Value (Liability) Asset Balance Hedged Debt Type Strike Rate Index Effective Date Derivative Contract Maturity Date Notional Amount March 31, 2022 December 31, 2021 Term Loan Instruments: Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 $ (324) $ (970) Credit Facility Swap 1.824 % 1-Month LIBOR + 2.20% September 3, 2019 August 10, 2022 103,500 (324) (970) Credit Facility Swap 1.460 % 1-Month LIBOR + 2.00% September 10, 2019 September 10, 2024 300,000 6,997 (3,729) Mortgages: Hyatt, Union Square, New York, NY Swap 1.870 % 1-Month LIBOR + 2.30% June 7, 2019 June 7, 2023 56,000 57 (987) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 339 (460) Hilton Garden Inn Tribeca, New York, NY Swap 1.768 % 1-Month LIBOR + 2.25% July 25, 2019 July 25, 2024 22,725 339 (460) Hilton Garden Inn 52nd Street, New York, NY Swap 1.540 % 1-Month LIBOR + 2.30% December 4, 2019 December 4, 2022 44,325 (36) (458) Courtyard, LA Westside, Culver City, CA Cap 2.500 % 1-Month LIBOR August 1, 2021 August 1, 2024 35,000 499 92 $ 7,547 $ (7,942) |
SHARE BASED PAYMENTS (Tables)
SHARE BASED PAYMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of unvested share awards issued to executives | A summary of our share based compensation activity from January 1, 2022 to March 31, 2022 is as follows: LTIP Unit Awards Restricted Share Awards Share Awards Number of Units Weighted Average Grant Date Fair Value Number of Restricted Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Unvested Balance as of December 31, 2021 1,658,995 $ 10.73 170,740 $ 10.52 — Granted — N/A — N/A 29,868 9.60 Vested — N/A (49,153) 11.37 (29,868) 9.60 Unvested Balance as of March 31, 2022 1,658,995 $ 10.73 121,587 $ 10.17 — |
Schedule of employee service share-based compensation, allocation of recognized period costs | The following table summarizes share based compensation expense for the three months ended March 31, 2022 and 2021 and unearned compensation as of March 31, 2022 and December 31, 2021: Share Based Unearned For the Three Months Ended As of March 31, 2022 March 31, 2021 March 31, 2022 December 31, 2021 Issued Awards LTIP Unit Awards $ 1,777 $ 1,724 $ 9,567 $ 11,344 Restricted Share Awards 192 168 642 834 Share Awards 287 — — — Unissued Awards Market Based 285 277 1,944 2,230 Total $ 2,541 $ 2,169 $ 12,153 $ 14,408 |
Disclosure of share-based compensation arrangements by share-based payment award | The remaining unvested target units are expected to vest as follows: 2021 2022 2023 LTIP Unit Awards 616,047 1,042,948 — Restricted Share Awards 66,172 52,415 3,000 682,219 1,095,363 3,000 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of earnings per share | The following table is a reconciliation of the income or loss (numerator) and the weighted average shares (denominator) used in the calculation of basic and diluted earnings per common share. The computation of basic and diluted earnings per share is presented below. Three Months Ended March 31, 2022 2021 NUMERATOR: Basic and Diluted* Net (loss) income $ (16,966) $ 9,090 Loss (Income) allocated to Noncontrolling Interests 451 (164) Distributions to Preferred Shareholders (6,044) (6,043) Net (loss) income applicable to Common Shareholders $ (22,559) $ 2,883 DENOMINATOR: Weighted average number of common shares - basic 39,231,550 38,970,893 Effect of dilutive securities: Restricted Stock Awards and LTIP Units (unvested) — 114,668 Contingently Issued Shares and Units — 754,913 Weighted average number of common shares - diluted 39,231,550 39,840,474 * Loss (Income) allocated to noncontrolling interest in HHLP has been excluded from the numerator and Common Units and Vested LTIP Units have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to (loss) income applicable to common shareholders. |
CASH FLOW DISCLOSURES AND NON_2
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of cash flow | The following non-cash investing and financing activities occurred during the three months ended March 31, 2022 and 2021: 2022 2021 Issuance of share based payments $ — $ 10,488 Accrued payables for capital expenditures placed into service 914 326 Adjustment to Record Noncontrolling Interest at Redemption Value 2,273 — |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the three months ended March 31, 2022 and 2021: 2022 2021 Cash and cash equivalents $ 77,447 $ 76,522 Escrowed cash 10,997 6,822 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 88,444 $ 83,344 |
Summary of restrictions on cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the three months ended March 31, 2022 and 2021: 2022 2021 Cash and cash equivalents $ 77,447 $ 76,522 Escrowed cash 10,997 6,822 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 88,444 $ 83,344 |
BASIS OF PRESENTATION (Narrativ
BASIS OF PRESENTATION (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Noncontrolling Interest [Abstract] | ||||
Share conversion ratio (shares) | 1 | |||
Adjustments to additional paid in capital | $ 1,153,486 | $ 1,155,034 | ||
Adjustments to redeemable non controlling interest | 4,583 | 2,310 | ||
Proceeds from unsecured debt | 0 | $ 144,750 | ||
Unsecured term loan | 496,306 | 496,085 | ||
Line of credit | $ 118,684 | 118,684 | ||
Unsecured Debt | ||||
Noncontrolling Interest [Abstract] | ||||
Proceeds from unsecured debt | $ 144,750 | |||
Buildings and Improvements | Maximum | ||||
Noncontrolling Interest [Abstract] | ||||
Useful life of buildings and improvements (in years) | 40 years | |||
Furniture, Fixtures and Equipment | Minimum | ||||
Noncontrolling Interest [Abstract] | ||||
Useful life of buildings and improvements (in years) | 2 years | |||
Furniture, Fixtures and Equipment | Maximum | ||||
Noncontrolling Interest [Abstract] | ||||
Useful life of buildings and improvements (in years) | 7 years | |||
Adjustment | ||||
Noncontrolling Interest [Abstract] | ||||
Adjustments to additional paid in capital | $ (2,273) | |||
Adjustments to redeemable non controlling interest | 4,583 | |||
Term Loans: | ||||
Noncontrolling Interest [Abstract] | ||||
Unsecured term loan | 496,306 | 496,085 | ||
Term Loans: | First And Third Term Loan Member | ||||
Noncontrolling Interest [Abstract] | ||||
Unsecured term loan | 218,635 | |||
Noncontrolling Interest | Common Shares | ||||
Noncontrolling Interest [Abstract] | ||||
Noncontrolling interests in nonredeemable common units | $ 51,809 | $ 50,922 | ||
Nonredeemable common units outstanding (in shares) | 6,926,253 | |||
Fair market value of nonredeemable common units | $ 62,890 | |||
Senior Common Equity Interest | ||||
Noncontrolling Interest [Abstract] | ||||
Noncontrolling interest, common equity interest, return | 12.00% | |||
Hersha Hospitality Limited Partnership | ||||
Class of Stock | ||||
Various subsidiary limited partnership interest (percent) | 85.00% | |||
Consolidated Joint Ventures | ||||
Noncontrolling Interest [Abstract] | ||||
Noncontrolling interest, ownership percentage | 15.00% | |||
Cumulative return on common equity interest (percent) | 30.00% | |||
Loss attributable to noncontrolling interest | $ 0 | $ 158 | ||
Consolidated Joint Ventures | Senior Common Equity Interest | ||||
Noncontrolling Interest [Abstract] | ||||
Cumulative return on common equity interest (percent) | 25.00% | |||
Consolidated Joint Ventures | Junior Common Equity Interest | ||||
Noncontrolling Interest [Abstract] | ||||
Noncontrolling interest, common equity interest, return | 8.00% | |||
Hersha Holding RC Owner, LLC | ||||
Noncontrolling Interest [Abstract] | ||||
Cumulative return on common equity interest (percent) | 70.00% | |||
Hersha Holding RC Owner, LLC | Senior Common Equity Interest | ||||
Noncontrolling Interest [Abstract] | ||||
Noncontrolling interest, common equity interest, return | 8.00% | |||
Cumulative return on common equity interest (percent) | 75.00% | |||
Hersha Hospitality, LLC | ||||
Class of Stock | ||||
General partnership interest (percent) | 1.00% |
BASIS OF PRESENTATION (Schedule
BASIS OF PRESENTATION (Schedule Of Preferred Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Class of Stock | |||
Shares outstanding (in shares) | 14,703,214 | 14,703,214 | |
Series C | |||
Class of Stock | |||
Shares outstanding (in shares) | 3,000,000 | 3,000,000 | |
Aggregate Liquidation Preference | $ 75,000 | ||
Dividend Rate (percentage) | 6.875% | ||
Dividend per share (in dollars per share) | $ 0.4297 | $ 2.1485 | |
Series D | |||
Class of Stock | |||
Shares outstanding (in shares) | 7,701,700 | 7,701,700 | |
Aggregate Liquidation Preference | $ 192,500 | ||
Dividend Rate (percentage) | 6.50% | ||
Dividend per share (in dollars per share) | $ 0.4063 | 2.0313 | |
Series E | |||
Class of Stock | |||
Shares outstanding (in shares) | 4,001,514 | 4,001,514 | |
Aggregate Liquidation Preference | $ 100,000 | ||
Dividend Rate (percentage) | 6.50% | ||
Dividend per share (in dollars per share) | $ 0.4063 | $ 2.0313 |
INVESTMENT IN HOTEL PROPERTIE_2
INVESTMENT IN HOTEL PROPERTIES (Investment In Hotel Properties) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | $ 2,319,976 | $ 2,315,766 |
Less Accumulated Depreciation | (669,796) | (650,669) |
Total Investment in Hotel Properties | 1,650,180 | 1,665,097 |
Variable Interest Entity, Primary Beneficiary | Ritz Coconut Grove | ||
Property, Plant and Equipment | ||
Total Investment in Hotel Properties | 38,939 | 39,577 |
Land | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 478,412 | 478,412 |
Buildings and Improvements | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 1,562,851 | 1,560,768 |
Furniture, Fixtures and Equipment | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 276,974 | 274,802 |
Construction in Progress | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | $ 1,739 | $ 1,784 |
INVESTMENT IN HOTEL PROPERTIE_3
INVESTMENT IN HOTEL PROPERTIES (Narrative) (Details) | 3 Months Ended | |||
Jun. 30, 2022USD ($) | Mar. 31, 2022USD ($)property | Mar. 31, 2021USD ($)property | Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | ||||
Number of real estate properties acquired (property) | property | 0 | 0 | ||
Proceeds from Disposition of Hotel Properties | $ 0 | $ 149,384,000 | ||
Subsequent Event | Forecast | ||||
Business Acquisition [Line Items] | ||||
Proceeds from Disposition of Hotel Properties | $ 505,000,000 | |||
Assets Held-for-sale | ||||
Business Acquisition [Line Items] | ||||
Assets held for sale | $ 0 | $ 0 |
INVESTMENT IN HOTEL PROPERTIE_4
INVESTMENT IN HOTEL PROPERTIES (Real Estate Assets Sold) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment | ||
Gain on Disposition | $ 0 | $ 48,352 |
Disposed of by Sale | ||
Property, Plant and Equipment | ||
Gain on Disposition | 48,283 | |
Courtyard San Diego, CA | Disposed of by Sale | ||
Property, Plant and Equipment | ||
Consideration | 64,500 | |
Gain on Disposition | 5,032 | |
The Capitol Hill Hotel Washington, DC | Disposed of by Sale | ||
Property, Plant and Equipment | ||
Consideration | 51,000 | |
Gain on Disposition | 12,975 | |
Holiday Inn Express Cambridge, MA | Disposed of by Sale | ||
Property, Plant and Equipment | ||
Consideration | 32,000 | |
Gain on Disposition | 20,280 | |
Residence Inn Miami Coconut Grove, FL | Disposed of by Sale | ||
Property, Plant and Equipment | ||
Consideration | 31,000 | |
Gain on Disposition | $ 9,996 |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investment In Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Investments in Unconsolidated Joint Ventures | ||
Investment in Unconsolidated Joint Ventures | $ 5,130 | $ 5,580 |
Courtyard by Marriott, South Boston, MA | Hiren Boston, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 50.00% | |
Investment in Unconsolidated Joint Ventures | $ 106 | 189 |
Holiday Inn Express, South Boston, MA | SB Partners, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 50.00% | |
Investment in Unconsolidated Joint Ventures | $ 0 | 0 |
Home2 Suites, South Boston, MA | SB Partners Three, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 50.00% | |
Investment in Unconsolidated Joint Ventures | $ 5,024 | $ 5,391 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Investments in Unconsolidated Joint Ventures | ||
Equity method investments | $ 5,130 | $ 5,580 |
Hilton and IHG branded hotels in NYC | Cindat Hersha Owner JV, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Equity method investments | $ 0 | $ 0 |
INVESTMENT IN UNCONSOLIDATED _5
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Income Or Loss From Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Investments in Unconsolidated Joint Ventures | ||
Loss from Unconsolidated Joint Venture Investments | $ (936) | $ (658) |
Hiren Boston, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Loss from Unconsolidated Joint Venture Investments | (258) | (335) |
SB Partners, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Loss from Unconsolidated Joint Venture Investments | (310) | 0 |
SB Partners Three, LLC | ||
Investments in Unconsolidated Joint Ventures | ||
Loss from Unconsolidated Joint Venture Investments | $ (368) | $ (323) |
INVESTMENT IN UNCONSOLIDATED _6
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summary of Unconsolidated Joint Ventures Balance Sheet) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Investment in Hotel Properties, Net | $ 1,650,180 | $ 1,665,097 |
Other Assets | 29,366 | 21,759 |
Total Assets | 1,824,874 | 1,833,144 |
Liabilities and Equity | ||
Mortgages and Notes Payable | 304,248 | 304,614 |
Equity: | ||
Hersha Hospitality Trust | 549,195 | 557,374 |
Joint Venture Partner(s) | 51,809 | 50,922 |
Accumulated Other Comprehensive Income (Loss) | 10,908 | (2,747) |
Liabilities and Equity | 1,824,874 | 1,833,144 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Assets | ||
Investment in Hotel Properties, Net | 62,860 | 64,096 |
Other Assets | 15,186 | 15,649 |
Total Assets | 78,046 | 79,745 |
Liabilities and Equity | ||
Mortgages and Notes Payable | 65,622 | 65,723 |
Other Liabilities | 15,481 | 15,656 |
Equity: | ||
Hersha Hospitality Trust | 2,679 | 3,328 |
Joint Venture Partner(s) | (5,736) | (4,962) |
Accumulated Other Comprehensive Income (Loss) | 0 | 0 |
Total Equity | (3,057) | (1,634) |
Liabilities and Equity | $ 78,046 | $ 79,745 |
INVESTMENT IN UNCONSOLIDATED _7
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summary of Unconsolidated Joint Ventures Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Operations | ||
Other Revenue | $ 41 | $ 12 |
Lease Expense | (1,248) | (1,301) |
Property Taxes and Insurance | (8,483) | (10,071) |
General and Administrative | (5,318) | (4,944) |
Depreciation and Amortization | (19,276) | (21,802) |
Interest Expense | (14,237) | (13,429) |
Income Tax Benefit | (21) | 589 |
Net (Loss) Income | (16,966) | 9,090 |
Room | ||
Statement of Operations | ||
Hotel Operating Revenues: | 65,132 | 39,350 |
Operating Expenses | (14,590) | (9,198) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Statement of Operations | ||
Other Revenue | 186 | 117 |
Operating Expenses | (2,455) | (1,864) |
Lease Expense | (257) | (270) |
Property Taxes and Insurance | (572) | (1,565) |
General and Administrative | (20) | (222) |
Depreciation and Amortization | (1,253) | (2,312) |
Interest Expense | (668) | (2,692) |
Loss on Dissolution of Joint Venture | 0 | (112,429) |
Income Tax Benefit | 125 | 54 |
Net (Loss) Income | (2,267) | (118,928) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Room | ||
Statement of Operations | ||
Hotel Operating Revenues: | $ 2,647 | $ 2,255 |
INVESTMENT IN UNCONSOLIDATED _8
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Reconciliation Of Share In Unconsolidated Joint Ventures' Equity In Investment In Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Our share of equity recorded on the joint ventures' financial statements | $ 2,679 | $ 3,328 |
Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures | 2,451 | 2,252 |
Investment in Unconsolidated Joint Ventures | $ 5,130 | $ 5,580 |
OTHER ASSETS (Other Assets) (De
OTHER ASSETS (Other Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Derivative Asset | $ 8,232 | $ 92 |
Deferred Financing Costs | 736 | 1,070 |
Prepaid Expenses | 11,390 | 11,632 |
Investment in Statutory Trusts | 1,548 | 1,548 |
Investment in Non-Hotel Property and Inventories | 2,108 | 2,193 |
Deposits with Unaffiliated Third Parties | 2,668 | 2,663 |
Deferred Tax Asset, Net of Valuation Allowance of $22,259 and $21,612, respectively | 0 | 0 |
Property Insurance Receivable | 575 | 693 |
Other | 2,109 | 1,868 |
Total other assets | 29,366 | 21,759 |
Deferred tax assets, valuation allowance | $ 22,259 | $ 21,612 |
OTHER ASSETS (Narrative) (Detai
OTHER ASSETS (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred tax assets, net | $ 0 | $ 0 |
DEBT (Mortgages) (Details)
DEBT (Mortgages) (Details) $ in Thousands | Mar. 31, 2022USD ($)mortgage | Dec. 31, 2021USD ($) |
Mortgages | ||
Mortgages and Notes Payable | ||
Mortgage Indebtedness | $ 305,525 | $ 306,078 |
Net Unamortized Deferred Financing Costs | (1,288) | (1,477) |
Net Unamortized Premium | 11 | 13 |
Total debt | $ 304,248 | 304,614 |
Number of secured credit agreements (agreements) | mortgage | 1 | |
Notes Payable And Payments In Kind | ||
Mortgages and Notes Payable | ||
Total debt | $ 200,855 | 198,490 |
Minimum | Mortgages | ||
Mortgages and Notes Payable | ||
Debt instrument, interest rate, effective (percentage) | 3.10% | |
Maximum | Mortgages | ||
Mortgages and Notes Payable | ||
Debt instrument, interest rate, effective (percentage) | 5.05% | |
Payment in Kind (PIK) Note | ||
Mortgages and Notes Payable | ||
Mortgage Indebtedness | $ 158,094 | 156,239 |
Net Unamortized Deferred Financing Costs | (3,970) | (4,209) |
Net Unamortized Premium | (4,124) | (4,382) |
Total debt | 150,000 | 147,648 |
Hersha Statutory Trust I and Hersha Statutory Trust II | Junior Subordinated Debt | ||
Mortgages and Notes Payable | ||
Mortgage Indebtedness | 51,548 | 51,548 |
Net Unamortized Deferred Financing Costs | (693) | (706) |
Total debt | $ 50,855 | $ 50,842 |
DEBT (Credit Facilities Narrati
DEBT (Credit Facilities Narrative) (Details) | Feb. 17, 2021USD ($) | Mar. 31, 2022USD ($)agreement | Mar. 31, 2021USD ($) | Dec. 31, 2022 |
Short-term Debt | ||||
Debt extinguishment expense | $ 2,977,000 | |||
Loss on debt extinguishment | $ 0 | $ 2,940,000 | ||
Line of credit facility covenant maximum leverage ratio (percentage) | 60.00% | |||
Forecast | ||||
Short-term Debt | ||||
Line of credit facility covenant maximum leverage ratio (percentage) | 65.00% | |||
Maximum | ||||
Short-term Debt | ||||
Line of credit facility covenant fixed charge coverage ratio | 1.50 | |||
Maximum | Forecast | ||||
Short-term Debt | ||||
Line of credit facility covenant fixed charge coverage ratio | 1.20 | |||
Credit Agreement | ||||
Short-term Debt | ||||
Loss on debt extinguishment | $ 635,000 | |||
Debt modification expense | 2,342,000 | |||
Term Loans: | ||||
Short-term Debt | ||||
Number of unsecured credit agreements (agreements) | agreement | 3 | |||
Revolving line of credit, current borrowing capacity | $ 747,481,000 | |||
Line of credit ability to borrow | 174,729,000 | |||
Liquid assets requirement | $ 30,000 | |||
Term Loans: | Credit Facility | ||||
Short-term Debt | ||||
Revolving line of credit, current borrowing capacity | 442,404,000 | |||
Term Loans: | $200 Million Senior Term Loan Agreement (Third Term Loan) | ||||
Short-term Debt | ||||
Debt instrument, face amount | 192,404,000 | |||
Term Loans: | $250 Million Term Loan (First Term Loan) | ||||
Short-term Debt | ||||
Revolving line of credit, current borrowing capacity | 278,846,000 | |||
Term Loans: | $300 Million Senior Term Loan Agreement (Second Term Loan) | ||||
Short-term Debt | ||||
Debt instrument, face amount | $ 26,231,000 | |||
Revolving Line Of Credit | ||||
Short-term Debt | ||||
Line of credit, weighted average interest rate (percentage) | 3.55% | 3.58% | ||
Revolving Line Of Credit | Forecast | ||||
Short-term Debt | ||||
Line of credit facility covenant maximum secured debt leverage ratio (percentage) | 60.00% | |||
Revolving Line Of Credit | $250 Million Senior Revolving Line Of Credit (Line of Credit) | ||||
Short-term Debt | ||||
Revolving line of credit, current borrowing capacity | $ 250,000,000 |
DEBT (Summary Of The Balances O
DEBT (Summary Of The Balances Outstanding And Interest Rate Spread) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Short-term Debt | ||
Line of Credit | $ 118,684 | $ 118,684 |
Unsecured term loan | 496,306 | 496,085 |
Term Loans: | ||
Short-term Debt | ||
Unsecured term loan | 496,306 | 496,085 |
Deferred Loan Costs | (1,175) | (1,396) |
$250 Million Senior Revolving Line Of Credit (Line of Credit) | Line of Credit | ||
Short-term Debt | ||
Line of Credit | 118,684 | 118,684 |
$250 Million Term Loan (First Term Loan) | Term Loans: | ||
Short-term Debt | ||
Unsecured term loan | 192,404 | 192,404 |
$300 Million Senior Term Loan Agreement (Second Term Loan) | Term Loans: | ||
Short-term Debt | ||
Unsecured term loan | 278,846 | 278,846 |
$200 Million Senior Term Loan Agreement (Third Term Loan) | Term Loans: | ||
Short-term Debt | ||
Unsecured term loan | $ 26,231 | $ 26,231 |
Minimum | $250 Million Senior Revolving Line Of Credit (Line of Credit) | Line of Credit | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.50% | |
Minimum | $250 Million Term Loan (First Term Loan) | Term Loans: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.45% | |
Minimum | $300 Million Senior Term Loan Agreement (Second Term Loan) | Term Loans: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.35% | |
Minimum | $200 Million Senior Term Loan Agreement (Third Term Loan) | Term Loans: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 1.45% | |
Maximum | $250 Million Senior Revolving Line Of Credit (Line of Credit) | Line of Credit | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.25% | |
Maximum | $250 Million Term Loan (First Term Loan) | Term Loans: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.20% | |
Maximum | $300 Million Senior Term Loan Agreement (Second Term Loan) | Term Loans: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.00% | |
Maximum | $200 Million Senior Term Loan Agreement (Third Term Loan) | Term Loans: | ||
Short-term Debt | ||
Basis spread on variable rate (percentage) | 2.20% |
DEBT (Unsecured Notes Payable)
DEBT (Unsecured Notes Payable) (Details) - Junior Subordinated Debt $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)loan | Mar. 31, 2021loan | |
Hersha Statutory Trust I and Hersha Statutory Trust II | ||
Subordinated Notes Payable | ||
Number of debt instruments | loan | 2 | 2 |
Subordinated notes payable | $ 51,548 | |
Number of business days prior to quarterly interest payments for resetting rates | 2 days | |
Debt instrument, interest rate during period (in hundredths) | 3.17% | 3.21% |
Hersha Statutory Trust I | ||
Subordinated Notes Payable | ||
Subordinated notes payable | $ 25,774 | |
Basis spread on variable rate (percentage) | 3.00% | |
Hersha Statutory Trust II | ||
Subordinated Notes Payable | ||
Subordinated notes payable | $ 25,774 | |
Basis spread on variable rate (percentage) | 3.00% |
DEBT (Junior Notes Payable) (De
DEBT (Junior Notes Payable) (Details) - Payment in Kind (PIK) Note - USD ($) | Feb. 17, 2021 | Mar. 31, 2022 |
Debt Instrument | ||
Debt instrument, face amount | $ 150,000,000 | $ 158,094,000 |
Debt instrument, interest rate, percentage | 0.095% | |
Discretionary interest rate, stated percentage | 0.0475% | |
PIK, stated percentage | 4.75% | |
Increase in accrued interest | $ 8,094,000 | |
Debt Instrument, Redemption, Period One | ||
Debt Instrument | ||
Redemption percentage | 104.00% | |
Debt Instrument, Redemption, Period Two | ||
Debt Instrument | ||
Redemption percentage | 102.00% |
DEBT (Schedule of Interest Expe
DEBT (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument | ||
Amortization of Debt Issuance Costs | $ 1,191 | $ 1,293 |
Interest Expense, Other | 75 | 70 |
Interest Expense, Total | 14,237 | 13,429 |
Line of Credit | ||
Debt Instrument | ||
Interest expense | 3,649 | 4,368 |
Interest Rate Swap | Line of Credit | ||
Debt Instrument | ||
Interest expense | 1,822 | 2,424 |
Mortgages | ||
Debt Instrument | ||
Interest expense | 2,529 | 2,833 |
Mortgages | Hersha Statutory Trust I and Hersha Statutory Trust II | ||
Debt Instrument | ||
Interest expense | 4,406 | 1,838 |
Mortgages | Interest Rate Swap | ||
Debt Instrument | ||
Interest expense | $ 565 | $ 603 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) | Mar. 31, 2022leaseproperty |
Land | |
Lessee, Lease, Description | |
Number of real estate properties (property) | property | 5 |
Office Lease | |
Lessee, Lease, Description | |
Number of lease agreements (leases) | lease | 2 |
LEASES (Lease Costs) (Details)
LEASES (Lease Costs) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Lessee, Lease, Description | ||
Operating lease costs | $ 1,138 | $ 1,197 |
Variable lease costs | 110 | 104 |
Total lease costs | 1,248 | 1,301 |
Ground Lease | ||
Lessee, Lease, Description | ||
Operating lease costs | 1,050 | 1,076 |
Variable lease costs | 40 | 24 |
Total lease costs | 1,090 | 1,100 |
Office Lease | ||
Lessee, Lease, Description | ||
Operating lease costs | 88 | 121 |
Variable lease costs | 70 | 80 |
Total lease costs | $ 158 | $ 201 |
LEASES (Other Information) (Det
LEASES (Other Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Cash paid from operating cash flow for operating leases | $ 1,085 | $ 1,072 |
Weighted average remaining lease term (in years) | 63 years 4 months 24 days | 64 years 2 months 12 days |
Weighted average discount rate (in percent) | 7.86% | 7.86% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022USD ($)property | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Management Agreements | |||
Term of management agreements with HHMLP (in years) | 5 years | ||
Base management fee as percentage of gross revenues (percentage) | 3.00% | ||
Base management fees incurred | $ 1,999 | $ 1,180 | |
Accounting, Revenue Management and Information Technology Fees | |||
Accounting fees | 277 | 313 | |
Information technology fees | 87 | 102 | |
Revenue management service fees | 574 | 438 | |
Capital Expenditure Fees | |||
Fees incurred on capital expenditures | $ 83 | 119 | |
Acquisitions From Affiliates | |||
Period of right of first refusal per option agreement with officers and affiliated trustees after termination | 1 year | ||
Hotel Supplies | |||
Hotel supplies | $ 0 | 1 | |
Charges for capital expenditure purchases | 889 | 134 | |
Insurance Services | |||
Risk management fees | 30 | 42 | |
Due from Related Parties, Unclassified | |||
Due from related parties | 153 | $ 2,495 | |
Due to Related Parties | |||
Due to related party | $ 439 | $ 1,723 | |
Hotel | |||
Lessee Disclosure | |||
Number of real estate properties (property) | property | 2 | ||
Fee revenue | $ 43 | 13 | |
Minimum | |||
Franchise Agreements | |||
Terms of franchise agreements (in years) | 10 years | ||
Accounting, Revenue Management and Information Technology Fees | |||
Monthly fees for accounting services per property for hotels managed by HHMLP | $ 2 | ||
Monthly information technology fees per property for hotels managed by HHMLP, minimum | $ 1 | ||
Capital Expenditure Fees | |||
Fee on all capital expenditures and pending renovation projects at the properties (percentage) | 3.00% | ||
Maximum | |||
Franchise Agreements | |||
Terms of franchise agreements (in years) | 20 years | ||
Accounting, Revenue Management and Information Technology Fees | |||
Monthly fees for accounting services per property for hotels managed by HHMLP | $ 3 | ||
Monthly information technology fees per property for hotels managed by HHMLP, minimum | $ 2 | ||
Capital Expenditure Fees | |||
Fee on all capital expenditures and pending renovation projects at the properties (percentage) | 5.00% | ||
Executive Officer | |||
Lessee Disclosure | |||
Ownership percentage in related party (in percentage) | 70.00% | ||
Franchise | |||
Franchise Agreements | |||
Franchise fee expense | $ 3,052 | $ 1,823 |
FAIR VALUE MEASUREMENTS AND D_3
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Fair Value Of Interest Rate Swaps And Caps) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value | ||
Estimated Fair Value | $ 7,547 | $ (7,942) |
Interest Rate Swap III | Credit Facility September 3, 2019 | ||
Derivatives, Fair Value | ||
Strike Rate | 1.824% | |
Notional Amount | $ 103,500 | |
Estimated Fair Value | $ (324) | (970) |
Interest Rate Swap III | Credit Facility September 3, 2019 | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.20% | |
Interest Rate Swap IV | Credit Facility September 3, 2019 | ||
Derivatives, Fair Value | ||
Strike Rate | 1.824% | |
Notional Amount | $ 103,500 | |
Estimated Fair Value | $ (324) | (970) |
Interest Rate Swap IV | Credit Facility September 3, 2019 | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.20% | |
Interest Rate Swap V | Credit Facility September 10, 2019 | ||
Derivatives, Fair Value | ||
Strike Rate | 1.46% | |
Notional Amount | $ 300,000 | |
Estimated Fair Value | $ 6,997 | (3,729) |
Interest Rate Swap V | Credit Facility September 10, 2019 | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.00% | |
Interest Rate Swap VII | Hyatt, Union Square, New York, NY | ||
Derivatives, Fair Value | ||
Strike Rate | 1.87% | |
Notional Amount | $ 56,000 | |
Estimated Fair Value | $ 57 | (987) |
Interest Rate Swap VII | Hyatt, Union Square, New York, NY | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.30% | |
Interest Rate Swap VIII | Hilton Garden Inn Tribeca, New York, NY | ||
Derivatives, Fair Value | ||
Strike Rate | 1.768% | |
Notional Amount | $ 22,725 | |
Estimated Fair Value | $ 339 | (460) |
Interest Rate Swap VIII | Hilton Garden Inn Tribeca, New York, NY | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.25% | |
Interest Rate Swap IX | Hilton Garden Inn Tribeca, New York, NY | ||
Derivatives, Fair Value | ||
Strike Rate | 1.768% | |
Notional Amount | $ 22,725 | |
Estimated Fair Value | $ 339 | (460) |
Interest Rate Swap IX | Hilton Garden Inn Tribeca, New York, NY | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.25% | |
Interest Rate Swap X | Hilton Garden Inn 52nd Street, New York, NY | ||
Derivatives, Fair Value | ||
Strike Rate | 1.54% | |
Notional Amount | $ 44,325 | |
Estimated Fair Value | $ (36) | (458) |
Interest Rate Swap X | Hilton Garden Inn 52nd Street, New York, NY | 1 Month LIBOR | ||
Derivatives, Fair Value | ||
Index | 2.30% | |
Interest Rate Cap | Courtyard, LA Westside, Culver City, CA | ||
Derivatives, Fair Value | ||
Strike Rate | 2.50% | |
Notional Amount | $ 35,000 | |
Estimated Fair Value | $ 499 | $ 92 |
FAIR VALUE MEASUREMENTS AND D_4
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Derivatives, Fair Value | |||
Gain (loss) on fair value of derivative instruments | $ 15,489 | $ 6,766 | |
Unrealized gain (loss) reclassified from accumulated other comprehensive income to interest expense | 0 | $ 301 | |
Loss to be reclassified to interest expense during next 12 months | 204 | ||
Carrying (Reported) Amount, Fair Value Disclosure | |||
Derivatives, Fair Value | |||
Carrying value and estimated fair value of debt | 1,120,093 | $ 1,117,873 | |
Estimate of Fair Value, Fair Value Disclosure | |||
Derivatives, Fair Value | |||
Carrying value and estimated fair value of debt | $ 1,148,059 | $ 1,146,699 |
SHARE BASED PAYMENTS (Summary O
SHARE BASED PAYMENTS (Summary Of Share Based Compensation Activity) (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
LTIP Unit Awards | |
Number of Units | |
Unvested balance, beginning of the period (in shares) | 1,658,995 |
Granted (in shares) | 0 |
Vested (in shares) | 0 |
Unvested balance, end of the period (in shares) | 1,658,995 |
Weighted Average Grant Date Fair Value | |
Unvested balance, beginning of the period (in dollars per share) | $ / shares | $ 10.73 |
Unvested balance, ending of the period (in dollars per share) | $ / shares | $ 10.73 |
Restricted Share Awards | |
Number of Units | |
Unvested balance, beginning of the period (in shares) | 170,740 |
Granted (in shares) | 0 |
Vested (in shares) | (49,153) |
Unvested balance, end of the period (in shares) | 121,587 |
Weighted Average Grant Date Fair Value | |
Unvested balance, beginning of the period (in dollars per share) | $ / shares | $ 10.52 |
Vested (in dollars per share) | $ / shares | 11.37 |
Unvested balance, ending of the period (in dollars per share) | $ / shares | $ 10.17 |
Share Awards | |
Number of Units | |
Unvested balance, beginning of the period (in shares) | 0 |
Granted (in shares) | 29,868 |
Vested (in shares) | (29,868) |
Unvested balance, end of the period (in shares) | 0 |
Weighted Average Grant Date Fair Value | |
Granted (in dollars per share) | $ / shares | $ 9.60 |
Vested (in dollars per share) | $ / shares | $ 9.60 |
SHARE BASED PAYMENTS (Summary_2
SHARE BASED PAYMENTS (Summary of share based compensation expense and unearned compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share Based Compensation Expense | $ 2,541 | $ 2,169 | |
Unearned Compensation | 12,153 | $ 14,408 | |
LTIP Unit Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share Based Compensation Expense | 1,777 | 1,724 | |
Unearned Compensation | 9,567 | 11,344 | |
Restricted Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share Based Compensation Expense | 192 | 168 | |
Unearned Compensation | 642 | 834 | |
Share Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share Based Compensation Expense | 287 | 0 | |
Unearned Compensation | 0 | 0 | |
Market Based | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share Based Compensation Expense | 285 | $ 277 | |
Unearned Compensation | $ 1,944 | $ 2,230 |
SHARE BASED PAYMENTS (Narrative
SHARE BASED PAYMENTS (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2022 | |
LTIP Unit Awards | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Compensation cost not yet recognized, period for recognition (in years) | 1 year 7 months 6 days |
Restricted Share Awards | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Compensation cost not yet recognized, period for recognition (in years) | 1 year 1 month 6 days |
SHARE BASED PAYMENTS (Remaining
SHARE BASED PAYMENTS (Remaining unvested target units expected to vest) (Details) | Mar. 31, 2022shares |
2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 682,219 |
2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 1,095,363 |
2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 3,000 |
LTIP Unit Awards | 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 616,047 |
LTIP Unit Awards | 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 1,042,948 |
LTIP Unit Awards | 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 0 |
Restricted Share Awards | 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 66,172 |
Restricted Share Awards | 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 52,415 |
Restricted Share Awards | 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Remaining unvested target units, expected to vest (in units) | 3,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Basic and Diluted | |||
Net (loss) income | $ (16,966) | $ 9,090 | |
Loss (Income) allocated to Noncontrolling Interests | 451 | (164) | |
Distributions to Preferred Shareholders | (6,044) | (6,043) | |
Net (loss) income applicable to Common Shareholders | $ (22,559) | $ 2,883 | |
DENOMINATOR: | |||
Weighted average number of common shares - basic (in shares) | 39,231,550 | 38,970,893 | |
Effect of dilutive securities: | |||
Restricted stock awards and LTIP units (unvested) (in shares) | 0 | 114,668 | |
Contingently issued shares and units (in shares) | 0 | 754,913 | |
Weighted average number of common shares - diluted (in shares) | [1] | 39,231,550 | 39,840,474 |
[1] | (Loss) Income allocated to noncontrolling interest in Hersha Hospitality Limited Partnership (the “Operating Partnership” or “HHLP”) has been excluded from the numerator and the Class A common shares issuable upon any redemption of the Operating Partnership’s common units of limited partnership interest (“Common Units”) and the Operating Partnership’s vested LTIP units (“Vested LTIP Units”) have been omitted from the denominator for the purpose of computing diluted earnings per share because the effect of including these shares and units in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to (loss) income applicable to common shareholders. |
CASH FLOW DISCLOSURES AND NON_3
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 8,390 | $ 8,056 |
Net payments for interest rate derivatives | 2,496 | 3,063 |
Cash paid for income taxes | $ 32 | $ 13 |
CASH FLOW DISCLOSURES AND NON_4
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Non-cash Investing And Financing Activities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Noncash Investing and Financing Items [Abstract] | ||
Issuance of share based payments | $ 0 | $ 10,488 |
Accrued payables for capital expenditures placed into service | 914 | 326 |
Adjustment to Record Noncontrolling Interest at Redemption Value | $ 2,273 | $ 0 |
CASH FLOW DISCLOSURES AND NON_5
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Reconciliation of Cash) (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 77,447 | $ 72,238 | $ 76,522 | |
Escrowed cash | 10,997 | 12,707 | 6,822 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 88,444 | $ 84,945 | $ 83,344 | $ 23,607 |