Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 08, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-32319 | ||
Entity Registrant Name | Sunstone Hotel Investors, Inc. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 20-1296886 | ||
Entity Address, Address Line One | 15 Enterprise, Suite 200 | ||
Entity Address, City or Town | Aliso Viejo | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92656 | ||
City Area Code | 949 | ||
Local Phone Number | 330-4000 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.1 | ||
Entity Common Stock, Shares Outstanding | 208,170,642 | ||
Entity Central Index Key | 0001295810 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Irvine, California | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | SHO | ||
Security Exchange Name | NYSE | ||
Series H Cumulative Redeemable Preferred Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series H Cumulative Redeemable Preferred Stock, $0.01 par value | ||
Trading Symbol | SHO.PRH | ||
Security Exchange Name | NYSE | ||
Series I Cumulative Redeemable Preferred Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Series I Cumulative Redeemable Preferred Stock, $0.01 par value | ||
Trading Symbol | SHO.PRI | ||
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 101,223 | $ 120,483 |
Restricted cash | 55,983 | 42,234 |
Accounts receivable, net | 42,092 | 28,733 |
Prepaid expenses and other current assets | 14,668 | 14,338 |
Assets held for sale, net | 76,308 | |
Total current assets | 213,966 | 282,096 |
Investment in hotel properties, net | 2,840,928 | 2,720,016 |
Operating lease right-of-use assets, net | 15,025 | 23,161 |
Deferred financing costs, net | 5,031 | 2,580 |
Other assets, net | 7,867 | 13,196 |
Total assets | 3,082,817 | 3,041,049 |
Current liabilities: | ||
Accounts payable and accrued expenses | 56,849 | 47,701 |
Accrued payroll and employee benefits | 22,801 | 19,753 |
Dividends and distributions payable | 13,995 | 3,513 |
Other current liabilities | 65,213 | 58,884 |
Current portion of notes payable, net | 222,030 | 20,694 |
Liabilities of assets held for sale | 25,213 | |
Total current liabilities | 380,888 | 175,758 |
Notes payable, less current portion, net | 590,651 | 588,741 |
Operating lease obligations, less current portion | 14,360 | 25,120 |
Other liabilities | 11,957 | 11,656 |
Total liabilities | 997,856 | 801,275 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value, 500,000,000 shares authorized, 209,320,447 shares issued and outstanding at December 31, 2022 and 219,333,783 shares issued and outstanding at December 31, 2021 | 2,093 | 2,193 |
Additional paid in capital | 2,465,595 | 2,631,484 |
Retained earnings | 1,035,353 | 948,064 |
Cumulative dividends and distributions | (1,699,330) | (1,664,024) |
Total stockholders' equity | 2,084,961 | 2,198,967 |
Noncontrolling interest in consolidated joint venture | 40,807 | |
Total equity | 2,084,961 | 2,239,774 |
Total liabilities and equity | 3,082,817 | 3,041,049 |
Series G Cumulative Redeemable Preferred Stock | ||
Stockholders' equity: | ||
Cumulative Redeemable Preferred Stock | 66,250 | 66,250 |
Series H Cumulative Redeemable Preferred Stock | ||
Stockholders' equity: | ||
Cumulative Redeemable Preferred Stock | 115,000 | 115,000 |
Series I Cumulative Redeemable Preferred Stock | ||
Stockholders' equity: | ||
Cumulative Redeemable Preferred Stock | $ 100,000 | $ 100,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 209,320,447 | 219,333,783 |
Common stock, shares outstanding (in shares) | 209,320,447 | 219,333,783 |
Series G Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 2,650,000 | 2,650,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 2,650,000 | 2,650,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Series H Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.125% | 6.125% |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,600,000 | 4,600,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 4,600,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Series I Cumulative Redeemable Preferred Stock | ||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 5.70% | 5.70% |
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUES | |||
Revenues | $ 912,053 | $ 509,150 | $ 267,906 |
OPERATING EXPENSES | |||
Advertising and promotion | 46,979 | 31,156 | 23,741 |
Repairs and maintenance | 36,801 | 33,898 | 27,084 |
Utilities | 26,357 | 20,745 | 17,311 |
Franchise costs | 15,839 | 11,354 | 7,060 |
Property tax, ground lease and insurance | 68,979 | 64,139 | 76,848 |
Other property-level expenses | 113,336 | 71,415 | 49,854 |
Corporate overhead | 35,246 | 40,269 | 28,149 |
Depreciation and amortization | 126,396 | 128,682 | 137,051 |
Impairment losses | 3,466 | 2,685 | 146,944 |
Total operating expenses | 816,175 | 597,272 | 661,795 |
Interest and other income (loss) | 5,242 | (343) | 2,836 |
Interest expense | (32,005) | (30,898) | (53,307) |
Gain on sale of assets | 22,946 | 152,524 | 34,298 |
(Loss) gain on extinguishment of debt, net | (936) | (57) | 6,146 |
Income (loss) before income taxes | 91,125 | 33,104 | (403,916) |
Income tax provision, net | (359) | (109) | (6,590) |
NET INCOME (LOSS) | 90,766 | 32,995 | (410,506) |
(Income) loss from consolidated joint venture attributable to noncontrolling interest | (3,477) | 1,303 | 5,817 |
Preferred stock dividends and redemption charges | (14,247) | (20,638) | (12,830) |
INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ 73,042 | $ 13,660 | $ (417,519) |
Basic and diluted per share amounts: | |||
Basic income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.34 | $ 0.06 | $ (1.93) |
Diluted income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.34 | $ 0.06 | $ (1.93) |
Basic weighted average common shares outstanding (in shares) | 212,613 | 216,296 | 215,934 |
Diluted weighted average common shares outstanding (in shares) | 212,653 | 216,296 | 215,934 |
Room | |||
REVENUES | |||
Revenues | $ 576,170 | $ 352,974 | $ 169,522 |
OPERATING EXPENSES | |||
Expenses | 145,285 | 98,723 | 76,977 |
Food and beverage | |||
REVENUES | |||
Revenues | 240,564 | 83,915 | 54,900 |
OPERATING EXPENSES | |||
Expenses | 174,146 | 79,807 | 63,140 |
Other operating | |||
REVENUES | |||
Revenues | 95,319 | 72,261 | 43,484 |
OPERATING EXPENSES | |||
Expenses | $ 23,345 | $ 14,399 | $ 7,636 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Series E Cumulative Redeemable Preferred Stock Preferred Stock | Series E Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series E Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series E Cumulative Redeemable Preferred Stock | Series F Cumulative Redeemable Preferred Stock Preferred Stock | Series F Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series F Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series F Cumulative Redeemable Preferred Stock | Series G Cumulative Redeemable Preferred Stock Preferred Stock | Series G Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series G Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series G Cumulative Redeemable Preferred Stock | Series H Cumulative Redeemable Preferred Stock Preferred Stock | Series H Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series H Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series H Cumulative Redeemable Preferred Stock | Series I Cumulative Redeemable Preferred Stock Preferred Stock | Series I Cumulative Redeemable Preferred Stock Additional Paid In Capital | Series I Cumulative Redeemable Preferred Stock Cumulative dividends and distributions | Series I Cumulative Redeemable Preferred Stock | Preferred Stock | Common Stock | Additional Paid In Capital | Retained Earnings | Cumulative dividends and distributions | Non-Controlling Interest in Consolidated Joint Venture | Total |
Beginning Balance at Dec. 31, 2019 | $ 190,000 | $ 2,249 | $ 2,683,913 | $ 1,318,455 | $ (1,619,779) | $ 46,233 | $ 2,621,071 | ||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 7,600,000 | 224,855,351 | |||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||
Amortization of deferred stock compensation | 9,988 | 9,988 | |||||||||||||||||||||||||
Issuance of restricted common stock, net | $ 5 | (3,997) | (3,992) | ||||||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 550,635 | ||||||||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (42,504) | ||||||||||||||||||||||||||
Common stock distributions and distributions payable | (10,777) | (10,777) | |||||||||||||||||||||||||
Preferred stock dividends and dividends payable | $ (7,992) | $ (7,992) | $ (4,838) | $ (4,838) | |||||||||||||||||||||||
Distribution to noncontrolling interest | (2,000) | (2,000) | |||||||||||||||||||||||||
Contribution from noncontrolling interest | 2,319 | 2,319 | |||||||||||||||||||||||||
Repurchases of outstanding common stock | $ (98) | (103,796) | (103,894) | ||||||||||||||||||||||||
Repurchases of outstanding common stock (in shares) | (9,770,081) | ||||||||||||||||||||||||||
Net income (loss) | (404,689) | (5,817) | (410,506) | ||||||||||||||||||||||||
Ending Balance at Dec. 31, 2020 | $ 190,000 | $ 2,156 | 2,586,108 | 913,766 | (1,643,386) | 40,735 | 2,089,379 | ||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2020 | 7,600,000 | 215,593,401 | |||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||
Amortization of deferred stock compensation | 13,278 | 13,278 | |||||||||||||||||||||||||
Issuance of restricted common stock, net | $ 10 | (4,887) | (4,877) | ||||||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 1,062,106 | ||||||||||||||||||||||||||
Forfeiture of restricted common stock | $ (2) | 2 | |||||||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (235,406) | ||||||||||||||||||||||||||
Preferred stock dividends and dividends payable | (3,552) | (3,552) | (2,969) | (2,969) | $ (619) | $ (619) | $ (4,246) | $ (4,246) | $ (2,612) | $ (2,612) | |||||||||||||||||
Contribution from noncontrolling interest | 1,375 | 1,375 | |||||||||||||||||||||||||
Net proceeds from issuance of common stock | $ 29 | 37,630 | 37,659 | ||||||||||||||||||||||||
Number of shares of common stock issued (in shares) | 2,913,682 | ||||||||||||||||||||||||||
Net issuance of preferred stock in connection with hotel acquisition | $ 66,250 | $ (142) | 66,108 | ||||||||||||||||||||||||
Net issuance of preferred stock in connection with hotel acquisition (in shares) | 2,650,000 | ||||||||||||||||||||||||||
Net proceeds from issuance of preferred stock | $ 115,000 | $ (3,801) | 111,199 | $ 100,000 | $ (3,344) | 96,656 | |||||||||||||||||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | 4,000,000 | |||||||||||||||||||||||||
Redemption of preferred stock | $ (115,000) | $ 4,016 | $ (4,016) | $ (115,000) | $ (75,000) | $ 2,624 | $ (2,624) | $ (75,000) | |||||||||||||||||||
Redemption of preferred stock (in shares) | (4,600,000) | (3,000,000) | |||||||||||||||||||||||||
Net income (loss) | 34,298 | (1,303) | 32,995 | ||||||||||||||||||||||||
Ending Balance at Dec. 31, 2021 | $ 281,250 | $ 2,193 | 2,631,484 | 948,064 | (1,664,024) | 40,807 | 2,239,774 | ||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2021 | 11,250,000 | 219,333,783 | |||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||||||||||||||
Amortization of deferred stock compensation | 11,372 | 11,372 | |||||||||||||||||||||||||
Issuance of restricted common stock, net | $ 3 | (3,445) | (3,442) | ||||||||||||||||||||||||
Issuance of restricted common stock, net (in shares) | 266,795 | ||||||||||||||||||||||||||
Forfeiture of restricted common stock (in shares) | (34,807) | ||||||||||||||||||||||||||
Common stock distributions and distributions payable | (21,059) | (21,059) | |||||||||||||||||||||||||
Preferred stock dividends and dividends payable | $ (1,503) | $ (1,503) | $ (7,044) | $ (7,044) | $ (5,700) | $ (5,700) | |||||||||||||||||||||
Distribution to noncontrolling interest | (5,500) | (5,500) | |||||||||||||||||||||||||
Repurchases of outstanding common stock | $ (103) | (108,339) | (108,442) | ||||||||||||||||||||||||
Repurchases of outstanding common stock (in shares) | (10,245,324) | ||||||||||||||||||||||||||
Acquisition of noncontrolling interest, net | (65,477) | (38,784) | (104,261) | ||||||||||||||||||||||||
Net income (loss) | 87,289 | $ 3,477 | 90,766 | ||||||||||||||||||||||||
Ending Balance at Dec. 31, 2022 | $ 281,250 | $ 2,093 | $ 2,465,595 | $ 1,035,353 | $ (1,699,330) | $ 2,084,961 | |||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2022 | 11,250,000 | 209,320,447 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Common stock distributions and distributions payable, per share (in dollars per share) | $ 0.10 | $ 0.05 | |
Series E Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.772222 | 1.7375 | |
Series F Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.989896 | $ 1.6125 | |
Series G Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.567112 | 0.233685 | |
Series H Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | 1.531252 | 0.923004 | |
Series I Cumulative Redeemable Preferred Stock | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 1.425000 | $ 0.653125 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ 90,766 | $ 32,995 | $ (410,506) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Bad debt expense | 964 | 323 | 384 |
Gain on sale of assets | (22,946) | (152,442) | (34,298) |
Loss (gain) on extinguishment of debt, net | 936 | 57 | (6,146) |
Noncash interest on derivatives and finance lease obligation, net | (2,194) | (3,405) | 4,740 |
Depreciation | 125,843 | 128,619 | 137,010 |
Amortization of franchise fees and other intangibles | 492 | 63 | 41 |
Amortization of deferred financing costs | 2,486 | 2,925 | 3,126 |
Amortization of deferred stock compensation | 10,891 | 12,788 | 9,576 |
Impairment losses | 3,466 | 2,685 | 146,944 |
Gain on hurricane-related damage | (4,369) | ||
Deferred income taxes, net | 7,415 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (12,739) | (20,515) | 26,827 |
Prepaid expenses and other assets | 4,457 | (18) | 3,663 |
Accounts payable and other liabilities | 11,074 | 21,705 | 4,065 |
Accrued payroll and employee benefits | 1,666 | 3,934 | (8,286) |
Operating lease right-of-use assets and obligations | (1,409) | (1,344) | (1,260) |
Net cash provided by (used in) operating activities | 209,384 | 28,370 | (116,705) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from sales of assets | 191,291 | 183,553 | 166,737 |
Disposition deposit | 4,000 | ||
Acquisitions of hotel properties and other assets | (232,506) | (363,498) | (1,398) |
Proceeds from property insurance | 4,369 | ||
Renovations and additions to hotel properties and other assets | (128,576) | (63,663) | (51,440) |
Payment for interest rate derivative | (299) | (80) | (111) |
Net cash (used in) provided by investing activities | (165,721) | (239,688) | 113,788 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Acquisition of noncontrolling interest, including transaction costs | (104,261) | ||
Proceeds from preferred stock offerings | 215,000 | ||
Redemptions of preferred stock | (190,000) | ||
Proceeds from common stock offerings | 38,443 | ||
Repurchases of outstanding common stock | (108,442) | (103,894) | |
Repurchases of common stock for employee tax obligations | (3,351) | (4,877) | (3,992) |
Proceeds from credit facility | 230,000 | 110,000 | 300,000 |
Payments on credit facility | (230,000) | (110,000) | (300,000) |
Proceeds from notes payable | 243,615 | ||
Payments on notes payable | (38,916) | (79,884) | (149,743) |
Payments of costs related to extinguishment of debt | (27,975) | ||
Payments of deferred financing costs | (7,404) | (397) | (4,361) |
Dividends and distributions paid | (24,824) | (13,693) | (156,271) |
Distributions to noncontrolling interest | (5,500) | (2,000) | |
Contributions from noncontrolling interest | 1,375 | 2,319 | |
Net cash used in financing activities | (49,174) | (42,104) | (445,917) |
Net decrease in cash and cash equivalents and restricted cash | (5,511) | (253,422) | (448,834) |
Cash and cash equivalents and restricted cash, beginning of year | 162,717 | 416,139 | 864,973 |
Cash and cash equivalents and restricted cash, end of year | 157,206 | 162,717 | 416,139 |
Supplemental Disclosure of Cash Flow Information | |||
Cash and cash equivalents | 101,223 | 120,483 | 368,406 |
Restricted cash | 55,983 | 42,234 | 47,733 |
Total cash and cash equivalents and restricted cash shown on the consolidated statements of cash flows | 157,206 | 162,717 | 416,139 |
Cash paid for interest | 31,658 | 31,431 | 40,309 |
Cash paid (refund) for income taxes, net | 709 | 35 | (996) |
Operating cash flows used for operating leases | 6,760 | 6,803 | 10,112 |
Changes in operating lease right-of-use assets | 3,774 | 3,796 | 3,483 |
Changes in operating lease obligations | (5,183) | (5,140) | (4,743) |
Changes in operating lease right-of-use assets and lease obligations, net | (1,409) | (1,344) | (1,260) |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Accrued renovations and additions to hotel properties and other assets | 9,567 | 8,527 | 3,344 |
Disposition deposit received in prior year in connection with sale of hotel | 4,000 | ||
Operating lease right-of-use assets obtained in exchange for operating lease obligations | 864 | ||
Amortization of deferred stock compensation - construction activities | 481 | 490 | 412 |
Preferred stock redemption charges | 6,640 | ||
Dividends and distributions payable | 13,995 | 3,513 | 3,208 |
Montage Healdsburg | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Issuance of preferred stock in connection with acquisition of hotel | 66,250 | ||
Hyatt Centric Chicago Magnificent Mile | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of finance lease right-of-use asset in connection with sale of hotel | 44,712 | ||
Assignment of finance lease obligation in connection with sale of hotel | 15,569 | ||
Embassy Suites La Jolla | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of loan in connection with disposition of hotel | (56,624) | ||
Hilton Times Square | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Loss (gain) on extinguishment of debt, net | (100) | (300) | |
Impairment losses | 107,857 | ||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assets transferred to lender in assignment-in-lieu transaction | (74,583) | ||
Liabilities transferred to lender in assignment-in-lieu transaction | (108,947) | ||
Operating lease | Hilton Garden Inn Chicago Downtown/Magnificent Mile | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of operating lease right-of-use asset in connection with sale of hotel | 2,275 | ||
Assignment of operating lease obligation in connection with sale of hotel | 2,609 | ||
Operating lease | Hilton Times Square | |||
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Assignment of operating lease right-of-use asset in connection with sale of hotel | 12,518 | ||
Assignment of operating lease obligation in connection with sale of hotel | $ 14,695 | ||
Preferred Stock | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payment of stock issuance costs | (7,287) | ||
Common Stock | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Payment of stock issuance costs | $ (91) | $ (784) |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Description of Business | |
Organization and Description of Business | 1. Organization and Description of Business Sunstone Hotel Investors, Inc. (the “Company”) was incorporated in Maryland on June 28, 2004 in anticipation of an initial public offering of common stock, which was consummated on October 26, 2004. The Company elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes, commencing with its taxable year ended on December 31, 2004. The Company, through its 100% controlling interest in Sunstone Hotel Partnership, LLC (the “Operating Partnership”), of which the Company is the sole managing member, and the subsidiaries of the Operating Partnership, including Sunstone Hotel TRS Lessee, Inc. (the “TRS Lessee”) and its subsidiaries, invests in hotels where it can add value through capital investment, hotel repositioning and asset management. In addition, the Company seeks to capitalize on its portfolio’s embedded value and balance sheet strength to actively recycle past investments into new growth and value creation opportunities in order to deliver strong stockholder returns and superior per share net asset value growth. As a REIT, certain tax laws limit the amount of “non-qualifying” income the Company can earn, including income derived directly from the operation of hotels. The Company leases all of its hotels to its TRS Lessee, which in turn enters into long-term management agreements with third parties to manage the operations of the Company’s hotels, in transactions that are intended to generate qualifying income. As of December 31, 2022, the Company owned 15 hotels (the “15 Hotels”) currently held for investment. The Company’s third-party managers included the following: Number of Hotels Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) 6 Hyatt Hotels Corporation 2 Four Seasons Hotels Limited 1 Highgate Hotels L.P. and an affiliate 1 Hilton Worldwide 1 Interstate Hotels & Resorts, Inc. 1 Montage North America, LLC 1 Sage Hospitality Group 1 Singh Hospitality, LLC 1 Total hotels owned as of December 31, 2022 15 COVID-19 Operational Update COVID-19 and its variants have had and continue to have a detrimental effect on the hotel industry and the Company’s business, including significant room and event cancellations , corporate and government travel restrictions and an unprecedented decline in hotel demand. While operations have gradually improved since the onset of the COVID-19 pandemic in 2020, the Omicron variant in December 2021 led to a slowdown in demand recovery at the Company’s hotels. However, travel demand began to recover again in February 2022 as Omicron-related case counts subsided. During 2022, corporate transient and group demand accelerated, reducing the Company’s reliance on leisure demand, which was the dominant source of business at many of the Company’s hotels during 2021. While leisure demand continued to be robust throughout most of 2022, the greatest demand growth during the second and third quarters of 2022 was at the Company’s urban and group-oriented hotels which experienced increased near-term booking activity, higher than expected attendance at group events and increased business transient demand. The amount of corporate business at the Company’s hotels continues to grow and the Company expects business travel to continue to increase. As such, the Company anticipates that operations will continue to normalize in 2023, absent the outbreak of a new critical variant. However, the negative effects of the COVID-19 pandemic on the hotel industry have been unprecedented, and the Company continues to have limited visibility to predict future operations. In the fourth quarter of 2022, the Company received business interruption proceeds of $10.0 million from one of its insurers as payment for revenue losses incurred at its hotels due to the COVID-19 pandemic, which is included in other operating revenue in the accompanying consolidated statement of operations for the year ended December 31, 2022. The Company is continuing to pursue its rights of recovery under the associated insurance policy, which has a $25.0 million limit of liability, inclusive of the $10.0 million received in the fourth quarter of 2022. Any additional business interruption proceeds will not be recognized until received, but the Company can make no assurances that any additional amounts will be recovered under the policy . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of December 31, 2022 and 2021, and for the years ended December 31, 2022, 2021 and 2020, include the accounts of the Company, the Operating Partnership, the TRS Lessee, and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Cash and Cash Equivalents Cash and cash equivalents includes cash on hand and in various bank accounts plus credit card receivables and all short-term investments with an original maturity of three months or less. The Company maintains cash and cash equivalents and certain other financial instruments with various financial institutions. These financial institutions are located throughout the country and the Company’s policy is designed to limit exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. At December 31, 2022 and 2021, the Company had amounts in banks that were in excess of federally insured amounts. Restricted Cash Restricted cash primarily includes lender reserves required by the Company’s debt agreements and reserves for operating expenses and capital expenditures required by certain of the Company’s management and franchise agreements. At times, restricted cash also includes hotel acquisition or disposition-related earnest money held in escrow reserves pending completion of the associated transaction. In addition, restricted cash as of December 31, 2022 and 2021 includes $10.2 million and $10.4 million, respectively, held in escrow related to certain current and potential employee-related obligations of one of the Company’s former hotels, $3.1 million held in escrow as of both December 31, 2022 and 2021 for the purpose of satisfying any potential employee-related obligations that arise in connection with the termination of hotel personnel and any employment claim by hotel personnel at the Four Seasons Resort Napa Valley and $0.2 million held as collateral for certain letters of credit as of both December 31, 2022 and 2021 (see Note 13). Accounts Receivable Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. Accounts receivable also includes, among other things, receivables from tenants who lease space in the Company’s hotels. The Company maintains an allowance for doubtful accounts sufficient to cover potential credit losses. Acquisitions of Hotel Properties and Other Entities The acquisition of a hotel property or other entity requires an analysis of the transaction to determine if it qualifies as the purchase of a business or an asset. If the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, then the transaction is an asset acquisition. Transaction costs associated with asset acquisitions are capitalized and subsequently depreciated over the life of the related asset, while the same costs associated with a business combination are expensed as incurred and included in corporate overhead on the Company’s consolidated statements of operations. Also, given the subjectivity, business combinations are provided a one-year measurement period to adjust the provisional amounts recognized if the necessary information is not available by the end of the reporting period in which the acquisition occurs; whereas asset acquisitions are not subject to a measurement period. Accounting for the acquisition of a hotel property or other entity requires either allocating the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective relative fair values for an asset acquisition or recording the assets and liabilities at their estimated fair values with any excess consideration above net assets going to goodwill for a business combination. The most difficult estimations of individual fair values are those involving long-lived assets, such as land, buildings, furniture, fixtures and equipment (“FF&E”) and identifiable intangible assets, together with any finance or operating lease right-of-use assets and their related obligations. When the Company acquires a hotel property or other entity, it uses all available information to make these fair value determinations, including discounted cash flow analyses, market comparable data and replacement cost data. In addition, the Company makes significant estimations regarding capitalization rates, discount rates, average daily rates, revenue growth rates and occupancy. The Company also engages independent valuation specialists to assist in the fair value determinations of the long-lived assets acquired and the liabilities assumed. The determination of fair value is subjective and is based in part on assumptions and estimates that could differ materially from actual results in future periods. Investments in Hotel Properties Investments in hotel properties, including land, buildings, FF&E and identifiable intangible assets are recorded at their respective relative fair values for an asset acquisition or at their estimated fair values for a business acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation is removed from the Company’s accounts and any resulting gain or loss is included in the consolidated statements of operations. Depreciation expense is based on the estimated life of the Company’s assets. The life of the assets is based on a number of assumptions, including the cost and timing of capital expenditures to maintain and refurbish the Company’s hotels, as well as specific market and economic conditions. Hotel properties are depreciated using the straight-line method over estimated useful lives primarily ranging from five years to 40 years for buildings and improvements and three years to 12 years for FF&E. Intangible assets are amortized using the straight-line method over the shorter of their estimated useful life or over the length of the related agreement. The Company’s investment in hotel properties, net also includes initial franchise fees which are recorded at cost and amortized using the straight-line method over the terms of the franchise agreements ranging from 15 years to 20 years . All other franchise fees that are based on the Company’s results of operations are expensed as incurred. While the Company believes its estimates are reasonable, a change in the estimated lives could affect depreciation expense and net income or the gain or loss on the sale of any of the Company’s hotels. The Company has not changed the useful lives of any of its assets during the periods discussed. Impairment losses are recorded on investments in hotel properties to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows, including potential sale proceeds, expected to be generated by those assets based on the Company’s anticipated investment horizon, are less than the assets’ carrying amount. The Company evaluates its investments in hotel properties to determine if there are indicators of impairment on a quarterly basis. No single indicator would necessarily result in the Company preparing an estimate to determine if a hotel’s future undiscounted cash flows are less than the book value of the hotel. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a hotel requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. The Company considers indicators of impairment such as, but not limited to, hotel disposition strategy and hold period, a significant decline in operating results not related to renovations or repositioning, physical damage to the property due to unforeseen events such as natural disasters, and an estimate or belief that the fair value is less than net book value. The Company performs an analysis to determine the recoverability of the hotel by comparing the future undiscounted cash flows expected to be generated by the hotel to the hotel’s carrying amount. If a hotel is considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The Company performs a fair value assessment using valuation techniques such as discounted cash flows and comparable sale transactions in the market to estimate the fair value of the hotel and, if appropriate and available, current estimated net sales proceeds from pending offers. The Company’s judgment is required in determining the discount rate, terminal capitalization rate, the estimated growth of revenues and expenses, net operating income and margins, as well as specific market and economic conditions. Based on the Company’s review, no hotels were impaired in 2022. In 2021, the Company recognized a $2.7 million impairment loss on the Hilton New Orleans St. Charles due to Hurricane Ida-related damage at the hotel (see Notes 5 and 13). Fair value represents the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than a forced or liquidation sale. The estimation process involved in determining if assets have been impaired and in the determination of fair value is inherently uncertain because it requires estimates of current market yields as well as future events and conditions. Such future events and conditions include economic and market conditions, as well as the availability of suitable financing. The realization of the Company’s investment in hotel properties is dependent upon future uncertain events and conditions and, accordingly, the actual timing and amounts realized by the Company may be materially different from their estimated fair values. Assets Held for Sale The Company considers a hotel and related assets held for sale if it is probable that the sale will be completed within 12 months , among other requirements. A sale is considered to be probable once the buyer completes its due diligence of the asset, there is an executed purchase and sale agreement between the Company and the buyer, the buyer waives any closing contingencies, there are no third-party approvals necessary and the Company has received a substantial non-refundable deposit. Depreciation ceases when a property is held for sale. Should an impairment loss be required for assets held for sale, the related assets are adjusted to their estimated fair values, less costs to sell. If the sale of the hotel represents a strategic shift that will have a major effect on the Company’s operations and financial results, the hotel qualifies as a discontinued operation, and operating results are removed from income from continuing operations and reported as discontinued operations. The operating results for any such assets for any prior periods presented must also be reclassified as discontinued operations. No hotels were considered held for sale as of December 31, 2022. As of December 31, 2021, one hotel was considered held for sale (see Note 4). Deferred Financing Costs Deferred financing costs consist of loan fees and other financing costs related to the Company’s outstanding indebtedness and credit facility commitments, and are amortized to interest expense over the terms of the related debt or commitment. If a loan is refinanced or paid before its maturity, any unamortized deferred financing costs will generally be expensed unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs related to the Company’s undrawn credit facility are included on the Company’s consolidated balance sheets as an asset, and are amortized ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. Deferred financing costs related to the Company’s outstanding debt are included on the Company’s consolidated balance sheets as a contra-liability (see Note 7), and subsequently amortized ratably over the term of the related debt. Interest Rate Derivatives The Company’s objective in holding interest rate derivatives is to manage its exposure to the interest rate risks related to its floating rate debt. To accomplish this objective, the Company uses interest rate caps and swaps, none of which qualifies for effective hedge accounting treatment. The Company records interest rate caps and swaps on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in the consolidated statements of operations. Leases The Company determines if a contract is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Expense for these short-term leases is recognized on a straight-line basis over the lease term. For leases with an initial term greater than 12 months , the Company records a right-of-use (“ROU”) asset and a corresponding lease obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make fixed lease payments as stipulated by the lease. The Company has elected to not separate lease components from nonlease components, resulting in the Company accounting for lease and nonlease components as one single lease component. Leases are accounted for using a dual approach, classifying leases as either operating or financing based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the Company. This classification determines whether the lease expense is recognized on a straight-line basis over the term of the lease for operating leases or based on an effective interest method for finance leases. Upon the sale of the Hyatt Centric Chicago Magnificent Mile and its related finance lease in February 2022 (see Notes 4 and 9), the Company’s leases consist solely of operating leases. Lease ROU assets are recognized at the lease commencement date and include the amount of the initial operating lease obligation, any lease payments made at or before the commencement date, excluding any lease incentives received, and any initial direct costs incurred. For leases that have extension options that the Company can exercise at its discretion, management uses judgment to determine if it is reasonably certain that the Company will in fact exercise such option. If the extension option is reasonably certain to occur, the Company includes the extended term’s lease payments in the calculation of the respective lease liability. None of the Company’s leases contain any material residual value guarantees or material restrictive covenants. Lease obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on information available at the commencement date in determining the present value of lease payments over the lease term. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In order to estimate the Company’s IBR, the Company first looks to its own unsecured debt offerings, and adjusts the rate for both length of term and secured borrowing using available market data as well as consultations with leading national financial institutions that are active in the issuance of both secured and unsecured notes. The Company reviews its right-of-use assets for indicators of impairment. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Based on the Company’s 2022 review, the Company recorded a $2.1 million impairment loss on the ROU asset related to the office lease at its former corporate headquarters (see Notes 5 and 9). No operating or finance lease ROU assets were impaired during 2021. Noncontrolling Interest In June 2022, the Company acquired the 25.0% outside equity interest in the Hilton San Diego Bayfront (see Note 3). Prior to this acquisition, the noncontrolling interest reported in the accompanying consolidated financial statements consisted of a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interest is reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from the less-than-wholly-owned subsidiary are reported at their consolidated amounts, including both the amounts attributable to the Company and the noncontrolling interest. Income or loss is allocated to the noncontrolling interest based on its weighted average ownership percentage for the applicable period. The consolidated statements of equity include beginning balances, activity for the period and ending balances for each component of stockholders’ equity, noncontrolling interest and total equity. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to hotel guests, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Room revenue and other occupancy based fees are recognized over a guest’s stay at the previously agreed upon daily rate. Some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is recognized by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is recognized by the Company on a gross basis, with the related discount or commission recognized in room expense. A majority of the Company’s hotels participate in frequent guest programs sponsored by the hotel brand owners whereby the hotel allows guests to earn loyalty points during their hotel stay. The Company expenses charges associated with these programs as incurred, and recognizes revenue at the amount it will receive from the brand when a guest redeems their loyalty points by staying at one of the Company’s hotels. In addition, some contracts for rooms or food and beverage services require an advance deposit, which the Company records as deferred revenue (or a contract liability) and recognizes once the performance obligations are satisfied. Cancellation fees and attrition fees, which are charged to groups when they do not fulfill their contracted minimum number of room nights or minimum food and beverage spending requirements, are typically recognized as revenue in the period the Company determines it is probable that a significant reversal in the amount of revenue recognized will not occur, which is generally the period in which these fees are collected. Food and beverage revenue and other ancillary services revenue are generated when a customer chooses to purchase goods or services. The revenue is recognized when the goods or services are provided to the customer at the amount the Company expects to be entitled to in exchange for those goods or services. For ancillary services provided by third parties, the Company assesses whether it is the principal or the agent. If the Company is the principal, revenue is recognized based upon the gross sales price. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. Additionally, the Company collects sales, use, occupancy and other similar taxes from customers at its hotels at the time of purchase, which are not included in revenue. The Company records a liability upon collection of such taxes from the customer, and relieves the liability when payments are remitted to the applicable governmental agency. Trade receivables and contract liabilities consisted of the following (in thousands): December 31, 2022 2021 Trade receivables, net (1) $ 19,751 $ 16,055 Contract liabilities (2) $ 50,219 $ 40,226 (1) Trade receivables, net are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits and are included in either other current liabilities or other liabilities on the accompanying consolidated balance sheets. During 2022 and 2021, the Company recognized approximately $27.9 million and $2.2 million, respectively, in revenue related to its outstanding contract liabilities. Advertising and Promotion Costs Advertising and promotion costs are expensed when incurred. Advertising and promotion costs represent the expense for advertising and reservation systems under the terms of the hotel franchise and brand management agreements and general and administrative expenses that are directly attributable to advertising and promotions. Stock Based Compensation Restricted shares and units are measured at fair value on the date of grant and amortized as compensation expense over the relevant requisite service period or derived service period. The Company has elected to account for forfeitures as they occur. Income Taxes The Company is subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, the TRS Lessee, which leases the Company’s hotels from the Operating Partnership, is subject to federal and state income taxes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reviews any uncertain tax positions and, if necessary, records the expected future tax consequences of uncertain tax positions in its consolidated financial statements. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. The Company recognizes any penalties and interest related to unrecognized tax benefits in income tax expense in its consolidated statements of operations. Dividends Under current federal income tax laws related to REITs, the Company is required to distribute at least 90% of its REIT taxable income to its stockholders. Currently, the Company pays quarterly cash dividends to its preferred stockholders as declared by the Company’s board of directors. In the third quarter of 2022, the Company’s board of directors reinstated its quarterly common stock dividends, which were suspended in 2020 due to the COVID-19 pandemic’s negative effect on the Company’s income. Any future common stock dividends will be determined by the Company’s board of directors after considering the Company’s obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and risks affecting its business. The Company’s ability to pay dividends is dependent on the receipt of distributions from the Operating Partnership. Earnings Per Share The Company applies the two-class method when computing its earnings per share. Net income per share for each class of stock is calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid), which include the Company’s time-based restricted stock awards, are considered participating securities and are included in the computation of earnings per share. Basic earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards and units, using the more dilutive of either the two-class method or the treasury stock method. The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 Numerator: Net income (loss) $ 90,766 $ 32,995 $ (410,506) (Income) loss from consolidated joint venture attributable to noncontrolling interest (3,477) 1,303 5,817 Preferred stock dividends and redemption charges (14,247) (20,638) (12,830) Distributions paid to participating securities (128) — (69) Undistributed income allocated to participating securities (323) (92) — Numerator for basic and diluted income (loss) attributable to common stockholders $ 72,591 $ 13,568 $ (417,588) Denominator: Weighted average basic common shares outstanding 212,613 216,296 215,934 Unvested restricted stock units 40 — — Weighted average diluted common shares outstanding 212,653 216,296 215,934 Basic income (loss) attributable to common stockholders per common share $ 0.34 $ 0.06 $ (1.93) Diluted income (loss) attributable to common stockholders per common share $ 0.34 $ 0.06 $ (1.93) At December 31, 2022, 2021 and 2020, the Company excluded 1,289,146 , 1,463,315 and 1,336,836 anti-dilutive time-based restricted stock awards, respectively, from its calculation of diluted earnings per share. The unvested time-based restricted stock awards generally vest over periods ranging from three years to five years (see Note 12). The Company also had unvested performance-based restricted stock units as of December 31, 2022 that are not considered participating securities as the awards contain forfeitable rights to dividends or dividend equivalents. The performance-based restricted stock units were granted based on either target market condition thresholds or pre-determined stock price targets. Based on the Company’s common stock performance during 2022, the Company excluded 188,004 anti-dilutive performance-based restricted stock units from its calculations of diluted earnings per share at December 31, 2022. The unvested performance-based restricted stock awards vest over periods ranging from two years to five years (see Note 12). Segment Reporting The Company considers each of its hotels to be an operating segment, and allocates resources and assesses the operating performance for each hotel. Because all of the Company’s hotels have similar economic characteristics, facilities and services, the hotels have been aggregated into one single reportable segment, hotel ownership. New Accounting Standards and Accounting Changes In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 Under the terms of the Amended Credit Agreement (see Note 7), the Company’s credit facility, Term Loan 1 and Term Loan 2 are now subject to SOFR rather than LIBOR. The Company’s two interest rate swap derivatives on its term loans either expired in September 2022 or will expire in January 2023. Currently, the Company’s $220.0 million loan secured by the Hilton San Diego Bayfront and its related interest rate cap derivative are subject to LIBOR. Both the loan and related interest rate cap derivative mature and expire, respectively, in December 2023. The adoptions of ASU No. 2020-04 and ASU No. 2022-06 are not expected to have a material impact on the Company’s consolidated financial statements. |
Investment in Hotel Properties
Investment in Hotel Properties | 12 Months Ended |
Dec. 31, 2022 | |
Investment in Hotel Properties | |
Investment in Hotel Properties | 3. Investment in Hotel Properties Investment in hotel properties, net consisted of the following (in thousands): December 31, 2022 2021 Land $ 672,531 $ 604,692 Buildings and improvements 2,793,771 2,729,461 Furniture, fixtures and equipment 426,189 431,780 Intangible assets 42,187 43,117 Construction in progress 71,689 41,260 Investment in hotel properties, gross 4,006,367 3,850,310 Accumulated depreciation and amortization (1,165,439) (1,130,294) Investment in hotel properties, net $ 2,840,928 $ 2,720,016 2022 Acquisitions In June 2022, the Company purchased the fee-simple interest in the 339 -room The Confidante Miami Beach, Florida for a contractual purchase price of $232.0 million. The acquisition was accounted for as an asset acquisition and was funded from available cash and with $140.0 million of proceeds received from the Company’s revolving credit facility (see Note 7). In June 2022, the Company acquired the 25.0% noncontrolling partner’s ownership interest in the Hilton San Diego Bayfront for a contractual purchase price of $102.0 million plus 25.0% of closing date working capital and cash. The Company paid a preliminary purchase price of $101.3 million on the closing date based on estimated working capital and cash amounts, with an additional $2.9 million true-up recognized in December 2022 based on actual working capital and cash amounts. Following the acquisition, the Company owns 100% of the hotel. The acquisition was funded from available cash and with $90.0 million of proceeds received from the Company’s revolving credit facility (see Note 7). The transaction was accounted for as an equity transaction. The acquisition date noncontrolling interest balance of $38.8 million was reclassified to additional paid in capital. In addition, the $65.5 million of excess cash paid to acquire the 25.0% noncontrolling partner’s ownership interest was classified as additional paid in capital. No gain or loss was recognized in the accompanying consolidated statements of operations related to this acquisition. 2021 Acquisitions The Company purchased two hotels in 2021, both of which were accounted for as asset acquisitions. In April 2021, the Company purchased the fee-simple interest in the newly-developed 130 -room Montage Healdsburg, California for $265.0 million, excluding acquisition costs and prorations. In December 2021, the Company purchased the fee-simple interest in the newly-developed 85-room Four Seasons Resort Napa Valley, California for $177.5 million, excluding acquisition costs and prorations. The acquisition was funded through a combination of cash on hand and $110.0 million borrowed under the Company’s revolving credit facility (see Note 7). Intangible Assets Intangible assets included in the Company’s investment in hotel properties, net consisted of the following (in thousands): December 31, 2022 2021 Element agreement (1) $ 18,436 $ 18,436 Airspace agreements (2) 1,947 1,916 Advance bookings (3) — 221 Residential program agreements (4) 21,038 21,038 Trade names (5) 121 117 Franchise agreements (6) 126 428 In-place lease agreement (7) 519 — Below market management agreement (8) — 961 42,187 43,117 Accumulated amortization (432) (1,245) $ 41,755 $ 41,872 Amortization expense on these intangible assets consisted of the following (in thousands): 2022 2021 2020 Element agreement (1) $ — $ — $ — Airspace agreements (2) — — — Advance bookings (3) 199 22 — Residential program agreements (4) 282 — — Trade names (5) — — — Franchise agreements (6) 11 40 42 In-place lease agreement (7) 58 — — Below market management agreement (8) 15 92 92 $ 565 $ 154 $ 134 (1) The Element agreement as of both December 31, 2022 and 2021 included the exclusive perpetual rights to certain space at the Renaissance Washington DC. The Element has an indefinite useful life and is not amortized. (2) Airspace agreements as of both December 31, 2022 and 2021 consisted of dry slip agreements at the Oceans Edge Resort & Marina. The dry slips at the Oceans Edge Resort & Marina have indefinite useful lives and are not amortized. (3) Advance bookings as of December 31, 2021 consisted of advance deposits related to our acquisition of the Four Seasons Resort Napa Valley. As part of the purchase price allocation, the contractual advance hotel bookings were recorded at a discounted present value based on estimated collectability. They were amortized using the straight-line method over the periods the amounts were expected to be collected and were fully amortized in September 2022. The amortization expense for contractual advance hotel bookings is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (4) Residential program agreements as of both December 31, 2022 and 2021 included $13.7 million and $7.3 million at the Montage Healdsburg and the Four Seasons Resort Napa Valley, respectively. The value of the agreements were determined based on each hotel’s purchase price allocation. The agreements relate to the hotels’ residential rental programs, whereby owners of the adjacent separately owned Montage Residences Healdsburg and Four Seasons Private Residences Napa Valley are eligible to participate in optional rental programs and have access to the hotels’ facilities. In addition, the agreement at the Montage Healdsburg includes a social membership program. The residential program agreement at the Montage Healdsburg will be amortized over the life of the related remaining 25-year Montage Healdsburg management agreement once the hotel begins to recognize revenue related to the programs. In April 2022, the Company began to recognize revenue associated with the residential program agreement at the Four Seasons Resort Napa Valley and began to amortize the agreement using the straight-line method over the life of the related remaining 20-year management agreement. The amortization expense for the Four Seasons Resort Napa Valley is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (5) Trade names as of both December 31, 2022 and 2021 included $0.1 million related to trademarks and bottle labeling used by the Elusa Winery at the Four Seasons Resort Napa Valley. The value of the trade names were determined as part of the hotel’s purchase price allocation. The trade names have indefinite useful lives and are not amortized. (6) Franchise agreements as of both December 31, 2022 and 2021 included $0.1 million related to agreements at the Hilton New Orleans St. Charles and The Bidwell Portland Marriott. Franchise agreements as of December 31, 2021 included an additional $0.3 million related to agreements at the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile, both of which were sold in March 2022 (see Note 4). The remaining agreements are amortized using the straight-line method over the lives of the franchise agreements and will be fully amortized in October 2024 and April 2028 for The Bidwell Portland Marriott and the Hilton New Orleans St. Charles, respectively. The amortization expense for the franchise agreements is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (7) The in-place lease agreement as of December 31, 2022 consisted of an agreement at The Confidante Miami Beach. The value of the agreement was determined as part of the hotel’s purchase price allocation. The agreement is amortized using the straight-line method over the remaining non-cancelable term of the lease and will be fully amortized in August 2027. The amortization expense for the in-place lease agreement is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (8) The below market management agreement as of December 31, 2021 consisted of an agreement at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. The agreement was amortized using the straight-line method over the remaining non-cancelable term until the hotel’s sale in March 2022 (see Note 4). For the next five years, amortization expense for the intangible assets noted above is expected to be as follows (in thousands): 2023 $ 483 2024 $ 483 2025 $ 481 2026 $ 481 2027 $ 448 |
Disposals
Disposals | 12 Months Ended |
Dec. 31, 2022 | |
Disposal Group, Not Including Discontinued Operations | |
Disposals | 4. Disposals Disposals - 2022 In February 2022, the Company sold the Hyatt Centric Chicago Magnificent Mile and in March 2022, the Company sold both the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile, all three of which are located in Illinois. None of these sales represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, none of the hotels qualified as a discontinued operation. The details of the sales were as follows (in thousands): Net Proceeds Net Gain Hyatt Centric Chicago Magnificent Mile $ 67,231 (1) $ 11,336 Embassy Suites Chicago and Hilton Garden Inn Chicago Downtown/Magnificent Mile 128,060 11,610 $ 195,291 $ 22,946 (1) Includes a $4.0 million disposition deposit received from the buyer of the hotel in December 2021. The Company classified the assets and liabilities of the Hyatt Centric Chicago Magnificent Mile as held for sale at December 31, 2021 as follows (in thousands): December 31, 2021 Accounts receivable, net $ 287 Prepaid expenses and other current assets 182 Investment in hotel properties, net 31,015 Finance lease right-of-use asset, net 44,712 Other assets, net 112 Assets held for sale, net $ 76,308 Accounts payable and accrued expenses $ 1,076 Accrued payroll and employee benefits 660 Other current liabilities 3,881 Finance lease obligation, less current portion 15,567 Other liabilities 4,029 Liabilities of assets held for sale $ 25,213 Disposals - 2021 In October 2021 and December 2021, the Company sold the Renaissance Westchester, located in New York, and the Embassy Suites La Jolla located in California, respectively. Neither of these sales represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, neither of the hotels qualified as a discontinued operation. The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Westchester (1) $ 17,054 $ 3,733 Embassy Suites La Jolla 166,499 148,791 $ 183,553 $ 152,524 (1) During 2020, the Company wrote down the hotel’s assets and recorded an impairment loss of $18.7 million (see Note 5). Disposals - 2020 In July 2020 and December 2020, the Company sold the Renaissance Harborplace, located in Maryland, and the Renaissance Los Angeles Airport, located in California, respectively. Neither of these sales represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, neither of the hotels qualified as a discontinued operation. The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Harborplace (1) $ 76,855 $ 189 Renaissance Los Angeles Airport 89,882 34,109 $ 166,737 $ 34,298 (1) During 2020, the Company wrote down the hotel’s assets and recorded an impairment loss of $18.1 million (see Note 5). In December 2020, an assignment-in-lieu agreement was filed in the Office of the City Register of the City of New York, and the Company transferred possession and control of its leasehold interest in the Hilton Times Square to the lender of the hotel’s non-recourse mortgage (see Note 7). As such, and in conjunction with the FASB ASC Subtopic (610-20), Gains and Losses from the Derecognition of Nonfinancial Assets , the Company concluded that it lost control of the hotel and removed the hotel’s net assets and liabilities from its balance sheet at December 31, 2020. The disposition of the Hilton Times Square did not represent a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, the hotel did not qualify as a discontinued operation. Results of Operations – Disposed Hotels The following table provides summary results of operations for the disposed hotels, which are included in net income (loss) for their respective ownership periods (in thousands): 2022 2021 2020 Total revenues $ 3,234 $ 49,389 $ 49,701 Loss before income taxes (1) $ (3,061) $ (23,516) $ (87,140) Gain on sale of assets $ 22,946 $ 152,524 $ 34,298 (1) Loss before income taxes does not include the gain recognized on the hotel sales. |
Fair Value Measurements and Int
Fair Value Measurements and Interest Rate Derivatives | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements and Interest Rate Derivatives | |
Fair Value Measurements and Interest Rate Derivatives | 5. Fair Value Measurements and Interest Rate Derivatives Fair Value Measurements As of December 31, 2022 and 2021, the carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses were representative of their fair values due to the short-term maturity of these instruments. A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value is as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. As of both December 31, 2022 and 2021, the Company measured its interest rate derivatives at fair value on a recurring basis. The Company estimated the fair value of its interest rate derivatives using Level 2 measurements based on quotes obtained from the counterparties, which are based upon the consideration that would be required to terminate the agreements. The Company recorded the following impairment losses, each of which is discussed below, as follows (in thousands): 2022 2021 2020 Hilton New Orleans St. Charles $ — $ 2,685 $ — Renaissance Harborplace — — 18,100 Hilton Times Square — — 107,857 Renaissance Westchester — — 18,685 Corporate headquarters 3,466 — — Abandoned development costs — — 2,302 $ 3,466 $ 2,685 $ 146,944 Corporate headquarters In 2022, the Company determined that it could reduce its future operating expenses by relocating its corporate headquarters to decrease the amount of space the Company occupied and to secure a lower rental cost per square foot. As such, the Company executed a sublease agreement with an unaffiliated party for the remainder of the original ten-year lease term and relocated its headquarters in January 2023. Coterminous with the execution of the sublease agreement, the Company identified indicators of impairment related to its original corporate headquarters as there were significant changes in the manner in which both the tenant improvements and the ROU asset were to be used and the original lease cost was greater than the expected sublease income. To determine the impairment losses, the Company applied Level 2 measurements to estimate the fair values of the tenant improvements and ROU asset, using the income expected to be generated under the sublease agreement with the unaffiliated sublessee to prepare a discounted cash flow analysis. Hilton New Orleans St. Charles Renaissance Harborplace In 2020, the Company determined that the fair value of the Renaissance Harborplace less costs to sell the hotel was lower than the carrying value of the hotel. The 2020 impairment loss was determined using Level 2 measurements, consisting of the third-party offer price less estimated costs to sell the hotel. Hilton Times Square . The Company disposed of the Hilton Times Square in December 2020 (see Notes 4 and 7). I In 2020, the Company identified indicators of impairment at the Hilton Times Square related to deteriorating profitability exacerbated by the effects of the COVID - Renaissance Westchester . The Company sold the Renaissance Westchester in October 2021 (see Note 4). In In 2020, the Company identified indicators of impairment at the Renaissance Westchester related to deteriorating profitability exacerbated by the effects of the COVID - Abandoned development costs . In 2020, the Company recorded an impairment loss of Fair Value of Debt As of December 31, 2022 and 2021, 42.4% and 64.0%, respectively, of the Company’s outstanding debt had fixed interest rates, including the effects of interest rate swap derivatives. The Company uses Level 3 measurements to estimate the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates. The Company’s principal balances and fair market values of its consolidated debt were as follows (in thousands): December 31, 2022 December 31, 2021 Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Debt $ 816,136 $ 809,141 $ 611,437 $ 590,359 (1) The principal balance of debt is presented before any unamortized deferred financing costs. (2) Due to prevailing market conditions and the uncertain economic environment caused by the COVID-19 pandemic, actual interest rates could vary materially from those estimated, which would result in variances in the Company’s calculations of the fair market value of its debt. Interest Rate Derivatives The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following (in thousands): Estimated Fair Value of Assets (Liabilities) (1) Strike / Capped Effective Maturity Notional December 31, Hedged Debt Type LIBOR Rate Index Date Date Amount 2022 2021 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2021 December 15, 2022 $ N/A $ N/A $ 3 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2022 December 9, 2023 $ 220,000 60 N/A Term Loan 1 Swap 1.591 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ N/A N/A (744) Term Loan 2 Swap 1.853 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 208 (1,484) $ 268 $ (2,225) (1) The fair values of the cap derivatives were included in prepaid expenses and other current assets on the accompanying consolidated balance sheets as of December 31, 2022 and 2021. The fair value of the Term Loan 2 swap derivative was included in prepaid expenses and other current assets on the accompanying consolidated balance sheet as of December 31, 2022. As of December 31, 2021, the fair value of the Term Loan 1 swap derivative was included in other current liabilities and the fair value of the Term Loan 2 swap derivative was included in other liabilities on the accompanying consolidated balance sheet. Noncash changes in the fair values of the Company’s interest rate derivatives resulted in (decreases) increases to interest expense as follows (in thousands): 2022 2021 2020 Noncash interest on derivatives, net $ (2,194) $ (3,405) $ 4,740 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets. | |
Other Assets | 6. Other Assets Other assets, net consisted of the following (in thousands): December 31, 2022 2021 Property and equipment, net $ 3,685 (1) $ 5,912 Deferred rent on straight-lined third-party tenant leases 2,413 2,455 Liquor licenses 933 826 Other receivables 597 3,914 Other 239 89 Total other assets, net $ 7,867 $ 13,196 (1) In 2022, the Company recorded an impairment loss of $1.4 million on the tenant improvements, net at its corporate headquarters (see Note 5). |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosures | |
Notes Payable | 7. Notes Payable Notes payable consisted of the following (in thousands): December 31, 2022 2021 Note payable requiring payments of interest only, bearing a blended rate of one-month LIBOR plus 130 basis points and plus 105 basis points at December 31, 2022 and 2021, respectively, resulting in effective interest rates of 5.571% and 1.140% at December 31, 2022 and 2021, respectively; matures on December 9, 2023 . The note is collateralized by a first deed of trust on one hotel property. $ 220,000 $ 220,000 Note payable requiring payments of interest and principal, with a fixed rate of 4.15% ; matures on December 11, 2024 . The note is collateralized by a first deed of trust on one hotel property. 76,136 78,137 Unsecured Term Loan 1 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus SOFR and 10 basis points , resulting in an effective interest rate of 5.822% at December 31, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR was swapped to a fixed rate of 1.591% , resulting in an effective interest rate of 3.941% at December 31, 2021. Matures on July 25, 2027 . 175,000 19,400 Unsecured Term Loan 2 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus SOFR and 10 basis points as of December 31, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR was swapped to a fixed rate of 1.853% , resulting in effective interest rates of 4.269% and 4.203% at December 31, 2022 and 2021, respectively. Matures on January 25, 2028 . 175,000 88,900 Unsecured Series A Senior Notes requiring semi-annual payments of interest only, bearing interest at 5.94% . Matures on January 10, 2026 . 65,000 90,000 Unsecured Series B Senior Notes requiring semi-annual payments of interest only, bearing interest at 6.04% Matures on January 10, 2028 . 105,000 115,000 Total notes payable $ 816,136 $ 611,437 Current portion of notes payable $ 222,086 $ 21,401 Less: current portion of deferred financing costs (56) (707) Carrying value of current portion of notes payable $ 222,030 $ 20,694 Notes payable, less current portion $ 594,050 $ 590,036 Less: long-term portion of deferred financing costs (3,399) (1,295) Carrying value of notes payable, less current portion $ 590,651 $ 588,741 Aggregate future principal maturities and amortization of notes payable at December 31, 2022, are as follows (in thousands): 2023 $ 222,086 2024 74,050 2025 — 2026 65,000 2027 175,000 Thereafter 280,000 Total $ 816,136 Notes Payable Transactions - 2022 Secured Debt . In December 2022, the Company exercised its remaining one-year option to extend the maturity of the mortgage secured by the Hilton San Diego Bayfront from December 2022 to December 2023. In accordance with the terms of the extension, the LIBOR spread increased 25 basis points, from 105 basis points to 130 basis points. In addition, the Company purchased an interest rate cap derivative for $0.3 million that will continue to cap the loan’s underlying floating rate interest benchmark at 6.0% until December 2023 (see Note 5). Certain of the Company’s loan agreements contain cash trap provisions that may be triggered if the performance of the hotels securing the loans decline. These provisions were triggered in January 2021 for the loan secured by the JW Marriott New Orleans, and in May 2021 for the loan secured by the Hilton San Diego Bayfront. In April 2022 and October 2022, the Hilton San Diego Bayfront and the JW Marriott New Orleans, respectively, reached profitability levels that terminated the cash traps. Unsecured Debt . In February 2022, the Company used a portion of the proceeds received from the disposition of the Hyatt Centric Chicago Magnificent Mile to repay $25.0 million of its unsecured Series A Senior Notes and $10.0 million of its unsecured Series B Senior Notes, resulting in remaining balances of $65.0 million and $105.0 million, respectively, as of December 31, 2022. In conjunction with the repayments, the Company recorded a $0.2 million loss on extinguishment of debt related to the accelerated amortization of the deferred financing costs. In March 2022, the Company elected to early terminate the covenant relief period related to its unsecured debt, having satisfied the financial covenants stipulated in the 2020 and 2021 amendments to its unsecured debt agreements (together, the “Unsecured Debt Amendments” key terms of which are disclosed below) for the quarter ended December 31, 2021. The Unsecured Debt Amendments were scheduled to provide covenant relief through the end of the third quarter of 2022, with quarterly testing resuming for the period ending September 30, 2022. Following the Company’s early termination of the covenant relief period in March 2022, the original financial covenants on its unsecured debt agreements were to be phased-in over the following five quarters to ease compliance. By exiting the covenant relief period, the Company is no longer subject to the additional restrictions on debt issuance and repayment, capital investment, share repurchases and dividend distributions that were imposed as part of the Unsecured Debt Amendments. In June 2022, the Company drew a total of $230.0 million under the revolving portion of its credit facility to fund the acquisitions of The Confidante Miami Beach and the 25.0% noncontrolling interest in the Hilton San Diego Bayfront (see Note 3). In July 2022, the Company entered into a Second Amended and Restated Credit Agreement (the “Amended Credit Agreement”) which expanded its unsecured borrowing capacity and extended the maturity of the Company’s two unsecured term loans. The Amended Credit Agreement increased the balances of both Term Loan 1 and Term Loan 2 to $175.0 million each from $19.4 million and $88.9 million, respectively. In addition, the maturity dates were extended to July 2027 and January 2028 for Term Loan 1 and Term Loan 2, respectively. Under the Amended Credit Agreement, the term loans bear interest pursuant to a leverage-based pricing grid ranging from 135 basis points to 220 basis points over the applicable adjusted term SOFR . In conjunction with the Amended Credit Agreement, the Company recorded a $0.8 million loss on extinguishment of debt related to the accelerated amortization of the deferred financing costs. In July 2022, the Company utilized the proceeds received from the incremental borrowing on the term loans to fully repay the $230.0 million that was outstanding on its revolving credit facility. The Amended Credit Agreement continues to provide for a $500.0 million revolving credit facility, with two six-month extension options, which would result in an extended maturity of July 2027. Under the Amended Credit Agreement, the revolving credit facility bears interest pursuant to a leverage-based pricing grid ranging from 140 basis points to 225 basis points over the applicable adjusted term SOFR . As of December 31, 2022, the Company had no amount outstanding on its credit facility, with $500.0 million of capacity available for borrowing under the facility. The Company’s ability to draw on the credit facility is subject to the Company’s compliance with various financial covenants. Notes Payable Transactions - 2021 Secured Debt In December 2021, the Company exercised its second option to extend the maturity of the $220.0 million loan secured by the Hilton San Diego Bayfront from December 2021 to December 2022. In addition, the Company purchased an interest rate cap derivative for $0.1 million that continued to cap the loan’s underlying floating rate interest benchmark at 6.0% until December 2022 (see Note 5). Unsecured Debt In July 2021 and November 2021, the Company completed amendments to its unsecured debt, consisting of its revolving credit facility, term loans and senior notes (the “2021 Unsecured Debt Amendments”). The 2021 Unsecured Debt Amendments were deemed to be debt modifications and were accounted for accordingly. Under the terms of the 2021 Unsecured Debt Amendments, the Company was provided with a waiver of its required financial covenants through the third quarter of 2022, subject to the satisfaction of certain conditions, with the financial covenants then being phased-in over the following five quarters. As part of the 2021 Unsecured Debt Amendments, the Company gained the ability to annualize various income metrics used to calculate the financial covenants in order to ease compliance with the financial covenants and also gained the right, exercisable one time each with respect to its term loans, to request an extension of the applicable maturity date by twelve months upon the payment of an extension fee. In December 2021, the Company used a portion of the proceeds received from its sale of the Embassy Suites La Jolla to repay $65.6 million on its Term Loan 1 and $11.1 million on its Term Loan 2, resulting in a Term Loan 1 balance of $19.4 million and a Term Loan 2 balance of $88.9 million as of December 31, 2021. In conjunction with the repayments, the Company recorded a $0.3 million loss on extinguishment of debt related to the accelerated amortization of deferred financing costs. Notes Payable Transactions - 2020 Secured Debt Additionally, in December 2020, the Company exercised its first option to extend the maturity date of the mortgage secured by the Hilton San Diego Bayfront from December 2020 to December 2021. Finally, in December 2020, the Company executed an assignment-in-lieu agreement with the holder of the $77.2 million mortgage secured by the Hilton Times Square (see Note 4). As stipulated by the agreement, the Company satisfied all outstanding debt obligations, including regular and default interest or late charges that were assessed, in exchange for a $20.0 million payment, the credit of $3.2 million of restricted cash held by the noteholder and $0.8 million of the hotel’s unrestricted cash, the assignment of the Company’s leasehold interest in the Hilton Times Square, and the retention of certain potential employee-related obligations. In conjunction with this agreement, the Company wrote off approximately $22.2 million of various accrued expenses related to the hotel’s operating lease and sublease, including, but not limited to, accrued property taxes, recapture of deferred taxes due from a prior deferral period, accrued ground rent and accrued easement payments. The Company removed the net assets and liabilities related to the hotel from its December 31, 2020 balance sheet; however, the Company retained approximately $11.6 million in certain current and potential employee-related obligations, which is currently held in escrow until those obligations are resolved (see Note 13). The Company recorded a $6.4 million gain on extinguishment of debt as a result of this transaction. Unsecured Debt . In March 2020, the Company drew $300.0 million under the revolving portion of its credit facility as a precautionary measure to increase the Company’s cash position and preserve financial flexibility due to the Company’s temporary hotel operating suspensions and the decrease in demand caused by the COVID-19 pandemic. In June 2020 and August 2020, the Company repaid $250.0 million and $11.2 million, respectively, of the outstanding credit facility balance after determining that it had sufficient cash on hand in addition to access to its credit facility. In addition, in August 2020, the Company used a portion of the proceeds it received from the sale of the Renaissance Harborplace to repay $38.8 million of the outstanding credit facility balance as stipulated in the 2020 Unsecured Debt Amendments described below. In September 2020, the Company repaid $35.0 million of its senior notes, comprising $30.0 million to the Series A note holders and $5.0 million to the Series B note holders, using a portion of the proceeds the Company received from the sale of the Renaissance Harborplace as stipulated in the 2020 Unsecured Debt Amendments described below. In conjunction with the repayments, the Company recorded a $0.2 million loss on extinguishment of debt related to the accelerated amortization of deferred financing costs. In July and December 2020, the Company completed amendments to its unsecured debt, consisting of its revolving credit facility, term loans and senior notes (the “2020 Unsecured Debt Amendments”). The 2020 Unsecured Debt Amendments were deemed to be debt modifications and were accounted for accordingly. Under the terms of the 2020 Unsecured Debt Amendments, the Company was provided with a waiver of its required financial covenants through the first quarter of 2022, with the financial covenants then being phased-in over the following four quarters to ease compliance. During the Covenant Relief Period, the Company was subject to various increases in the interest rates governing the debt and to certain restrictions including, but not limited to, restrictions on share repurchases, maintenance of minimum liquidity thresholds, certain required mandatory debt prepayments on asset sales and equity issuances and restrictions on the incurrence of new indebtedness. Deferred Financing Costs and (Loss) Gain on Extinguishment of Debt, net Deferred financing costs and (loss) gain on extinguishment of debt, net were as follows (in thousands): 2022 (1) 2021 (2) 2020 (3) Payments of deferred financing costs $ 7,404 $ 397 $ 4,361 (Loss) gain on extinguishment of debt, net $ (936) $ (57) $ 6,146 (1) During 2022, the Company paid a total of $7.4 million in deferred financing costs related to its Amended Credit Agreement. In addition, the Company recognized a net loss of $0.9 million, comprising losses of $0.2 million related to the accelerated amortization of deferred financing costs associated with the partial repayments of the senior notes and $0.8 million related to lender fees and the accelerated amortization of deferred financing costs associated with the Amended Credit Agreement. These losses were slightly offset by a gain of $0.1 million associated with the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder due to reassessments of the potential employee-related obligations currently held in escrow. (2) During 2021, the Company paid a total of $0.4 million in deferred financing costs related to its 2021 Unsecured Debt Amendments. In addition, the Company recognized a net loss of $0.1 million, comprising a loss of $0.4 million related to the accelerated amortization of deferred financing costs associated with the assignment of the mortgage secured by the Embassy Suites La Jolla to the hotel’s buyer and the repayments of a portion of the term loans, partially offset by a gain of $0.3 million associated with the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder due to reassessments of the potential employee-related obligations currently held in escrow. (3) During 2020, the Company paid a total of $4.4 million in deferred financing costs related to the 2020 Unsecured Debt Amendments. In addition, the Company recognized a net gain on extinguishment of debt of $6.1 million, comprising a gain of $6.4 million related to the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder, partially offset by a loss of $0.2 million related to the Company’s repayment of a portion of the senior notes. Interest Expense Total interest incurred and expensed on the notes payable and finance lease obligation was as follows (in thousands): 2022 2021 2020 Interest expense on debt and finance lease obligation $ 31,713 $ 31,378 $ 45,441 Noncash interest on derivatives, net (2,194) (3,405) 4,740 Amortization of deferred financing costs 2,486 2,925 3,126 Total interest expense $ 32,005 $ 30,898 $ 53,307 |
Other Current Liabilities and O
Other Current Liabilities and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Liabilities and Other Liabilities | |
Other Current Liabilities and Other Liabilities | 8. Other Current Liabilities and Other Liabilities Other Current Liabilities Other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Property, sales and use taxes payable $ 7,500 $ 12,591 Accrued interest 6,915 6,858 Advance deposits 44,224 33,750 Interest rate swap derivative — 744 Management fees payable 1,584 1,691 Other 4,990 3,250 Total other current liabilities $ 65,213 $ 58,884 Other Liabilities Other liabilities consisted of the following (in thousands): December 31, 2022 2021 Deferred revenue $ 6,088 $ 6,598 Deferred rent 2,718 74 Interest rate swap derivative — 1,484 Other 3,151 3,500 Total other liabilities $ 11,957 $ 11,656 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 9. Leases As of both December 31, 2022 and 2021, the Company had operating leases for ground, office, equipment and airspace leases with maturity dates ranging from 2024 through 2097, excluding renewal options. Including renewal options available to the Company, the lease maturity date extends to 2147. Operating leases were included on the Company’s consolidated balance sheets as follows (in thousands): December 31, 2022 2021 Right-of-use assets, net $ 15,025 (1) $ 23,161 Accounts payable and accrued expenses $ 4,652 $ 5,586 Lease obligations, less current portion 14,360 25,120 Total lease obligations $ 19,012 $ 30,706 Weighted average remaining lease term 38 years Weighted average discount rate 5.0 % (1) In 2022, the Company wrote-down its operating lease right-of-use assets, net and recorded an impairment loss of $2.1 million related to the office lease at its former corporate headquarters. (see Note 5). As of December 31, 2021, the Company had an operating lease related to certain office and parking space at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. Upon the hotel’s sale in March 2022 (see Note 4), the Company was no longer obligated under the operating lease and the related $2.3 million right-of-use asset, net and $2.6 million lease obligation were removed from the Company’s consolidated balance sheet. As of December 31, 2021, the Company also had a finance lease related to the building occupied by the Hyatt Centric Chicago Magnificent Mile. The related lease obligation and right-of-use asset, net were classified as held for sale on the accompanying consolidated balance sheet as of December 31, 2021. Upon sale of the hotel in February 2022 (see Note 4), the Company was no longer obligated under the building lease and the related $44.7 million right-of-use asset, net and $15.6 million finance lease obligation were removed from the Company’s consolidated balance sheet. The components of lease expense were as follows (in thousands): 2022 2021 2020 Finance lease cost (1): Amortization of right-of-use asset $ — $ 1,470 $ 1,470 Interest on lease obligations 117 1,404 1,404 Operating lease cost 5,367 5,457 9,300 Variable lease cost (2) 6,853 393 27 Total lease cost $ 12,337 $ 8,724 $ 12,201 (1) Finance lease cost included expenses for the Hyatt Centric Chicago Magnificent Mile’s finance lease obligation before the hotel’s sale in February 2022 (see Note 4). (2) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. At December 31, 2022, future maturities of the Company’s operating lease obligations were as follows (in thousands): 2023 $ 5,432 2024 5,783 2025 (1) 5,854 2026 917 2027 908 Thereafter 2,514 Total lease payments 21,408 Less: interest (2) (3,490) Present value of lease obligations (3) $ 17,918 (1) Operating lease obligations include a ground lease that expires in 2071 and requires a reassessment of rent payments due after 2025, agreed upon by both the Company and the lessor; therefore, no amounts are included in the above table for this ground lease after 2025. (2) Calculated using the respective discount rate for each lease. (3) Operating lease obligations include the lease on the Company’s new corporate headquarters and the sublease on the Company’s previous corporate headquarters, both of which were entered into during the fourth quarter of 2022; however, both the Company and the sublessee had no rights to occupy their respective spaces until January 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 Deferred Tax Assets: Net operating loss carryforward $ 22,383 $ 21,252 Other reserves 561 526 State taxes and other 3,926 2,148 Depreciation 720 515 Total gross deferred tax assets 27,590 24,441 Deferred Tax Liabilities: Amortization (25) (27) Deferred revenue — (51) Other (47) (67) Total gross deferred tax liabilities (72) (145) Less: valuation allowance (27,518) (24,296) Deferred tax assets, net $ — $ — At December 31, 2022 and 2021, the net operating loss carryforwards for federal income tax purposes totaled approximately $101.9 million and $97.4 million, respectively. These losses, which begin to expire in 2031, are available to offset future income through 2042. The Company’s income tax provision, net was included in the consolidated statements of operations as follows (in thousands): 2022 2021 2020 Current: Federal $ — $ — $ 817 State (359) (109) 8 Current income tax (provision) benefit, net (359) (109) 825 Deferred: Federal 2,568 1,262 15,724 State 654 (963) 858 Change in valuation allowance (3,222) (299) (23,997) Deferred income tax provision, net — — (7,415) Income tax provision, net $ (359) $ (109) $ (6,590) The differences between the income tax benefit calculated at the statutory U.S. federal income tax rate of 21% and the actual income tax provision, net were as follows (in thousands): 2022 2021 2020 Expected federal tax expense at statutory rate $ (18,406) $ (7,226) $ (86,369) Tax impact of REIT election 20,981 8,823 103,273 Expected tax benefit of TRS 2,575 1,597 16,904 State income tax benefit, net of federal (provision) 517 (760) 678 Change in valuation allowance (3,222) (299) (23,997) Other permanent items (729) (647) 645 Tax refunds and credits 500 — (820) Income tax provision, net $ (359) $ (109) $ (6,590) The Company’s tax years from 2019 to 2022 will remain open to examination by the federal and state authorities for three and four years, respectively. In 2020, the Company recorded a full valuation allowance on its deferred income tax assets, net. The Company was no longer assured that it would be able to realize these assets due to uncertainties regarding the long-term impact of the COVID-19 pandemic on the Company’s hotel operations. Characterization of Distributions For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. Distributions paid per share were characterized as follows (unaudited): 2022 2021 2020 Amount % Amount % Amount % Common Stock: Ordinary income (1) $ 0.100 100 % $ — — % $ 0.050 100 % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.100 100 % $ — — % $ 0.050 100 % Preferred Stock — Series E Ordinary income (1) $ — — % $ 0.772 100 % $ 1.738 100 % Capital gain — — — — — — Return of capital — — — — — — Total $ — — % $ 0.772 100 % $ 1.738 100 % Preferred Stock — Series F Ordinary income (1) $ — — % $ 0.990 100 % $ 1.613 100 % Capital gain — — — — — — Return of capital — — — — — — Total $ — — % $ 0.990 100 % $ 1.613 100 % Preferred Stock — Series G Ordinary income (1) $ 0.567 100 % $ 0.234 100 % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.567 100 % $ 0.234 100 % $ — — % Preferred Stock — Series H Ordinary income (1) $ 1.531 100 % $ 0.923 100 % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 1.531 100 % $ 0.923 100 % $ — — % Preferred Stock — Series I Ordinary income (1) $ 1.425 100 % $ 0.653 100 % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 1.425 100 % $ 0.653 100 % $ — — % (1) Ordinary income qualifies for Section 199A treatment per the 2017 Tax Cuts and Jobs Act. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity Series E Cumulative Redeemable Preferred Stock In June 2021, the Company redeemed all 4,600,000 shares of its 6.95% Series E preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. An additional redemption charge of $4.0 million was recognized related to the original issuance costs of the Series E preferred stock, which were previously included in additional paid in capital. After the redemption date, the Company has no outstanding shares of Series E preferred stock, and all rights of the holders of such shares were terminated. Because the redemption of the Series E preferred stock was a redemption in full, trading of the Series E preferred stock on the New York Stock Exchange ceased on the June 11, 2021 redemption date. Series F Cumulative Redeemable Preferred Stock In August 2021, the Company redeemed all 3,000,000 shares of its 6.45% Series F preferred stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. An additional redemption charge of $2.6 million was recognized related to the original issuance costs of the Series F preferred stock, which were previously included in additional paid in capital. After the redemption date, the Company has no outstanding shares of Series F preferred stock, and all rights of the holders of such shares were terminated. Because the redemption of the Series F preferred stock was a redemption in full, trading of the Series F preferred stock on the New York Stock Exchange ceased on the August 12, 2021 redemption date. Series G Cumulative Redeemable Preferred Stock Contemporaneous with the Company’s April 2021 purchase of the Montage Healdsburg, the Company issued 2,650,000 shares of its Series G preferred stock to the hotel’s seller as partial payment of the hotel (see Note 3). The Series G preferred stock, which is callable at its $25.00 redemption price plus accrued and unpaid dividends by the Company at any time, accrues dividends at an initial rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s investment in the resort. The annual dividend rate is expected to increase in 2024 to the greater of 3.0% or the rate equal to the Montage Healdsburg’s annual net operating income yield on the Company’s total investment in the resort. The Series G preferred stock is not convertible into any other security. Series H Cumulative Redeemable Preferred Stock In May 2021, the Company issued 4,600,000 shares of its 6.125% Series H preferred stock with a liquidation preference of $25.00. On or after May 24, 2026, the Series H preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a change of control, as defined by the Articles Supplementary for Series H preferred stock, the Company may at its option redeem the Series H preferred stock for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. If the Company chooses not to redeem the Series H preferred stock upon the occurrence of a change of control, holders of the Series H preferred stock may convert their preferred shares into shares of the Company’s common stock. Series I Cumulative Redeemable Preferred Stock In July 2021, the Company issued 4,000,000 shares of its 5.70% Series I preferred stock with a liquidation preference of $25.00. On or after July 16, 2026, the Series I preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a change of control, as defined by the Articles Supplementary for Series I preferred stock, the Company may at its option redeem the Series I preferred stock for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. If the Company chooses not to redeem the Series I preferred stock upon the occurrence of a change of control, holders of the Series I preferred stock may convert their preferred shares into shares of the Company’s common stock. Common Stock Stock Repurchase Program Details of the Company’s repurchases were as follows (dollars in thousands): 2022 2021 2020 Number of common shares repurchased 10,245,324 — 9,770,081 Cost, including fees and commissions $ 108,442 $ — $ 103,894 Number of preferred shares repurchased (1) — — — (1) The redemptions of the Series E preferred stock and the Series F preferred stock in June 2021 and August 2021, respectively, were completed through separate authorizations by the Company’s board of directors. As of December 31, 2022, $391.8 million remains available for repurchase under the stock repurchase program. Future repurchases will depend on various factors, including the Company’s capital needs and restrictions under its various financing agreements, as well as the price of the Company’s common and preferred stock. ATM Agreements J.P. Morgan Securities LLC and Wells Fargo Securities, LLC In accordance with the terms of the ATM Agreements, Details of the Company’s issuances of common stock under the ATM Agreements were as follows (dollars in thousands): 2022 2021 2020 Number of shares issued — 2,913,682 — Gross proceeds $ — $ 38,443 $ — As of December 31, 2022, the Company has $300.0 million authorized for sale under the ATM Agreements. Dividends and Distributions The Company declared dividends and distributions per share on its preferred stock and common stock, respectively, as follows: 2022 2021 2020 Series E preferred stock $ — $ 0.772222 $ 1.7375 Series F preferred stock $ — $ 0.989896 $ 1.6125 Series G preferred stock $ 0.567112 $ 0.233685 $ — Series H preferred stock $ 1.531252 $ 0.923004 $ — Series I preferred stock $ 1.425000 $ 0.653125 $ — Common stock $ 0.100000 $ — $ 0.0500 |
Incentive Award Plan
Incentive Award Plan | 12 Months Ended |
Dec. 31, 2022 | |
Incentive Award Plan | |
Incentive Award Plan | 12. Incentive Award Plan In April 2022, the Company’s stockholders approved the 2022 Incentive Award Plan (the “Plan”), which replaced the Company’s prior long-term incentive plan. The Plan provides for granting discretionary awards to employees, consultants and non-employee directors. The awards may be made in the form of options, restricted stock awards, dividend equivalents, stock payments, restricted stock units, other incentive awards, LTIP units or share appreciation rights. The Company has reserved 3,750,000 common shares for issuance under the Plan, and 3,731,191 shares remain available for future issuance as of December 31, 2022. At December 31, 2022, only shares of restricted stock were issued and outstanding under the Plan. Should a stock grant be forfeited prior to its vesting, the shares covered by the stock grant are added back to the Plan and remain available for future issuance. Shares of common stock tendered or withheld to satisfy the grant or exercise price or tax withholding obligations upon the vesting of a stock grant are not added back to the Plan. Restricted shares and units are measured at fair value on the date of grant and amortized as compensation expense over the relevant requisite service period or derived service period. The Company has elected to account for forfeitures as they occur. As of December 31, 2022, the Company’s issued and outstanding awards consisted of both time-based and performance-based restricted stock grants. The Company’s amortization expense, including forfeitures related to restricted shares was as follows (in thousands): 2022 2021 2020 Amortization expense, including forfeitures $ 10,891 $ 12,788 (1) $ 9,576 Capitalized compensation cost (2) $ 481 $ 490 $ 412 (1) In 2021, the Company recognized $1.1 million in amortization of deferred stock compensation expense related to the departure of its former Chief Executive Officer. (2) The Company capitalizes compensation costs related to restricted shares granted to certain employees whose work is directly related to the Company’s capital investment in hotels. As of December 31, 2022, $12.3 million in compensation expense related to non-vested restricted stock grants remained to be recognized over a weighted-average period of 22 months . Restricted Stock Awards The Company’s restricted stock awards are time-based restricted shares that generally vest over periods ranging from three years to five years from the date of grant. The following is a summary of non-vested restricted stock grant activity: 2022 2021 2020 Weighted Weighted Weighted Average Average Average Shares Price Shares Price Shares Price Outstanding at beginning of year 1,463,315 $ 12.15 1,336,836 $ 14.01 1,217,850 $ 14.88 Granted 555,501 $ 11.41 1,478,874 $ 11.55 852,601 $ 12.91 Vested (694,863) $ 12.50 (1,116,989) $ 13.65 (691,111) $ 14.20 Forfeited (34,807) $ 11.79 (235,406) $ 11.81 (42,504) $ 14.05 Outstanding at end of year 1,289,146 $ 11.65 1,463,315 $ 12.15 1,336,836 $ 14.01 Restricted Stock Units In February and March 2022, the Company granted performance-based restricted stock units that generally vest based on the Company’s total relative shareholder return and the achievement of pre-determined stock price targets during performance periods ranging from two years to five years as follows: 169,832 shares that vest based on the achievement of the Company’s total relative shareholder return following a two year performance period (the “Two Year Performance Period Shares”); 254,748 shares that vest based on the achievement of the Company’s total relative shareholder return following a three year performance period (the “Three Year Performance Period Shares”); and 188,004 shares that vest based on the achievement of pre-determined stock price targets during a five year performance period (the “Five Year Performance Period Shares”). The number of Two Year Performance Period Shares and Three Year Performance Period Shares that may become vested ranges from zero to 200% . Vesting of the Five Year Performance Period Shares is subject to the achievement of five increasing levels of the Company’s closing common stock price per share, from $13.50 to $19.50 , sustained over a 20 consecutive trading day period. Earned Five Year Performance Period Shares will vest on the later to occur of the date on which the stock price target is achieved and the third anniversary of the grant date. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies Management Agreements Management agreements with the Company’s third-party hotel managers currently require the Company to pay between 2.0% and 3.0% of total revenue of the managed hotels to the third-party managers each month as a basic management fee. In addition to basic management fees, provided that certain operating thresholds are met, the Company may also be required to pay incentive management fees to certain of its third-party managers. Total basic management and incentive management fees were included in other property-level expenses on the Company’s consolidated statements of operations as follows (in thousands): 2022 2021 2020 Basic management fees $ 24,858 $ 13,406 $ 7,095 Incentive management fees 6,696 1,806 — Total basic and incentive management fees $ 31,554 $ 15,212 $ 7,095 License and Franchise Agreements The Company has entered into license and franchise agreements related to certain of its hotels. The license and franchise agreements require the Company to, among other things, pay monthly fees that are calculated based on specified percentages of certain revenues. The license and franchise agreements generally contain specific standards for, and restrictions and limitations on, the operation and maintenance of the hotels which are established by the franchisors to maintain uniformity in the system created by each such franchisor. Such standards generally regulate the appearance of the hotel, quality and type of goods and services offered, signage and protection of trademarks. Compliance with such standards may from time to time require the Company to make significant expenditures for capital improvements. Total license and franchise fees were included in franchise costs on the Company’s consolidated statements of operations as follows (in thousands): 2022 2021 2020 Franchise assessments (1) $ 14,690 $ 9,060 $ 5,998 Franchise royalties (2) 1,149 2,294 1,062 Total franchise costs $ 15,839 $ 11,354 $ 7,060 (1) Includes advertising, reservation and frequent guest program assessments. (2) Prior to the sale of the Hyatt Centric Chicago Magnificent Mile in February 2022 (see Note 4), franchise royalties included key money received from the hotel’s franchisor, which the Company was amortizing over the term of the hotel’s franchise agreement. Renovation and Construction Commitments At December 31, 2022, the Company had various contracts outstanding with third parties in connection with the ongoing renovations of certain of its hotel properties. The remaining commitments under these contracts at December 31, 2022 totaled $57.6 million. 401(k) Savings and Retirement Plan The Company’s corporate employees may participate, subject to eligibility, in the Company’s 401(k) Savings and Retirement Plan (the “401(k) Plan”). Qualified employees are eligible to participate in the 401(k) Plan after attaining 21 years of age and after the first of the month following the completion of six calendar months of employment. Three percent of eligible employee annual base earnings are contributed by the Company as a Safe Harbor elective contribution. Safe Harbor contributions made by the Company totaled $0.2 million in each of the years 2022, 2021 and 2020, and were included in corporate overhead expense on the Company’s consolidated statements of operations. The Company is also responsible for funding various retirement plans at certain hotels operated by its management companies. Other property-level expenses on the Company’s consolidated statements of operations includes matching contributions into these various retirement plans of $1.4 million in 2022, $1.0 million in 2021 and $0.8 million in 2020. Collective Bargaining Agreements The Company is subject to exposure to collective bargaining agreements at certain hotels operated by its management companies. At December 31, 2022, approximately 29.4% of workers employed by the Company’s third-party managers were covered by such collective bargaining agreements. Concentration of Risk The concentration of the Company’s hotels in California, Florida, Hawaii and Massachusetts exposes the Company’s business to economic and severe weather conditions, competition and real and personal property tax rates unique to these locales. As of December 31, 2022, 11 of the 15 Hotels were geographically concentrated as follows: Percentage of Percentage of Total Number of Hotels Total Rooms 2022 Revenue California 5 34 % 39 % Florida 3 17 % 14 % Hawaii 1 7 % 18 % Massachusetts 2 19 % 17 % Hurricanes Ida and Ian During the third quarter of 2021, the Company’s two New Orleans hotels were impacted to varying degrees by Hurricane Ida. While both hotels remained open during the storm, they sustained wind-driven damage, rain infiltration and water damage. The Company maintains customary property, casualty, environmental, flood and business interruption insurance at all of its hotels, the coverage of which is subject to certain limitations including higher deductibles in the event of a named storm. The Company is working with its insurers to identify and settle a property damage claim and a business interruption claim at the Hilton New Orleans St. Charles for portions of the costs related to Hurricane Ida. The Company has concluded that the cost to restore damages at the JW Marriott New Orleans will not exceed the hotel’s deductible. During 2022 and 2021, the Company incurred Hurricane Ida-related restoration expenses of $1.6 million and $2.9 million, respectively, at the Hilton New Orleans St. Charles and $0.1 million and $1.3 million, respectively, at the JW Marriott New Orleans. All restoration expenses are included in repairs and maintenance expense on the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021. In addition, in 2021, the Company wrote-off $2.7 million in assets at the Hilton New Orleans St. Charles due to Hurricane Ida-related damage, which is included in impairment losses on the accompanying consolidated statement of operations for the year ended December 31, 2021. Though the property damage claim has not been finalized, the Company recognized an advance payment of $4.4 million from its insurers in 2022 for Hurricane Ida-related property damage expenses previously incurred, which is included in interest and other income (loss) on the accompanying consolidated statement of operations for the year ended December 31, 2022. During 2022, the Company also recognized an advance payment of $1.0 million from its insurers related to its ongoing business interruption claim at the Hilton New Orleans St. Charles, which is included in other operating revenue on the accompanying consolidated statement of operations for the year ended December 31, 2022. In late September 2022, two of the Company’s Florida hotels, the Oceans Edge Resort & Marina and the Renaissance Orlando at SeaWorld® were immaterially impacted by Hurricane Ian. In the fourth quarter of 2022, the Company incurred Hurricane Ian-related restoration expenses of $0.1 million and $0.2 million at the Oceans Edge Resort & Marina and the Renaissance Orlando at SeaWorld®, respectively, which is included in repairs and maintenance expense on the accompanying consolidated statement of operations for the year ended December 31, 2022. The Company anticipates that the costs to restore the damages will not exceed either of the hotels’ property insurance deductible. The Company may incur additional expenses related to Hurricane Ida and Hurricane Ian at the New Orleans and Florida hotels in the future. Any additional expenses will be recognized as incurred, and any additional property damage or business interruption recoveries will not be recognized until final settlements have been reached with the Company’s insurers. Other In accordance with the assignment-in-lieu agreement executed in December 2020 between the Company and the mortgage holder of the Hilton Times Square, the Company was required to retain approximately $11.6 million related to certain current and potential employee-related obligations (the “potential obligation”). As of December 31, 2022, the Company has been relieved of $1.0 million of the potential obligation to the hotel’s employees, $0.2 million in 2022 and $0.8 million in 2021. In addition, the potential obligation is reassessed at the end of every quarter, resulting in gains on extinguishment of debt of $0.1 million in 2022 and $0.3 million in 2021, both of which are included in (loss) gain on extinguishment of debt, net on the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, restricted cash on the accompanying consolidated balance sheets included $10.2 million and $10.4 million, respectively, which will continue to be held in escrow until the potential obligation is resolved. Other current liabilities on the accompanying consolidated balance sheets as of December 31, 2022 and 2021 included the potential obligation balances of $10.2 million and $10.5 million, respectively (see Note 14). Coterminous with the Company’s acquisition of the Four Seasons Resort Napa Valley in 2021, the Company was required to deposit $3.1 million into a restricted bank account owned by the Company, but to which the hotel’s management company, Four Seasons, has sole and unrestricted access to withdraw funds for the purpose of satisfying any potential employee-related obligations that arise in connection with the termination of hotel personnel and any employment claim by hotel personnel (“severance obligations”). Prior to Four Seasons withdrawing funds from the restricted account, the Company has the option to pay the severance obligations using its cash on hand. Should amounts in the restricted bank account be used to fund the severance obligations, the Company will be required to deposit additional funds into the restricted bank account so that the amount in the account totals any estimated future severance obligations. Currently, the estimated future severance obligations total $3.1 million, which is included in restricted cash on the accompanying consolidated balance sheets as of both December 31, 2022 and 2021 (see Note 14); however, the estimated future severance obligations may increase up to a maximum of $5.0 million. The Company has provided customary unsecured indemnities to certain lenders, including in particular, environmental indemnities. The Company has performed due diligence on the potential environmental risks, including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate the Company to reimburse the indemnified parties for damages related to certain environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, the Company could have recourse against other previous owners or a claim against its environmental insurance policies. At December 31, 2022, the Company had $0.2 million of outstanding irrevocable letters of credit to guarantee the Company’s financial obligations related to workers’ compensation insurance programs from prior policy years. The beneficiaries of these letters of credit may draw upon the letters of credit in the event of a contractual default by the Company relating to each respective obligation. No draws have been made through December 31, 2022. The letters of credit are collateralized with $0.2 million held in a restricted bank account owned by the Company, which is included in restricted cash on the accompanying consolidated balance sheets as of both December 31, 2022 and 2021. The Company is subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business, regarding the operation of its hotels, its managers and other Company matters. While it is not possible to ascertain the ultimate outcome of such matters, the Company believes that the aggregate identifiable amount of such liabilities, if any, in excess of amounts covered by insurance will not have a material adverse impact on its financial condition or results of operations. The outcome of claims, lawsuits and legal proceedings, including any potential COVID-19-related litigation, brought against the Company, however, is subject to significant uncertainties. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 14. Subsequent Events Subsequent to December 31, 2022 and through the date of issuance of these financial statements, the Company repurchased 1,149,805 shares of its common stock for $11.0 million, including fees and commissions. In January 2023, Four Seasons consented to release the $3.1 million held in a restricted bank account for the purpose of satisfying any potential severance obligations at the Four Seasons Resort Napa Valley (see Note 13). Concurrently, the Company agreed to provide an unconditional guaranty to Four Seasons for the full and prompt payment of all amounts payable by the Company to Four Seasons relating to employee liability. The $3.1 million was released to the Company in January 2023. In February 2023, the Company was relieved of $9.8 million of its obligation for potential employee-related obligations related to the Hilton Times Square (see Note 13) and the funds were released from escrow to the Company. |
Schedule III-Real Estate and Ac
Schedule III-Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2022 | |
Schedule III-Real Estate and Accumulated Depreciation | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure | SUNSTONE HOTEL INVESTORS, INC. SCHEDULE II I—REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2022 (In thousands) Cost Capitalized Gross Amount at Initial costs Subsequent to Acquisition December 31, 2022 (1) Bldg. and Bldg. and Bldg. and Accum. Date Depr. Encmbr. Land Impr. Land Impr. Land Impr. Totals Depr. Acq./Constr. Life Boston Park Plaza $ — (2) $ 58,527 $ 170,589 $ — $ 128,189 $ 58,527 $ 298,778 $ 357,305 $ 111,078 7/2/2013 5 - 35 Four Seasons Resort Napa Valley — (2) 23,514 128,645 — 1,682 23,514 130,327 153,841 3,941 12/1/2021 5 - 40 Hilton New Orleans St. Charles — (2) 3,698 53,578 — 15,780 3,698 69,358 73,056 14,485 5/1/2013 5 - 35 Hilton San Diego Bayfront 220,000 — 424,992 — 31,798 — 456,790 456,790 99,748 4/15/2011 5 - 57 Hyatt Regency San Francisco — (2) 116,140 131,430 — 105,214 116,140 236,644 352,784 82,611 12/2/2013 5 - 35 JW Marriott New Orleans 76,136 — 73,420 15,147 40,596 15,147 114,016 129,163 37,554 2/15/2011 5 - 35 Marriott Boston Long Wharf — (2) 51,598 170,238 — 77,767 51,598 248,005 299,603 119,968 3/23/2007 5 - 35 Montage Healdsburg — (2) 40,326 194,589 — 1,373 40,326 195,962 236,288 10,032 4/22/2021 5 - 40 Oceans Edge Resort & Marina — (2) 92,510 74,361 2,515 6,576 95,025 80,937 175,962 12,528 7/25/2017 5 - 40 Renaissance Long Beach — (2) 10,437 37,300 — 27,757 10,437 65,057 75,494 34,160 6/23/2005 5 - 35 Renaissance Orlando at SeaWorld ® — (2) — 119,733 30,717 71,124 30,717 190,857 221,574 97,734 6/23/2005 5 - 35 Renaissance Washington DC — (2) 14,563 132,800 — 75,036 14,563 207,836 222,399 104,081 7/13/2005 5 - 35 The Bidwell Marriott Portland — (2) 5,341 20,705 — 27,526 5,341 48,231 53,572 21,734 8/11/2000 5 - 35 The Confidante Miami Beach — (2) 87,791 140,725 — 32 87,791 140,757 228,548 2,078 6/1/2022 3 - 40 Wailea Beach Resort — (2) 119,707 194,137 — 116,079 119,707 310,216 429,923 84,229 7/14/2014 5 - 40 $ 296,136 $ 624,152 $ 2,067,242 $ 48,379 $ 726,529 $ 672,531 $ 2,793,771 $ 3,466,302 $ 835,961 (1) The aggregate cost of properties for federal income tax purposes is approximately $3.8 billion (unaudited) at December 31, 2022. (2) Hotel is pledged as collateral by the Company’s credit facility. As of December 31, 2022, the Company has no outstanding indebtedness under its credit facility. The following is a reconciliation of real estate assets and accumulated depreciation (in thousands): Hotel Properties 2022 2021 2020 Reconciliation of land and buildings and improvements: Balance at the beginning of the year $ 3,334,153 $ 3,094,962 $ 3,551,715 Activity during year: Acquisitions 229,030 387,074 1,296 Improvements 76,230 36,884 47,547 Impairment losses — (3,264) (252,909) Changes in reporting presentation (1) — (53,068) — Dispositions (173,111) (128,435) (252,687) Balance at the end of the year $ 3,466,302 $ 3,334,153 $ 3,094,962 Reconciliation of accumulated depreciation: Balance at the beginning of the year $ 799,641 $ 772,289 $ 888,378 Depreciation 95,495 96,508 101,218 Impairment losses — (579) (137,292) Changes in reporting presentation (1) — (24,144) — Dispositions (59,175) (44,433) (80,015) Balance at the end of the year $ 835,961 $ 799,641 $ 772,289 (1) Changes in reporting presentation in 2021 include the net assets for the Hyatt Centric Chicago Magnificent Mile, which the Company classified as held for sale as of December 31, 2021 due to its sale in February 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements as of December 31, 2022 and 2021, and for the years ended December 31, 2022, 2021 and 2020, include the accounts of the Company, the Operating Partnership, the TRS Lessee, and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes cash on hand and in various bank accounts plus credit card receivables and all short-term investments with an original maturity of three months or less. The Company maintains cash and cash equivalents and certain other financial instruments with various financial institutions. These financial institutions are located throughout the country and the Company’s policy is designed to limit exposure to any one institution. The Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. At December 31, 2022 and 2021, the Company had amounts in banks that were in excess of federally insured amounts. |
Restricted Cash | Restricted Cash Restricted cash primarily includes lender reserves required by the Company’s debt agreements and reserves for operating expenses and capital expenditures required by certain of the Company’s management and franchise agreements. At times, restricted cash also includes hotel acquisition or disposition-related earnest money held in escrow reserves pending completion of the associated transaction. In addition, restricted cash as of December 31, 2022 and 2021 includes $10.2 million and $10.4 million, respectively, held in escrow related to certain current and potential employee-related obligations of one of the Company’s former hotels, $3.1 million held in escrow as of both December 31, 2022 and 2021 for the purpose of satisfying any potential employee-related obligations that arise in connection with the termination of hotel personnel and any employment claim by hotel personnel at the Four Seasons Resort Napa Valley and $0.2 million held as collateral for certain letters of credit as of both December 31, 2022 and 2021 (see Note 13). |
Accounts Receivable | Accounts Receivable Accounts receivable primarily represents receivables from hotel guests who occupy hotel rooms and utilize hotel services. Accounts receivable also includes, among other things, receivables from tenants who lease space in the Company’s hotels. The Company maintains an allowance for doubtful accounts sufficient to cover potential credit losses. |
Acquisitions of Hotel Properties and Other Entities | Acquisitions of Hotel Properties and Other Entities The acquisition of a hotel property or other entity requires an analysis of the transaction to determine if it qualifies as the purchase of a business or an asset. If the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, then the transaction is an asset acquisition. Transaction costs associated with asset acquisitions are capitalized and subsequently depreciated over the life of the related asset, while the same costs associated with a business combination are expensed as incurred and included in corporate overhead on the Company’s consolidated statements of operations. Also, given the subjectivity, business combinations are provided a one-year measurement period to adjust the provisional amounts recognized if the necessary information is not available by the end of the reporting period in which the acquisition occurs; whereas asset acquisitions are not subject to a measurement period. Accounting for the acquisition of a hotel property or other entity requires either allocating the purchase price to the assets acquired and the liabilities assumed in the transaction at their respective relative fair values for an asset acquisition or recording the assets and liabilities at their estimated fair values with any excess consideration above net assets going to goodwill for a business combination. The most difficult estimations of individual fair values are those involving long-lived assets, such as land, buildings, furniture, fixtures and equipment (“FF&E”) and identifiable intangible assets, together with any finance or operating lease right-of-use assets and their related obligations. When the Company acquires a hotel property or other entity, it uses all available information to make these fair value determinations, including discounted cash flow analyses, market comparable data and replacement cost data. In addition, the Company makes significant estimations regarding capitalization rates, discount rates, average daily rates, revenue growth rates and occupancy. The Company also engages independent valuation specialists to assist in the fair value determinations of the long-lived assets acquired and the liabilities assumed. The determination of fair value is subjective and is based in part on assumptions and estimates that could differ materially from actual results in future periods. |
Investments in Hotel Properties | Investments in Hotel Properties Investments in hotel properties, including land, buildings, FF&E and identifiable intangible assets are recorded at their respective relative fair values for an asset acquisition or at their estimated fair values for a business acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation is removed from the Company’s accounts and any resulting gain or loss is included in the consolidated statements of operations. Depreciation expense is based on the estimated life of the Company’s assets. The life of the assets is based on a number of assumptions, including the cost and timing of capital expenditures to maintain and refurbish the Company’s hotels, as well as specific market and economic conditions. Hotel properties are depreciated using the straight-line method over estimated useful lives primarily ranging from five years to 40 years for buildings and improvements and three years to 12 years for FF&E. Intangible assets are amortized using the straight-line method over the shorter of their estimated useful life or over the length of the related agreement. The Company’s investment in hotel properties, net also includes initial franchise fees which are recorded at cost and amortized using the straight-line method over the terms of the franchise agreements ranging from 15 years to 20 years . All other franchise fees that are based on the Company’s results of operations are expensed as incurred. While the Company believes its estimates are reasonable, a change in the estimated lives could affect depreciation expense and net income or the gain or loss on the sale of any of the Company’s hotels. The Company has not changed the useful lives of any of its assets during the periods discussed. Impairment losses are recorded on investments in hotel properties to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows, including potential sale proceeds, expected to be generated by those assets based on the Company’s anticipated investment horizon, are less than the assets’ carrying amount. The Company evaluates its investments in hotel properties to determine if there are indicators of impairment on a quarterly basis. No single indicator would necessarily result in the Company preparing an estimate to determine if a hotel’s future undiscounted cash flows are less than the book value of the hotel. The Company uses judgment to determine if the severity of any single indicator, or the fact there are a number of indicators of less severity that when combined, would result in an indication that a hotel requires an estimate of the undiscounted cash flows to determine if an impairment has occurred. The Company considers indicators of impairment such as, but not limited to, hotel disposition strategy and hold period, a significant decline in operating results not related to renovations or repositioning, physical damage to the property due to unforeseen events such as natural disasters, and an estimate or belief that the fair value is less than net book value. The Company performs an analysis to determine the recoverability of the hotel by comparing the future undiscounted cash flows expected to be generated by the hotel to the hotel’s carrying amount. If a hotel is considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The Company performs a fair value assessment using valuation techniques such as discounted cash flows and comparable sale transactions in the market to estimate the fair value of the hotel and, if appropriate and available, current estimated net sales proceeds from pending offers. The Company’s judgment is required in determining the discount rate, terminal capitalization rate, the estimated growth of revenues and expenses, net operating income and margins, as well as specific market and economic conditions. Based on the Company’s review, no hotels were impaired in 2022. In 2021, the Company recognized a $2.7 million impairment loss on the Hilton New Orleans St. Charles due to Hurricane Ida-related damage at the hotel (see Notes 5 and 13). Fair value represents the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than a forced or liquidation sale. The estimation process involved in determining if assets have been impaired and in the determination of fair value is inherently uncertain because it requires estimates of current market yields as well as future events and conditions. Such future events and conditions include economic and market conditions, as well as the availability of suitable financing. The realization of the Company’s investment in hotel properties is dependent upon future uncertain events and conditions and, accordingly, the actual timing and amounts realized by the Company may be materially different from their estimated fair values. |
Assets Held for Sale | Assets Held for Sale The Company considers a hotel and related assets held for sale if it is probable that the sale will be completed within 12 months , among other requirements. A sale is considered to be probable once the buyer completes its due diligence of the asset, there is an executed purchase and sale agreement between the Company and the buyer, the buyer waives any closing contingencies, there are no third-party approvals necessary and the Company has received a substantial non-refundable deposit. Depreciation ceases when a property is held for sale. Should an impairment loss be required for assets held for sale, the related assets are adjusted to their estimated fair values, less costs to sell. If the sale of the hotel represents a strategic shift that will have a major effect on the Company’s operations and financial results, the hotel qualifies as a discontinued operation, and operating results are removed from income from continuing operations and reported as discontinued operations. The operating results for any such assets for any prior periods presented must also be reclassified as discontinued operations. No hotels were considered held for sale as of December 31, 2022. As of December 31, 2021, one hotel was considered held for sale (see Note 4). |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs consist of loan fees and other financing costs related to the Company’s outstanding indebtedness and credit facility commitments, and are amortized to interest expense over the terms of the related debt or commitment. If a loan is refinanced or paid before its maturity, any unamortized deferred financing costs will generally be expensed unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs related to the Company’s undrawn credit facility are included on the Company’s consolidated balance sheets as an asset, and are amortized ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. Deferred financing costs related to the Company’s outstanding debt are included on the Company’s consolidated balance sheets as a contra-liability (see Note 7), and subsequently amortized ratably over the term of the related debt. |
Interest Rate Derivatives | Interest Rate Derivatives The Company’s objective in holding interest rate derivatives is to manage its exposure to the interest rate risks related to its floating rate debt. To accomplish this objective, the Company uses interest rate caps and swaps, none of which qualifies for effective hedge accounting treatment. The Company records interest rate caps and swaps on the balance sheet at their fair value. Changes in the fair value of derivatives are recorded each period in the consolidated statements of operations. |
Leases | Leases The Company determines if a contract is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Expense for these short-term leases is recognized on a straight-line basis over the lease term. For leases with an initial term greater than 12 months , the Company records a right-of-use (“ROU”) asset and a corresponding lease obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make fixed lease payments as stipulated by the lease. The Company has elected to not separate lease components from nonlease components, resulting in the Company accounting for lease and nonlease components as one single lease component. Leases are accounted for using a dual approach, classifying leases as either operating or financing based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the Company. This classification determines whether the lease expense is recognized on a straight-line basis over the term of the lease for operating leases or based on an effective interest method for finance leases. Upon the sale of the Hyatt Centric Chicago Magnificent Mile and its related finance lease in February 2022 (see Notes 4 and 9), the Company’s leases consist solely of operating leases. Lease ROU assets are recognized at the lease commencement date and include the amount of the initial operating lease obligation, any lease payments made at or before the commencement date, excluding any lease incentives received, and any initial direct costs incurred. For leases that have extension options that the Company can exercise at its discretion, management uses judgment to determine if it is reasonably certain that the Company will in fact exercise such option. If the extension option is reasonably certain to occur, the Company includes the extended term’s lease payments in the calculation of the respective lease liability. None of the Company’s leases contain any material residual value guarantees or material restrictive covenants. Lease obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate (“IBR”) based on information available at the commencement date in determining the present value of lease payments over the lease term. The IBR is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In order to estimate the Company’s IBR, the Company first looks to its own unsecured debt offerings, and adjusts the rate for both length of term and secured borrowing using available market data as well as consultations with leading national financial institutions that are active in the issuance of both secured and unsecured notes. The Company reviews its right-of-use assets for indicators of impairment. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment loss is recognized. The impairment loss recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Based on the Company’s 2022 review, the Company recorded a $2.1 million impairment loss on the ROU asset related to the office lease at its former corporate headquarters (see Notes 5 and 9). No operating or finance lease ROU assets were impaired during 2021. |
Noncontrolling Interest | Noncontrolling Interest In June 2022, the Company acquired the 25.0% outside equity interest in the Hilton San Diego Bayfront (see Note 3). Prior to this acquisition, the noncontrolling interest reported in the accompanying consolidated financial statements consisted of a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interest is reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from the less-than-wholly-owned subsidiary are reported at their consolidated amounts, including both the amounts attributable to the Company and the noncontrolling interest. Income or loss is allocated to the noncontrolling interest based on its weighted average ownership percentage for the applicable period. The consolidated statements of equity include beginning balances, activity for the period and ending balances for each component of stockholders’ equity, noncontrolling interest and total equity. |
Revenue Recognition | Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to hotel guests, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Room revenue and other occupancy based fees are recognized over a guest’s stay at the previously agreed upon daily rate. Some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is recognized by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is recognized by the Company on a gross basis, with the related discount or commission recognized in room expense. A majority of the Company’s hotels participate in frequent guest programs sponsored by the hotel brand owners whereby the hotel allows guests to earn loyalty points during their hotel stay. The Company expenses charges associated with these programs as incurred, and recognizes revenue at the amount it will receive from the brand when a guest redeems their loyalty points by staying at one of the Company’s hotels. In addition, some contracts for rooms or food and beverage services require an advance deposit, which the Company records as deferred revenue (or a contract liability) and recognizes once the performance obligations are satisfied. Cancellation fees and attrition fees, which are charged to groups when they do not fulfill their contracted minimum number of room nights or minimum food and beverage spending requirements, are typically recognized as revenue in the period the Company determines it is probable that a significant reversal in the amount of revenue recognized will not occur, which is generally the period in which these fees are collected. Food and beverage revenue and other ancillary services revenue are generated when a customer chooses to purchase goods or services. The revenue is recognized when the goods or services are provided to the customer at the amount the Company expects to be entitled to in exchange for those goods or services. For ancillary services provided by third parties, the Company assesses whether it is the principal or the agent. If the Company is the principal, revenue is recognized based upon the gross sales price. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. Additionally, the Company collects sales, use, occupancy and other similar taxes from customers at its hotels at the time of purchase, which are not included in revenue. The Company records a liability upon collection of such taxes from the customer, and relieves the liability when payments are remitted to the applicable governmental agency. Trade receivables and contract liabilities consisted of the following (in thousands): December 31, 2022 2021 Trade receivables, net (1) $ 19,751 $ 16,055 Contract liabilities (2) $ 50,219 $ 40,226 (1) Trade receivables, net are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits and are included in either other current liabilities or other liabilities on the accompanying consolidated balance sheets. During 2022 and 2021, the Company recognized approximately $27.9 million and $2.2 million, respectively, in revenue related to its outstanding contract liabilities. |
Advertising and Promotion Costs | Advertising and Promotion Costs Advertising and promotion costs are expensed when incurred. Advertising and promotion costs represent the expense for advertising and reservation systems under the terms of the hotel franchise and brand management agreements and general and administrative expenses that are directly attributable to advertising and promotions. |
Stock Based Compensation | Stock Based Compensation Restricted shares and units are measured at fair value on the date of grant and amortized as compensation expense over the relevant requisite service period or derived service period. The Company has elected to account for forfeitures as they occur. |
Income Taxes | Income Taxes The Company is subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. In addition, the TRS Lessee, which leases the Company’s hotels from the Operating Partnership, is subject to federal and state income taxes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company reviews any uncertain tax positions and, if necessary, records the expected future tax consequences of uncertain tax positions in its consolidated financial statements. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. The Company’s management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which includes federal and certain states. The Company recognizes any penalties and interest related to unrecognized tax benefits in income tax expense in its consolidated statements of operations. |
Dividends | Dividends Under current federal income tax laws related to REITs, the Company is required to distribute at least 90% of its REIT taxable income to its stockholders. Currently, the Company pays quarterly cash dividends to its preferred stockholders as declared by the Company’s board of directors. In the third quarter of 2022, the Company’s board of directors reinstated its quarterly common stock dividends, which were suspended in 2020 due to the COVID-19 pandemic’s negative effect on the Company’s income. Any future common stock dividends will be determined by the Company’s board of directors after considering the Company’s obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and risks affecting its business. The Company’s ability to pay dividends is dependent on the receipt of distributions from the Operating Partnership. |
Earnings Per Share | Earnings Per Share The Company applies the two-class method when computing its earnings per share. Net income per share for each class of stock is calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid), which include the Company’s time-based restricted stock awards, are considered participating securities and are included in the computation of earnings per share. Basic earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards and units, using the more dilutive of either the two-class method or the treasury stock method. The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 Numerator: Net income (loss) $ 90,766 $ 32,995 $ (410,506) (Income) loss from consolidated joint venture attributable to noncontrolling interest (3,477) 1,303 5,817 Preferred stock dividends and redemption charges (14,247) (20,638) (12,830) Distributions paid to participating securities (128) — (69) Undistributed income allocated to participating securities (323) (92) — Numerator for basic and diluted income (loss) attributable to common stockholders $ 72,591 $ 13,568 $ (417,588) Denominator: Weighted average basic common shares outstanding 212,613 216,296 215,934 Unvested restricted stock units 40 — — Weighted average diluted common shares outstanding 212,653 216,296 215,934 Basic income (loss) attributable to common stockholders per common share $ 0.34 $ 0.06 $ (1.93) Diluted income (loss) attributable to common stockholders per common share $ 0.34 $ 0.06 $ (1.93) At December 31, 2022, 2021 and 2020, the Company excluded 1,289,146 , 1,463,315 and 1,336,836 anti-dilutive time-based restricted stock awards, respectively, from its calculation of diluted earnings per share. The unvested time-based restricted stock awards generally vest over periods ranging from three years to five years (see Note 12). The Company also had unvested performance-based restricted stock units as of December 31, 2022 that are not considered participating securities as the awards contain forfeitable rights to dividends or dividend equivalents. The performance-based restricted stock units were granted based on either target market condition thresholds or pre-determined stock price targets. Based on the Company’s common stock performance during 2022, the Company excluded 188,004 anti-dilutive performance-based restricted stock units from its calculations of diluted earnings per share at December 31, 2022. The unvested performance-based restricted stock awards vest over periods ranging from two years to five years (see Note 12). |
Segment Reporting | Segment Reporting The Company considers each of its hotels to be an operating segment, and allocates resources and assesses the operating performance for each hotel. Because all of the Company’s hotels have similar economic characteristics, facilities and services, the hotels have been aggregated into one single reportable segment, hotel ownership. |
New Accounting Standards and Accounting Changes | New Accounting Standards and Accounting Changes In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “ Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 Under the terms of the Amended Credit Agreement (see Note 7), the Company’s credit facility, Term Loan 1 and Term Loan 2 are now subject to SOFR rather than LIBOR. The Company’s two interest rate swap derivatives on its term loans either expired in September 2022 or will expire in January 2023. Currently, the Company’s $220.0 million loan secured by the Hilton San Diego Bayfront and its related interest rate cap derivative are subject to LIBOR. Both the loan and related interest rate cap derivative mature and expire, respectively, in December 2023. The adoptions of ASU No. 2020-04 and ASU No. 2022-06 are not expected to have a material impact on the Company’s consolidated financial statements. |
Organization and Description _2
Organization and Description of Business (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Description of Business | |
Schedule of number of hotels managed by each third-party manager | As of December 31, 2022, the Company owned 15 hotels (the “15 Hotels”) currently held for investment. The Company’s third-party managers included the following: Number of Hotels Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) 6 Hyatt Hotels Corporation 2 Four Seasons Hotels Limited 1 Highgate Hotels L.P. and an affiliate 1 Hilton Worldwide 1 Interstate Hotels & Resorts, Inc. 1 Montage North America, LLC 1 Sage Hospitality Group 1 Singh Hospitality, LLC 1 Total hotels owned as of December 31, 2022 15 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of contract assets and liabilities | Trade receivables and contract liabilities consisted of the following (in thousands): December 31, 2022 2021 Trade receivables, net (1) $ 19,751 $ 16,055 Contract liabilities (2) $ 50,219 $ 40,226 (1) Trade receivables, net are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits and are included in either other current liabilities or other liabilities on the accompanying consolidated balance sheets. |
Schedule of computation of basic and diluted earnings (loss) per common share | The following table sets forth the computation of basic and diluted earnings (loss) per common share (in thousands, except per share data): Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2020 Numerator: Net income (loss) $ 90,766 $ 32,995 $ (410,506) (Income) loss from consolidated joint venture attributable to noncontrolling interest (3,477) 1,303 5,817 Preferred stock dividends and redemption charges (14,247) (20,638) (12,830) Distributions paid to participating securities (128) — (69) Undistributed income allocated to participating securities (323) (92) — Numerator for basic and diluted income (loss) attributable to common stockholders $ 72,591 $ 13,568 $ (417,588) Denominator: Weighted average basic common shares outstanding 212,613 216,296 215,934 Unvested restricted stock units 40 — — Weighted average diluted common shares outstanding 212,653 216,296 215,934 Basic income (loss) attributable to common stockholders per common share $ 0.34 $ 0.06 $ (1.93) Diluted income (loss) attributable to common stockholders per common share $ 0.34 $ 0.06 $ (1.93) |
Investment in Hotel Properties
Investment in Hotel Properties (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investment in Hotel Properties | |
Schedule of investment in hotel properties | Investment in hotel properties, net consisted of the following (in thousands): December 31, 2022 2021 Land $ 672,531 $ 604,692 Buildings and improvements 2,793,771 2,729,461 Furniture, fixtures and equipment 426,189 431,780 Intangible assets 42,187 43,117 Construction in progress 71,689 41,260 Investment in hotel properties, gross 4,006,367 3,850,310 Accumulated depreciation and amortization (1,165,439) (1,130,294) Investment in hotel properties, net $ 2,840,928 $ 2,720,016 |
Schedule of intangible assets included in Investment in Hotel Properties | Intangible assets included in the Company’s investment in hotel properties, net consisted of the following (in thousands): December 31, 2022 2021 Element agreement (1) $ 18,436 $ 18,436 Airspace agreements (2) 1,947 1,916 Advance bookings (3) — 221 Residential program agreements (4) 21,038 21,038 Trade names (5) 121 117 Franchise agreements (6) 126 428 In-place lease agreement (7) 519 — Below market management agreement (8) — 961 42,187 43,117 Accumulated amortization (432) (1,245) $ 41,755 $ 41,872 |
Schedule of amortization expense of intangible assets included in investment in hotel properties | Amortization expense on these intangible assets consisted of the following (in thousands): 2022 2021 2020 Element agreement (1) $ — $ — $ — Airspace agreements (2) — — — Advance bookings (3) 199 22 — Residential program agreements (4) 282 — — Trade names (5) — — — Franchise agreements (6) 11 40 42 In-place lease agreement (7) 58 — — Below market management agreement (8) 15 92 92 $ 565 $ 154 $ 134 (1) The Element agreement as of both December 31, 2022 and 2021 included the exclusive perpetual rights to certain space at the Renaissance Washington DC. The Element has an indefinite useful life and is not amortized. (2) Airspace agreements as of both December 31, 2022 and 2021 consisted of dry slip agreements at the Oceans Edge Resort & Marina. The dry slips at the Oceans Edge Resort & Marina have indefinite useful lives and are not amortized. (3) Advance bookings as of December 31, 2021 consisted of advance deposits related to our acquisition of the Four Seasons Resort Napa Valley. As part of the purchase price allocation, the contractual advance hotel bookings were recorded at a discounted present value based on estimated collectability. They were amortized using the straight-line method over the periods the amounts were expected to be collected and were fully amortized in September 2022. The amortization expense for contractual advance hotel bookings is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (4) Residential program agreements as of both December 31, 2022 and 2021 included $13.7 million and $7.3 million at the Montage Healdsburg and the Four Seasons Resort Napa Valley, respectively. The value of the agreements were determined based on each hotel’s purchase price allocation. The agreements relate to the hotels’ residential rental programs, whereby owners of the adjacent separately owned Montage Residences Healdsburg and Four Seasons Private Residences Napa Valley are eligible to participate in optional rental programs and have access to the hotels’ facilities. In addition, the agreement at the Montage Healdsburg includes a social membership program. The residential program agreement at the Montage Healdsburg will be amortized over the life of the related remaining 25-year Montage Healdsburg management agreement once the hotel begins to recognize revenue related to the programs. In April 2022, the Company began to recognize revenue associated with the residential program agreement at the Four Seasons Resort Napa Valley and began to amortize the agreement using the straight-line method over the life of the related remaining 20-year management agreement. The amortization expense for the Four Seasons Resort Napa Valley is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (5) Trade names as of both December 31, 2022 and 2021 included $0.1 million related to trademarks and bottle labeling used by the Elusa Winery at the Four Seasons Resort Napa Valley. The value of the trade names were determined as part of the hotel’s purchase price allocation. The trade names have indefinite useful lives and are not amortized. (6) Franchise agreements as of both December 31, 2022 and 2021 included $0.1 million related to agreements at the Hilton New Orleans St. Charles and The Bidwell Portland Marriott. Franchise agreements as of December 31, 2021 included an additional $0.3 million related to agreements at the Embassy Suites Chicago and the Hilton Garden Inn Chicago Downtown/Magnificent Mile, both of which were sold in March 2022 (see Note 4). The remaining agreements are amortized using the straight-line method over the lives of the franchise agreements and will be fully amortized in October 2024 and April 2028 for The Bidwell Portland Marriott and the Hilton New Orleans St. Charles, respectively. The amortization expense for the franchise agreements is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (7) The in-place lease agreement as of December 31, 2022 consisted of an agreement at The Confidante Miami Beach. The value of the agreement was determined as part of the hotel’s purchase price allocation. The agreement is amortized using the straight-line method over the remaining non-cancelable term of the lease and will be fully amortized in August 2027. The amortization expense for the in-place lease agreement is included in depreciation and amortization expense in the Company’s consolidated statements of operations. (8) The below market management agreement as of December 31, 2021 consisted of an agreement at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. The agreement was amortized using the straight-line method over the remaining non-cancelable term until the hotel’s sale in March 2022 (see Note 4). |
Schedule of amortization expense for next five years | For the next five years, amortization expense for the intangible assets noted above is expected to be as follows (in thousands): 2023 $ 483 2024 $ 483 2025 $ 481 2026 $ 481 2027 $ 448 |
Disposals (Tables)
Disposals (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Held for sale, not considered a discontinued operation | |
Schedule of assets and liabilities held for sale | The Company classified the assets and liabilities of the Hyatt Centric Chicago Magnificent Mile as held for sale at December 31, 2021 as follows (in thousands): December 31, 2021 Accounts receivable, net $ 287 Prepaid expenses and other current assets 182 Investment in hotel properties, net 31,015 Finance lease right-of-use asset, net 44,712 Other assets, net 112 Assets held for sale, net $ 76,308 Accounts payable and accrued expenses $ 1,076 Accrued payroll and employee benefits 660 Other current liabilities 3,881 Finance lease obligation, less current portion 15,567 Other liabilities 4,029 Liabilities of assets held for sale $ 25,213 |
Schedule of operating results for sold entities | The following table provides summary results of operations for the disposed hotels, which are included in net income (loss) for their respective ownership periods (in thousands): 2022 2021 2020 Total revenues $ 3,234 $ 49,389 $ 49,701 Loss before income taxes (1) $ (3,061) $ (23,516) $ (87,140) Gain on sale of assets $ 22,946 $ 152,524 $ 34,298 (1) Loss before income taxes does not include the gain recognized on the hotel sales. |
2022 Disposals | Sold, not considered a discontinued operation | |
Schedule of proceeds and gain on sale of hotels | The details of the sales were as follows (in thousands): Net Proceeds Net Gain Hyatt Centric Chicago Magnificent Mile $ 67,231 (1) $ 11,336 Embassy Suites Chicago and Hilton Garden Inn Chicago Downtown/Magnificent Mile 128,060 11,610 $ 195,291 $ 22,946 (1) Includes a $4.0 million disposition deposit received from the buyer of the hotel in December 2021. |
2021 Disposals | Sold, not considered a discontinued operation | |
Schedule of proceeds and gain on sale of hotels | The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Westchester (1) $ 17,054 $ 3,733 Embassy Suites La Jolla 166,499 148,791 $ 183,553 $ 152,524 (1) During 2020, the Company wrote down the hotel’s assets and recorded an impairment loss of $18.7 million (see Note 5). |
2020 Disposals | Sold, not considered a discontinued operation | |
Schedule of proceeds and gain on sale of hotels | The details of the sales were as follows (in thousands): Net Proceeds Net Gain Renaissance Harborplace (1) $ 76,855 $ 189 Renaissance Los Angeles Airport 89,882 34,109 $ 166,737 $ 34,298 (1) During 2020, the Company wrote down the hotel’s assets and recorded an impairment loss of $18.1 million (see Note 5). |
Fair Value Measurements and I_2
Fair Value Measurements and Interest Rate Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements and Interest Rate Derivatives | |
Schedule of impairment losses | The Company recorded the following impairment losses, each of which is discussed below, as follows (in thousands): 2022 2021 2020 Hilton New Orleans St. Charles $ — $ 2,685 $ — Renaissance Harborplace — — 18,100 Hilton Times Square — — 107,857 Renaissance Westchester — — 18,685 Corporate headquarters 3,466 — — Abandoned development costs — — 2,302 $ 3,466 $ 2,685 $ 146,944 |
Schedule of principal values and estimated fair values of debt | The Company’s principal balances and fair market values of its consolidated debt were as follows (in thousands): December 31, 2022 December 31, 2021 Carrying Amount (1) Fair Value (2) Carrying Amount (1) Fair Value (2) Debt $ 816,136 $ 809,141 $ 611,437 $ 590,359 (1) The principal balance of debt is presented before any unamortized deferred financing costs. (2) Due to prevailing market conditions and the uncertain economic environment caused by the COVID-19 pandemic, actual interest rates could vary materially from those estimated, which would result in variances in the Company’s calculations of the fair market value of its debt. |
Schedule of interest rate derivatives | The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following (in thousands): Estimated Fair Value of Assets (Liabilities) (1) Strike / Capped Effective Maturity Notional December 31, Hedged Debt Type LIBOR Rate Index Date Date Amount 2022 2021 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2021 December 15, 2022 $ N/A $ N/A $ 3 Hilton San Diego Bayfront Cap 6.000 % 1-Month LIBOR December 9, 2022 December 9, 2023 $ 220,000 60 N/A Term Loan 1 Swap 1.591 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ N/A N/A (744) Term Loan 2 Swap 1.853 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 208 (1,484) $ 268 $ (2,225) (1) The fair values of the cap derivatives were included in prepaid expenses and other current assets on the accompanying consolidated balance sheets as of December 31, 2022 and 2021. The fair value of the Term Loan 2 swap derivative was included in prepaid expenses and other current assets on the accompanying consolidated balance sheet as of December 31, 2022. As of December 31, 2021, the fair value of the Term Loan 1 swap derivative was included in other current liabilities and the fair value of the Term Loan 2 swap derivative was included in other liabilities on the accompanying consolidated balance sheet. |
Schedule of changes in fair value of interest rate derivatives | Noncash changes in the fair values of the Company’s interest rate derivatives resulted in (decreases) increases to interest expense as follows (in thousands): 2022 2021 2020 Noncash interest on derivatives, net $ (2,194) $ (3,405) $ 4,740 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets. | |
Schedule of other assets | Other assets, net consisted of the following (in thousands): December 31, 2022 2021 Property and equipment, net $ 3,685 (1) $ 5,912 Deferred rent on straight-lined third-party tenant leases 2,413 2,455 Liquor licenses 933 826 Other receivables 597 3,914 Other 239 89 Total other assets, net $ 7,867 $ 13,196 (1) In 2022, the Company recorded an impairment loss of $1.4 million on the tenant improvements, net at its corporate headquarters (see Note 5). |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosures | |
Schedule of notes payable | Notes payable consisted of the following (in thousands): December 31, 2022 2021 Note payable requiring payments of interest only, bearing a blended rate of one-month LIBOR plus 130 basis points and plus 105 basis points at December 31, 2022 and 2021, respectively, resulting in effective interest rates of 5.571% and 1.140% at December 31, 2022 and 2021, respectively; matures on December 9, 2023 . The note is collateralized by a first deed of trust on one hotel property. $ 220,000 $ 220,000 Note payable requiring payments of interest and principal, with a fixed rate of 4.15% ; matures on December 11, 2024 . The note is collateralized by a first deed of trust on one hotel property. 76,136 78,137 Unsecured Term Loan 1 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus SOFR and 10 basis points , resulting in an effective interest rate of 5.822% at December 31, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR was swapped to a fixed rate of 1.591% , resulting in an effective interest rate of 3.941% at December 31, 2021. Matures on July 25, 2027 . 175,000 19,400 Unsecured Term Loan 2 requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 135 to 220 basis points, depending on the Company's leverage ratios, plus SOFR and 10 basis points as of December 31, 2022, and a range of 135 to 235 basis points, depending on the Company's leverage ratios, plus the greater of one-month LIBOR or 25 basis points as of December 31, 2021. LIBOR was swapped to a fixed rate of 1.853% , resulting in effective interest rates of 4.269% and 4.203% at December 31, 2022 and 2021, respectively. Matures on January 25, 2028 . 175,000 88,900 Unsecured Series A Senior Notes requiring semi-annual payments of interest only, bearing interest at 5.94% . Matures on January 10, 2026 . 65,000 90,000 Unsecured Series B Senior Notes requiring semi-annual payments of interest only, bearing interest at 6.04% Matures on January 10, 2028 . 105,000 115,000 Total notes payable $ 816,136 $ 611,437 Current portion of notes payable $ 222,086 $ 21,401 Less: current portion of deferred financing costs (56) (707) Carrying value of current portion of notes payable $ 222,030 $ 20,694 Notes payable, less current portion $ 594,050 $ 590,036 Less: long-term portion of deferred financing costs (3,399) (1,295) Carrying value of notes payable, less current portion $ 590,651 $ 588,741 |
Schedule of aggregate future principal maturities and amortization of notes payable | Aggregate future principal maturities and amortization of notes payable at December 31, 2022, are as follows (in thousands): 2023 $ 222,086 2024 74,050 2025 — 2026 65,000 2027 175,000 Thereafter 280,000 Total $ 816,136 |
Schedule of deferred financing costs and (loss) gain on extinguishment of debt | Deferred financing costs and (loss) gain on extinguishment of debt, net were as follows (in thousands): 2022 (1) 2021 (2) 2020 (3) Payments of deferred financing costs $ 7,404 $ 397 $ 4,361 (Loss) gain on extinguishment of debt, net $ (936) $ (57) $ 6,146 (1) During 2022, the Company paid a total of $7.4 million in deferred financing costs related to its Amended Credit Agreement. In addition, the Company recognized a net loss of $0.9 million, comprising losses of $0.2 million related to the accelerated amortization of deferred financing costs associated with the partial repayments of the senior notes and $0.8 million related to lender fees and the accelerated amortization of deferred financing costs associated with the Amended Credit Agreement. These losses were slightly offset by a gain of $0.1 million associated with the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder due to reassessments of the potential employee-related obligations currently held in escrow. (2) During 2021, the Company paid a total of $0.4 million in deferred financing costs related to its 2021 Unsecured Debt Amendments. In addition, the Company recognized a net loss of $0.1 million, comprising a loss of $0.4 million related to the accelerated amortization of deferred financing costs associated with the assignment of the mortgage secured by the Embassy Suites La Jolla to the hotel’s buyer and the repayments of a portion of the term loans, partially offset by a gain of $0.3 million associated with the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder due to reassessments of the potential employee-related obligations currently held in escrow. (3) During 2020, the Company paid a total of $4.4 million in deferred financing costs related to the 2020 Unsecured Debt Amendments. In addition, the Company recognized a net gain on extinguishment of debt of $6.1 million, comprising a gain of $6.4 million related to the assignment-in-lieu of the Hilton Times Square to the hotel’s mortgage holder, partially offset by a loss of $0.2 million related to the Company’s repayment of a portion of the senior notes. |
Schedule of interest expense | Total interest incurred and expensed on the notes payable and finance lease obligation was as follows (in thousands): 2022 2021 2020 Interest expense on debt and finance lease obligation $ 31,713 $ 31,378 $ 45,441 Noncash interest on derivatives, net (2,194) (3,405) 4,740 Amortization of deferred financing costs 2,486 2,925 3,126 Total interest expense $ 32,005 $ 30,898 $ 53,307 |
Other Current Liabilities and_2
Other Current Liabilities and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Liabilities and Other Liabilities | |
Schedule of other current liabilities | Other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Property, sales and use taxes payable $ 7,500 $ 12,591 Accrued interest 6,915 6,858 Advance deposits 44,224 33,750 Interest rate swap derivative — 744 Management fees payable 1,584 1,691 Other 4,990 3,250 Total other current liabilities $ 65,213 $ 58,884 |
Schedule of other liabilities | Other liabilities consisted of the following (in thousands): December 31, 2022 2021 Deferred revenue $ 6,088 $ 6,598 Deferred rent 2,718 74 Interest rate swap derivative — 1,484 Other 3,151 3,500 Total other liabilities $ 11,957 $ 11,656 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of supplemental balance sheet information related to leases | Operating leases were included on the Company’s consolidated balance sheets as follows (in thousands): December 31, 2022 2021 Right-of-use assets, net $ 15,025 (1) $ 23,161 Accounts payable and accrued expenses $ 4,652 $ 5,586 Lease obligations, less current portion 14,360 25,120 Total lease obligations $ 19,012 $ 30,706 Weighted average remaining lease term 38 years Weighted average discount rate 5.0 % (1) In 2022, the Company wrote-down its operating lease right-of-use assets, net and recorded an impairment loss of $2.1 million related to the office lease at its former corporate headquarters. (see Note 5). |
Lease costs | The components of lease expense were as follows (in thousands): 2022 2021 2020 Finance lease cost (1): Amortization of right-of-use asset $ — $ 1,470 $ 1,470 Interest on lease obligations 117 1,404 1,404 Operating lease cost 5,367 5,457 9,300 Variable lease cost (2) 6,853 393 27 Total lease cost $ 12,337 $ 8,724 $ 12,201 (1) Finance lease cost included expenses for the Hyatt Centric Chicago Magnificent Mile’s finance lease obligation before the hotel’s sale in February 2022 (see Note 4). (2) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. |
Summary of Future payments on leases, Operating lease | At December 31, 2022, future maturities of the Company’s operating lease obligations were as follows (in thousands): 2023 $ 5,432 2024 5,783 2025 (1) 5,854 2026 917 2027 908 Thereafter 2,514 Total lease payments 21,408 Less: interest (2) (3,490) Present value of lease obligations (3) $ 17,918 (1) Operating lease obligations include a ground lease that expires in 2071 and requires a reassessment of rent payments due after 2025, agreed upon by both the Company and the lessor; therefore, no amounts are included in the above table for this ground lease after 2025. (2) Calculated using the respective discount rate for each lease. (3) Operating lease obligations include the lease on the Company’s new corporate headquarters and the sublease on the Company’s previous corporate headquarters, both of which were entered into during the fourth quarter of 2022; however, both the Company and the sublessee had no rights to occupy their respective spaces until January 2023. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of deferred tax assets (liabilities) | The significant components of the Company’s deferred tax assets and liabilities were as follows (in thousands): December 31, 2022 2021 Deferred Tax Assets: Net operating loss carryforward $ 22,383 $ 21,252 Other reserves 561 526 State taxes and other 3,926 2,148 Depreciation 720 515 Total gross deferred tax assets 27,590 24,441 Deferred Tax Liabilities: Amortization (25) (27) Deferred revenue — (51) Other (47) (67) Total gross deferred tax liabilities (72) (145) Less: valuation allowance (27,518) (24,296) Deferred tax assets, net $ — $ — |
Schedule of income tax (provision) benefit, net | The Company’s income tax provision, net was included in the consolidated statements of operations as follows (in thousands): 2022 2021 2020 Current: Federal $ — $ — $ 817 State (359) (109) 8 Current income tax (provision) benefit, net (359) (109) 825 Deferred: Federal 2,568 1,262 15,724 State 654 (963) 858 Change in valuation allowance (3,222) (299) (23,997) Deferred income tax provision, net — — (7,415) Income tax provision, net $ (359) $ (109) $ (6,590) |
Schedule of effective income tax rate reconciliation | The differences between the income tax benefit calculated at the statutory U.S. federal income tax rate of 21% and the actual income tax provision, net were as follows (in thousands): 2022 2021 2020 Expected federal tax expense at statutory rate $ (18,406) $ (7,226) $ (86,369) Tax impact of REIT election 20,981 8,823 103,273 Expected tax benefit of TRS 2,575 1,597 16,904 State income tax benefit, net of federal (provision) 517 (760) 678 Change in valuation allowance (3,222) (299) (23,997) Other permanent items (729) (647) 645 Tax refunds and credits 500 — (820) Income tax provision, net $ (359) $ (109) $ (6,590) |
Schedule of characterization of distributions | Characterization of Distributions For income tax purposes, distributions paid consist of ordinary income, capital gains, return of capital or a combination thereof. Distributions paid per share were characterized as follows (unaudited): 2022 2021 2020 Amount % Amount % Amount % Common Stock: Ordinary income (1) $ 0.100 100 % $ — — % $ 0.050 100 % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.100 100 % $ — — % $ 0.050 100 % Preferred Stock — Series E Ordinary income (1) $ — — % $ 0.772 100 % $ 1.738 100 % Capital gain — — — — — — Return of capital — — — — — — Total $ — — % $ 0.772 100 % $ 1.738 100 % Preferred Stock — Series F Ordinary income (1) $ — — % $ 0.990 100 % $ 1.613 100 % Capital gain — — — — — — Return of capital — — — — — — Total $ — — % $ 0.990 100 % $ 1.613 100 % Preferred Stock — Series G Ordinary income (1) $ 0.567 100 % $ 0.234 100 % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 0.567 100 % $ 0.234 100 % $ — — % Preferred Stock — Series H Ordinary income (1) $ 1.531 100 % $ 0.923 100 % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 1.531 100 % $ 0.923 100 % $ — — % Preferred Stock — Series I Ordinary income (1) $ 1.425 100 % $ 0.653 100 % $ — — % Capital gain — — — — — — Return of capital — — — — — — Total $ 1.425 100 % $ 0.653 100 % $ — — % (1) Ordinary income qualifies for Section 199A treatment per the 2017 Tax Cuts and Jobs Act. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity | |
Schedule of repurchases of common and preferred stock | Details of the Company’s repurchases were as follows (dollars in thousands): 2022 2021 2020 Number of common shares repurchased 10,245,324 — 9,770,081 Cost, including fees and commissions $ 108,442 $ — $ 103,894 Number of preferred shares repurchased (1) — — — (1) The redemptions of the Series E preferred stock and the Series F preferred stock in June 2021 and August 2021, respectively, were completed through separate authorizations by the Company’s board of directors. |
Schedule of At the Market common stock issuances | Details of the Company’s issuances of common stock under the ATM Agreements were as follows (dollars in thousands): 2022 2021 2020 Number of shares issued — 2,913,682 — Gross proceeds $ — $ 38,443 $ — |
Schedule of dividends and distributions declared per share | The Company declared dividends and distributions per share on its preferred stock and common stock, respectively, as follows: 2022 2021 2020 Series E preferred stock $ — $ 0.772222 $ 1.7375 Series F preferred stock $ — $ 0.989896 $ 1.6125 Series G preferred stock $ 0.567112 $ 0.233685 $ — Series H preferred stock $ 1.531252 $ 0.923004 $ — Series I preferred stock $ 1.425000 $ 0.653125 $ — Common stock $ 0.100000 $ — $ 0.0500 |
Incentive Award Plan (Tables)
Incentive Award Plan (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Incentive Award Plan | |
Schedule of amortization expense and forfeitures related to restricted shares | As of December 31, 2022, the Company’s issued and outstanding awards consisted of both time-based and performance-based restricted stock grants. The Company’s amortization expense, including forfeitures related to restricted shares was as follows (in thousands): 2022 2021 2020 Amortization expense, including forfeitures $ 10,891 $ 12,788 (1) $ 9,576 Capitalized compensation cost (2) $ 481 $ 490 $ 412 (1) In 2021, the Company recognized $1.1 million in amortization of deferred stock compensation expense related to the departure of its former Chief Executive Officer. (2) The Company capitalizes compensation costs related to restricted shares granted to certain employees whose work is directly related to the Company’s capital investment in hotels. |
Schedule of non-vested restricted stock grant activity | The Company’s restricted stock awards are time-based restricted shares that generally vest over periods ranging from three years to five years from the date of grant. The following is a summary of non-vested restricted stock grant activity: 2022 2021 2020 Weighted Weighted Weighted Average Average Average Shares Price Shares Price Shares Price Outstanding at beginning of year 1,463,315 $ 12.15 1,336,836 $ 14.01 1,217,850 $ 14.88 Granted 555,501 $ 11.41 1,478,874 $ 11.55 852,601 $ 12.91 Vested (694,863) $ 12.50 (1,116,989) $ 13.65 (691,111) $ 14.20 Forfeited (34,807) $ 11.79 (235,406) $ 11.81 (42,504) $ 14.05 Outstanding at end of year 1,289,146 $ 11.65 1,463,315 $ 12.15 1,336,836 $ 14.01 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Schedule of basic and incentive management fees | Total basic management and incentive management fees were included in other property-level expenses on the Company’s consolidated statements of operations as follows (in thousands): 2022 2021 2020 Basic management fees $ 24,858 $ 13,406 $ 7,095 Incentive management fees 6,696 1,806 — Total basic and incentive management fees $ 31,554 $ 15,212 $ 7,095 |
Schedule of license and franchise costs | Total license and franchise fees were included in franchise costs on the Company’s consolidated statements of operations as follows (in thousands): 2022 2021 2020 Franchise assessments (1) $ 14,690 $ 9,060 $ 5,998 Franchise royalties (2) 1,149 2,294 1,062 Total franchise costs $ 15,839 $ 11,354 $ 7,060 (1) Includes advertising, reservation and frequent guest program assessments. (2) Prior to the sale of the Hyatt Centric Chicago Magnificent Mile in February 2022 (see Note 4), franchise royalties included key money received from the hotel’s franchisor, which the Company was amortizing over the term of the hotel’s franchise agreement. |
Schedule of hotel geographic concentration of risk | As of December 31, 2022, 11 of the 15 Hotels were geographically concentrated as follows: Percentage of Percentage of Total Number of Hotels Total Rooms 2022 Revenue California 5 34 % 39 % Florida 3 17 % 14 % Hawaii 1 7 % 18 % Massachusetts 2 19 % 17 % |
Organization and Description _3
Organization and Description of Business (Details) | 12 Months Ended |
Dec. 31, 2022 property | |
Sunstone Hotel Partnership, LLC | |
Organization and Description of Business | |
Controlling interest owned (as a percent) | 100% |
Hotel owned by the Company | |
Organization and Description of Business | |
Number of hotels owned by the Company | 15 |
Number of hotels managed by third parties | 15 |
Hotel owned by the Company | Marriott | |
Organization and Description of Business | |
Number of hotels managed by third parties | 6 |
Hotel owned by the Company | Hyatt Corporation | |
Organization and Description of Business | |
Number of hotels managed by third parties | 2 |
Hotel owned by the Company | Four Seasons Hotels Limited | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Hotel owned by the Company | Highgate Hotels L.P. and an affiliate | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Hotel owned by the Company | Hilton Worldwide | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Hotel owned by the Company | Interstate Hotels & Resorts, Inc | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Hotel owned by the Company | Montage North America, LLC | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Hotel owned by the Company | Sage Hospitality Group | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
Hotel owned by the Company | Singh Hospitality, LLC | |
Organization and Description of Business | |
Number of hotels managed by third parties | 1 |
COVID-19 Operational Update (De
COVID-19 Operational Update (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | |
Business Interruption Losses, Nature of Event | In the fourth quarter of 2022, the Company received business interruption proceeds of $10.0 million from one of its insurers as payment for revenue losses incurred at its hotels due to the COVID-19 pandemic, which is included in other operating revenue in the accompanying consolidated statement of operations for the year ended December 31, 2022. The Company is continuing to pursue its rights of recovery under the associated insurance policy, which has a $25.0 million limit of liability, inclusive of the $10.0 million received in the fourth quarter of 2022. Any additional business interruption proceeds will not be recognized until received, but the Company can make no assurances that any additional amounts will be recovered under the policy |
Business interruption insurance proceeds received | $ 10 |
Other operating | |
Loss Contingencies [Line Items] | |
Gain on Business Interruption Insurance Recovery, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenues |
Maximum | |
Loss Contingencies [Line Items] | |
Insurance policy liability limit | $ 25 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - (Details) | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) property segment | Dec. 31, 2021 USD ($) segment property | Dec. 31, 2020 USD ($) | Jun. 30, 2022 | May 31, 2022 | |
Investments in Hotel Properties | |||||
Impairment losses | $ 3,466,000 | $ 2,685,000 | $ 146,944,000 | ||
Assets Held for Sale | |||||
Maximum time period for sale for classification of asset as held for sale | 12 months | ||||
Number of hotels and/or other assets held for sale | property | 0 | 1 | |||
Leases | |||||
Leases Initial Maximum Term Not Recorded On Balance Sheet | 12 months | ||||
Leases Initial Minimum Term Recorded Right Of Use Assets | 12 months | ||||
Operating lease impairment loss | $ 0 | ||||
Revenue Recognition | |||||
Trade receivables, net | $ 19,751,000 | 16,055,000 | |||
Contract liabilities | 50,219,000 | 40,226,000 | |||
Deferred revenue recognized | $ 27,900,000 | $ 2,200,000 | |||
Segment Reporting | |||||
Number of operating segments | segment | 1 | 1 | |||
Financial standby letter of credit | |||||
Restricted Cash | |||||
Restricted Cash | $ 200,000 | $ 200,000 | |||
Franchise fees | Minimum | |||||
Investments in Hotel Properties | |||||
Estimated useful life | 15 years | ||||
Franchise fees | Maximum | |||||
Investments in Hotel Properties | |||||
Estimated useful life | 20 years | ||||
Buildings and improvements | Minimum | |||||
Investments in Hotel Properties | |||||
Estimated useful life for property, plant and equipment | 5 years | ||||
Buildings and improvements | Maximum | |||||
Investments in Hotel Properties | |||||
Estimated useful life for property, plant and equipment | 40 years | ||||
Furniture, fixtures and equipment | Minimum | |||||
Investments in Hotel Properties | |||||
Estimated useful life for property, plant and equipment | 3 years | ||||
Furniture, fixtures and equipment | Maximum | |||||
Investments in Hotel Properties | |||||
Estimated useful life for property, plant and equipment | 12 years | ||||
Impaired hotels | |||||
Investments in Hotel Properties | |||||
Number of hotels impaired | property | 0 | ||||
Hilton New Orleans St. Charles | |||||
Investments in Hotel Properties | |||||
Impairment losses | 2,685,000 | ||||
Hilton San Diego Bayfront [Member] | |||||
Stockholders' Equity Attributable to Noncontrolling Interest | |||||
Noncontrolling interest percentage acquired | 25% | 25% | |||
Accounting Standards Update and Change in Accounting Principle [Abstract] | |||||
Outstanding balance of secured debt | $ 220,000,000 | ||||
Hilton Times Square | |||||
Restricted Cash | |||||
Restricted Cash | 10,200,000 | 10,400,000 | 11,600,000 | ||
Investments in Hotel Properties | |||||
Impairment losses | $ 107,857,000 | ||||
Four Seasons Resort Napa Valley | |||||
Restricted Cash | |||||
Restricted Cash | 3,100,000 | $ 3,100,000 | |||
Former corporate headquarters | |||||
Investments in Hotel Properties | |||||
Impairment losses | 3,466,000 | ||||
Leases | |||||
Operating lease impairment loss | $ 2,100,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income (loss) | $ 90,766 | $ 32,995 | $ (410,506) |
(Income) loss from consolidated joint venture attributable to noncontrolling interest | (3,477) | 1,303 | 5,817 |
Preferred stock dividends and redemption charges | (14,247) | (20,638) | (12,830) |
Distributions paid to participating securities | (128) | (69) | |
Undistributed income allocated to participating securities | (323) | (92) | |
Numerator for basic and diluted income (loss) attributable to common stockholders | $ 72,591 | $ 13,568 | $ (417,588) |
Denominator: | |||
Weighted average basic common shares outstanding (in shares) | 212,613,000 | 216,296,000 | 215,934,000 |
Unvested restricted stock units | 40,000 | ||
Weighted average diluted common shares outstanding (in shares) | 212,653,000 | 216,296,000 | 215,934,000 |
Basic income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.34 | $ 0.06 | $ (1.93) |
Diluted income (loss) attributable to common stockholders per common share (in dollars per share) | $ 0.34 | $ 0.06 | $ (1.93) |
Restricted Stock [Member] | |||
Denominator: | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,289,146 | 1,463,315 | 1,336,836 |
Performance Shares [Member] | |||
Denominator: | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 188,004 | ||
Minimum | Restricted Stock [Member] | |||
Denominator: | |||
Vesting period | 3 years | ||
Minimum | Performance Shares [Member] | |||
Denominator: | |||
Vesting period | 2 years | ||
Maximum | Restricted Stock [Member] | |||
Denominator: | |||
Vesting period | 5 years | ||
Maximum | Performance Shares [Member] | |||
Denominator: | |||
Vesting period | 5 years |
Investment in Hotel Propertie_2
Investment in Hotel Properties (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Land | $ 672,531 | $ 604,692 |
Buildings and improvements | 2,793,771 | 2,729,461 |
Furniture, fixtures and equipment | 426,189 | 431,780 |
Intangible assets | 42,187 | 43,117 |
Construction in progress | 71,689 | 41,260 |
Investment in hotel properties, gross | 4,006,367 | 3,850,310 |
Accumulated depreciation and amortization | (1,165,439) | (1,130,294) |
Investment in hotel properties, net | 2,840,928 | $ 2,720,016 |
Loss Contingencies | ||
Business interruption insurance proceeds received | $ 10,000 |
Investment in Hotel Propertie_3
Investment in Hotel Properties - Acquisitions (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) room | Dec. 31, 2021 USD ($) room | Apr. 30, 2021 USD ($) room shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 room property | |
Asset Acquisition [Line Items] | ||||||
Acquisition of noncontrolling interest, including transaction costs | $ 104,261 | |||||
Acquisition of noncontrolling interest | 104,261 | |||||
Asset acquisition 2021 member | ||||||
Asset Acquisition [Line Items] | ||||||
Number of hotels acquired | property | 2 | |||||
Additional Paid In Capital | ||||||
Asset Acquisition [Line Items] | ||||||
Acquisition of noncontrolling interest | 65,477 | |||||
Non-Controlling Interest in Consolidated Joint Venture | ||||||
Asset Acquisition [Line Items] | ||||||
Acquisition of noncontrolling interest | $ 38,784 | |||||
Senior unsecured revolving credit facility | ||||||
Asset Acquisition [Line Items] | ||||||
Proceeds from draw on revolving credit facility | $ 230,000 | |||||
The Confidante Miami Beach | Asset acquisition 2022 member | ||||||
Asset Acquisition [Line Items] | ||||||
Number of rooms in acquired hotel | room | 339 | |||||
Asset acquisition, consideration transferred | $ 232,000 | |||||
Proceeds from draw on revolving credit facility | $ 140,000 | |||||
Hilton San Diego Bayfront Outside Equity Interest [Member] | ||||||
Asset Acquisition [Line Items] | ||||||
Noncontrolling interest percentage acquired | 25% | |||||
Hilton San Diego Bayfront Outside Equity Interest [Member] | Asset acquisition 2022 member | ||||||
Asset Acquisition [Line Items] | ||||||
Proceeds from draw on revolving credit facility | $ 90,000 | |||||
Noncontrolling interest percentage acquired | 25% | |||||
Asset Acquisition, Price of Acquisition, Expected | $ 102,000 | |||||
Asset acquisition, consideration transferred, percentage of working capital and cash | 25% | |||||
Acquisition of noncontrolling interest, including transaction costs | $ 2,900 | $ 101,300 | ||||
Hilton San Diego Bayfront Outside Equity Interest [Member] | Additional Paid In Capital | Asset acquisition 2022 member | ||||||
Asset Acquisition [Line Items] | ||||||
Acquisition of noncontrolling interest | 65,500 | |||||
Hilton San Diego Bayfront Outside Equity Interest [Member] | Non-Controlling Interest in Consolidated Joint Venture | Asset acquisition 2022 member | ||||||
Asset Acquisition [Line Items] | ||||||
Acquisition of noncontrolling interest | $ 38,800 | |||||
Hilton San Diego Bayfront [Member] | Hilton San Diego Bayfront [Member] | Asset acquisition 2022 member | ||||||
Asset Acquisition [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 100% | |||||
Montage Healdsburg | Asset acquisition 2021 member | ||||||
Asset Acquisition [Line Items] | ||||||
Number of rooms in acquired hotel | room | 130 | |||||
Asset acquisition, consideration transferred | $ 265,000 | |||||
Montage Healdsburg | Series G Cumulative Redeemable Preferred Stock | Asset acquisition 2021 member | ||||||
Asset Acquisition [Line Items] | ||||||
Asset acquisition, consideration transferred, equity interest issued and issuable | $ 66,300 | |||||
Number of shares of preferred stock issued (in shares) | shares | 2,650,000 | |||||
Four Seasons Resort Napa Valley | Asset acquisition 2021 member | ||||||
Asset Acquisition [Line Items] | ||||||
Number of rooms in acquired hotel | room | 85 | 85 | ||||
Asset acquisition, consideration transferred | $ 177,500 | |||||
Proceeds from draw on revolving credit facility | $ 110,000 |
Investment in Hotel Propertie_4
Investment in Hotel Properties - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets | |||
Intangible assets | $ 42,187 | $ 43,117 | |
Amortization of Intangible Assets | 492 | 63 | $ 41 |
Intangible assets included in hotel properties | |||
Intangible Assets | |||
Intangible assets | 42,187 | 43,117 | |
Accumulated amortization | (432) | (1,245) | |
Intangible assets, net | 41,755 | 41,872 | |
Amortization of Intangible Assets | 565 | 154 | 134 |
Renaissance Washington D.C. | Intangible assets included in hotel properties | Element agreement | |||
Intangible Assets | |||
Element agreement, gross | 18,436 | 18,436 | |
Oceans Edge Resort & Marina | Intangible assets included in hotel properties | Airspace agreements | |||
Intangible Assets | |||
Airspace agreements, gross | 1,947 | 1,916 | |
Napa/Sonoma Hotels Member | Intangible assets included in hotel properties | Residential program agreements | |||
Intangible Assets | |||
Residential program agreements, gross | 21,038 | 21,038 | |
Amortization of Intangible Assets | 282 | ||
Four Seasons Resort Napa Valley | Residential program agreements | |||
Intangible Assets | |||
Residential program agreements, gross | $ 7,300 | $ 7,300 | |
Estimated useful life for finite-lived intangible assets | 20 years | 20 years | |
Four Seasons Resort Napa Valley | Trade names | |||
Intangible Assets | |||
Trade names, gross | $ 100 | $ 100 | |
Four Seasons Resort Napa Valley | Intangible assets included in hotel properties | Advanced bookings | |||
Intangible Assets | |||
Advance bookings, gross | 221 | ||
Amortization of Intangible Assets | 199 | 22 | |
Four Seasons Resort Napa Valley | Intangible assets included in hotel properties | Trade names | |||
Intangible Assets | |||
Trade names, gross | 121 | 117 | |
Montage Healdsburg | Residential program agreements | |||
Intangible Assets | |||
Residential program agreements, gross | $ 13,700 | $ 13,700 | |
Estimated useful life for finite-lived intangible assets | 25 years | 25 years | |
Franchised Hotels Member | Franchise agreements | |||
Intangible Assets | |||
Franchise agreements, gross | $ 100 | $ 100 | |
Franchised Hotels Member | Intangible assets included in hotel properties | Franchise agreements | |||
Intangible Assets | |||
Franchise agreements, gross | 126 | 428 | |
Amortization of Intangible Assets | 11 | 40 | 42 |
The Confidante Miami Beach | Intangible assets included in hotel properties | In-place lease agreements | |||
Intangible Assets | |||
In-place lease agreement, gross | 519 | ||
Amortization of Intangible Assets | 58 | ||
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Franchise agreements | |||
Intangible Assets | |||
Franchise agreements, gross | 300 | ||
Hilton Garden Inn Chicago Downtown/Magnificent Mile | Intangible assets included in hotel properties | Below-market management agreement | |||
Intangible Assets | |||
Below market management agreement, gross | 961 | ||
Amortization of Intangible Assets | $ 15 | $ 92 | $ 92 |
Investment in Hotel Propertie_5
Investment in Hotel Properties - Future Amortization of Intangible Assets (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Investment in Hotel Properties | |
2023 | $ 483 |
2024 | 483 |
2025 | 481 |
2026 | 481 |
2027 | $ 448 |
Disposals (Details)
Disposals (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Detail of Amounts Held for Sale | ||||
Assets held for sale, net | $ 76,308 | $ 76,308 | ||
Liabilities of assets held for sale | 25,213 | 25,213 | ||
Detail of Disposals | ||||
Proceeds from sales of assets | $ 191,291 | 183,553 | $ 166,737 | |
Gain on sale of assets | 22,946 | 152,524 | 34,298 | |
Disposition deposit | 4,000 | |||
Impairment losses | 3,466 | 2,685 | 146,944 | |
Held for sale, not considered a discontinued operation | Hyatt Centric Chicago Magnificent Mile | ||||
Detail of Amounts Held for Sale | ||||
Accounts receivable, net | 287 | 287 | ||
Prepaids and other current assets | 182 | 182 | ||
Investment in hotel properties, net | 31,015 | 31,015 | ||
Finance lease right-of-use asset | 44,712 | 44,712 | ||
Other assets, net | 112 | 112 | ||
Assets held for sale, net | 76,308 | 76,308 | ||
Accounts payable and accrued expenses | 1,076 | 1,076 | ||
Accrued payroll and employee benefits | 660 | 660 | ||
Other current liabilities | 3,881 | 3,881 | ||
Finance lease obligation, less current portion | 15,567 | 15,567 | ||
Other noncurrent liabilities | 4,029 | 4,029 | ||
Liabilities of assets held for sale | 25,213 | 25,213 | ||
Sold, not considered a discontinued operation | ||||
Detail of Disposals | ||||
Gain on sale of assets | 22,946 | 152,524 | 34,298 | |
Total revenues | 3,234 | 49,389 | 49,701 | |
(Loss) income before income taxes | (3,061) | (23,516) | (87,140) | |
Sold, not considered a discontinued operation | 2022 Disposals | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 195,291 | |||
Gain on sale of assets | 22,946 | |||
Sold, not considered a discontinued operation | Hyatt Centric Chicago Magnificent Mile | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 67,231 | |||
Gain on sale of assets | 11,336 | |||
Disposition deposit | $ 4,000 | |||
Sold, not considered a discontinued operation | Chicago Two Pack | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 128,060 | |||
Gain on sale of assets | $ 11,610 | |||
Sold, not considered a discontinued operation | 2021 Disposals | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 183,553 | |||
Gain on sale of assets | 152,524 | |||
Sold, not considered a discontinued operation | Renaissance Westchester | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 17,054 | |||
Gain on sale of assets | 3,733 | |||
Impairment losses | 18,700 | |||
Sold, not considered a discontinued operation | Embassy Suites La Jolla | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 166,499 | |||
Gain on sale of assets | $ 148,791 | |||
Sold, not considered a discontinued operation | 2020 Disposals | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 166,737 | |||
Gain on sale of assets | 34,298 | |||
Sold, not considered a discontinued operation | Renaissance Harborplace | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 76,855 | |||
Gain on sale of assets | 189 | |||
Impairment losses | 18,100 | |||
Sold, not considered a discontinued operation | Renaissance Los Angeles Airport | ||||
Detail of Disposals | ||||
Proceeds from sales of assets | 89,882 | |||
Gain on sale of assets | $ 34,109 |
Fair Value Measurements and I_3
Fair Value Measurements and Interest Rate Derivatives - Fair Value Measurements (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Asset Impairment Charges | |||
Impairment losses | $ 3,466,000 | $ 2,685,000 | $ 146,944,000 |
Operating lease impairment loss | 0 | ||
Former corporate headquarters | |||
Asset Impairment Charges | |||
Impairment losses | 3,466,000 | ||
Operating lease impairment loss | 2,100,000 | ||
Hilton New Orleans St. Charles | |||
Asset Impairment Charges | |||
Impairment losses | $ 2,685,000 | ||
Renaissance Harborplace | |||
Asset Impairment Charges | |||
Impairment losses | 18,100,000 | ||
Hilton Times Square | |||
Asset Impairment Charges | |||
Impairment losses | 107,857,000 | ||
Renaissance Westchester | |||
Asset Impairment Charges | |||
Impairment losses | 18,685,000 | ||
Abandoned hotel project | |||
Asset Impairment Charges | |||
Impairment losses | 2,302,000 | ||
Abandoned hotel project | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 2,300,000 | ||
Level 2 | Former corporate headquarters | |||
Asset Impairment Charges | |||
Impairment losses | 3,500,000 | ||
Level 2 | Former corporate headquarters | Property and Equipment [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 1,400,000 | ||
Level 2 | Former corporate headquarters | Operating Lease Right-Of-Use Asset | |||
Asset Impairment Charges | |||
Operating lease impairment loss | $ 2,100,000 | ||
Level 2 | Renaissance Harborplace | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 18,100,000 | ||
Level 2 | Renaissance Westchester | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 18,700,000 | ||
Level 3 | Hilton Times Square | |||
Asset Impairment Charges | |||
Impairment losses | 107,900,000 | ||
Level 3 | Hilton Times Square | Investment in Hotel Properties [Member] | |||
Asset Impairment Charges | |||
Impairment losses | 89,400,000 | ||
Level 3 | Hilton Times Square | Operating Lease Right-Of-Use Asset | |||
Asset Impairment Charges | |||
Operating lease impairment loss | $ 18,500,000 |
Fair Value Measurements and I_4
Fair Value Measurements and Interest Rate Derivatives - Fair Value of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Percentage of Debt Bearing Fixed Interest Rates | 42.40% | 64% |
Total notes payable | $ 816,136 | $ 611,437 |
Level 3 | ||
Fair value of debt | $ 809,141 | $ 590,359 |
Fair Value Measurements and I_5
Fair Value Measurements and Interest Rate Derivatives - Interest Rate Derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest Rate Derivatives | |||
Interest rate derivative effective date | Dec. 09, 2022 | ||
Noncash interest on derivatives, net | $ (2,194) | $ (3,405) | $ 4,740 |
Hilton San Diego Bayfront mortgage | |||
Interest Rate Derivatives | |||
Strike rate under interest rate cap agreement | 6% | ||
Term loan #2 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |
Interest rate derivative agreements. | |||
Interest Rate Derivatives | |||
Strike rate under interest rate cap agreement | 6% | ||
Fair value of interest rate derivatives, net | $ 268 | $ (2,225) | |
Interest Rate Cap Derivative | Not designated as hedging instrument | Hilton San Diego Bayfront mortgage | |||
Interest Rate Derivatives | |||
Strike rate under interest rate cap agreement | 6% | ||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Interest rate derivative effective date | Dec. 09, 2021 | Dec. 09, 2021 | |
Interest rate derivative maturity date | Dec. 15, 2022 | Dec. 15, 2022 | |
Fair value of interest rate derivatives, net | $ 3 | ||
Interest Rate Swap Derivative | Not designated as hedging instrument | Term loan #1 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.591% | ||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Interest rate derivative effective date | Oct. 29, 2015 | Oct. 29, 2015 | |
Interest rate derivative maturity date | Sep. 02, 2022 | Sep. 02, 2022 | |
Fair value of interest rate derivatives, net | $ (744) | ||
Interest Rate Swap Derivative | Not designated as hedging instrument | Term loan #2 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | |
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
Interest rate derivative effective date | Jan. 29, 2016 | Jan. 29, 2016 | |
Interest rate derivative maturity date | Jan. 31, 2023 | Jan. 31, 2023 | |
Notional amount | $ 100,000 | $ 100,000 | |
Fair value of interest rate derivatives, net | $ 208 | $ (1,484) | |
London Interbank Offered Rate (LIBOR) | Hilton San Diego Bayfront mortgage | |||
Interest Rate Derivatives | |||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |
London Interbank Offered Rate (LIBOR) | Term loan #1 | |||
Interest Rate Derivatives | |||
Fixed rate under interest rate swap agreement | 1.591% | ||
Interest rate, description of reference rate | one-month LIBOR | ||
London Interbank Offered Rate (LIBOR) | Term loan #2 | |||
Interest Rate Derivatives | |||
Interest rate, description of reference rate | one-month LIBOR |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other assets, net | |||
Property and equipment, net | $ 3,685 | $ 5,912 | |
Deferred rent on straight-lined third-party tenant leases | 2,413 | 2,455 | |
Liquor licenses | 933 | 826 | |
Other receivables | 597 | 3,914 | |
Other | 239 | 89 | |
Total other assets, net | 7,867 | 13,196 | |
Impairment losses | 3,466 | $ 2,685 | $ 146,944 |
Former corporate headquarters | |||
Other assets, net | |||
Impairment losses | 3,466 | ||
Former corporate headquarters | Level 2 | |||
Other assets, net | |||
Impairment losses | 3,500 | ||
Former corporate headquarters | Property and Equipment [Member] | Level 2 | |||
Other assets, net | |||
Impairment losses | $ 1,400 |
Notes Payable (Details)
Notes Payable (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 27, 2022 USD ($) | Dec. 31, 2022 USD ($) property | Nov. 30, 2022 | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | |
Notes Payable | |||||
Total notes payable | $ 816,136 | $ 816,136 | $ 611,437 | ||
Current portion of notes payable | 222,086 | 222,086 | 21,401 | ||
Less: current portion of deferred financing costs | (56) | (56) | (707) | ||
Current portion of notes payable, net | 222,030 | 222,030 | 20,694 | ||
Notes payable, less current portion | 594,050 | 594,050 | 590,036 | ||
Less: long-term portion of deferred financing costs | (3,399) | (3,399) | (1,295) | ||
Carrying value of notes payable, less current portion | 590,651 | 590,651 | $ 588,741 | ||
Aggregate Future Principal Maturities and Amortization of Notes Payable | |||||
2023 | 222,086 | 222,086 | |||
2024 | 74,050 | 74,050 | |||
2025 | 0 | 0 | |||
2026 | 65,000 | 65,000 | |||
2027 | 175,000 | 175,000 | |||
Thereafter | 280,000 | 280,000 | |||
Total | $ 816,136 | $ 816,136 | |||
Hilton San Diego Bayfront mortgage | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 1.30% | 1.05% | 1.30% | 1.05% | |
Total interest rate, including effect of derivative | 5.571% | 5.571% | 1.14% | ||
Debt maturity date | Dec. 09, 2023 | Dec. 09, 2023 | |||
Number of hotels provided as collateral | property | 1 | 1 | 1 | ||
Outstanding balance of secured debt | $ 220,000 | $ 220,000 | $ 220,000 | ||
Hilton San Diego Bayfront mortgage | London Interbank Offered Rate (LIBOR) | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Hilton San Diego Bayfront mortgage | Not designated as hedging instrument | Interest Rate Cap Derivative | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
JW Marriott New Orleans Mortgage | |||||
Notes Payable | |||||
Debt maturity date | Dec. 11, 2024 | Dec. 11, 2024 | |||
Number of hotels provided as collateral | property | 1 | 1 | 1 | ||
Fixed interest rate (as a percent) | 4.15% | 4.15% | 4.15% | ||
Outstanding balance of secured debt | $ 76,136 | $ 76,136 | $ 78,137 | ||
Term loan #1 | |||||
Notes Payable | |||||
Debt maturity date | Jul. 25, 2027 | Jul. 25, 2027 | |||
Outstanding balance of unsecured debt | $ 175,000 | $ 175,000 | $ 19,400 | ||
Line of Credit Facility, Interest Rate at Period End | 5.822% | 5.822% | 3.941% | ||
Term loan #1 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||
Notes Payable | |||||
Interest rate, description of reference rate | SOFR and 10 basis points | ||||
Interest rate added to base rate (as a percent) | 0.10% | ||||
Term loan #1 | London Interbank Offered Rate (LIBOR) | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | ||||
Debt instrument variable rate floor | 0.25% | ||||
Fixed rate under interest rate swap agreement | 1.591% | ||||
Term loan #1 | Not designated as hedging instrument | Interest Rate Swap Derivative | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Fixed rate under interest rate swap agreement | 1.591% | ||||
Term loan #1 | Minimum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |||
Term loan #1 | Maximum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||
Term loan #2 | |||||
Notes Payable | |||||
Debt maturity date | Jan. 25, 2028 | Jan. 25, 2028 | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | 1.853% | ||
Outstanding balance of unsecured debt | $ 175,000 | $ 175,000 | $ 88,900 | ||
Line of Credit Facility, Interest Rate at Period End | 4.269% | 4.269% | 4.203% | ||
Term loan #2 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||
Notes Payable | |||||
Interest rate, description of reference rate | SOFR and 10 basis points | ||||
Interest rate added to base rate (as a percent) | 0.10% | ||||
Term loan #2 | London Interbank Offered Rate (LIBOR) | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | ||||
Debt instrument variable rate floor | 0.25% | ||||
Term loan #2 | Not designated as hedging instrument | Interest Rate Swap Derivative | |||||
Notes Payable | |||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||
Fixed rate under interest rate swap agreement | 1.853% | 1.853% | 1.853% | ||
Term loan #2 | Minimum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |||
Term loan #2 | Maximum | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||
Series A Senior Notes | |||||
Notes Payable | |||||
Debt maturity date | Jan. 10, 2026 | Jan. 10, 2026 | |||
Fixed interest rate (as a percent) | 5.94% | 5.94% | 5.94% | ||
Outstanding balance of unsecured debt | $ 65,000 | $ 65,000 | $ 90,000 | ||
Series B Senior Notes | |||||
Notes Payable | |||||
Debt maturity date | Jan. 10, 2028 | Jan. 10, 2028 | |||
Fixed interest rate (as a percent) | 6.04% | 6.04% | 6.04% | ||
Outstanding balance of unsecured debt | $ 105,000 | $ 105,000 | $ 115,000 | ||
Senior unsecured revolving credit facility | |||||
Notes Payable | |||||
Interest rate, description of reference rate | adjusted term SOFR | ||||
Repayment of revolving credit facility | $ 230,000 | ||||
Senior unsecured revolving credit facility | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 1.40% | ||||
Senior unsecured revolving credit facility | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | |||||
Notes Payable | |||||
Interest rate added to base rate (as a percent) | 2.25% |
Notes Payable - 2022 Transactio
Notes Payable - 2022 Transactions (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Jul. 27, 2022 USD ($) | Dec. 31, 2022 USD ($) | Nov. 30, 2022 | Jul. 31, 2022 loan | Jun. 30, 2022 USD ($) | Feb. 28, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Secured Debt [Abstract] | |||||||||||
Payment for interest rate derivative | $ 299,000 | $ 80,000 | $ 111,000 | ||||||||
Hilton San Diego Bayfront mortgage | |||||||||||
Secured Debt [Abstract] | |||||||||||
Term of extension period for secured debt | 1 year | ||||||||||
Debt instrument increase in spread on variable rate | 0.25% | ||||||||||
Interest rate added to base rate (as a percent) | 1.30% | 1.05% | 1.30% | 1.05% | |||||||
Payment for interest rate derivative | $ 300,000 | ||||||||||
Strike rate under interest rate cap agreement | 6% | 6% | |||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 1.30% | 1.05% | 1.30% | 1.05% | |||||||
Line of credit facility | |||||||||||
Debt maturity date | Dec. 09, 2023 | Dec. 09, 2023 | |||||||||
Unsecured Term Loans | |||||||||||
Unsecured Debt | |||||||||||
Write-off of deferred financing costs | $ 300,000 | ||||||||||
Term loan #1 | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | 65,600,000 | ||||||||||
Outstanding balance of unsecured debt | $ 175,000,000 | 19,400,000 | $ 175,000,000 | $ 19,400,000 | |||||||
Line of credit facility | |||||||||||
Debt maturity date | Jul. 25, 2027 | Jul. 25, 2027 | |||||||||
Term loan #2 | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | 11,100,000 | ||||||||||
Outstanding balance of unsecured debt | 175,000,000 | 88,900,000 | $ 175,000,000 | $ 88,900,000 | |||||||
Line of credit facility | |||||||||||
Debt maturity date | Jan. 25, 2028 | Jan. 25, 2028 | |||||||||
Senior Notes | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | $ 35,000,000 | ||||||||||
Write-off of deferred financing costs | $ 200,000 | 200,000 | |||||||||
Series A Senior Notes | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | 25,000,000 | 30,000,000 | |||||||||
Outstanding balance of unsecured debt | 65,000,000 | 90,000,000 | $ 65,000,000 | $ 90,000,000 | |||||||
Line of credit facility | |||||||||||
Debt maturity date | Jan. 10, 2026 | Jan. 10, 2026 | |||||||||
Series B Senior Notes | |||||||||||
Unsecured Debt | |||||||||||
Payments on unsecured debt | $ 10,000,000 | $ 5,000,000 | |||||||||
Outstanding balance of unsecured debt | 105,000,000 | 115,000,000 | $ 105,000,000 | $ 115,000,000 | |||||||
Line of credit facility | |||||||||||
Debt maturity date | Jan. 10, 2028 | Jan. 10, 2028 | |||||||||
Hilton San Diego Bayfront Outside Equity Interest [Member] | |||||||||||
Asset Acquisition Abstract | |||||||||||
Noncontrolling interest percentage acquired | 25% | ||||||||||
Minimum | Term loan #1 | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |||||||||
Minimum | Term loan #2 | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 1.35% | 1.35% | |||||||||
Maximum | Term loan #1 | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||||||||
Maximum | Term loan #2 | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 2.20% | 2.35% | |||||||||
Senior unsecured revolving credit facility | |||||||||||
Unsecured Debt | |||||||||||
Interest rate, description of reference rate | adjusted term SOFR | ||||||||||
Line of credit facility | |||||||||||
Proceeds from draw on revolving credit facility | $ 230,000,000 | ||||||||||
Repayment of revolving credit facility | $ 230,000,000 | ||||||||||
Maximum borrowing capacity for unsecured revolving credit facility | $ 500,000,000 | 500,000,000 | $ 500,000,000 | ||||||||
Number of extension periods for unsecured debt | 2 | ||||||||||
Term of extension period for unsecured debt | 6 months | ||||||||||
Outstanding indebtedness under credit facility | $ 0 | $ 0 | |||||||||
Unsecured Debt | Unsecured Term Loans | |||||||||||
Unsecured Debt | |||||||||||
Write-off of deferred financing costs | $ 800,000 | ||||||||||
Interest rate, description of reference rate | adjusted term SOFR | ||||||||||
Number of unsecured term loans | loan | 2 | ||||||||||
Unsecured Debt | Term loan #1 | |||||||||||
Unsecured Debt | |||||||||||
Outstanding balance of unsecured debt | $ 175,000,000 | 19,400,000 | $ 19,400,000 | ||||||||
Unsecured Debt | Term loan #2 | |||||||||||
Unsecured Debt | |||||||||||
Outstanding balance of unsecured debt | $ 175,000,000 | 88,900,000 | $ 88,900,000 | ||||||||
Unsecured Debt | Minimum | Unsecured Term Loans | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 1.35% | ||||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 1.35% | ||||||||||
Unsecured Debt | Maximum | Unsecured Term Loans | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 2.20% | ||||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 2.20% | ||||||||||
London Interbank Offered Rate (LIBOR) | Hilton San Diego Bayfront mortgage | |||||||||||
Unsecured Debt | |||||||||||
Interest rate, description of reference rate | one-month LIBOR | one-month LIBOR | |||||||||
London Interbank Offered Rate (LIBOR) | Term loan #1 | |||||||||||
Unsecured Debt | |||||||||||
Interest rate, description of reference rate | one-month LIBOR | ||||||||||
London Interbank Offered Rate (LIBOR) | Term loan #2 | |||||||||||
Unsecured Debt | |||||||||||
Interest rate, description of reference rate | one-month LIBOR | ||||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Term loan #1 | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 0.10% | ||||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 0.10% | ||||||||||
Interest rate, description of reference rate | SOFR and 10 basis points | ||||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Term loan #2 | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 0.10% | ||||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 0.10% | ||||||||||
Interest rate, description of reference rate | SOFR and 10 basis points | ||||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Senior unsecured revolving credit facility | Minimum | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 1.40% | ||||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 1.40% | ||||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Senior unsecured revolving credit facility | Maximum | |||||||||||
Secured Debt [Abstract] | |||||||||||
Interest rate added to base rate (as a percent) | 2.25% | ||||||||||
Unsecured Debt | |||||||||||
Interest rate added to base rate (as a percent) | 2.25% | ||||||||||
Interest rate derivative agreements. | |||||||||||
Secured Debt [Abstract] | |||||||||||
Strike rate under interest rate cap agreement | 6% | 6% | |||||||||
Hilton San Diego Bayfront new interest rate cap | Secured debt | Hilton San Diego Bayfront mortgage | |||||||||||
Secured Debt [Abstract] | |||||||||||
Payment for interest rate derivative | $ 100,000 |
Notes Payable - 2021 Transactio
Notes Payable - 2021 Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jul. 27, 2022 | Aug. 28, 2020 | Aug. 11, 2020 | Dec. 31, 2022 | Feb. 28, 2022 | Dec. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instruments [Line Items] | |||||||||||||
Payment for interest rate derivative | $ 299,000 | $ 80,000 | $ 111,000 | ||||||||||
Unsecured Debt | |||||||||||||
Proceeds from credit facility | 230,000,000 | 110,000,000 | 300,000,000 | ||||||||||
Payments on credit facility | 230,000,000 | 110,000,000 | $ 300,000,000 | ||||||||||
Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Outstanding balance of secured debt | $ 220,000,000 | $ 220,000,000 | $ 220,000,000 | $ 220,000,000 | $ 220,000,000 | ||||||||
Payment for interest rate derivative | $ 300,000 | ||||||||||||
Total interest rate, including effect of derivative | 5.571% | 1.14% | 1.14% | 5.571% | 1.14% | ||||||||
Unsecured Term Loans | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Write-off of deferred financing costs | $ 300,000 | ||||||||||||
Unsecured Debt | |||||||||||||
Write-off of deferred financing costs | 300,000 | ||||||||||||
Term loan #1 | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 65,600,000 | ||||||||||||
Outstanding balance of unsecured debt | $ 175,000,000 | 19,400,000 | $ 19,400,000 | $ 175,000,000 | $ 19,400,000 | ||||||||
Term loan #2 | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 11,100,000 | ||||||||||||
Outstanding balance of unsecured debt | 175,000,000 | 88,900,000 | 88,900,000 | 175,000,000 | 88,900,000 | ||||||||
Senior Notes | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Write-off of deferred financing costs | $ 200,000 | $ 200,000 | |||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 35,000,000 | ||||||||||||
Write-off of deferred financing costs | 200,000 | 200,000 | |||||||||||
Series A Senior Notes | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 25,000,000 | 30,000,000 | |||||||||||
Outstanding balance of unsecured debt | 65,000,000 | 90,000,000 | 90,000,000 | 65,000,000 | 90,000,000 | ||||||||
Series B Senior Notes | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | $ 10,000,000 | $ 5,000,000 | |||||||||||
Outstanding balance of unsecured debt | 105,000,000 | 115,000,000 | 115,000,000 | 105,000,000 | 115,000,000 | ||||||||
Senior unsecured revolving credit facility | |||||||||||||
Unsecured Debt | |||||||||||||
Proceeds from credit facility | $ 300,000,000 | 110,000,000 | |||||||||||
Payments on credit facility | $ 11,200,000 | $ 38,800,000 | 110,000,000 | $ 250,000,000 | |||||||||
Outstanding indebtedness under credit facility | $ 0 | $ 0 | |||||||||||
Number of extension periods for unsecured debt | 2 | ||||||||||||
Term of extension period for unsecured debt | 6 months | ||||||||||||
Secured debt | Embassy Suites La Jolla Mortgage | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Assignment of loan in connection with disposition of hotel | 56,600,000 | ||||||||||||
Write-off of deferred financing costs | 100,000 | ||||||||||||
Unsecured Debt | |||||||||||||
Write-off of deferred financing costs | 100,000 | ||||||||||||
Secured debt | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Outstanding balance of secured debt | 220,000,000 | 220,000,000 | 220,000,000 | ||||||||||
Unsecured Debt | Unsecured Term Loans | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Write-off of deferred financing costs | $ 800,000 | ||||||||||||
Unsecured Debt | |||||||||||||
Write-off of deferred financing costs | 800,000 | ||||||||||||
Unsecured Debt | Term loan #1 | |||||||||||||
Unsecured Debt | |||||||||||||
Outstanding balance of unsecured debt | 175,000,000 | 19,400,000 | 19,400,000 | 19,400,000 | |||||||||
Unsecured Debt | Term loan #2 | |||||||||||||
Unsecured Debt | |||||||||||||
Outstanding balance of unsecured debt | $ 175,000,000 | 88,900,000 | $ 88,900,000 | $ 88,900,000 | |||||||||
Hilton San Diego Bayfront new interest rate cap | Secured debt | Entity that owns the Hilton San Diego Bayfront Mortgage Payable | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Payment for interest rate derivative | $ 100,000 | ||||||||||||
Total interest rate, including effect of derivative | 6% | 6% | 6% |
Notes Payable - 2020 Transactio
Notes Payable - 2020 Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Jul. 27, 2022 | Aug. 28, 2020 | Aug. 11, 2020 | Feb. 28, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instruments [Line Items] | |||||||||||||
Payment for interest rate derivative | $ 299,000 | $ 80,000 | $ 111,000 | ||||||||||
Extinguishment of Debt Disclosures [Abstract] | |||||||||||||
Payments of debt extinguishment costs | 27,975,000 | ||||||||||||
Gain (loss) on extinguishment of debt | (936,000) | (57,000) | 6,146,000 | ||||||||||
Unsecured Debt | |||||||||||||
Proceeds from credit facility | 230,000,000 | 110,000,000 | 300,000,000 | ||||||||||
Payments on credit facility | 230,000,000 | 110,000,000 | 300,000,000 | ||||||||||
Hilton Times Square Mortgage | |||||||||||||
Extinguishment of Debt Disclosures [Abstract] | |||||||||||||
Extinguishment of Debt, Amount | $ 77,200,000 | ||||||||||||
Payments of debt extinguishment costs | 20,000,000 | ||||||||||||
Payment concessions upon extinguishment of debt - restricted cash | 3,200,000 | ||||||||||||
Payment concessions upon extinguishment of debt - unrestricted cash | 800,000 | ||||||||||||
Write-off of accrued liabilities in connection with extinguishment of debt | 22,200,000 | ||||||||||||
Gain (loss) on extinguishment of debt | 6,400,000 | ||||||||||||
Loss contingency accrued balance | 11,600,000 | 11,600,000 | |||||||||||
Senior unsecured revolving credit facility | |||||||||||||
Unsecured Debt | |||||||||||||
Proceeds from credit facility | $ 300,000,000 | $ 110,000,000 | |||||||||||
Payments on credit facility | $ 11,200,000 | $ 38,800,000 | $ 110,000,000 | $ 250,000,000 | |||||||||
Renaissance Washington DC Mortgage | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Repayment of mortgage debt | $ 107,900,000 | ||||||||||||
Unsecured Term Loans | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Write-off of deferred financing costs | 300,000 | ||||||||||||
Extinguishment of Debt Disclosures [Abstract] | |||||||||||||
Gain (loss) on extinguishment of debt | (800,000) | ||||||||||||
Unsecured Debt | |||||||||||||
Write-off of deferred financing costs | 300,000 | ||||||||||||
Unsecured Term Loans | Unsecured Debt | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Write-off of deferred financing costs | $ 800,000 | ||||||||||||
Unsecured Debt | |||||||||||||
Write-off of deferred financing costs | 800,000 | ||||||||||||
Term loan #1 | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 65,600,000 | ||||||||||||
Outstanding balance of unsecured debt | 19,400,000 | 19,400,000 | 175,000,000 | 19,400,000 | |||||||||
Term loan #1 | Unsecured Debt | |||||||||||||
Unsecured Debt | |||||||||||||
Outstanding balance of unsecured debt | 175,000,000 | 19,400,000 | 19,400,000 | 19,400,000 | |||||||||
Term loan #2 | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 11,100,000 | ||||||||||||
Outstanding balance of unsecured debt | 88,900,000 | 88,900,000 | 175,000,000 | 88,900,000 | |||||||||
Term loan #2 | Unsecured Debt | |||||||||||||
Unsecured Debt | |||||||||||||
Outstanding balance of unsecured debt | $ 175,000,000 | 88,900,000 | 88,900,000 | 88,900,000 | |||||||||
Senior Notes | |||||||||||||
Debt Instruments [Line Items] | |||||||||||||
Write-off of deferred financing costs | $ 200,000 | $ 200,000 | |||||||||||
Extinguishment of Debt Disclosures [Abstract] | |||||||||||||
Gain (loss) on extinguishment of debt | (200,000) | $ (200,000) | |||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 35,000,000 | ||||||||||||
Write-off of deferred financing costs | 200,000 | 200,000 | |||||||||||
Series A Senior Notes | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | 25,000,000 | 30,000,000 | |||||||||||
Outstanding balance of unsecured debt | 90,000,000 | 90,000,000 | 65,000,000 | 90,000,000 | |||||||||
Series B Senior Notes | |||||||||||||
Unsecured Debt | |||||||||||||
Payments on unsecured debt | $ 10,000,000 | $ 5,000,000 | |||||||||||
Outstanding balance of unsecured debt | $ 115,000,000 | $ 115,000,000 | $ 105,000,000 | $ 115,000,000 |
Notes Payable - Deferred Financ
Notes Payable - Deferred Financing Costs and Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Transactions | |||
Payments of deferred financing costs | $ 7,404 | $ 397 | $ 4,361 |
(Loss) gain on extinguishment of debt, net | (936) | (57) | 6,146 |
Interest Expense | |||
Noncash interest on derivatives, net | (2,194) | (3,405) | 4,740 |
Noncash interest on derivatives and finance lease obligation, net | (2,194) | (3,405) | 4,740 |
Amortization of deferred financing costs | 2,486 | 2,925 | 3,126 |
Total interest expense | 32,005 | 30,898 | 53,307 |
Notes payable. | |||
Interest Expense | |||
Interest expense on debt and finance lease obligation | 31,713 | 31,378 | 45,441 |
Noncash interest on derivatives, net | (2,194) | (3,405) | 4,740 |
Amortization of deferred financing costs | 2,486 | 2,925 | 3,126 |
Total interest expense | 32,005 | 30,898 | 53,307 |
Hilton Times Square Mortgage and Unsecured Debt | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | (900) | ||
Embassy Suites La Jolla Mortgage, Term Loans and Hilton Times Square Mortgage | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | (100) | ||
Hilton Times Square Mortgage and Senior Notes | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | 6,100 | ||
Hilton Times Square Mortgage | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | 100 | ||
Unsecured Debt | |||
Debt Transactions | |||
Payments of deferred financing costs | 7,400 | ||
Unsecured Term Loans | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | (800) | ||
Senior Notes | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | $ (200) | (200) | |
Senior unsecured revolving credit facility | Unsecured Debt | |||
Debt Transactions | |||
Payments of deferred financing costs | 400 | ||
Senior unsecured revolving credit facility | Unsecured Term Loans | |||
Debt Transactions | |||
Payments of deferred financing costs | 4,400 | ||
Secured debt | Embassy Suites La Jolla Mortgage | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | (400) | ||
Secured debt | Hilton Times Square Mortgage | |||
Debt Transactions | |||
(Loss) gain on extinguishment of debt, net | $ 300 | $ 6,400 |
Other Current Liabilities and_3
Other Current Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Current Liabilities | ||
Property, sales and use taxes payable | $ 7,500 | $ 12,591 |
Accrued interest | 6,915 | 6,858 |
Advance deposits | 44,224 | 33,750 |
Interest rate swap derivatives, current | 744 | |
Management fees payable | 1,584 | 1,691 |
Other | 4,990 | 3,250 |
Total other current liabilities | 65,213 | 58,884 |
Other Liabilities | ||
Deferred revenue | 6,088 | 6,598 |
Deferred rent | 2,718 | 74 |
Interest rate swap derivative, noncurrent | 1,484 | |
Other | 3,151 | 3,500 |
Total other liabilities | $ 11,957 | $ 11,656 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Feb. 28, 2022 | |
Operating Leases | ||||
Operating lease right-of-use assets, net | $ 15,025,000 | $ 23,161,000 | ||
Operating lease obligations, current | $ 4,652,000 | $ 5,586,000 | ||
Accounts payable and accrued expenses | Accounts payable and accrued expenses | Accounts payable and accrued expenses | ||
Operating lease obligations, less current portion | $ 14,360,000 | $ 25,120,000 | ||
Total operating lease obligations | $ 19,012,000 | 30,706,000 | ||
Weighted average remaining operating lease term | 38 years | |||
Weighted average operating lease discount rate | 5% | |||
Asset Impairment Charges | ||||
Operating lease impairment loss | $ 0 | |||
Hilton Garden Inn Chicago Downtown/Magnificent Mile | ||||
Operating Leases | ||||
Assignment of operating lease right-of-use asset in connection with sale of hotel | $ 2,300,000 | |||
Assignment of operating lease obligation in connection with sale of hotel | $ 2,600,000 | |||
Hyatt Centric Chicago Magnificent Mile | ||||
Finance Lease | ||||
Assignment of finance lease right-of-use asset in connection with sale of hotel | $ 44,712,000 | $ 44,700,000 | ||
Assignment of finance lease obligation in connection with sale of hotel | 15,569,000 | $ 15,600,000 | ||
Former corporate headquarters | ||||
Asset Impairment Charges | ||||
Operating lease impairment loss | 2,100,000 | |||
Operating lease | Hilton Garden Inn Chicago Downtown/Magnificent Mile | ||||
Operating Leases | ||||
Assignment of operating lease right-of-use asset in connection with sale of hotel | 2,275,000 | |||
Assignment of operating lease obligation in connection with sale of hotel | $ 2,609,000 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease Cost | |||
Amortization of right-of-use asset | $ 1,470 | $ 1,470 | |
Interest on lease obligation | $ 117 | 1,404 | 1,404 |
Operating lease cost | 5,367 | 5,457 | 9,300 |
Variable lease cost | 6,853 | 393 | 27 |
Total lease cost | $ 12,337 | $ 8,724 | $ 12,201 |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 5,432 | |
2024 | 5,783 | |
2025 | 5,854 | |
2026 | 917 | |
2027 | 908 | |
Thereafter | 2,514 | |
Total lease payments | 21,408 | |
Less: interest | (3,490) | |
Present value of lease obligations | 19,012 | $ 30,706 |
Present value of lease obligations due in subsequent years | $ 17,918 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred tax assets | |||
Net operating loss carryforward | $ 22,383 | $ 21,252 | |
Other reserves | 561 | 526 | |
State taxes and other | 3,926 | 2,148 | |
Depreciation | 720 | 515 | |
Total gross deferred tax assets | 27,590 | 24,441 | |
Deferred tax liabilities | |||
Amortization | (25) | (27) | |
Deferred revenue | (51) | ||
Other | (47) | (67) | |
Total gross deferred tax liabilities | (72) | (145) | |
Valuation allowance | (27,518) | (24,296) | |
Deferred tax assets, net | |||
Net operating loss carryforwards for federal income tax purposes | 101,900 | 97,400 | |
Current income tax (provision) benefit, net: | |||
Federal | $ 817 | ||
State and Local tax | (359) | (109) | 8 |
Current income tax (provision) benefit, net | (359) | (109) | 825 |
Deferred income tax provision, net: | |||
Federal | 2,568 | 1,262 | 15,724 |
State | 654 | (963) | 858 |
Change in valuation allowance | (3,222) | (299) | (23,997) |
Deferred income tax provision, net | (7,415) | ||
Income tax (provision) benefit, net | $ (359) | $ (109) | $ (6,590) |
Corporate tax rate (as a percent) | 21% | 21% | 21% |
Effective Income Tax Rate Reconciliation, Amount | |||
Expected federal tax expense at statutory rate | $ (18,406) | $ (7,226) | $ (86,369) |
Tax impact of REIT election | 20,981 | 8,823 | 103,273 |
Expected tax benefit (provision) of TRS | 2,575 | 1,597 | 16,904 |
State income tax benefit, net of federal (provision) | 517 | (760) | 678 |
Change in valuation allowance | (3,222) | (299) | (23,997) |
Other permanent items | (729) | (647) | 645 |
Tax refunds and credits | 500 | (820) | |
Income tax provision, net | $ (359) | $ (109) | $ (6,590) |
Income Taxes - Characterization
Income Taxes - Characterization of Distributions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Common Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.100 | $ 0.050 | |
Total (in dollars per share) | $ 0.100 | $ 0.050 | |
Ordinary income (as a percent) | 100% | 100% | |
Total (as a percent) | 100% | 100% | |
Series E Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.772 | $ 1.738 | |
Total (in dollars per share) | $ 0.772 | $ 1.738 | |
Ordinary income (as a percent) | 100% | 100% | |
Total (as a percent) | 100% | 100% | |
Series F Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.990 | $ 1.613 | |
Total (in dollars per share) | $ 0.990 | $ 1.613 | |
Ordinary income (as a percent) | 100% | 100% | |
Total (as a percent) | 100% | 100% | |
Series G Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 0.567 | $ 0.234 | |
Total (in dollars per share) | $ 0.567 | $ 0.234 | |
Ordinary income (as a percent) | 100% | 100% | |
Total (as a percent) | 100% | 100% | |
Series H Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 1.531 | $ 0.923 | |
Total (in dollars per share) | $ 1.531 | $ 0.923 | |
Ordinary income (as a percent) | 100% | 100% | |
Total (as a percent) | 100% | 100% | |
Series I Cumulative Redeemable Preferred Stock | |||
Income Taxes | |||
Ordinary income (in dollars per share) | $ 1.425 | $ 0.653 | |
Total (in dollars per share) | $ 1.425 | $ 0.653 | |
Ordinary income (as a percent) | 100% | 100% | |
Total (as a percent) | 100% | 100% |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 12, 2021 | Jun. 11, 2021 | Jul. 31, 2021 | May 31, 2021 | Apr. 30, 2021 | Dec. 31, 2024 | Dec. 31, 2021 | |
Stockholders' equity | |||||||||
Preferred stock redemption charges | $ 6,640 | ||||||||
Series E Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Redemption of preferred stock (in shares) | 4,600,000 | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.95% | ||||||||
Redemption price (in dollars per share) | $ 25 | ||||||||
Preferred stock redemption charges | $ 4,000 | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 0 | ||||||||
Series F Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Redemption of preferred stock (in shares) | 3,000,000 | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.45% | ||||||||
Redemption price (in dollars per share) | $ 25 | ||||||||
Preferred stock redemption charges | $ 2,600 | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 0 | ||||||||
Series G Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 2,650,000 | 2,650,000 | 2,650,000 | ||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | ||||||
Series G Cumulative Redeemable Preferred Stock | Montage Healdsburg | |||||||||
Stockholders' equity | |||||||||
Redemption price (in dollars per share) | $ 25 | ||||||||
Number of shares of preferred stock issued (in shares) | 2,650,000 | ||||||||
Series G Cumulative Redeemable Preferred Stock | Maximum | Montage Healdsburg | |||||||||
Stockholders' equity | |||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 3% | ||||||||
Series H Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 6.125% | 6.125% | 6.125% | ||||||
Redemption price (in dollars per share) | $ 25 | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,600,000 | 4,600,000 | 4,600,000 | ||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | ||||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | $ 25 | |||||
Series I Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent) | 5.70% | 5.70% | 5.70% | ||||||
Redemption price (in dollars per share) | $ 25 | ||||||||
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares) | 4,000,000 | 4,000,000 | 4,000,000 | ||||||
Number of shares of preferred stock issued (in shares) | 4,000,000 | ||||||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | $ 25 | |||||
Preferred Stock | Series E Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Redemption of preferred stock (in shares) | (4,600,000) | ||||||||
Preferred Stock | Series F Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Redemption of preferred stock (in shares) | (3,000,000) | ||||||||
Preferred Stock | Series H Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Number of shares of preferred stock issued (in shares) | 4,600,000 | ||||||||
Preferred Stock | Series I Cumulative Redeemable Preferred Stock | |||||||||
Stockholders' equity | |||||||||
Number of shares of preferred stock issued (in shares) | 4,000,000 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 28, 2022 | Feb. 28, 2021 | Feb. 28, 2017 | |
Stockholders' equity | ||||||
Proceeds from common stock offerings | $ 38,443 | |||||
Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Repurchase Program, remaining authorized capacity | $ 391,800 | |||||
At The Market | ||||||
Stockholders' equity | ||||||
ATM Program, number of shares sold or issued (in shares) | 2,913,682 | |||||
Proceeds from common stock offerings | $ 38,443 | |||||
ATM Program, remaining amount authorized for issuance | $ 300,000 | |||||
Maximum | Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Stock Repurchase Program, maximum amount authorized for repurchase | $ 500,000 | |||||
Maximum | At The Market | ||||||
Stockholders' equity | ||||||
ATM Program, maximum amount authorized for issuance | $ 300,000 | $ 300,000 | ||||
Common Stock | Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Repurchase Program, number of shares repurchased (in shares) | 10,245,324 | 9,770,081 | ||||
Repurchase Program, value of shares repurchased | $ 108,442 | $ 103,894 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Dividends | |||
Common stock dividends declared (in dollars per share) | $ 0.10 | $ 0.05 | |
Series E Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | $ 0.772222 | 1.7375 | |
Series F Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.989896 | 1.6125 | |
Series G Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 0.567112 | 0.233685 | |
Series H Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 1.531252 | 0.923004 | |
Series I Cumulative Redeemable Preferred Stock | |||
Dividends | |||
Preferred stock dividends and dividends payable (in dollars per share) | 1.425000 | $ 0.653125 | |
Common Stock | |||
Dividends | |||
Common stock dividends declared (in dollars per share) | $ 0.100000 | $ 0.0500 |
Incentive Award Plan (Details)
Incentive Award Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Compensation Expense and Forfeitures | |||||
Capitalized compensation cost | $ 481 | $ 490 | $ 412 | ||
Restricted Stock [Member] | Minimum | |||||
Incentive Award Plan | |||||
Vesting period | 3 years | ||||
Restricted Stock [Member] | Maximum | |||||
Incentive Award Plan | |||||
Vesting period | 5 years | ||||
Performance Shares [Member] | Minimum | |||||
Incentive Award Plan | |||||
Vesting period | 2 years | ||||
Performance Shares [Member] | Maximum | |||||
Incentive Award Plan | |||||
Vesting period | 5 years | ||||
Performance Shares [Member] | Total Relative Shareholder Return Two Year Vest | |||||
Incentive Award Plan | |||||
Vesting period | 2 years | ||||
Non-Vested Stock Grants, Number of Shares | |||||
Granted (in shares) | 169,832 | ||||
Performance Shares [Member] | Total Relative Shareholder Return Three Year Vest | |||||
Incentive Award Plan | |||||
Vesting period | 3 years | ||||
Non-Vested Stock Grants, Number of Shares | |||||
Granted (in shares) | 254,748 | ||||
Performance Shares [Member] | Stock Price Targets Five Year Vest | |||||
Incentive Award Plan | |||||
Vesting period | 5 years | ||||
Number Of Consecutive Trading Day Period | 20 | ||||
Non-Vested Stock Grants, Number of Shares | |||||
Granted (in shares) | 188,004 | ||||
Performance Shares [Member] | Stock Price Targets Five Year Vest | Minimum | |||||
Incentive Award Plan | |||||
Share-Based Compensation Average Closing Sales Price (in dollars per share) | $ 13.50 | ||||
Performance Shares [Member] | Stock Price Targets Five Year Vest | Maximum | |||||
Incentive Award Plan | |||||
Share-Based Compensation Average Closing Sales Price (in dollars per share) | $ 19.50 | ||||
Performance Shares [Member] | Total Relative Shareholder Return Two Year and Three Year Vest | |||||
Incentive Award Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights | zero to 200% | ||||
Performance Shares [Member] | Total Relative Shareholder Return Two Year and Three Year Vest | Minimum | |||||
Incentive Award Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 0% | ||||
Performance Shares [Member] | Total Relative Shareholder Return Two Year and Three Year Vest | Maximum | |||||
Incentive Award Plan | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 200% | ||||
Restricted Shares and Performance awards | |||||
Incentive Award Plan | |||||
Number of common shares reserved for issuance under the Incentive Award Plan (in shares) | 3,750,000 | 3,750,000 | |||
Number of shares available for future issuance (in shares) | 3,731,191 | 3,731,191 | |||
Compensation Expense and Forfeitures | |||||
Amortization expense, including forfeitures | $ 10,891 | 12,788 | 9,576 | ||
Capitalized compensation cost | $ 481 | $ 490 | $ 412 | ||
Non-Vested Stock Grants, Number of Shares | |||||
Outstanding at the beginning of the period (in shares) | 1,463,315 | 1,463,315 | 1,336,836 | 1,217,850 | |
Granted (in shares) | 555,501 | 1,478,874 | 852,601 | ||
Vested (in shares) | (694,863) | (1,116,989) | (691,111) | ||
Forfeited (in shares) | (34,807) | (235,406) | (42,504) | ||
Outstanding at the end of the period (in shares) | 1,289,146 | 1,289,146 | 1,463,315 | 1,336,836 | |
Non-Vested Stock Grants, Weighted Average Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 12.15 | $ 12.15 | $ 14.01 | $ 14.88 | |
Granted (in dollars per share) | 11.41 | 11.55 | 12.91 | ||
Vested (in dollars per share) | 12.50 | 13.65 | 14.20 | ||
Forfeited (in dollars per share) | 11.79 | 11.81 | 14.05 | ||
Outstanding at the end of the period (in dollars per share) | $ 11.65 | $ 11.65 | $ 12.15 | $ 14.01 | |
Compensation cost to be recognized related to non-vested restricted stock grants | $ 12,300 | $ 12,300 | |||
Weighted average period over which compensation cost will be recognized | 22 months | ||||
Restricted Shares and Performance awards | Former Chief Executive Officer | |||||
Compensation Expense and Forfeitures | |||||
Amortization expense, including forfeitures | $ 1,100 |
Commitments and Contingencies -
Commitments and Contingencies - Management Fees, Franchise Costs and Renovation Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic and incentive management fees incurred | |||
Other property-level expenses | $ 113,336 | $ 71,415 | $ 49,854 |
License and Franchise Agreements | |||
Franchise assessments | 14,690 | 9,060 | 5,998 |
Franchise royalties | 1,149 | 2,294 | 1,062 |
Franchise costs | 15,839 | 11,354 | 7,060 |
Basic management fees | |||
Basic and incentive management fees incurred | |||
Other property-level expenses | 24,858 | 13,406 | 7,095 |
Incentive management fees | |||
Basic and incentive management fees incurred | |||
Other property-level expenses | 6,696 | 1,806 | |
Total basic and incentive management fees | |||
Basic and incentive management fees incurred | |||
Other property-level expenses | $ 31,554 | $ 15,212 | $ 7,095 |
Minimum | |||
Management Agreements | |||
Basic management fees (as a percent) | 2% | ||
Maximum | |||
Management Agreements | |||
Basic management fees (as a percent) | 3% | ||
Renovation and Construction Commitments | |||
Renovation and Construction Commitments | |||
Remaining construction commitments | $ 57,600 |
Commitments and Contingencies_2
Commitments and Contingencies - Other Commitments and Concentration of Risk (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2022 USD ($) property | Dec. 31, 2022 USD ($) property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 USD ($) property | |
Loss Contingencies | ||||||
Proceeds from property insurance | $ 4,369 | |||||
Business interruption insurance proceeds received | $ 10,000 | |||||
Impairment losses | 3,466 | $ 2,685 | $ 146,944 | |||
Gain on extinguishment of debt | $ (936) | (57) | 6,146 | |||
Term of unsecured environmental indemnities | 0 years | |||||
Damage limitation of unsecured environmental indemnities | $ 0 | |||||
Payments on credit facility | $ 230,000 | $ 110,000 | $ 300,000 | |||
Safe Harbor Plan | ||||||
401(k) Savings and Hotel Retirement Plans | ||||||
Age required for participating in 401(k) plan | 21 years | 21 years | 21 years | |||
Employment period required for participating in 401(k) plan | 6 months | 6 months | 6 months | |||
Percentage of eligible employee annual base earnings contributed by the company (as a percent) | 3% | 3% | 3% | |||
Contributions to retirement plans | $ 200 | $ 200 | $ 200 | |||
Retirement plans | ||||||
401(k) Savings and Hotel Retirement Plans | ||||||
Contributions to retirement plans | 1,400 | 1,000 | 800 | |||
Hilton New Orleans St. Charles | ||||||
Loss Contingencies | ||||||
Impairment losses | 2,685 | |||||
Hilton Times Square | ||||||
Loss Contingencies | ||||||
Impairment losses | 107,857 | |||||
Loss contingency accrued balance | $ 10,200 | 10,200 | 10,200 | 10,500 | $ 10,200 | |
Loss contingency payment | 200 | 800 | 1,000 | |||
Restricted Cash | 10,200 | 10,200 | 10,200 | 10,400 | $ 11,600 | 10,200 |
Gain on extinguishment of debt | 100 | 300 | ||||
Four Seasons Resort Napa Valley | ||||||
Loss Contingencies | ||||||
Loss contingency accrued balance | 3,100 | 3,100 | 3,100 | 3,100 | 3,100 | |
Restricted Cash | 3,100 | 3,100 | 3,100 | 3,100 | 3,100 | |
Four Seasons Resort Napa Valley | Maximum | ||||||
Loss Contingencies | ||||||
Estimated liability | 5,000 | 5,000 | 5,000 | 5,000 | ||
Maximum estimated future severance obligations | $ 5,000 | 5,000 | $ 5,000 | 5,000 | ||
Workforce Subject to Collective Bargaining Arrangements | Collective Bargaining Agreements | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 29.40% | |||||
Number of rooms | Geographic Concentration Risk [Member] | California | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 34% | |||||
Number of rooms | Geographic Concentration Risk [Member] | Florida | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 17% | |||||
Number of rooms | Geographic Concentration Risk [Member] | Hawaii | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 7% | |||||
Number of rooms | Geographic Concentration Risk [Member] | Massachusetts | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 19% | |||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | California | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 39% | |||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Florida | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 14% | |||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Hawaii | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 18% | |||||
Revenue generated by hotels | Geographic Concentration Risk [Member] | Massachusetts | ||||||
Concentration of Risk | ||||||
Concentration risk (as a percent) | 17% | |||||
Financial standby letter of credit | ||||||
Loss Contingencies | ||||||
Restricted Cash | $ 200 | 200 | $ 200 | 200 | 200 | |
Workers' compensation insurance programs | ||||||
Loss Contingencies | ||||||
Outstanding irrevocable letters of credit | $ 200 | 200 | 200 | $ 200 | ||
Payments on credit facility | 0 | |||||
Hurricane | Hilton New Orleans St. Charles | ||||||
Loss Contingencies | ||||||
Hurricane-related restoration expenses | 1,600 | 2,900 | ||||
Impairment losses | 2,700 | |||||
Hurricane | JW Marriott New Orleans | ||||||
Loss Contingencies | ||||||
Hurricane-related restoration expenses | 100 | $ 1,300 | ||||
Hurricane | Oceans Edge Resort & Marina | ||||||
Loss Contingencies | ||||||
Hurricane-related restoration expenses | 100 | |||||
Hurricane | Renaissance Orlando at SeaWorld | ||||||
Loss Contingencies | ||||||
Hurricane-related restoration expenses | $ 200 | |||||
Hurricane | Insurance Claims [Member] | Hilton New Orleans St. Charles | ||||||
Loss Contingencies | ||||||
Proceeds from property insurance | 4,400 | |||||
Business interruption insurance proceeds received | $ 1,000 | |||||
Hotel owned by the Company | ||||||
Concentration of Risk | ||||||
Number of hotels owned by the Company | property | 15 | 15 | 15 | 15 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | California | ||||||
Concentration of Risk | ||||||
Number of hotels owned by the Company | property | 5 | 5 | 5 | 5 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Florida | ||||||
Concentration of Risk | ||||||
Number of hotels owned by the Company | property | 3 | 3 | 3 | 3 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Hawaii | ||||||
Concentration of Risk | ||||||
Number of hotels owned by the Company | property | 1 | 1 | 1 | 1 | ||
Hotel owned by the Company | Geographic Concentration Risk [Member] | Massachusetts | ||||||
Concentration of Risk | ||||||
Number of hotels owned by the Company | property | 2 | 2 | 2 | 2 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | ||||
Feb. 28, 2023 | Jan. 31, 2023 | Feb. 28, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Four Seasons Resort Napa Valley | ||||||
Loss Contingencies | ||||||
Restricted Cash | $ 3.1 | $ 3.1 | ||||
Hilton Times Square | ||||||
Loss Contingencies | ||||||
Restricted Cash | 10.2 | $ 10.4 | $ 11.6 | |||
Share Repurchase Program | ||||||
Stockholders' equity | ||||||
Repurchase Program, remaining authorized capacity | $ 391.8 | |||||
Subsequent Event [Member] | ||||||
Stockholders' equity | ||||||
Repurchase Program, number of shares repurchased (in shares) | 1,149,805 | |||||
Repurchase Program, value of shares repurchased | $ 11 | |||||
Subsequent Event [Member] | Four Seasons Resort Napa Valley | ||||||
Loss Contingencies | ||||||
Loss Contingency, Settlement Agreement, Terms | In January 2023, Four Seasons consented to release the $3.1 million held in a restricted bank account for the purpose of satisfying any potential severance obligations at the Four Seasons Resort Napa Valley (see Note 13). Concurrently, the Company agreed to provide an unconditional guaranty to Four Seasons for the full and prompt payment of all amounts payable by the Company to Four Seasons relating to employee liability. The $3.1 million was released to the Company in January 2023. | |||||
Loss contingency increase (decrease) | $ (3.1) | |||||
Restricted Cash | $ 3.1 | |||||
Subsequent Event [Member] | Hilton Times Square | ||||||
Loss Contingencies | ||||||
Loss Contingency, Settlement Agreement, Terms | In February 2023, the Company was relieved of $9.8 million of its obligation for potential employee-related obligations related to the Hilton Times Square (see Note 13) and the funds were released from escrow to the Company. | |||||
Loss contingency increase (decrease) | $ (9.8) |
Schedule III-Real Estate and _2
Schedule III-Real Estate and Accumulated Depreciation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Gross Amount at year end | |
Aggregate cost of properties for federal income tax purposes | $ 3,800,000 |
Hotel properties | |
Real Estate and Accumulated Depreciation | |
Encmbr | 296,136 |
Initial costs | |
Land | 624,152 |
Bldg. and Impr | 2,067,242 |
Cost Capitalized Subsequent to Acquisition | |
Land | 48,379 |
Bldg. and Impr | 726,529 |
Gross Amount at year end | |
Land | 672,531 |
Bldg. and Impr | 2,793,771 |
Totals | 3,466,302 |
Accum. Depr. | $ 835,961 |
Boston Park Plaza | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Boston Park Plaza | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Boston Park Plaza | Hotel properties | |
Initial costs | |
Land | $ 58,527 |
Bldg. and Impr | 170,589 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 128,189 |
Gross Amount at year end | |
Land | 58,527 |
Bldg. and Impr | 298,778 |
Totals | 357,305 |
Accum. Depr. | $ 111,078 |
Date Acquired | Jul. 02, 2013 |
Four Seasons Resort Napa Valley | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Four Seasons Resort Napa Valley | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Four Seasons Resort Napa Valley | Hotel properties | |
Initial costs | |
Land | $ 23,514 |
Bldg. and Impr | 128,645 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 1,682 |
Gross Amount at year end | |
Land | 23,514 |
Bldg. and Impr | 130,327 |
Totals | 153,841 |
Accum. Depr. | $ 3,941 |
Date Acquired | Dec. 01, 2021 |
Hilton New Orleans St. Charles | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton New Orleans St. Charles | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hilton New Orleans St. Charles | Hotel properties | |
Initial costs | |
Land | $ 3,698 |
Bldg. and Impr | 53,578 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 15,780 |
Gross Amount at year end | |
Land | 3,698 |
Bldg. and Impr | 69,358 |
Totals | 73,056 |
Accum. Depr. | $ 14,485 |
Date Acquired | May 01, 2013 |
Hilton San Diego Bayfront [Member] | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hilton San Diego Bayfront [Member] | Maximum | |
Gross Amount at year end | |
Depr. Life | 57 years |
Hilton San Diego Bayfront [Member] | Hotel properties | |
Real Estate and Accumulated Depreciation | |
Encmbr | $ 220,000 |
Initial costs | |
Bldg. and Impr | 424,992 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 31,798 |
Gross Amount at year end | |
Bldg. and Impr | 456,790 |
Totals | 456,790 |
Accum. Depr. | $ 99,748 |
Date Acquired | Apr. 15, 2011 |
Hyatt Regency San Francisco | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Hyatt Regency San Francisco | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Hyatt Regency San Francisco | Hotel properties | |
Initial costs | |
Land | $ 116,140 |
Bldg. and Impr | 131,430 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 105,214 |
Gross Amount at year end | |
Land | 116,140 |
Bldg. and Impr | 236,644 |
Totals | 352,784 |
Accum. Depr. | $ 82,611 |
Date Acquired | Dec. 02, 2013 |
JW Marriott New Orleans | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
JW Marriott New Orleans | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
JW Marriott New Orleans | Hotel properties | |
Real Estate and Accumulated Depreciation | |
Encmbr | $ 76,136 |
Initial costs | |
Bldg. and Impr | 73,420 |
Cost Capitalized Subsequent to Acquisition | |
Land | 15,147 |
Bldg. and Impr | 40,596 |
Gross Amount at year end | |
Land | 15,147 |
Bldg. and Impr | 114,016 |
Totals | 129,163 |
Accum. Depr. | $ 37,554 |
Date Acquired | Feb. 15, 2011 |
Marriott Boston Long Wharf | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Marriott Boston Long Wharf | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Marriott Boston Long Wharf | Hotel properties | |
Initial costs | |
Land | $ 51,598 |
Bldg. and Impr | 170,238 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 77,767 |
Gross Amount at year end | |
Land | 51,598 |
Bldg. and Impr | 248,005 |
Totals | 299,603 |
Accum. Depr. | $ 119,968 |
Date Acquired | Mar. 23, 2007 |
Montage Healdsburg | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Montage Healdsburg | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Montage Healdsburg | Hotel properties | |
Initial costs | |
Land | $ 40,326 |
Bldg. and Impr | 194,589 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 1,373 |
Gross Amount at year end | |
Land | 40,326 |
Bldg. and Impr | 195,962 |
Totals | 236,288 |
Accum. Depr. | $ 10,032 |
Date Acquired | Apr. 22, 2021 |
Oceans Edge Resort & Marina | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Oceans Edge Resort & Marina | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Oceans Edge Resort & Marina | Hotel properties | |
Initial costs | |
Land | $ 92,510 |
Bldg. and Impr | 74,361 |
Cost Capitalized Subsequent to Acquisition | |
Land | 2,515 |
Bldg. and Impr | 6,576 |
Gross Amount at year end | |
Land | 95,025 |
Bldg. and Impr | 80,937 |
Totals | 175,962 |
Accum. Depr. | $ 12,528 |
Date Acquired | Jul. 25, 2017 |
Renaissance Long Beach | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Long Beach | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Long Beach | Hotel properties | |
Initial costs | |
Land | $ 10,437 |
Bldg. and Impr | 37,300 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 27,757 |
Gross Amount at year end | |
Land | 10,437 |
Bldg. and Impr | 65,057 |
Totals | 75,494 |
Accum. Depr. | $ 34,160 |
Date Acquired | Jun. 23, 2005 |
Renaissance Orlando at SeaWorld | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Orlando at SeaWorld | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Orlando at SeaWorld | Hotel properties | |
Initial costs | |
Bldg. and Impr | $ 119,733 |
Cost Capitalized Subsequent to Acquisition | |
Land | 30,717 |
Bldg. and Impr | 71,124 |
Gross Amount at year end | |
Land | 30,717 |
Bldg. and Impr | 190,857 |
Totals | 221,574 |
Accum. Depr. | $ 97,734 |
Date Acquired | Jun. 23, 2005 |
Renaissance Washington D.C. | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Renaissance Washington D.C. | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
Renaissance Washington D.C. | Hotel properties | |
Initial costs | |
Land | $ 14,563 |
Bldg. and Impr | 132,800 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 75,036 |
Gross Amount at year end | |
Land | 14,563 |
Bldg. and Impr | 207,836 |
Totals | 222,399 |
Accum. Depr. | $ 104,081 |
Date Acquired | Jul. 13, 2005 |
The Bidwell Marriott Portland | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
The Bidwell Marriott Portland | Maximum | |
Gross Amount at year end | |
Depr. Life | 35 years |
The Bidwell Marriott Portland | Hotel properties | |
Initial costs | |
Land | $ 5,341 |
Bldg. and Impr | 20,705 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 27,526 |
Gross Amount at year end | |
Land | 5,341 |
Bldg. and Impr | 48,231 |
Totals | 53,572 |
Accum. Depr. | $ 21,734 |
Date Acquired | Aug. 11, 2000 |
The Confidante Miami Beach | Minimum | |
Gross Amount at year end | |
Depr. Life | 3 years |
The Confidante Miami Beach | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
The Confidante Miami Beach | Hotel properties | |
Initial costs | |
Land | $ 87,791 |
Bldg. and Impr | 140,725 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 32 |
Gross Amount at year end | |
Land | 87,791 |
Bldg. and Impr | 140,757 |
Totals | 228,548 |
Accum. Depr. | $ 2,078 |
Date Acquired | Jun. 01, 2022 |
Wailea Beach Resort | Minimum | |
Gross Amount at year end | |
Depr. Life | 5 years |
Wailea Beach Resort | Maximum | |
Gross Amount at year end | |
Depr. Life | 40 years |
Wailea Beach Resort | Hotel properties | |
Initial costs | |
Land | $ 119,707 |
Bldg. and Impr | 194,137 |
Cost Capitalized Subsequent to Acquisition | |
Bldg. and Impr | 116,079 |
Gross Amount at year end | |
Land | 119,707 |
Bldg. and Impr | 310,216 |
Totals | 429,923 |
Accum. Depr. | $ 84,229 |
Date Acquired | Jul. 14, 2014 |
Senior corporate credit facility | |
Gross Amount at year end | |
Outstanding indebtedness under credit facility | $ 0 |
Schedule III-Reconciliation of
Schedule III-Reconciliation of Carrying Amounts and Accumulated Depreciation (Details) - Hotel properties [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of land and buildings and improvements | |||
Balance at the beginning of the year | $ 3,334,153 | $ 3,094,962 | $ 3,551,715 |
Acquisitions | 229,030 | 387,074 | 1,296 |
Improvements | 76,230 | 36,884 | 47,547 |
Impairment losses | (3,264) | (252,909) | |
Changes in reporting presentation | (53,068) | ||
Dispositions | (173,111) | (128,435) | (252,687) |
Balance at the end of the year | 3,466,302 | 3,334,153 | 3,094,962 |
Reconciliation of accumulated depreciation | |||
Balance at the beginning of the year | 799,641 | 772,289 | 888,378 |
Depreciation | 95,495 | 96,508 | 101,218 |
Impairment losses | (579) | (137,292) | |
Changes in reporting presentation | (24,144) | ||
Retirement | (59,175) | (44,433) | (80,015) |
Balance at the end of the year | $ 835,961 | $ 799,641 | $ 772,289 |