Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 04, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SOHO | |
Entity Registrant Name | SOTHERLY HOTELS INC. | |
Entity Central Index Key | 1,301,236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 13,823,459 | |
Sotherly Hotels LP [Member] | ||
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | SOTHERLY HOTELS LP | |
Entity Central Index Key | 1,301,236 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Investment in hotel properties, net | $ 357,645,087 | $ 348,593,912 |
Investment in hotel properties held for sale, net | 5,333,000 | |
Cash and cash equivalents | 32,651,893 | 31,766,775 |
Restricted cash | 6,115,997 | 4,596,145 |
Accounts receivable, net | 5,580,895 | 4,127,748 |
Accounts receivable - affiliate | 493,895 | 4,175 |
Prepaid expenses, inventory and other assets | 6,228,659 | 4,648,469 |
Deferred income taxes | 7,729,111 | 6,949,340 |
TOTAL ASSETS | 416,445,537 | 406,019,564 |
LIABILITIES | ||
Mortgage loans, net | 298,429,955 | 282,708,289 |
Unsecured notes, net | 24,560,735 | 24,308,713 |
Accounts payable and accrued liabilities | 16,110,521 | 12,970,960 |
Advance deposits | 2,317,658 | 2,315,787 |
Dividends and distributions payable | 2,520,249 | 2,376,527 |
TOTAL LIABILITIES | 343,939,118 | 324,680,276 |
Commitments and contingencies (See Note 6) | ||
Sotherly Hotels Inc. stockholders’ equity | ||
8% Series B cumulative redeemable perpetual preferred stock, par value $0.01, 11,000,000 shares authorized, liquidation preference $25 per share, 1,610,000 shares issued and outstanding at September 30, 2017 and December 31, 2016 | 16,100 | 16,100 |
Common stock, par value $0.01, 49,000,000 shares authorized, 13,823,459 shares and 14,468,551 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 138,234 | 144,685 |
Additional paid-in capital | 118,502,294 | 118,395,082 |
Unearned ESOP shares | (4,693,282) | |
Distributions in excess of retained earnings | (43,293,677) | (39,545,754) |
Total Sotherly Hotels Inc. stockholders’ equity | 70,669,669 | 79,010,113 |
Noncontrolling interest | 1,836,750 | 2,329,175 |
TOTAL EQUITY | 72,506,419 | 81,339,288 |
TOTAL LIABILITIES AND EQUITY | 416,445,537 | 406,019,564 |
Sotherly Hotels LP [Member] | ||
ASSETS | ||
Investment in hotel properties, net | 357,645,087 | 348,593,912 |
Investment in hotel properties held for sale, net | 5,333,000 | |
Cash and cash equivalents | 32,651,893 | 31,766,775 |
Restricted cash | 6,115,997 | 4,596,145 |
Accounts receivable, net | 5,580,895 | 4,127,748 |
Accounts receivable - affiliate | 493,895 | 4,175 |
Loan receivable - affiliate | 4,697,508 | |
Prepaid expenses, inventory and other assets | 6,228,659 | 4,648,469 |
Deferred income taxes | 7,729,111 | 6,949,340 |
TOTAL ASSETS | 421,143,045 | 406,019,564 |
LIABILITIES | ||
Mortgage loans, net | 298,429,955 | 282,708,289 |
Unsecured notes, net | 24,560,735 | 24,308,713 |
Accounts payable and accrued liabilities | 16,110,521 | 12,970,960 |
Advance deposits | 2,317,658 | 2,315,787 |
Dividends and distributions payable | 2,593,456 | 2,376,527 |
TOTAL LIABILITIES | 344,012,325 | 324,680,276 |
Commitments and contingencies (See Note 6) | ||
Sotherly Hotels Inc. stockholders’ equity | ||
TOTAL LIABILITIES AND EQUITY | 421,143,045 | 406,019,564 |
PARTNERS’ CAPITAL | ||
8% Series B cumulative redeemable perpetual preferred units, liquidation preference $25 per unit, 1,610,000 units issued and outstanding at September 30, 2017 and December 31, 2016 | 37,766,531 | 37,766,531 |
General Partner: 162,587 units and 162,467 units issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 662,073 | 681,389 |
Limited Partners: 16,096,104 units and 16,084,224 units issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 38,702,116 | 42,891,368 |
TOTAL PARTNERS’ CAPITAL | $ 77,130,720 | $ 81,339,288 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Preferred stock, dividend rate percentage | 8.00% | |
Preferred stock, shares authorized | 11,000,000 | |
Preferred stock, liquidation preference per share | $ 25 | |
Preferred stock, shares issued | 1,610,000 | 1,610,000 |
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 49,000,000 | 49,000,000 |
Common stock, shares issued | 13,823,459 | 14,468,551 |
Common stock, shares outstanding | 13,823,459 | 14,468,551 |
Sotherly Hotels LP [Member] | ||
General Partner, units issued | 162,587 | 162,467 |
General Partner, units outstanding | 162,587 | 162,467 |
Limited Partner, units issued | 16,096,104 | 16,084,224 |
Limited Partner, units outstanding | 16,096,104 | 16,084,224 |
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | ||
Preferred units, dividend rate percentage | 8.00% | 8.00% |
Preferred units, liquidation preference per units | $ 25 | $ 25 |
Preferred units, issued | 1,610,000 | 1,610,000 |
Preferred units, outstanding | 1,610,000 | 1,610,000 |
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||
Preferred stock, dividend rate percentage | 8.00% | 8.00% |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 11,000,000 | 11,000,000 |
Preferred stock, liquidation preference per share | $ 25 | $ 25 |
Preferred stock, shares issued | 1,610,000 | 1,610,000 |
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE | ||||
Rooms department | $ 25,093,226 | $ 26,665,132 | $ 81,366,731 | $ 83,896,833 |
Food and beverage department | 7,997,818 | 8,412,842 | 24,904,934 | 26,240,932 |
Other operating departments | 3,678,427 | 2,197,338 | 9,835,322 | 6,772,647 |
Total revenue | 36,769,471 | 37,275,312 | 116,106,987 | 116,910,412 |
Hotel operating expenses | ||||
Rooms department | 6,826,822 | 7,126,673 | 20,252,889 | 21,330,914 |
Food and beverage department | 6,039,174 | 5,820,000 | 17,919,142 | 18,250,542 |
Other operating departments | 705,111 | 642,219 | 1,928,662 | 1,880,618 |
Indirect | 15,209,249 | 14,603,034 | 45,019,742 | 43,827,294 |
Total hotel operating expenses | 28,780,356 | 28,191,926 | 85,120,435 | 85,289,368 |
Depreciation and amortization | 4,427,738 | 3,790,872 | 12,708,548 | 11,260,987 |
Loss on disposal of assets | 189,267 | 51,569 | 329,461 | |
Corporate general and administrative | 1,335,192 | 1,367,848 | 4,882,541 | 4,331,896 |
Total operating expenses | 34,543,286 | 33,539,913 | 102,763,093 | 101,211,712 |
NET OPERATING INCOME | 2,226,185 | 3,735,399 | 13,343,894 | 15,698,700 |
Other income (expense) | ||||
Interest expense | (4,139,267) | (4,626,333) | (11,827,061) | (13,872,129) |
Interest income | 53,314 | 44,485 | 126,241 | 63,523 |
Loss on early debt extinguishment | (1,087,395) | (228,087) | (1,157,688) | |
Unrealized loss on hedging activities | (3,542) | (492) | (30,748) | (66,567) |
Gain (loss) on sale of assets | (23,000) | 77,807 | ||
Gain on involuntary conversion of assets | 0 | 1,041,815 | ||
Net income (loss) before income taxes | (1,886,310) | (1,934,336) | 2,503,861 | 665,839 |
Income tax benefit | 950,310 | 385,145 | 581,890 | 308,398 |
Net income (loss) | (936,000) | (1,549,191) | 3,085,751 | 974,237 |
Less: Net loss (income) attributable to noncontrolling interest | 190,445 | 172,846 | (73,366) | (106,377) |
Net income (loss) attributable to the Company | (745,555) | (1,376,345) | 3,012,385 | 867,860 |
Distributions to preferred stockholders | (805,000) | (339,889) | (2,415,000) | (339,889) |
Net income (loss) available to common stockholders | $ (1,550,555) | $ (1,716,234) | $ 597,385 | $ 527,971 |
Net income (loss) per share available to common stockholders | ||||
Basic | $ (0.11) | $ (0.11) | $ 0.04 | $ 0.04 |
Diluted | $ (0.11) | $ (0.11) | $ 0.04 | $ 0.04 |
Weighted average number of common shares outstanding | ||||
Basic | 13,822,543 | 14,949,651 | 13,873,175 | 14,897,595 |
Diluted | 13,822,543 | 14,949,651 | 13,885,290 | 14,897,595 |
Sotherly Hotels LP [Member] | ||||
REVENUE | ||||
Rooms department | $ 25,093,226 | $ 26,665,132 | $ 81,366,731 | $ 83,896,833 |
Food and beverage department | 7,997,818 | 8,412,842 | 24,904,934 | 26,240,932 |
Other operating departments | 3,678,427 | 2,197,338 | 9,835,322 | 6,772,647 |
Total revenue | 36,769,471 | 37,275,312 | 116,106,987 | 116,910,412 |
Hotel operating expenses | ||||
Rooms department | 6,826,822 | 7,126,673 | 20,252,889 | 21,330,914 |
Food and beverage department | 6,039,174 | 5,820,000 | 17,919,142 | 18,250,542 |
Other operating departments | 705,111 | 642,219 | 1,928,662 | 1,880,618 |
Indirect | 15,209,249 | 14,603,034 | 45,019,742 | 43,827,294 |
Total hotel operating expenses | 28,780,356 | 28,191,926 | 85,120,435 | 85,289,368 |
Depreciation and amortization | 4,427,738 | 3,790,872 | 12,708,548 | 11,260,987 |
Loss on disposal of assets | 189,267 | 51,569 | 329,461 | |
Corporate general and administrative | 1,335,192 | 1,367,848 | 4,882,541 | 4,331,896 |
Total operating expenses | 34,543,286 | 33,539,913 | 102,763,093 | 101,211,712 |
NET OPERATING INCOME | 2,226,185 | 3,735,399 | 13,343,894 | 15,698,700 |
Other income (expense) | ||||
Interest expense | (4,139,267) | (4,626,333) | (11,827,061) | (13,872,129) |
Interest income | 53,314 | 44,485 | 126,241 | 63,523 |
Loss on early debt extinguishment | (1,087,395) | (228,087) | (1,157,688) | |
Unrealized loss on hedging activities | (3,542) | (492) | (30,748) | (66,567) |
Gain (loss) on sale of assets | (23,000) | 77,807 | ||
Gain on involuntary conversion of assets | 1,041,815 | |||
Net income (loss) before income taxes | (1,886,310) | (1,934,336) | 2,503,861 | 665,839 |
Income tax benefit | 950,310 | 385,145 | 581,890 | 308,398 |
Net income (loss) | (936,000) | (1,549,191) | 3,085,751 | 974,237 |
Distributions to preferred unit holder | (805,000) | (339,889) | (2,415,000) | (339,889) |
Net income available to operating partnership unit holders | $ (1,741,000) | $ (1,889,080) | $ 670,751 | $ 634,348 |
Net income (loss) per share available to common stockholders | ||||
Basic and diluted | $ (0.11) | $ (0.11) | $ 0.04 | $ 0.04 |
Weighted average number of common shares outstanding | ||||
Basic and diluted | 16,258,691 | 16,727,791 | 16,256,713 | 16,723,557 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - 9 months ended Sep. 30, 2017 - USD ($) | Total | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Unearned ESOP Shares [Member] | Distributions in Excess of Retained Earnings [Member] | Noncontrolling Interest [Member] |
Balances, beginning at Dec. 31, 2016 | $ 81,339,288 | $ 16,100 | $ 144,685 | $ 118,395,082 | $ (39,545,754) | $ 2,329,175 | |
Balances, shares, beginning at Dec. 31, 2016 | 1,610,000 | 14,468,551 | |||||
Net income | 3,085,751 | 3,012,385 | 73,366 | ||||
Issuance of restricted common stock awards | 89,160 | $ 120 | 89,040 | ||||
Issuance of restricted common stock awards, shares | 12,000 | ||||||
Purchase of shares by ESOP | (4,874,758) | $ (6,825) | 6,825 | $ (4,874,758) | |||
Purchase of shares by ESOP, shares | (682,500) | ||||||
Amortization of ESOP shares | 178,137 | $ 254 | (3,593) | 181,476 | |||
Amortization of ESOP shares, shares | 25,408 | ||||||
Amortization of restricted stock award | 14,940 | 14,940 | |||||
Preferred stock dividends declared | (2,415,000) | (2,415,000) | |||||
Common stockholders' dividends and distributions declared | (4,911,099) | (4,345,308) | (565,791) | ||||
Balances, ending at Sep. 30, 2017 | $ 72,506,419 | $ 16,100 | $ 138,234 | $ 118,502,294 | $ (4,693,282) | $ (43,293,677) | $ 1,836,750 |
Balances, shares, ending at Sep. 30, 2017 | 1,610,000 | 13,823,459 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 3,085,751 | $ 974,237 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12,708,548 | 11,260,987 |
Amortization of deferred financing costs | 616,390 | 939,122 |
Amortization of mortgage premium | (18,511) | (18,511) |
Gain on involuntary conversion of assets | (1,041,815) | |
Unrealized loss on derivative instrument | 30,748 | 66,567 |
Loss on disposal of assets | 51,569 | 329,461 |
Gain on sale of assets | (77,807) | |
Loss on early extinguishment of debt | 228,087 | 1,157,688 |
Share / Unit - based compensation | 282,237 | 206,702 |
Changes in assets and liabilities: | ||
Restricted cash | (2,401,869) | (2,409,252) |
Accounts receivable | (1,453,147) | (481,741) |
Prepaid expenses, inventory and other assets | (1,699,380) | (617,601) |
Deferred income taxes | (779,771) | (456,188) |
Accounts payable and other accrued liabilities | 3,962,544 | 3,535,914 |
Advance deposits | 1,871 | 787,257 |
Accounts receivable - affiliate | (489,720) | 35,819 |
Net cash provided by operating activities | 13,005,725 | 15,310,461 |
Cash flows from investing activities: | ||
Acquisitions of hotel properties | (3,986,849) | |
Improvements and additions to hotel properties | (17,483,257) | (11,223,268) |
Funding of restricted cash reserves | (3,501,192) | (3,970,657) |
Proceeds of restricted cash reserves | 4,383,209 | 6,307,518 |
Proceeds from the sale of hotel property | 5,434,856 | |
Proceeds from insurance conversion | 1,041,815 | |
Proceeds from the sale of assets | 3,355 | 211,400 |
Net cash used in investing activities | (14,108,063) | (8,675,007) |
Cash flows from financing activities: | ||
Proceeds of mortgage debt | 40,500,000 | 45,700,000 |
Proceeds from mortgage loan receivable | 2,600,711 | |
Proceeds from the sale of preferred stock / units | 37,774,229 | |
Settlement of repurchase of common stock / units | (1,103,130) | |
Payments on mortgage loans | (24,767,275) | (44,453,440) |
Redemption of unsecured notes | (27,600,000) | |
Payments of deferred financing costs | (585,004) | (1,455,645) |
Funding of ESOP stock purchase | (4,874,758) | |
Dividends and distributions paid | (7,182,377) | (4,262,691) |
Net cash provided by financing activities | 1,987,456 | 8,303,164 |
Net increase in cash and cash equivalents | 885,118 | 14,938,618 |
Cash and cash equivalents at the beginning of the period | 31,766,775 | 11,493,914 |
Cash and cash equivalents at the end of the period | 32,651,893 | 26,432,532 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 11,227,980 | 12,948,885 |
Cash paid during the period for income taxes | 155,077 | 29,925 |
Non-cash investing and financing activities: | ||
Change in amount of hotel property improvements in accounts payable and accrued liabilities | 77,843 | 307,098 |
Sotherly Hotels LP [Member] | ||
Cash flows from operating activities: | ||
Net income | 3,085,751 | 974,237 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 12,708,548 | 11,260,987 |
Amortization of deferred financing costs | 616,390 | 939,122 |
Amortization of mortgage premium | (18,511) | (18,511) |
Gain on involuntary conversion of assets | (1,041,815) | |
Unrealized loss on derivative instrument | 30,748 | 66,567 |
Loss on disposal of assets | 51,569 | 329,461 |
Gain on sale of assets | (77,807) | |
Loss on early extinguishment of debt | 228,087 | 1,157,688 |
Share / Unit - based compensation | 244,994 | 206,702 |
Changes in assets and liabilities: | ||
Restricted cash | (2,401,869) | (2,409,252) |
Accounts receivable | (1,453,147) | (481,741) |
Prepaid expenses, inventory and other assets | (1,699,380) | (617,601) |
Deferred income taxes | (779,771) | (456,188) |
Accounts payable and other accrued liabilities | 3,962,544 | 3,535,914 |
Advance deposits | 1,871 | 787,257 |
Accounts receivable - affiliate | (489,720) | 35,819 |
Net cash provided by operating activities | 12,968,482 | 15,310,461 |
Cash flows from investing activities: | ||
Acquisitions of hotel properties | (3,986,849) | |
Improvements and additions to hotel properties | (17,483,257) | (11,223,268) |
ESOP loan advances | (4,874,758) | |
ESOP loan payments | 177,250 | |
Funding of restricted cash reserves | (3,501,192) | (3,970,657) |
Proceeds of restricted cash reserves | 4,383,209 | 6,307,518 |
Proceeds from the sale of hotel property | 5,434,856 | |
Proceeds from insurance conversion | 1,041,815 | |
Proceeds from the sale of assets | 3,355 | 211,400 |
Net cash used in investing activities | (18,805,571) | (8,675,007) |
Cash flows from financing activities: | ||
Proceeds of mortgage debt | 40,500,000 | 45,700,000 |
Proceeds from mortgage loan receivable | 2,600,711 | |
Proceeds from the sale of preferred stock / units | 37,774,229 | |
Settlement of repurchase of common stock / units | (1,103,130) | |
Payments on mortgage loans | (24,767,275) | (44,453,440) |
Redemption of unsecured notes | (27,600,000) | |
Payments of deferred financing costs | (585,004) | (1,455,645) |
Dividends and distributions paid | (7,322,384) | (4,262,691) |
Net cash provided by financing activities | 6,722,207 | 8,303,164 |
Net increase in cash and cash equivalents | 885,118 | 14,938,618 |
Cash and cash equivalents at the beginning of the period | 31,766,775 | 11,493,914 |
Cash and cash equivalents at the end of the period | 32,651,893 | 26,432,532 |
Supplemental disclosures: | ||
Cash paid during the period for interest | 11,227,980 | 12,948,885 |
Cash paid during the period for income taxes | 155,077 | 29,925 |
Non-cash investing and financing activities: | ||
Change in amount of hotel property improvements in accounts payable and accrued liabilities | $ 77,843 | $ 307,098 |
Consolidated Statement of Chan7
Consolidated Statement of Changes in Partners' Capital - 9 months ended Sep. 30, 2017 - USD ($) | Total | Sotherly Hotels LP [Member] | Sotherly Hotels LP [Member]General Partner [Member] | Sotherly Hotels LP [Member]Limited Partner [Member] | Sotherly Hotels LP [Member]Preferred Units [Member] |
Balances, beginning at Dec. 31, 2016 | $ 81,339,288 | $ 681,389 | $ 42,891,368 | $ 37,766,531 | |
Balances, units, beginning at Dec. 31, 2016 | 162,467 | 16,084,224 | 1,610,000 | ||
Issuance of common partnership units | 89,160 | $ 892 | $ 88,268 | ||
Issuance of common partnership units, number of units | 120 | 11,880 | |||
Amortization of restricted units award | $ 14,940 | 103,208 | $ 149 | $ 103,059 | |
Amortization of ESOP units | 178,137 | 52,626 | 52,626 | ||
Preferred units distributions declared | (2,415,000) | $ (2,415,000) | |||
Partnership units distributions declared | (5,124,313) | (51,214) | (5,073,099) | ||
Net income | $ 3,085,751 | 3,085,751 | 30,857 | 639,894 | 2,415,000 |
Balances, ending at Sep. 30, 2017 | $ 77,130,720 | $ 662,073 | $ 38,702,116 | $ 37,766,531 | |
Balances, units, ending at Sep. 30, 2017 | 162,587 | 16,096,104 | 1,610,000 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Sotherly Hotels Inc., (the “Company”), is a self-managed and self-administered lodging real estate investment trust (“REIT”) that was incorporated in Maryland on August 20, 2004 to own full-service, primarily upscale and upper-upscale hotels located in primary and secondary markets in the mid-Atlantic and southern United States. Currently, the Company is focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the southern United States. The Company’s portfolio consists of investments in eleven hotel properties, comprising 2,838 rooms, and the hotel commercial condominium unit of the Hyde Resort & Residences condominium hotel. All of the Company’s hotels, except for The DeSoto, the Georgian Terrace, The Whitehall and the Hyde Resort & Residences, operate under the Hilton, Crowne Plaza, DoubleTree, and Sheraton brands. The Company commenced operations on December 21, 2004 when it completed its initial public offering and thereafter consummated the acquisition of six hotel properties (the “initial properties”). Substantially all of the Company’s assets are held by, and all of its operations are conducted through, Sotherly Hotels LP, (the “Operating Partnership”). Pursuant to the terms of the Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) of the Operating Partnership, the Company, as general partner, is not entitled to compensation for its services to the Operating Partnership. The Company, as general partner, conducts substantially all of its operations through the Operating Partnership and the Company’s administrative expenses are the obligations of the Operating Partnership. Additionally, the Company is entitled to reimbursement for any expenditure incurred by it on the Operating Partnership’s behalf. For the Company to qualify as a REIT, it cannot operate hotels. Therefore, the Operating Partnership, which, at September 30, 2017, was approximately 89.1% owned by the Company, and its subsidiaries, leases the hotels to direct and indirect subsidiaries of MHI Hospitality TRS Holding, Inc. (collectively, “MHI TRS”), which is a wholly-owned subsidiary of the Operating Partnership. MHI TRS then engages an eligible independent hotel management company, MHI Hotels Services, LLC, which does business as Chesapeake Hospitality (“Chesapeake Hospitality”), to operate the hotels under a management contract. MHI TRS is treated as a taxable REIT subsidiary for federal income tax purposes. All references in this report to “we”, “us” and “our” refer to the Company, its Operating Partnership and its subsidiaries and predecessors, collectively, unless the context otherwise requires or where otherwise indicated. Significant transactions occurring during the current and prior fiscal year include the following: On March 21, 2016, we entered into an agreement with the then existing lender to extend the maturity of the mortgage on The Whitehall until November 13, 2017, which was subsequently refinanced with a new lender on October 12, 2016. On June 27, 2016, we entered into a promissory note and other loan documents to secure a $35.0 million mortgage on The DeSoto with MONY Life Insurance Company. The mortgage term is ten years maturing July 1, 2026, subject to certain criteria. The mortgage bears a fixed interest rate of 4.25%. The mortgage amortizes on a 25-year schedule after a 1-year interest-only period. The Company used the proceeds to repay the existing first mortgage on The DeSoto, to pay closing costs, to fund ongoing renovations at the hotel and for general corporate purposes. On September 2, 2017, we drew down the final $5.0 million of loan proceeds available under the loan documents, after finalizing renovations on The DeSoto and meeting other criteria under the loan documents. On June 30, 2016, we entered into a loan agreement and other loan documents, including a guaranty of payment by the Operating Partnership, to secure a $19.0 million mortgage on the Crowne Plaza Tampa Westshore with Fifth Third Bank. The mortgage term has an initial term of three years, and may be extended for two additional periods of one year each, subject to certain conditions. The mortgage bears a floating interest rate of the 30-day LIBOR plus 3.75%, subject to a floor rate of 3.75%. The mortgage amortizes on a 25-year schedule. The Company used the proceeds to repay the existing first mortgage on the Crowne Plaza Tampa Westshore, to pay closing costs and for general corporate purposes. On August 23, 2016, the Company sold 1,610,000 shares of its 8% Series B cumulative redeemable perpetual preferred stock (the “Series B Preferred Stock”), for net proceeds after all expenses of approximately $37.8 million, which it contributed to the Operating Partnership for an equivalent number of preferred units. On September 30, 2016, the Operating Partnership redeemed the entire $27.6 million aggregate principal amount of its outstanding 8% senior unsecured notes. On October 12, 2016, we entered into a loan agreement to secure a $20.5 million mortgage on The Whitehall with the International Bank of Commerce. Pursuant to the loan documents, the loan provides initial proceeds of $15.0 million, with an additional $5.5 million available upon the satisfaction of certain conditions, has a term of five years, bears a floating interest rate of the one month LIBOR plus 3.50%, subject to a floor rate of 4.00%, amortizes on an 18-year schedule after a 2-year interest only period, is subject to prepayment fees, and is guaranteed by Sotherly Hotels LP. The Company used the proceeds to repay the existing first mortgage on The Whitehall, to pay closing costs and for general corporate purposes. On November 3, 2016, On November 3, 2016, we entered into a loan agreement to modify and extend the mortgage on the Crowne Plaza Hampton Marina with TowneBank. Pursuant to the amended loan documents, the loan continues to bear a fixed interest rate of 5.00%, has a maturity date of November 1, 2019, and beginning on December 1, 2016 requires monthly principal payments of $15,367 plus interest. On December 1, 2016, we entered into a promissory note and other loan documents to secure a $35.0 million mortgage on the Hilton Wilmington Riverside with MONY Life Insurance Company. Pursuant to the loan documents, the loan provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions. The mortgage term is ten years maturing November 30, 2026, subject to certain criteria. The mortgage bears a fixed interest rate of 4.25%. The mortgage amortizes on a 25-year schedule after a 1-year interest-only period. The Company used the proceeds to repay the existing first mortgage on the Hilton Wilmington Riverside and to pay closing costs, and will use the balance of the proceeds to fund ongoing renovations at the hotel and for general corporate purposes. On December 2, 2016, the Company’s board of directors authorized a stock repurchase program under which the Company may purchase up to $10.0 million of its outstanding common stock, par value $0.01 per share, at prevailing prices on the open market or in privately negotiated transactions, at the discretion of management. Through December 31, 2016 the Company repurchased 481,100 shares of common stock for approximately $3.2 million and the repurchased shares have been returned to the status of authorized but unissued shares of common stock. The Company did not repurchase any shares under the stock repurchase program during the three and nine months ended September 30, 2017, respectively. The Company used available working capital to fund purchases under the stock repurchase program and intends to complete the repurchase program prior to December 31, 2017, unless extended by the board of directors. The Company adopted an Employee Stock Ownership Plan (“ESOP”) in December 2016, effective as of January 1, 2016. The Company sponsors and maintains the ESOP and related trust for the benefit of its eligible employees. The ESOP is funded by a loan from the Company, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock. From January 3, 2017 to February 28, 2017 the ESOP purchased 682,500 shares of common stock at an aggregate cost of approximately $4.9 million . Coincident with the execution of the loan from the Company to the ESOP, the Operating Partnership committed to fund a loan to the Company to allow the Company to loan funds to the ESOP, for the purpose as stated above. On January 30, 2017, we closed on the purchase of the commercial condominium unit of the Hyde Resort & Residences, a 400-unit condominium hotel located in the Hollywood, Florida market, for an aggregated price of approximately $4.8 million from 4111 South Ocean Drive, LLC. In connection with the closing of the transaction, the Company entered into a lease agreement for the 400-space parking garage and meeting rooms associated with the condominium hotel, agreements relating to the operation and management of the hotel condominium association and a condominium unit rental program, and a pre-opening services agreement whereby the seller paid the Company a fee of approximately $0.8 million for certain pre-opening related preparations. On February 7, 2017, we closed on the sale of the Crowne Plaza Hampton Marina to Marina Hotels, LLC for a price of $5.6 million. On June 1, 2017, we entered into an agreement to purchase the commercial unit of the planned Hyde Beach House Resort & Residences, a condominium hotel under development in Hollywood, Florida, for a price of $5.1 million from 4000 South Ocean Property Owner, LLLP. In connection with the agreement, we also entered into a pre-opening services agreement whereby the seller has agreed to pay the Company approximately $0.8 million in connection with certain pre-opening activities to be undertaken prior to the closing. The Company has agreed to purchase inventories at closing consistent with the management and operation of the hotel and the related condominium association for an additional amount and has further agreed to enter into a lease agreement for the parking garage and poolside cabanas associated with the hotel; and to enter into a management agreement relating to the operation and management of the hotel’s condominium association. The Company anticipates that the closing of the transaction and the execution of related agreements will take place in the second quarter of 2019, once construction of the hotel has been substantially completed. The closing of the transaction is subject to various closing conditions as described in the purchase agreement. On June 29, 2017, we entered into a promissory note and other loan documents to secure a $35.5 million mortgage on the DoubleTree by Hilton Jacksonville Riverfront with Wells Fargo Bank, N.A. Pursuant to the loan documents, the loan has a maturity date of July 11, 2024, bears a fixed interest rate of 4.88%, amortizes on a 30-year schedule, and is subject to a prepayment premium following a prepayment lockout period. The Company used a portion of the proceeds to repay the existing first mortgage on the DoubleTree by Hilton Jacksonville Riverfront, to pay closing costs and for general corporate purposes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation – The consolidated financial statements of the Company presented herein include all of the accounts of Sotherly Hotels Inc., the Operating Partnership, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of the Operating Partnership presented herein include all of the accounts of Sotherly Hotels LP, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. Additionally, all administrative expenses of the Company and those expenditures made by the Company on behalf of the Operating Partnership are reflected as the administrative expenses, expenditures and obligations thereto of the Operating Partnership, pursuant to the terms of the Partnership Agreement. Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at acquisition cost and allocated to land, property and equipment and identifiable intangible assets. 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 are removed from our accounts and any resulting gain or loss is included in the statements of operations. Expenditures under a renovation project which constitute additions or improvements that extend the life of the property are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 7 to 39 years for buildings and building improvements and 3 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse permanent changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are found to be less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value would be recorded and an impairment loss recognized. Assets Held For Sale – We record assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) protection limits of $250,000. Our exposure to credit loss in the event of the failure of these institutions is represented by the difference between the FDIC protection limit and the total amounts on deposit. Management monitors, on a regular basis, the financial condition of the financial institutions along with the balances there on deposit to minimize our potential risk. Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements. Accounts Receivable – Accounts receivable consists primarily of hotel guest and banqueting receivables. Ongoing evaluations of collectability are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. Inventories – Inventories, consisting primarily of food and beverages, are stated at the lower of cost or market, with cost determined on a method that approximates first-in, first-out basis. Franchise License Fees – Fees expended to obtain or renew a franchise license are amortized over the life of the license or renewal. The unamortized franchise fees as of September 30, 2017 and December 31, 2016 were $342,980 and $386,612, respectively. Amortization expense for the three-month periods ended September 30, 2017 and 2016 totaled $11,217 and $15,331, respectively, and for the nine-month periods ended September 30, 2017 and 2016 totaled $35,299 and $45,593, respectively. Deferred Financing and Offering Costs – Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt and are reflected in mortgage loans, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in issuing equity and are reflected in prepaid expenses, inventory and other assets on the consolidated balance sheets. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations. Deferred offering costs are netted against our equity offerings when the offering is complete, whereby the costs are offset against the equity funds raised in the future and included in additional paid-in capital on the consolidated balance sheets, or if the offering expires and the offering costs exceed the funds raised in the offering then the excess will be included in corporate general and administrative expenses in the consolidated statements of operations. During the three and nine months ended September 30, 2017 the Company wrote off approximately $0 and $0.5 million of deferred offering costs, respectively. Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the balance sheet and measured at fair value. Derivative instruments used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as an interest rate risk, are considered fair value hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For a derivative instrument designated as a cash flow hedge, the change in fair value each period is reported in accumulated other comprehensive income in stockholders’ equity and partners’ capital to the extent the hedge is effective. For a derivative instrument designated as a fair value hedge, the change in fair value each period is reported in earnings along with the change in fair value of the hedged item attributable to the risk being hedged. For a derivative instrument that does not qualify for hedge accounting or is not designated as a hedge, the change in fair value each period is reported in earnings. We use derivative instruments to add stability to interest expense and to manage our exposure to interest-rate movements. To accomplish this objective, we currently use an interest rate cap which acts as a cash flow hedge and is not designated as a hedge. We value our interest-rate cap at fair value, which we define as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We also have used derivative instruments in the Company’s stock to obtain more favorable terms on our financing. We do not enter into contracts to purchase or sell derivative instruments for speculative trading purposes. Fair Value Measurements – We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table represents our interest rate cap, mortgage loans and unsecured notes measured at fair value and the basis for that measurement: Level 1 Level 2 Level 3 December 31, 2016 Interest Rate Cap (1) $ — $ 33,597 $ — Mortgage loans (2) $ — $ (281,840,780 ) $ — Unsecured notes (3) $ (26,241,160 ) $ — $ — September 30, 2017 Interest Rate Cap (1) $ — $ 2,849 $ — Mortgage loans (2) $ — $ (294,869,206 ) $ — Unsecured notes (3) $ (25,836,360 ) $ — $ — (1) Interest rate cap, which caps a 1-month LIBOR rate at 2.5%. (2) Mortgage loans are reflected at outstanding principal balance, net of deferred financing costs on our Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016. (3) Unsecured notes are recorded at outstanding principal balance on our Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016. Noncontrolling Interest in Operating Partnership – Certain hotel properties were acquired, in part, by the Operating Partnership through the issuance of limited partnership units of the Operating Partnership. The noncontrolling interest in the Operating Partnership is: (i) increased or decreased by the limited partners’ pro-rata share of the Operating Partnership’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by redemption of partnership units for the Company’s common stock; and (iv) adjusted to equal the net equity of the Operating Partnership multiplied by the limited partners’ ownership percentage immediately after each issuance of units of the Operating Partnership and/or the Company’s common stock through an adjustment to additional paid-in capital. Net income or net loss is allocated to the noncontrolling interest in the Operating Partnership based on the weighted average percentage ownership throughout the period. Revenue Recognition – Revenues from operations of the hotels and condominium hotel are recognized when the services are provided. Other hotel department revenues include cancellation charges, charges for TV, internet and telephone use, parking, gift shop sales and rentals from restaurant tenants, rooftop leases and gift shop operators. Management fees earned under the condominium rental program at the Hyde Resort & Residences are also reflected as other hotel operating revenue. Revenues are reported net of occupancy and other taxes collected from customers and remitted to governmental authorities. Lease Revenue – Several of our properties generate revenue from leasing commercial space adjacent to the hotel, the restaurant space within the hotel, apartment units and space on the roofs of our hotels for antennas and satellite dishes. We account for the lease income as revenue from other operating departments within the statement of operations pursuant to the terms of each lease. Lease revenue was approximately $0.4 million, for the each of the three months ended September 30, 2017 and 2016, respectively and approximately $1.3 million, for each of the nine months ended September 30, 2017 and 2016, respectively . A schedule of minimum future lease payments receivable for the remaining three and twelve-month lease periods is as follows: For the remaining three months ending: December 31, 2017 $ 425,322 December 31, 2018 1,112,282 December 31, 2019 868,289 December 31, 2020 832,695 December 31, 2021 725,244 December 31, 2022 and thereafter 3,085,873 Total $ 7,049,705 Income Taxes – The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally will not be subject to federal income tax. MHI TRS, our wholly owned taxable REIT subsidiary which leases our hotels from subsidiaries of the Operating Partnership, is subject to federal and state income taxes. We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. As of September 30, 2017, and December 31, 2016, deferred tax assets totaled approximately $7.7 million and $6.9 million, respectively, of which approximately $6.8 million and $6.0 million relate to net operating losses of our TRS Lessee. A valuation allowance is required for deferred tax assets if, based on all available evidence, it is “more-likely-than-not” that all or a portion of the deferred tax asset will or will not be realized due to the inability to generate sufficient taxable income in certain financial statement periods. The “more-likely-than-not” analysis means the likelihood of realization is greater than 50%, that we will or will not be able to fully utilize the deferred tax assets against future taxable income. The net amount of deferred tax assets that are recorded on the financial statements must reflect the tax benefits that are expected to be realized using these criteria. We perform this analysis by evaluating future hotel revenues and expenses accounting for certain non-recurring costs and expenses during the current and prior two fiscal years as well as anticipated changes in the lease rental payments from the TRS Lessee to subsidiaries of the Operating Partnership. We have determined that it is more-likely-than-not that we will be able to fully utilize our deferred tax assets for future tax consequences, therefore no valuation allowance is required. As of September 30, 2017 and December 31, 2016, we had no uncertain tax positions. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2010 through 2016. In addition, as of September 30, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject generally include 2004 through 2016. The Operating Partnership is generally not subject to federal and state income taxes as the unit holders of the Partnership are subject to tax on their respective shares of the Partnership’s taxable income. Stock-based Compensation – The Company’s 2004 Long Term Incentive Plan (the “2004 Plan”) and its 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permit the grant of stock options, restricted stock, unrestricted stock and performance share compensation awards to its employees for up to 350,000 and 750,000 shares of common stock, respectively. The Company believes that such awards better align the interests of its employees with those of its stockholders. Under the 2004 Plan, the Company made stock awards totaling 337,438 shares, including 255,938 shares issued to certain executives and employees and 81,500 restricted shares issued to its independent directors. Of the 255,938 shares issued to certain of our executives and employees, all have vested except 6,000 shares issued to the Chief Financial Officer upon execution of his employment contract which will vest pro rata on the next anniversary of the effective date of his employment agreement. All of the 81,500 restricted shares issued to the Company’s independent directors have vested. The 2004 Plan was terminated in 2013. Under the 2013 Plan, the Company has made stock awards totaling 121,100 shares, including 74,600 non-restricted shares to certain executives and employees and 46,500 restricted shares issued to its independent directors. All awards have vested except for 12,000 shares issued to the Company’s independent directors in February 2017, which will vest on December 31, 2017. Previously, under the 2004 Plan, and currently, under the 2013 Plan, the Company may issue a variety of performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of September 30, 2017, no performance-based stock awards have been granted. Total compensation cost recognized under the 2004 Plan and the 2013 Plan for each of the three months ended September 30, 2017 and 2016 was $4,980, and for the nine months ended September 30, 2017 and 2016 was $104,100 and $206,703, Additionally, the Company sponsors and maintains an ESOP and related trust for the benefit of its eligible employees. We reflect Advertising – Advertising costs were $101,788 and $138,017 for the three months ended September 30, 2017 and 2016, respectively and were $ 251,892 and $ 333,076 for the nine months ended September 30, 2017 and 2016, respectively . Advertising costs are expensed as incurred. Involuntary Conversion of Assets – We record gains or losses on involuntary conversions of assets due to recovered insurance proceeds to the extent the undepreciated cost of a nonmonetary asset differs from the amount of monetary proceeds received. During the three and nine month periods ending September 30, 2017, we recognized approximately $0 and $1.0 million gain on involuntary conversion of assets, respectively, which is reflected in the consolidated statements of operations. Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income. Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership. Use of Estimates – The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“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 from those estimates. Reclassifications – Certain reclassifications in the amount of approximately $0.1 million and approximately $0.6 million for the three and nine month periods ending September 30, 2016, respectively, from rooms expense to indirect expense balances have been made to conform to the current period presentation. Recent Accounting Pronouncements – In February 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-05, The FASB issued this update to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments in this update also simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses in many transactions related to: a partial sale of real estate; a transfer of a nonfinancial asset within the scope of FASB ASC Topic 845, ; a contribution of a nonfinancial asset to form a joint venture; and a transfer of a nonfinancial asset to an equity method investee. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. We will adopt this ASU as of January 1, 2018. We do not expect this ASU to have a material impact on the Company’s current consolidated financial position, results of operations or cash flows, however this ASU may have a significant impact on future transactions. In January 2017, the FASB issued ASU 2017-01, Business Combinations – Clarifying the Definition of a Business (Topic 805). In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients (Topic 606) In April 2016, the FASB issued ASU No. 2016-10 , Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09 , Revenue from Contracts with Customers (Topic 606) |
Acquisition of Hotel Property
Acquisition of Hotel Property | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Hotel Property | 3. Acquisition of Hotel Property Hyde Resort & Residences. On January 30, 2017, we acquired the hotel commercial condominium unit of the Hyde Resort & Residences condominium hotel, for an aggregate price including inventory and other assets of approximately $4.8 million. The allocation of the estimated purchase price based on fair values is as follows: Hyde Resort & Residences Land and land improvements $ 500 Buildings and improvements 4,309,500 Furniture, fixtures and equipment 72,616 Investment in hotel properties 4,382,616 Accrued liabilities and other costs (866,142 ) Prepaid expenses, inventory and other assets 470,375 Net cash $ 3,986,849 The results of operations of the hotel are included in our consolidated financial statements from the date of acquisition. The total revenue and net loss related to the acquisition for the period January 30, 2017 to September 30, 2017 are approximately $2.8 million and $0.6 million, respectively. There is no pro forma financial information, since this is a new operation without prior historical information. |
Investment in Hotel Properties,
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net | 4. Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net Investment in hotel properties, net as of September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Land and land improvements $ 59,009,041 $ 57,851,380 Buildings and improvements 346,142,725 336,996,876 Furniture, fixtures and equipment 49,056,456 43,458,781 454,208,222 438,307,037 Less: accumulated depreciation and impairment (96,563,135 ) (89,713,125 ) Investment in Hotel Properties, Net $ 357,645,087 $ 348,593,912 Investment in hotel properties held for sale, net as of September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Land and land improvements $ — $ 1,097,096 Buildings and improvements — 6,242,504 Furniture, fixtures and equipment — 2,289,008 — 9,628,608 Less: accumulated depreciation and impairment — (4,295,608 ) Investment in Hotel Properties Held for Sale, Net $ — $ 5,333,000 Investment in hotel properties held for sale, net represents the Crowne Plaza Hampton Marina property, which was sold on February 7, 2017 for approximately $5.6 million. After selling costs, mortgage loan payoff and associated fees we realized an approximate gain on the sale of assets of $0.1 million, as reflected in the consolidated statements of operations. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Mortgage Loans, Net . As of September 30, 2017 and December 31, 2016, we had approximately $298.4 million and approximately $282.7 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels. Balance Outstanding as of September 30, December 31, Prepayment Maturity Amortization Interest Property 2017 2016 Penalties Date Provisions Rate Crowne Plaza Hampton Marina (1) $ - $ 2,584,633 None 11/1/2019 3 years 5.00% Crowne Plaza Tampa Westshore ( 2) 15,353,500 15,561,400 None 6/30/2019 25 years LIBOR plus 3.75 % The DeSoto (3) 34,845,934 30,000,000 Yes 7/1/2026 25 years 4.25% DoubleTree by Hilton Jacksonville Riverfront ( 4) 35,422,241 19,291,716 Yes 7/11/2024 30 years 4.88% DoubleTree by Hilton Laurel (5) 9,182,987 9,329,005 Yes 8/5/2021 25 years 5.25% DoubleTree by Hilton Philadelphia Airport (6) 30,646,946 31,261,991 None 4/1/2019 25 years LIBOR plus 3.00 % DoubleTree by Hilton Raleigh Brownstone University (7) 14,571,181 14,773,885 n/a 8/1/2018 30 years 4.78% DoubleTree Resort by Hilton Hollywood Beach (8) 58,249,890 58,935,818 n/a 10/1/2025 30 years 4.913% Georgian Terrace (9) 45,230,148 45,826,038 n/a 6/1/2025 30 years 4.42% Hilton Wilmington Riverside (10) 30,000,000 30,000,000 Yes 1/1/2027 25 years 4.25% Sheraton Louisville Riverside (11) 11,771,942 11,977,557 Yes 12/1/2026 25 years 4.27% The Whitehall (12) 15,000,000 15,000,000 Yes 10/12/2021 18 years LIBOR plus 3.50 % Total Mortgage Principal Balance $ 300,274,769 $ 284,542,043 Deferred financing costs, net (2,041,958 ) (2,049,409 ) Unamortized premium on loan 197,144 215,655 Total Mortgage Loans, Net $ 298,429,955 $ 282,708,289 (1) As of February 7, 2017, the note is no longer outstanding due to the sale of the property. (2) The note provides initial proceeds of $15.7 million, with an additional $3.3 million available upon the satisfaction of certain conditions; bears a floating interest rate of 1-month LIBOR plus 3.75% subject to a floor rate of 3.75%; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. (3) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions, namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (4) The note may not be prepaid until August 2019, after which it is subject to a pre-payment penalty until March 2024. Prepayment can be made without penalty thereafter. (5) The note is subject to a pre-payment penalty except for any pre-payments made either between April 2017 and August 2017, or from April 2021 through maturity of the note. The note provides that on January 5, 2018, the rate of interest will adjust to a rate of 3.00% per annum plus the then-current five-year U.S. Treasury rate of interest, with a floor of 5.25%. (6) The note bears a minimum interest rate of 3.50%. (7) With limited exception, the note may not be prepaid until two months before maturity. (8) With limited exception, the note may not be prepaid until June 2025. (9) With limited exception, the note may not be prepaid until February 2025. (10) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (11) The note bears a fixed interest rate of 4.27% for the first 5 years of the loan, with an option for the lender to reset the interest rate after 5 years. (12) The note was refinanced in October 2016, provides initial proceeds of $15.0 million, with an additional $5.5 million available upon the satisfaction of certain conditions; bears a floating interest rate of the 1-month LIBOR plus 3.5%, subject to a floor rate of 4.0% and is subject to prepayment penalties subject to a declining scale from 3.0% penalty on or before the first anniversary date, a 2.0% penalty during the second anniversary year and a 1.0% penalty after the third anniversary date. We were in compliance with all debt covenants, current on all loan payments and not otherwise in default under any of our mortgage loans, as of September 30, 2017. Total future mortgage debt maturities, without respect to any extension of loan maturity, as of September 30, 2017 were as follows: For the remaining three months ending: December 31, 2017 $ 1,682,647 December 31, 2018 23,696,155 December 31, 2019 52,902,464 December 31, 2020 9,012,007 December 31, 2021 30,769,803 December 31, 2022 and thereafter 182,211,693 Total future maturities $ 300,274,769 7.0% Unsecured Notes. On November 21, 2014, the Operating Partnership issued 7.0% senior unsecured notes in the aggregate amount of $25.3 million (the “7% Notes”). The indenture requires quarterly payments of interest and matures on November 15, 2019. The 7% Notes are callable after November 15, 2017 at 101% of face value. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Ground, Building and Submerged Land Leases – We lease 2,086 square feet of commercial space next to The DeSoto for use as an office, retail or conference space, or for any related or ancillary purposes for the hotel and/or atrium space. In December 2007, we signed an amendment to the lease to include rights to the outdoor esplanade adjacent to the leased commercial space. The areas are leased under a six-year operating lease, which expired October 31, 2006 and has been renewed for the third of three optional five-year renewal periods expiring October 31, 2011, October 31, 2016 and October 31, 2021, respectively. Rent expense for this operating lease for each of the three months ended September 30, 2017 and 2016 totaled $18,245 and for each of the nine months ended September 30, 2017 and 2016, totaled $54,738 . We lease, as landlord, the entire fourteenth floor of The DeSoto hotel property to The Chatham Club, Inc. under a ninety-nine year lease expiring July 31, 2086. This lease was assumed upon the purchase of the building under the terms and conditions agreed to by the previous owner of the property. No rental income is recognized under the terms of this lease as the original lump sum rent payment of $990 was received by the previous owner and not prorated over the life of the lease. We lease a parking lot adjacent to the DoubleTree by Hilton Raleigh Brownstone-University in Raleigh, North Carolina. The land is leased under a second amendment, dated April 28, 1998, to a ground lease originally dated May 25, 1966. The original lease is a 50-year operating lease, which expired August 31, 2016. We exercised a renewal option for the first of three additional ten-year periods expiring August 31, 2026, August 31, 2036, and August 31, 2046, respectively. We hold an exclusive and irrevocable option to purchase the leased land at fair market value at August 1, 2018, or at the end of any 10-year renewal period, subject to the payment of an annual fee of $9,000, and other conditions. Rent expense for the three months ended September 30, 2017 and 2016, totaled $41,184 and $23,871, respectively, and for the nine months ended September 30, 2017 and 2016, totaled $88,925 and $71,612, respectively. We lease land adjacent to the Crowne Plaza Tampa Westshore for use as parking under a five-year agreement with the Florida Department of Transportation that commenced in July 2009. In May 2014, we extended the agreement for an additional five years. The agreement expires in July 2019. The agreement requires annual payments of $2,432, plus tax, and may be renewed for an additional five years. Rent expense for the three and nine months ended September 30, 2017 and 2016, each totaled $651 and $1,952, respectively. We lease 5,216 square feet of commercial office space in Williamsburg, Virginia under an agreement, as amended, that commenced September 1, 2009 and expires August 31, 2018. Rent expense for the three months ended September 30, 2017 and 2016 totaled and $22,224 and $22,552, respectively, and for the nine months ended September 30, 2017 and 2016 totaled $67,327 and $68,451, respectively We lease the parking garage adjacent to the Hyde Resort & Residences in Hollywood Beach, Florida. The parking garage is leased under a 20-year operating lease requiring monthly payments of $20,000, which expires in February, 2037. Rent expense for the three and nine months ended September 30, 2017 totaled $60,000 and $140,000, respectively. We also lease certain furniture and equipment under financing arrangements expiring between August 2017 and March 2019. A schedule of minimum future lease payments for the following three and twelve-month periods is as follows: For the remaining three months ending: December 31, 2017 $ 156,035 December 31, 2018 573,451 December 31, 2019 391,266 December 31, 2020 351,464 December 31, 2021 351,464 December 31, 2022 and thereafter 4,271,629 Total $ 6,095,309 Employment Agreements - The Company has entered into various employment contracts with employees that could result in obligations to the Company in the event of a change in control or termination without cause. Management Agreements – As of September 30, 2017, each of our wholly-owned hotels and the rental program and condominium association of the Hyde Resort & Residences operated under a management agreement with Chesapeake Hospitality (see Note 9). The management agreements expire between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. Each of the individual hotel management agreements may be terminated earlier than the stated term upon the sale of the hotel covered by the respective management agreement, in which case we may incur early termination fees. Franchise Agreements – As of September 30, 2017, most of our hotels operated under franchise licenses from national hotel companies. Under the franchise agreements, we are required to pay a franchise fee generally between 2.5% and 5.0% of room revenues, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenues from the hotels. The franchise agreements expire between July 2017 and October 2030. Each of our franchise agreements provides for early termination fees in the event the agreement is terminated before the stated term. On April 12, 2016 we allowed the franchise agreement on the Crowne Plaza Houston Downtown to expire. The property has been rebranded as The Whitehall. On July 31, 2017, we allowed the franchise agreement on the Hilton Savannah DeSoto to expire. The property has been rebranded as The DeSoto and operates as an independent hotel. Restricted Cash Reserves – Each month, we are required to escrow with the lenders on the Hilton Wilmington Riverside, The DeSoto, the DoubleTree by Hilton Raleigh Brownstone-University, the DoubleTree by Hilton Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, and the Georgian Terrace an amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties. We are also required by several of our lenders to establish individual property improvement funds to cover the cost of replacing capital assets at our properties. Each month, those contributions equal 4.0% of gross revenues for the Hilton Wilmington Riverside, The DeSoto, DoubleTree by Hilton Raleigh Brownstone–University, the DoubleTree by Hilton Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, The Whitehall, and the Georgian Terrace and equal 4.0% of room revenues for the DoubleTree by Hilton Philadelphia Airport. ESOP Loan and Purchase Commitment – The Company’s board of directors approved the ESOP on November 29, 2016, which was adopted by the Company in December 2016 and effective January 1, 2016. The ESOP is a non-contributory defined contribution plan covering all employees of the Company. The ESOP is a leveraged ESOP, meaning funds are loaned to the ESOP from the Company. The Company entered into a loan agreement with the ESOP on December 29, 2016, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock on the open market. Under the loan agreement, the aggregate principal amount outstanding at any time may not exceed $5.0 million and the ESOP may borrow additional funds up to that limit in the future, until December 29, 2036. Shares purchased by the ESOP are held in a suspense account for allocation among participants as contributions are made to the ESOP by the Company. The share allocations will be accounted for at fair value at the date of allocation. As of September 30, 2017, the ESOP had purchased 682,500 shares of the Company’s common stock in the open market for approximately $4.9 million, which the ESOP borrowed from the Company pursuant to the loan agreement. A total of 8,424 and 25,408 shares with a fair value of $60,075 and $178,137 were allocated or committed to be released from the suspense account and recognized as compensation cost during the three and nine months ended September 30, 2017, respectively. The remaining 657,092 unallocated shares have an approximate fair value of $3.9 million, as of September 30, 2017. At September 30, 2017, the ESOP held a total of 9,473 allocated shares, 15,935 committed-to-be-released shares and 657,092 suspense shares. Dividends on allocated shares are paid to the participants of the ESOP, while dividends on unallocated shares are used to pay down the ESOP loan from the Operating Partnership. Litigation –To our knowledge, no material litigation has been threatened against us. We are involved in routine litigation arising out of the ordinary course of business, all of which we expect to be covered by insurance and we believe it is not reasonably possible such matters will have a material adverse impact on our financial condition or results of operations or cash flows. |
Preferred Stock and Units
Preferred Stock and Units | 9 Months Ended |
Sep. 30, 2017 | |
Preferred Stock And Units [Abstract] | |
Preferred Stock and Units | 7. Preferred Stock and Units Preferred Stock - The Company is authorized to issue up to 11,000,000 shares of preferred stock. As of September 30, 2017, and December 31, 2016, there were 1,610,000 shares, of the Preferred Stock issued and outstanding. On August 23, 2016, the Company issued 1,610,000 shares, $0.01 par value per share, of its 8% Series B Preferred Stock for net proceeds after all expenses of approximately $37.8 million, which it contributed to the Operating Partnership for an equivalent number of preferred partnership units. Holders of the Company’s preferred stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. The Company pays cumulative cash distributions on the preferred stock at a rate of 8.00% per annum of the $25.00 liquidation preference per share. The preferred stock is not redeemable by the holders, has no maturity date and is not convertible into any other security of the Company or its affiliates. Preferred Units -The Company is the holder of the preferred partnership units issued by the Operating Partnership . As of September 30, 2017, and December 31, 2016, there were 1,610,000 preferred partnership units issued and outstanding, respectively. The Company is the holder of the Operating Partnership’s preferred partnership units, and is entitled to receive distributions, when authorized by the general partner of the Operating Partnership out of assets legally available for the payment of distributions. The Operating Partnership pays cumulative cash dividends on the preferred partnership units at a rate of 8.00% per annum of the $25.00 liquidation preference per unit. For each of the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017, the Operating Partnership has declared and has paid $0.50 per preferred unit, respectively, and $0.211 per preferred unit for the quarter ended September 30, 2016 and $0.50 per preferred unit for the quarter ended December 31, 2016. |
Common Stock and Units
Common Stock and Units | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Common Stock and Units | 8. Common Stock and Units Common Stock – The Company is authorized to issue up to 49,000,000 shares of common stock, $0.01 par value per share. Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Holders of the Company’s common stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. On December 2, 2016, the Company’s board of directors authorized a stock repurchase program under which the Company may purchase up to $10.0 million of its outstanding common stock, par value $0.01 per share, at prevailing prices on the open market or in privately negotiated transactions, at the discretion of management. The Company has and expects to continue to use available working capital to fund purchases under the stock repurchase program and intends to complete the repurchase program prior to December 31, 2017, unless extended by the board of directors. Through December 31, 2016 the Company repurchased 481,100 shares of common stock for approximately $3.2 million and the repurchased shares have been returned to the status of authorized but unissued shares of common stock. The Company did not repurchase any shares under the stock repurchase program during the three months ended September 30, 2017. Between January 3, 2017 and February 28, 2017, the ESOP purchased 682,500 shares of the Company’s common stock for approximately $4.9 million. Of the 682,500 ESOP shares purchased, 657,092 of these shares are considered unearned ESOP shares at September 30, 2017 and are excluded from the Company’s outstanding common stock on the consolidated balance sheets and the earnings per share calculations on the consolidated statements of operations. The following is a schedule of issuances, since January 1, 2016, of the Company’s common stock and related units of the Operating Partnership: On February 15, 2017, the Company was issued 12,000 units in the Operating Partnership and awarded 12,000 shares of restricted stock to its independent directors. On February 2, 2016, the Company was issued 36,250 units in the Operating Partnership and awarded an aggregate of 22,000 shares of unrestricted stock to certain executives and employees as well as 12,000 shares of restricted stock and 2,250 shares of unrestricted stock to certain of its independent directors. On February 1, 2016, two holders of units in the Operating Partnership redeemed 422,687 units for an equivalent number of shares of the Company’s common stock. As of September 30, 2017 and December 31, 2016, the Company had 13,823,459 and 14,468,551 shares of common stock outstanding, respectively. Operating Partnership Units – Holders of Operating Partnership units, other than the Company as general partner, have certain redemption rights, which enable them to cause the Operating Partnership to redeem their units in exchange for shares of the Company’s common stock on a one-for-one basis or, at the option of the Company, cash per unit equal to the average of the market price of the Company’s common stock for the 10 trading days immediately preceding the notice date of such redemption. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the limited partners or the stockholders of the Company. There have been no issuances or redemptions, since January 1, 2016, of units in the Operating Partnership other than the redemptions and issuances of units in the Operating Partnership to the Company described above. As of September 30, 2017 and December 31, 2016, the total number of Operating Partnership units outstanding was 16,258,691 and 16,246,691, respectively. As of September 30, 2017 and December 31, 2016, the total number of outstanding Operating Partnership units not owned by the Company was 1,778,140 and 1,778,140, respectively, with a fair market value of approximately $10.5 million and $12.1 million, respectively, based on the price per share of the common stock on such respective dates. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Chesapeake Hospitality . As of September 30, 2017, the members of Chesapeake Hospitality (a company that is majority-owned and controlled by the Company’s chairman and chief executive officer, and two former members of the Company’s board of directors) owned 1,686,442 shares, approximately 12.2%, of the Company’s outstanding common stock as well as 652,326 Operating Partnership units. The following is a summary of the transactions between Chesapeake Hospitality and us: Accounts Receivable – At September 30, 2017 and December 31, 2016, we were due $94,425 and $0, respectively, from Chesapeake Hospitality. Management Agreements – As of September 30, 2017, each of our wholly-owned hotels and the Hyde Resort & Residences operated under various management agreements with Chesapeake Hospitality. The management agreements each provide for an initial term of 5 years and expire between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. Each of the individual hotel management agreements may be terminated earlier than the stated term upon the sale of the hotel covered by the respective management agreement, in which case we may incur early termination fees. We also have a master agreement with Chesapeake Hospitality that has a five-year term, but may be extended for such additional periods as long as an individual management agreement remains in effect. The base management fees for The Whitehall and the Georgian Terrace were 2.00% through 2015, increased to 2.25% in 2016, and increased to 2.50% in 2017 and for each year thereafter. The base management fee for the DoubleTree Resort by Hilton Hollywood Beach was 2.00% from July 2015 through July 2016, increased to 2.25% in July 2016, and increases to 2.50% in July 2017 and each year thereafter. The base management fee for the Hyde Resort & Residences is 2.00% from January 2017 through January 2018, increases to 2.25% in January 2018, and increases to 2.50% in January 2019 and for each year thereafter. The base management fees for the remaining properties in the current portfolio are 2.65% through 2017 and decreases to 2.50% thereafter. For new individual hotel management agreements, Chesapeake Hospitality will receive a base management fee of 2.00% of gross revenues for the first full year from the commencement date through the anniversary date, 2.25% of gross revenues the second full year, and 2.50% of gross revenues for every year thereafter. The Company and Chesapeake Hospitality agreed to substitute the Hyde Resort & Residences for the Crowne Plaza Hampton Marina and there was no termination fee associated with the termination of the Crowne Plaza Hampton Marina management agreement. Each management agreement sets an incentive management fee equal to 10% of the amount by which gross operating profit, as defined in the management agreement, for a given year exceeds the budgeted gross operating profit for such year; provided, however, that the incentive management fee payable in respect of any such year shall not exceed 0.25% of the gross revenues of the hotel included in such calculation. Base management and administrative fees earned by Chesapeake Hospitality for our properties totaled $976,232 and $944,939 for the three months ended September 30, 2017 and 2016, respectively and $3,042,840 and $2,927,333 for the nine months ended September 30, 2017 and 2016, respectively $51,751 and $60,636 were accrued for the nine months ended September 30, 2017 and 2016, respectively Employee Medical Benefits – We purchase employee medical benefits through Maryland Hospitality, Inc. (d/b/a MHI Health), an affiliate of Chesapeake Hospitality for our employees as well as those employees that are employed by Chesapeake Hospitality that work exclusively for our hotel properties. Gross premiums for employee medical benefits paid by the Company (before offset of employee co-payments) were $1,292,287 and $3,962,161 for the three and nine months ended September 30, 2017, respectively and were approximately $1,267,721 and $3,813,333 for the three and nine months ended September 30, 2016, respectively. Sotherly Foundation – During 2015, the Company loaned $180,000 to the Sotherly Foundation, a non-profit organization to benefit wounded American veterans living in communities near our hotels. As of September 30, 2017, and December 31, 2016, the balance of the loan was $80,000, respectively. Loan Receivable - Affiliate – As of September 30, 2017, approximately $4.7 million was due the Operating Partnership for advances to the Company under a loan agreement dated December 29, 2016. The Company used the proceeds to make advances to the ESOP to purchase shares of the Company’s common stock. Others. We employ Ashley S. Kirkland, the daughter of our Chief Executive Officer as a legal analyst and Robert E. Kirkland IV, her husband, as our compliance officer. We also employ Andrew M. Sims Jr., the son of our Chief Executive Officer, as a manager. Compensation for the three months ended September 30, 2017 and 2016 totaled $87,915 and $79,453, respectively, and for the nine months ended September 30, 2017 and 2016 totaled approximately $267,557 and $246,084, respectively , for all three individuals. On February 1, 2016, one current member of the Company’s board of directors redeemed 322,687 units for an equivalent number of shares of the Company’s common stock, and one previous member of the board of directors redeemed 100,000 units for an equivalent number of shares of the Company’s common stock, pursuant to the terms of the partnership agreement. During the three-month period ending September 30, 2017 and 2016, the Company reimbursed $26,233 and $31,803, respectively and during the nine-month period ending September 30, 2017 and 2016, the Company reimbursed $132,239 and $101,571, respectively |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | 10. Retirement Plans 401(K) Plan - We maintain a 401(K) plan for qualified employees which is subject to “safe harbor” provisions and which requires that we match 100.0% of the first 3.0% of employee contributions and 50.0% of the next 2.0% of employee contributions. All employer matching funds vest immediately in accordance with the “safe harbor” provision. Contributions to the plan totaled $11,659 and $57,516 for the three and nine months ended September 30, 2017, respectively and $10,177 and $56,122 for the three and nine months ended September 30, 2016, respectively . Employee Stock Ownership Plan - The Company adopted an Employee Stock Ownership Plan (“ESOP”) in December 2016, effective January 1, 2016. The ESOP is a non-contributory defined contribution plan covering all employees of the Company. The Company sponsors and maintains the ESOP and related trust for the benefit of its eligible employees. The ESOP is a leveraged ESOP, meaning funds are loaned to the ESOP from the Company. The Company entered into a loan agreement with the ESOP on December 29, 2016, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock on the open market, which serve as collateral for the loan. Between January 3, 2017 and February 28, 2017, the Company’s ESOP purchased 682,500 shares of the Company’s common stock of an aggregate cost of $4.9 million. Shares purchased by the ESOP are held in a suspense account for allocation among participants. The share allocations are accounted for at fair value on the date of allocation as follows: September 30, 2017 December 31, 2016 Number of Shares Fair Value Number of Shares Fair Value Allocated shares 9,473 $ 64,321 - $ — Committed-to-be released shares 15,935 113,816 - — Total allocated and committed-to-be-released 25,408 $ 178,137 - $ — Unallocated shares 657,092 3,870,272 - — Total ESOP shares 682,500 $ 4,048,409 - $ — |
Indirect Hotel Operating Expens
Indirect Hotel Operating Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Other Income And Expenses [Abstract] | |
Indirect Hotel Operating Expenses | 11. Indirect Hotel Operating Expenses Indirect hotel operating expenses consists of the following expenses incurred by the hotels: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) General and administrative $ 3,194,007 $ 2,962,097 $ 9,788,564 $ 9,092,373 Sales and marketing 3,397,811 3,348,577 10,547,138 10,312,982 Repairs and maintenance 1,805,103 1,825,829 5,174,066 5,527,727 Property taxes 1,539,066 1,675,917 4,518,267 4,501,154 Utilities 1,568,324 1,751,562 4,394,631 4,799,329 Franchise fees 888,460 968,801 3,061,535 3,177,780 Management fees, including incentive 999,866 958,572 3,090,515 2,987,969 Insurance 620,244 618,599 1,845,702 1,984,269 Information and telecommunications 412,714 409,631 1,243,847 1,246,670 Other 783,654 83,449 1,355,477 197,041 Total indirect hotel operating expenses $ 15,209,249 $ 14,603,034 $ 45,019,742 $ 43,827,294 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The components of the income tax provision for the three and nine months ended September 30, 2017 and 2016 are as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Current: Federal $ (10,184 ) $ — $ — $ — State 97,641 63,429 197,881 147,791 87,457 63,429 197,881 147,791 Deferred: Federal (879,206 ) (437,390 ) (661,787 ) (429,257 ) State (158,561 ) (11,184 ) (117,984 ) (26,932 ) (1,037,767 ) (448,574 ) (779,771 ) (456,189 ) $ (950,310 ) $ (385,145 ) $ (581,890 ) $ (308,398 ) A reconciliation of the statutory federal income tax provision (benefit) to the Company’s income tax provision is as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Statutory federal income tax provision (benefit) $ (641,346 ) $ (650,790 ) $ 851,313 $ 233,267 Effect of non-taxable REIT income (loss) (248,043 ) 76,172 (1,513,100 ) (662,524 ) State income tax provision (benefit) (60,921 ) 189,473 79,897 120,859 $ (950,310 ) $ (385,145 ) $ (581,890 ) $ (308,398 ) As of September 30, 2017 and December 31, 2016, we had a net deferred tax asset of approximately $7.7 million and $6.9 million, respectively, of which, approximately $6.8 million and $6.0 million, respectively, are due to accumulated net operating losses of our TRS Lessee. These loss carryforwards will begin to expire in 2028 if not utilized by such time. As of both September 30, 2017 and December 31, 2016, approximately $0.2 million of the net deferred tax asset is attributable to our share of start-up expenses related to the DoubleTree Resort by Hilton Hollywood Beach, start-up expenses related to the opening of the Sheraton Louisville Riverside and the Crowne Plaza Tampa Westshore that were not deductible in the year incurred, but are being amortized over 15 years. The remainder of the net deferred tax asset is attributable to year-to-year timing differences including accrued, but not deductible, employee performance awards, vacation and sick pay, bad debt allowance and depreciation. We record a valuation allowance to reduce deferred tax assets to an amount that we believe is more likely than not to be realized. Because of expected future taxable income of our TRS Lessee, we have not recorded a valuation allowance to reduce our net deferred tax asset as of September 30, 2017 and December 31, 2016, respectively. We regularly evaluate the likelihood that our TRS Lessee will be able to realize its deferred tax assets and the continuing need for a valuation allowance. At September 30, 2017 and December 31, 2016, we determined, based on all available positive and negative evidence, that it is more-likely-than-not that future taxable income will be available during the carryforward periods to absorb all of the consolidated federal and state net operating loss carryforward of our TRS Lessee. A number of factors played a critical role in this determination, including: • a demonstrated track record of past profitability and utilization of past NOL carryforwards, • reasonable forecasts of future taxable income, and • anticipated changes in the lease rental payments from the TRS Lessee to subsidiaries of the Operating Partnership. |
Income Per Share and Per Unit
Income Per Share and Per Unit | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Income Per Share and Per Unit | 13. Income Per Share and Per Unit Income per Share . The limited partners’ outstanding limited partnership units in the Operating Partnership (which may be redeemed for common stock upon notice from the limited partners and following our election to redeem the units for stock rather than cash) have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income. The shares of Series B Preferred Stock are not convertible into or exchangeable for any other property or securities of the Company, except upon the occurrence of a change of control and have been excluded from the diluted earnings per share calculation, as there would be no impact on the current controlling stockholders. The 657,092 non-committed, unearned ESOP shares reduce the number of issued and outstanding common shares and similarly reduce the weighted average number of common shares outstanding. The allocated and committed to be released shares have been included in the weighted average diluted earnings per share calculation, and the amount of compensation for allocated shares is reflected in net income. There are no ESOP units, therefore there is no dilution on the calculation of earnings per unit. The computation of basic and diluted net income per share is presented below. Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income (loss) available to common stockholders for basic computation $ (1,550,555 ) $ (1,716,234 ) $ 597,385 $ 527,971 Denominator Weighted average number of common shares outstanding for basic computation 13,822,543 14,949,651 13,873,175 14,897,595 Basic net income (loss) per share $ (0.11 ) $ (0.11 ) $ 0.04 $ 0.04 Weighted average number of common shares outstanding for diluted computation 13,822,543 14,949,651 13,885,290 14,897,595 Diluted net income (loss) per share $ (0.11 ) $ (0.11 ) $ 0.04 $ 0.04 Income Per Unit – The computation of basic and diluted net income per unit is presented below. Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income (loss) available to common unitholders for basic computation $ (1,741,000 ) $ (1,889,080 ) $ 670,751 $ 634,348 Denominator Weighted average number of units outstanding 16,258,691 16,727,791 16,256,713 16,723,557 Basic and diluted net income (loss) per unit $ (0.11 ) $ (0.11 ) $ 0.04 $ 0.04 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On October 11, 2017, the Company closed a sale and issuance of 1,200,000 shares of its newly authorized 7.875% Series C cumulative redeemable perpetual preferred stock (the “Series C Preferred Stock”), for net proceeds after all estimated expenses of approximately $28.0 million. On October 17, 2017, the Company closed a sale and issuance of an additional 100,000 shares of its Series C Preferred Stock, for net proceeds of approximately $2.4 million, pursuant to the underwriters’ partial exercise of an option granted by the Company to purchase additional shares. The Company contributed the net proceeds from the offering to its Operating Partnership for an equivalent number of Series C preferred units. We intend to use the net proceeds to redeem in full the Operating Partnership’s 7.0% Senior Unsecured Notes due 2019 and for general corporate purposes, including potential future acquisitions of hotel properties. On October 11, 2017, we paid a quarterly dividend (distribution) of $0.11 per common share (and unit) to those stockholders (and unitholders of the Operating Partnership) of record on September 15, 2017. On October 12, 2017, the Operating Partnership notified Wilmington Trust, National Association of the Operating Partnership’s intent to redeem the entire $25.3 million aggregate principal amount of its 7.0% Notes due 2019, pursuant to the terms of the indenture. The 7% Notes will be redeemed on November 15, 2017 at a redemption price equal to 101% of the principal amount of the 7% Notes, plus any accrued and unpaid interest to, but not including, the redemption date. On October 16, 2017, we paid a On October 23, 2017, we authorized payment of a quarterly dividend (distribution) of $0.11 per common share (and unit) to the stockholders (and unitholders of the Operating Partnership) of record as of December 15, 2017. The dividend (distribution) is to be paid on January 11, 2018. On October 23, 2017, we authorized payment of a quarterly dividend of $0.50 per preferred share (and unit) to the Series B Preferred Stock holders (and preferred unitholders of the Operating Partnership) of record as of December 29, 2017. The dividend is to be paid on January 16, 2018. On October 23, 2017, we authorized payment of a quarterly dividend of $0.43203 per preferred share (and unit) to the Series C Preferred Stock holders (and preferred unitholders of the Operating Partnership) of record as of December 29, 2017. The dividend is to be paid on January 16, 2018. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The consolidated financial statements of the Company presented herein include all of the accounts of Sotherly Hotels Inc., the Operating Partnership, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of the Operating Partnership presented herein include all of the accounts of Sotherly Hotels LP, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. Additionally, all administrative expenses of the Company and those expenditures made by the Company on behalf of the Operating Partnership are reflected as the administrative expenses, expenditures and obligations thereto of the Operating Partnership, pursuant to the terms of the Partnership Agreement. |
Investment in Hotel Properties | Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at acquisition cost and allocated to land, property and equipment and identifiable intangible assets. 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 are removed from our accounts and any resulting gain or loss is included in the statements of operations. Expenditures under a renovation project which constitute additions or improvements that extend the life of the property are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 7 to 39 years for buildings and building improvements and 3 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse permanent changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceed its carrying value. If the estimated undiscounted future cash flows are found to be less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value would be recorded and an impairment loss recognized. |
Assets Held For Sale | Assets Held For Sale – We record assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. |
Cash and Cash Equivalents | Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) protection limits of $ 250,000. Our exposure to credit loss in the event of the failure of these institutions is represented by the difference between the FDIC protection limit and the total amounts on deposit. Management monitors, on a regular basis, the financial condition of the financial institutions along with the balances there on deposit to minimize our potential risk. |
Restricted Cash | Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements. |
Accounts Receivable | Accounts Receivable – Accounts receivable consists primarily of hotel guest and banqueting receivables. Ongoing evaluations of collectability are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. |
Inventories | Inventories – Inventories, consisting primarily of food and beverages, are stated at the lower of cost or market, with cost determined on a method that approximates first-in, first-out basis. |
Franchise License Fees | Franchise License Fees – Fees expended to obtain or renew a franchise license are amortized over the life of the license or renewal. The unamortized franchise fees as of September 30, 2017 and December 31, 2016 were $342,980 and $386,612, respectively. Amortization expense for the three-month periods ended September 30, 2017 and 2016 totaled $11,217 and $15,331, respectively, and for the nine-month periods ended September 30, 2017 and 2016 totaled $35,299 and $45,593, respectively. |
Deferred Financing and Offering Costs | Deferred Financing and Offering Costs – Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt and are reflected in mortgage loans, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in issuing equity and are reflected in prepaid expenses, inventory and other assets on the consolidated balance sheets. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations. Deferred offering costs are netted against our equity offerings when the offering is complete, whereby the costs are offset against the equity funds raised in the future and included in additional paid-in capital on the consolidated balance sheets, or if the offering expires and the offering costs exceed the funds raised in the offering then the excess will be included in corporate general and administrative expenses in the consolidated statements of operations. During the three and nine months ended September 30, 2017 the Company wrote off approximately $0 and $0.5 million of deferred offering costs, respectively. |
Derivative Instruments | Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the balance sheet and measured at fair value. Derivative instruments used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as an interest rate risk, are considered fair value hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For a derivative instrument designated as a cash flow hedge, the change in fair value each period is reported in accumulated other comprehensive income in stockholders’ equity and partners’ capital to the extent the hedge is effective. For a derivative instrument designated as a fair value hedge, the change in fair value each period is reported in earnings along with the change in fair value of the hedged item attributable to the risk being hedged. For a derivative instrument that does not qualify for hedge accounting or is not designated as a hedge, the change in fair value each period is reported in earnings. We use derivative instruments to add stability to interest expense and to manage our exposure to interest-rate movements. To accomplish this objective, we currently use an interest rate cap which acts as a cash flow hedge and is not designated as a hedge. We value our interest-rate cap at fair value, which we define as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We also have used derivative instruments in the Company’s stock to obtain more favorable terms on our financing. We do not enter into contracts to purchase or sell derivative instruments for speculative trading purposes. |
Fair Value Measurements | Fair Value Measurements – We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table represents our interest rate cap, mortgage loans and unsecured notes measured at fair value and the basis for that measurement: Level 1 Level 2 Level 3 December 31, 2016 Interest Rate Cap (1) $ — $ 33,597 $ — Mortgage loans (2) $ — $ (281,840,780 ) $ — Unsecured notes (3) $ (26,241,160 ) $ — $ — September 30, 2017 Interest Rate Cap (1) $ — $ 2,849 $ — Mortgage loans (2) $ — $ (294,869,206 ) $ — Unsecured notes (3) $ (25,836,360 ) $ — $ — (1) Interest rate cap, which caps a 1-month LIBOR rate at 2.5%. (2) Mortgage loans are reflected at outstanding principal balance, net of deferred financing costs on our Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016. (3) Unsecured notes are recorded at outstanding principal balance on our Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016. |
Noncontrolling Interest in Operating Partnership | Noncontrolling Interest in Operating Partnership – Certain hotel properties were acquired, in part, by the Operating Partnership through the issuance of limited partnership units of the Operating Partnership. The noncontrolling interest in the Operating Partnership is: ( i) increased or decreased by the limited partners’ pro-rata share of the Operating Partnership’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by redemption of partnership units for the Company’s common stock; and (iv) adjusted to equal the net equity of the Operating Partnership multiplied by the limited partners’ ownership percentage immediately after each issuance of units of the Operating Partnership and/or the Company’s common stock through an adjustment to additional paid-in capital. Net income or net loss is allocated to the noncontrolling interest in the Operating Partnership based on the weighted average percentage ownership throughout the period. |
Revenue Recognition | Revenue Recognition – Revenues from operations of the hotels and condominium hotel are recognized when the services are provided. Other hotel department revenues include cancellation charges, charges for TV, internet and telephone use, parking, gift shop sales and rentals from restaurant tenants, rooftop leases and gift shop operators. Management fees earned under the condominium rental program at the Hyde Resort & Residences are also reflected as other hotel operating revenue. Revenues are reported net of occupancy and other taxes collected from customers and remitted to governmental authorities. |
Lease Revenue | Lease Revenue – Several of our properties generate revenue from leasing commercial space adjacent to the hotel, the restaurant space within the hotel, apartment units and space on the roofs of our hotels for antennas and satellite dishes. We account for the lease income as revenue from other operating departments within the statement of operations pursuant to the terms of each lease. Lease revenue was approximately $ 0.4 million, for the each of the three months ended September 30, 2017 and 2016, respectively and approximately $1.3 million, for each of the nine months ended September 30, 2017 and 2016, respectively . A schedule of minimum future lease payments receivable for the remaining three and twelve-month lease periods is as follows: For the remaining three months ending: December 31, 2017 $ 425,322 December 31, 2018 1,112,282 December 31, 2019 868,289 December 31, 2020 832,695 December 31, 2021 725,244 December 31, 2022 and thereafter 3,085,873 Total $ 7,049,705 |
Income Taxes | Income Taxes – The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally will not be subject to federal income tax. MHI TRS, our wholly owned taxable REIT subsidiary which leases our hotels from subsidiaries of the Operating Partnership, is subject to federal and state income taxes. We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. As of September 30, 2017, and December 31, 2016, deferred tax assets totaled approximately $7.7 million and $6.9 million, respectively, of which approximately $6.8 million and $6.0 million relate to net operating losses of our TRS Lessee. A valuation allowance is required for deferred tax assets if, based on all available evidence, it is “more-likely-than-not” that all or a portion of the deferred tax asset will or will not be realized due to the inability to generate sufficient taxable income in certain financial statement periods. The “more-likely-than-not” analysis means the likelihood of realization is greater than 50%, that we will or will not be able to fully utilize the deferred tax assets against future taxable income. The net amount of deferred tax assets that are recorded on the financial statements must reflect the tax benefits that are expected to be realized using these criteria. We perform this analysis by evaluating future hotel revenues and expenses accounting for certain non-recurring costs and expenses during the current and prior two fiscal years as well as anticipated changes in the lease rental payments from the TRS Lessee to subsidiaries of the Operating Partnership. We have determined that it is more-likely-than-not that we will be able to fully utilize our deferred tax assets for future tax consequences, therefore no valuation allowance is required. As of September 30, 2017 and December 31, 2016, we had no uncertain tax positions. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2010 through 2016. In addition, as of September 30, 2017, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject generally include 2004 through 2016. The Operating Partnership is generally not subject to federal and state income taxes as the unit holders of the Partnership are subject to tax on their respective shares of the Partnership’s taxable income. |
Stock-Based Compensation | Stock-based Compensation – The Company’s 2004 Long Term Incentive Plan (the “2004 Plan”) and its 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permit the grant of stock options, restricted stock , unrestricted stock and performance share compensation awards to its employees for up to 350,000 and 750,000 shares of common stock, respectively. The Company believes that such awards better align the interests of its employees with those of its stockholders. Under the 2004 Plan, the Company made stock awards totaling 337,438 shares, including 255,938 shares issued to certain executives and employees and 81,500 restricted shares issued to its independent directors. Of the 255,938 shares issued to certain of our executives and employees, all have vested except 6,000 shares issued to the Chief Financial Officer upon execution of his employment contract which will vest pro rata on the next anniversary of the effective date of his employment agreement. All of the 81,500 restricted shares issued to the Company’s independent directors have vested. The 2004 Plan was terminated in 2013. Under the 2013 Plan, the Company has made stock awards totaling 121,100 shares, including 74,600 non-restricted shares to certain executives and employees and 46,500 restricted shares issued to its independent directors. All awards have vested except for 12,000 shares issued to the Company’s independent directors in February 2017, which will vest on December 31, 2017. Previously, under the 2004 Plan, and currently, under the 2013 Plan, the Company may issue a variety of performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of September 30, 2017, no performance-based stock awards have been granted. Total compensation cost recognized under the 2004 Plan and the 2013 Plan for each of the three months ended September 30, 2017 and 2016 was $4,980, and for the nine months ended September 30, 2017 and 2016 was $104,100 and $206,703, Additionally, the Company sponsors and maintains an ESOP and related trust for the benefit of its eligible employees. We reflect |
Advertising | Advertising – Advertising costs were $ 101,788 and $138,017 for the three months ended September 30, 2017 and 2016, respectively and were $ 251,892 and $ 333,076 for the nine months ended September 30, 2017 and 2016, respectively . Advertising costs are expensed as incurred. |
Involuntary Conversion of Assets | Involuntary Conversion of Assets – We record gains or losses on involuntary conversions of assets due to recovered insurance proceeds to the extent the undepreciated cost of a nonmonetary asset differs from the amount of monetary proceeds received. During the three and nine month periods ending September 30, 2017, we recognized approximately $0 and $1.0 million gain on involuntary conversion of assets, respectively, which is reflected in the consolidated statements of operations. |
Comprehensive Income | Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income. |
Segment Information | Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership. |
Use of Estimates | Use of Estimates – The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“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 from those estimates. |
Reclassifications | Reclassifications – Certain reclassifications in the amount of approximately $0.1 million and approximately $0.6 million for the three and nine month periods ending September 30, 2016, respectively, from rooms expense to indirect expense balances have been made to conform to the current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – In February 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-05, The FASB issued this update to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. Subtopic 610-20, which was issued in May 2014 as a part of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. The amendments in this update also simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses in many transactions related to: a partial sale of real estate; a transfer of a nonfinancial asset within the scope of FASB ASC Topic 845, ; a contribution of a nonfinancial asset to form a joint venture; and a transfer of a nonfinancial asset to an equity method investee. The amendments in this ASU are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. We will adopt this ASU as of January 1, 2018. We do not expect this ASU to have a material impact on the Company’s current consolidated financial position, results of operations or cash flows, however this ASU may have a significant impact on future transactions. In January 2017, the FASB issued ASU 2017-01, Business Combinations – Clarifying the Definition of a Business (Topic 805). In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers – Narrow-Scope Improvements and Practical Expedients (Topic 606) In April 2016, the FASB issued ASU No. 2016-10 , Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing (Topic 606) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In May 2014, the FASB issued ASU No. 2014-09 , Revenue from Contracts with Customers (Topic 606) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Derivative Instruments and Mortgage Debt Measured at Fair Value | The following table represents our interest rate cap, mortgage loans and unsecured notes measured at fair value and the basis for that measurement: Level 1 Level 2 Level 3 December 31, 2016 Interest Rate Cap (1) $ — $ 33,597 $ — Mortgage loans (2) $ — $ (281,840,780 ) $ — Unsecured notes (3) $ (26,241,160 ) $ — $ — September 30, 2017 Interest Rate Cap (1) $ — $ 2,849 $ — Mortgage loans (2) $ — $ (294,869,206 ) $ — Unsecured notes (3) $ (25,836,360 ) $ — $ — (1) Interest rate cap, which caps a 1-month LIBOR rate at 2.5%. (2) Mortgage loans are reflected at outstanding principal balance, net of deferred financing costs on our Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016. (3) Unsecured notes are recorded at outstanding principal balance on our Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016. |
Schedule of Minimum Future Lease Payments Receivable | A schedule of minimum future lease payments receivable for the remaining three and twelve-month lease periods is as follows: For the remaining three months ending: December 31, 2017 $ 425,322 December 31, 2018 1,112,282 December 31, 2019 868,289 December 31, 2020 832,695 December 31, 2021 725,244 December 31, 2022 and thereafter 3,085,873 Total $ 7,049,705 |
Acquisition of Hotel Property (
Acquisition of Hotel Property (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Allocation of Estimated Purchase Price Based on Fair Values | The allocation of the estimated purchase price based on fair values is as follows: Hyde Resort & Residences Land and land improvements $ 500 Buildings and improvements 4,309,500 Furniture, fixtures and equipment 72,616 Investment in hotel properties 4,382,616 Accrued liabilities and other costs (866,142 ) Prepaid expenses, inventory and other assets 470,375 Net cash $ 3,986,849 |
Investment in Hotel Propertie25
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of Investment in Hotel Properties, Net | Investment in hotel properties, net as of September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Land and land improvements $ 59,009,041 $ 57,851,380 Buildings and improvements 346,142,725 336,996,876 Furniture, fixtures and equipment 49,056,456 43,458,781 454,208,222 438,307,037 Less: accumulated depreciation and impairment (96,563,135 ) (89,713,125 ) Investment in Hotel Properties, Net $ 357,645,087 $ 348,593,912 |
Schedule of Investment in Hotel Properties Held for Sale, Net | Investment in hotel properties held for sale, net as of September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Land and land improvements $ — $ 1,097,096 Buildings and improvements — 6,242,504 Furniture, fixtures and equipment — 2,289,008 — 9,628,608 Less: accumulated depreciation and impairment — (4,295,608 ) Investment in Hotel Properties Held for Sale, Net $ — $ 5,333,000 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgage Debt Obligations on Hotels | The following table sets forth our mortgage debt obligations on our hotels. Balance Outstanding as of September 30, December 31, Prepayment Maturity Amortization Interest Property 2017 2016 Penalties Date Provisions Rate Crowne Plaza Hampton Marina (1) $ - $ 2,584,633 None 11/1/2019 3 years 5.00% Crowne Plaza Tampa Westshore ( 2) 15,353,500 15,561,400 None 6/30/2019 25 years LIBOR plus 3.75 % The DeSoto (3) 34,845,934 30,000,000 Yes 7/1/2026 25 years 4.25% DoubleTree by Hilton Jacksonville Riverfront ( 4) 35,422,241 19,291,716 Yes 7/11/2024 30 years 4.88% DoubleTree by Hilton Laurel (5) 9,182,987 9,329,005 Yes 8/5/2021 25 years 5.25% DoubleTree by Hilton Philadelphia Airport (6) 30,646,946 31,261,991 None 4/1/2019 25 years LIBOR plus 3.00 % DoubleTree by Hilton Raleigh Brownstone University (7) 14,571,181 14,773,885 n/a 8/1/2018 30 years 4.78% DoubleTree Resort by Hilton Hollywood Beach (8) 58,249,890 58,935,818 n/a 10/1/2025 30 years 4.913% Georgian Terrace (9) 45,230,148 45,826,038 n/a 6/1/2025 30 years 4.42% Hilton Wilmington Riverside (10) 30,000,000 30,000,000 Yes 1/1/2027 25 years 4.25% Sheraton Louisville Riverside (11) 11,771,942 11,977,557 Yes 12/1/2026 25 years 4.27% The Whitehall (12) 15,000,000 15,000,000 Yes 10/12/2021 18 years LIBOR plus 3.50 % Total Mortgage Principal Balance $ 300,274,769 $ 284,542,043 Deferred financing costs, net (2,041,958 ) (2,049,409 ) Unamortized premium on loan 197,144 215,655 Total Mortgage Loans, Net $ 298,429,955 $ 282,708,289 (1) As of February 7, 2017, the note is no longer outstanding due to the sale of the property. (2) The note provides initial proceeds of $15.7 million, with an additional $3.3 million available upon the satisfaction of certain conditions; bears a floating interest rate of 1-month LIBOR plus 3.75% subject to a floor rate of 3.75%; the note provides that the mortgage can be extended for two additional periods of one year each, subject to certain conditions. (3) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions, namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (4) The note may not be prepaid until August 2019, after which it is subject to a pre-payment penalty until March 2024. Prepayment can be made without penalty thereafter. (5) The note is subject to a pre-payment penalty except for any pre-payments made either between April 2017 and August 2017, or from April 2021 through maturity of the note. The note provides that on January 5, 2018, the rate of interest will adjust to a rate of 3.00% per annum plus the then-current five-year U.S. Treasury rate of interest, with a floor of 5.25%. (6) The note bears a minimum interest rate of 3.50%. (7) With limited exception, the note may not be prepaid until two months before maturity. (8) With limited exception, the note may not be prepaid until June 2025. (9) With limited exception, the note may not be prepaid until February 2025. (10) The note provides initial proceeds of $30.0 million, with an additional $5.0 million available upon the satisfaction of certain conditions namely, the completion of a renovation project; amortizes on a 25-year schedule after a 1-year interest-only period; and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date. (11) The note bears a fixed interest rate of 4.27% for the first 5 years of the loan, with an option for the lender to reset the interest rate after 5 years. (12) The note was refinanced in October 2016, provides initial proceeds of $15.0 million, with an additional $5.5 million available upon the satisfaction of certain conditions; bears a floating interest rate of the 1-month LIBOR plus 3.5%, subject to a floor rate of 4.0% and is subject to prepayment penalties subject to a declining scale from 3.0% penalty on or before the first anniversary date, a 2.0% penalty during the second anniversary year and a 1.0% penalty after the third anniversary date. |
Schedule of Future Mortgage Debt Maturities | Total future mortgage debt maturities, without respect to any extension of loan maturity, as of September 30, 2017 were as follows: For the remaining three months ending: December 31, 2017 $ 1,682,647 December 31, 2018 23,696,155 December 31, 2019 52,902,464 December 31, 2020 9,012,007 December 31, 2021 30,769,803 December 31, 2022 and thereafter 182,211,693 Total future maturities $ 300,274,769 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Minimum Future Lease Payments | A schedule of minimum future lease payments for the following three and twelve-month periods is as follows: For the remaining three months ending: December 31, 2017 $ 156,035 December 31, 2018 573,451 December 31, 2019 391,266 December 31, 2020 351,464 December 31, 2021 351,464 December 31, 2022 and thereafter 4,271,629 Total $ 6,095,309 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Shares Allocations are Accounted For Fair Value on The Date of Allocations | The share allocations are accounted for at fair value on the date of allocation as follows: September 30, 2017 December 31, 2016 Number of Shares Fair Value Number of Shares Fair Value Allocated shares 9,473 $ 64,321 - $ — Committed-to-be released shares 15,935 113,816 - — Total allocated and committed-to-be-released 25,408 $ 178,137 - $ — Unallocated shares 657,092 3,870,272 - — Total ESOP shares 682,500 $ 4,048,409 - $ — |
Indirect Hotel Operating Expe29
Indirect Hotel Operating Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Income And Expenses [Abstract] | |
Summary of Indirect Hotel Operating Expenses | Indirect hotel operating expenses consists of the following expenses incurred by the hotels: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) General and administrative $ 3,194,007 $ 2,962,097 $ 9,788,564 $ 9,092,373 Sales and marketing 3,397,811 3,348,577 10,547,138 10,312,982 Repairs and maintenance 1,805,103 1,825,829 5,174,066 5,527,727 Property taxes 1,539,066 1,675,917 4,518,267 4,501,154 Utilities 1,568,324 1,751,562 4,394,631 4,799,329 Franchise fees 888,460 968,801 3,061,535 3,177,780 Management fees, including incentive 999,866 958,572 3,090,515 2,987,969 Insurance 620,244 618,599 1,845,702 1,984,269 Information and telecommunications 412,714 409,631 1,243,847 1,246,670 Other 783,654 83,449 1,355,477 197,041 Total indirect hotel operating expenses $ 15,209,249 $ 14,603,034 $ 45,019,742 $ 43,827,294 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Provision | The components of the income tax provision for the three and nine months ended September 30, 2017 and 2016 are as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Current: Federal $ (10,184 ) $ — $ — $ — State 97,641 63,429 197,881 147,791 87,457 63,429 197,881 147,791 Deferred: Federal (879,206 ) (437,390 ) (661,787 ) (429,257 ) State (158,561 ) (11,184 ) (117,984 ) (26,932 ) (1,037,767 ) (448,574 ) (779,771 ) (456,189 ) $ (950,310 ) $ (385,145 ) $ (581,890 ) $ (308,398 ) |
Reconciliation of Statutory Federal Income Tax Provision (Benefit) | A reconciliation of the statutory federal income tax provision (benefit) to the Company’s income tax provision is as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Statutory federal income tax provision (benefit) $ (641,346 ) $ (650,790 ) $ 851,313 $ 233,267 Effect of non-taxable REIT income (loss) (248,043 ) 76,172 (1,513,100 ) (662,524 ) State income tax provision (benefit) (60,921 ) 189,473 79,897 120,859 $ (950,310 ) $ (385,145 ) $ (581,890 ) $ (308,398 ) |
Income Per Share and Per Unit (
Income Per Share and Per Unit (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The computation of basic and diluted net income per share is presented below. Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income (loss) available to common stockholders for basic computation $ (1,550,555 ) $ (1,716,234 ) $ 597,385 $ 527,971 Denominator Weighted average number of common shares outstanding for basic computation 13,822,543 14,949,651 13,873,175 14,897,595 Basic net income (loss) per share $ (0.11 ) $ (0.11 ) $ 0.04 $ 0.04 Weighted average number of common shares outstanding for diluted computation 13,822,543 14,949,651 13,885,290 14,897,595 Diluted net income (loss) per share $ (0.11 ) $ (0.11 ) $ 0.04 $ 0.04 |
Computation of Basic and Diluted Net Income Per Unit | The computation of basic and diluted net income per unit is presented below. Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Numerator Net income (loss) available to common unitholders for basic computation $ (1,741,000 ) $ (1,889,080 ) $ 670,751 $ 634,348 Denominator Weighted average number of units outstanding 16,258,691 16,727,791 16,256,713 16,723,557 Basic and diluted net income (loss) per unit $ (0.11 ) $ (0.11 ) $ 0.04 $ 0.04 |
Organization and Description 32
Organization and Description of Business - Additional Information (Detail) | Sep. 02, 2017USD ($) | Jun. 29, 2017USD ($) | Jun. 01, 2017USD ($) | Feb. 07, 2017USD ($) | Jan. 30, 2017USD ($)RoomParkingSpaces | Dec. 02, 2016USD ($)$ / shares | Dec. 01, 2016USD ($) | Nov. 03, 2016USD ($) | Oct. 12, 2016USD ($)mortgage | Aug. 23, 2016USD ($)shares | Jun. 30, 2016USD ($) | Jun. 27, 2016USD ($) | Mar. 21, 2016 | Feb. 28, 2017USD ($)shares | Sep. 30, 2017USD ($)HotelRoom$ / sharesshares | Sep. 30, 2017USD ($)HotelRoom$ / sharesshares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 29, 2016USD ($) | Jan. 01, 2016USD ($) |
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Date of incorporation | Aug. 20, 2004 | |||||||||||||||||||
Investment in number of hotels | Hotel | 11 | 11 | ||||||||||||||||||
Rooms in hotel | Room | 2,838 | 2,838 | ||||||||||||||||||
Date of commencement of business | Dec. 21, 2004 | |||||||||||||||||||
Number of hotels acquired before commencement of business | Hotel | 6 | |||||||||||||||||||
Debt instrument maturity date | Nov. 13, 2017 | |||||||||||||||||||
Mortgage loan term period | 5 years | |||||||||||||||||||
Proceeds of mortgage debt | $ 15,000,000 | $ 40,500,000 | $ 45,700,000 | |||||||||||||||||
Mortgage loans | $ 20,500,000 | $ 300,274,769 | $ 300,274,769 | $ 284,542,043 | ||||||||||||||||
Floating rate of interest rate | 3.50% | |||||||||||||||||||
Amortization Period | 18 years | |||||||||||||||||||
Floating interest rate period | 1 month | |||||||||||||||||||
Fixed interest rate | 4.00% | |||||||||||||||||||
Preferred stock, shares issued | shares | 1,610,000 | 1,610,000 | 1,610,000 | |||||||||||||||||
Preferred stock, dividend rate percentage | 8.00% | |||||||||||||||||||
Proceeds from sale of preferred stock | 37,774,229 | |||||||||||||||||||
Mortgage loan additional earn-out provision | $ 5,500,000 | |||||||||||||||||||
Number of parts mortgage loan issued | mortgage | 2 | |||||||||||||||||||
Repurchase of common stock | $ 3,200,000 | |||||||||||||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||||
Number of common stock shares repurchased | shares | 0 | 0 | 481,100 | |||||||||||||||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | $ 5,000,000 | ||||||||||||||||||
Number of common stock, shares purchased | shares | 682,500 | |||||||||||||||||||
Purchased common stock at an aggregate cost | $ 4,900,000 | $ 4,874,758 | ||||||||||||||||||
Crowne Plaza Hampton Marina [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Proceeds from sale of assets | $ 5,600,000 | |||||||||||||||||||
Commercial Condominium Unit of Hyde Resort & Residences [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Rooms in hotel | Room | 400 | |||||||||||||||||||
Commercial unit purchase price | $ 4,800,000 | |||||||||||||||||||
Number of parking space lease agreement entered | ParkingSpaces | 400 | |||||||||||||||||||
Proceeds from pre-opening services fee | $ 800,000 | |||||||||||||||||||
Commercial Unit of Planned Hyde Beach House Resort & Residences [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Commercial unit purchase price | $ 5,100,000 | |||||||||||||||||||
Pre-opening services fee receivable | $ 800,000 | |||||||||||||||||||
Maximum [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Repurchase of common stock | $ 10,000,000 | |||||||||||||||||||
Sotherly Hotels LP [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Proceeds of mortgage debt | $ 40,500,000 | 45,700,000 | ||||||||||||||||||
Proceeds from sale of preferred stock | $ 37,774,229 | |||||||||||||||||||
8.0% Senior Unsecured Notes [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Interest rate | 8.00% | |||||||||||||||||||
Debt instrument redeemed, principal amount | $ 27,600,000 | |||||||||||||||||||
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Preferred stock, shares issued | shares | 1,610,000 | |||||||||||||||||||
Preferred stock, dividend rate percentage | 8.00% | |||||||||||||||||||
Proceeds from sale of preferred stock | $ 37,800,000 | |||||||||||||||||||
DeSoto [Member] | Mortgage Loans [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Jul. 1, 2026 | |||||||||||||||||||
Proceeds of mortgage debt | $ 30,000,000 | |||||||||||||||||||
Mortgage loans | $ 34,845,934 | $ 34,845,934 | $ 30,000,000 | |||||||||||||||||
Amortization Period | 25 years | |||||||||||||||||||
Period subject to certain terms and conditions | 1 year | |||||||||||||||||||
Mortgage loan additional earn-out provision | $ 5,000,000 | |||||||||||||||||||
Fixed interest rate | 4.25% | |||||||||||||||||||
Crowne Plaza Tampa Westshore [Member] | Mortgage Loans [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Jun. 30, 2019 | |||||||||||||||||||
Proceeds of mortgage debt | $ 15,700,000 | |||||||||||||||||||
Mortgage loans | $ 15,353,500 | $ 15,353,500 | 15,561,400 | |||||||||||||||||
Floating rate of interest rate | 3.75% | |||||||||||||||||||
Amortization Period | 25 years | |||||||||||||||||||
Fixed interest rate | 3.75% | 3.75% | ||||||||||||||||||
Mortgage loan additional earn-out provision | $ 3,300,000 | |||||||||||||||||||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Dec. 1, 2026 | Dec. 1, 2026 | ||||||||||||||||||
Mortgage loan term period | 5 years | |||||||||||||||||||
Interest rate | 4.27% | |||||||||||||||||||
Proceeds of mortgage debt | $ 12,000,000 | |||||||||||||||||||
Mortgage loans | $ 11,771,942 | $ 11,771,942 | 11,977,557 | |||||||||||||||||
Amortization Period | 25 years | 25 years | ||||||||||||||||||
Fixed interest rate | 4.27% | |||||||||||||||||||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | Sotherly Hotels LP [Member] | Maximum [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Guaranteed percentage of unpaid principal balance, interest, and other amounts owed | 50.00% | |||||||||||||||||||
Crowne Plaza Hampton Marina [Member] | Mortgage Loans [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Nov. 1, 2019 | Nov. 1, 2019 | ||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||
Mortgage loans | $ 0 | 2,584,633 | ||||||||||||||||||
Amortization Period | 3 years | |||||||||||||||||||
Debt instrument, date of first required payment | Dec. 1, 2016 | |||||||||||||||||||
Debt instrument periodic payment | $ 15,367 | |||||||||||||||||||
Fixed interest rate | 5.00% | |||||||||||||||||||
Double Tree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Jul. 11, 2024 | |||||||||||||||||||
Mortgage loans | $ 35,422,241 | $ 35,422,241 | $ 19,291,716 | |||||||||||||||||
Amortization Period | 30 years | |||||||||||||||||||
Fixed interest rate | 4.88% | |||||||||||||||||||
MONY Life Insurance Company [Member] | DeSoto [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Jul. 1, 2026 | |||||||||||||||||||
Mortgage loans | $ 35,000,000 | |||||||||||||||||||
Mortgage loan term period | 10 years | |||||||||||||||||||
Amortization schedule | 25 years | |||||||||||||||||||
Interest rate | 4.25% | |||||||||||||||||||
Proceeds of mortgage debt | $ 5,000,000 | |||||||||||||||||||
MONY Life Insurance Company [Member] | Hilton Savannah DeSoto [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Nov. 30, 2026 | |||||||||||||||||||
Mortgage loans | $ 35,000,000 | |||||||||||||||||||
Mortgage loan term period | 10 years | |||||||||||||||||||
Proceeds of mortgage debt | $ 30,000,000 | |||||||||||||||||||
Amortization Period | 25 years | |||||||||||||||||||
Fixed interest rate | 4.25% | |||||||||||||||||||
Mortgage loan additional earn-out provision | $ 5,000,000 | |||||||||||||||||||
Fifth Third Bank [Member] | Crowne Plaza Tampa Westshore [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Mortgage loan term period | 3 years | |||||||||||||||||||
Mortgage loans | $ 19,000,000 | |||||||||||||||||||
Floating rate of interest rate | 3.75% | |||||||||||||||||||
Amortization Period | 25 years | |||||||||||||||||||
Floating interest rate period | 30 days | |||||||||||||||||||
Fixed interest rate | 3.75% | |||||||||||||||||||
Period subject to certain terms and conditions | 2 years | |||||||||||||||||||
Wells Fargo Bank, N.A [Member] | Double Tree by Hilton Jacksonville Riverfront [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Debt instrument maturity date | Jul. 11, 2024 | |||||||||||||||||||
Mortgage loans | $ 35,500,000 | |||||||||||||||||||
Amortization Period | 30 years | |||||||||||||||||||
Fixed interest rate | 4.88% | |||||||||||||||||||
Operating Partnership [Member] | ||||||||||||||||||||
Organization Consolidation and Presentation of Financial Statements [Line Items] | ||||||||||||||||||||
Percentage of operating partnership owned | 89.10% | 89.10% |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Segmentshares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Federal Deposit Insurance Corporation protection limits | $ 250,000 | $ 250,000 | |||
Un-amortized franchise fees | 342,980 | 342,980 | $ 386,612 | ||
Amortization expense | 11,217 | $ 15,331 | 35,299 | $ 45,593 | |
Deferred offering costs write off | 0 | 500,000 | |||
Lease revenue | 400,000 | 400,000 | 1,300,000 | 1,300,000 | |
Deferred income taxes | 7,729,111 | 7,729,111 | 6,949,340 | ||
Deferred tax assets related to net operating losses | 6,800,000 | $ 6,800,000 | 6,000,000 | ||
Minimum percentage of likelihood of realization of deferred tax assets | 50.00% | ||||
Deferred tax assets valuation allowance | 0 | $ 0 | |||
Uncertain tax positions | 0 | 0 | $ 0 | ||
Compensation cost recognized | 282,237 | 206,702 | |||
Advertising cost | 101,788 | 138,017 | 251,892 | 333,076 | |
Gain on involuntary conversion of assets | 0 | $ 1,041,815 | |||
Number of reportable segment | Segment | 1 | ||||
Reclassifications of expenses from rooms expense to indirect expense | 15,209,249 | 14,603,034 | $ 45,019,742 | 43,827,294 | |
Reclassifications of Expenses [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Reclassifications of expenses from rooms expense to indirect expense | 100,000 | 600,000 | |||
2004 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 337,438 | ||||
Termination year of stock based compensation plan | 2,013 | ||||
2004 Plan [Member] | Executives and Employees [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 255,938 | ||||
2004 Plan [Member] | Director [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 81,500 | ||||
Stock-based Compensation , Number of Shares, Vested | shares | 81,500 | ||||
2004 Plan [Member] | Chief Financial Officer [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued but not vested | shares | 6,000 | ||||
2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 121,100 | ||||
Performance-based stock awards granted | shares | 0 | ||||
2013 Plan [Member] | Executives and Employees [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 74,600 | ||||
2013 Plan [Member] | Director [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Shares issued under plan | shares | 46,500 | ||||
Shares issued but not vested | shares | 12,000 | ||||
2004 and 2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Compensation cost recognized | $ 4,980 | $ 4,980 | $ 104,100 | $ 206,703 | |
Maximum [Member] | 2004 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted, unrestricted and performance stock awards permitted to grant to employees | shares | 350,000 | 350,000 | |||
Maximum [Member] | 2013 Plan [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted, unrestricted and performance stock awards permitted to grant to employees | shares | 750,000 | 750,000 | |||
Buildings and Improvements [Member] | Minimum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 7 years | ||||
Buildings and Improvements [Member] | Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 39 years | ||||
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 3 years | ||||
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of the assets | 10 years |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Derivative Instruments and Mortgage Debt Measured at Fair Value (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Level 1 [Member] | Unsecured Notes [Member] | ||
Derivatives Fair Value [Line Items] | ||
Debt instruments measured at fair value | $ (25,836,360) | $ (26,241,160) |
Level 2 [Member] | Interest Rate Cap [Member] | ||
Derivatives Fair Value [Line Items] | ||
Interest rate cap | 2,849 | 33,597 |
Level 2 [Member] | Mortgage Loans [Member] | ||
Derivatives Fair Value [Line Items] | ||
Debt instruments measured at fair value | $ (294,869,206) | $ (281,840,780) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Derivative Instruments and Mortgage Debt Measured at Fair Value (Parenthetical) (Detail) | Sep. 30, 2017 | Dec. 31, 2016 |
1-Month LIBOR | ||
Derivatives Fair Value [Line Items] | ||
Interest rate cap for loan | 2.50% | 2.50% |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Minimum Future Lease Payments Receivable (Detail) | Sep. 30, 2017USD ($) |
Leases [Abstract] | |
For the remaining three months ending: December 31, 2017 | $ 425,322 |
December 31, 2018 | 1,112,282 |
December 31, 2019 | 868,289 |
December 31, 2020 | 832,695 |
December 31, 2021 | 725,244 |
December 31, 2022 and thereafter | 3,085,873 |
Total | $ 7,049,705 |
Acquisition of Hotel Property -
Acquisition of Hotel Property - Additional Information (Detail) - Commercial Condominium Unit of Hyde Resort & Residences [Member] - USD ($) $ in Millions | Jan. 30, 2017 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||
Commercial unit purchase price | $ 4.8 | |
Total revenue from acquisitions | $ 2.8 | |
Net income from acquisitions | $ 0.6 |
Acquisition of Hotel Property38
Acquisition of Hotel Property - Allocation of Estimated Purchase Price Based on Fair Values (Detail) - USD ($) | Jan. 30, 2017 | Sep. 30, 2017 |
Business Acquisition [Line Items] | ||
Net cash | $ 3,986,849 | |
Commercial Condominium Unit of Hyde Resort & Residences [Member] | ||
Business Acquisition [Line Items] | ||
Land and land improvements | $ 500 | |
Buildings and improvements | 4,309,500 | |
Furniture, fixtures and equipment | 72,616 | |
Investment in hotel properties | 4,382,616 | |
Accrued liabilities and other costs | (866,142) | |
Prepaid expenses, inventory and other assets | 470,375 | |
Net cash | $ 3,986,849 |
Investment in Hotel Propertie39
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net - Schedule of Investment in Hotel Properties, Net (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total Gross | $ 454,208,222 | $ 438,307,037 |
Less: accumulated depreciation and impairment | (96,563,135) | (89,713,125) |
Total Net | 357,645,087 | 348,593,912 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Gross | 59,009,041 | 57,851,380 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Gross | 346,142,725 | 336,996,876 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Gross | $ 49,056,456 | $ 43,458,781 |
Investment in Hotel Propertie40
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net - Schedule of Investment in Hotel Properties Held for Sale, Net (Detail) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment [Line Items] | |
Total Gross | $ 9,628,608 |
Less: accumulated depreciation and impairment | (4,295,608) |
Investment in Hotel Properties Held for Sale, Net | 5,333,000 |
Land and Land Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Total Gross | 1,097,096 |
Buildings and Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Total Gross | 6,242,504 |
Furniture, Fixtures and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Total Gross | $ 2,289,008 |
Investment in Hotel Propertie41
Investment in Hotel Properties, Net and Investment in Hotel Properties Held for Sale, Net - Additional Information (Detail) - USD ($) | Feb. 07, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Proceeds From Sales Of Business Affiliate And Productive Assets [Line Items] | ||||
Gain (loss) on sale/disposal of assets | $ (189,267) | $ (51,569) | $ (329,461) | |
Crowne Plaza Hampton Marina [Member] | ||||
Proceeds From Sales Of Business Affiliate And Productive Assets [Line Items] | ||||
Proceeds from sale of assets | $ 5,600,000 | |||
Gain (loss) on sale/disposal of assets | $ 100,000 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Millions | Mar. 21, 2016 | Nov. 21, 2014 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Mortgage loan outstanding balance | $ 298.4 | $ 282.7 | ||
Debt instrument maturity date | Nov. 13, 2017 | |||
7.0% Senior Unsecured Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate on loan | 7.00% | |||
Borrowed amount | $ 25.3 | |||
Debt instrument maturity date | Nov. 15, 2019 | |||
Debt instrument callable date | Nov. 15, 2017 | |||
Notes face value | 101.00% |
Debt - Schedule of Mortgage Deb
Debt - Schedule of Mortgage Debt Obligations on Hotels (Detail) - USD ($) | Nov. 03, 2016 | Oct. 12, 2016 | Mar. 21, 2016 | Sep. 30, 2017 | Feb. 07, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 20,500,000 | $ 300,274,769 | $ 284,542,043 | |||
Deferred financing costs, net | (2,041,958) | (2,049,409) | ||||
Unamortized premium on loan | 197,144 | 215,655 | ||||
Total Mortgage Loans, Net | $ 298,429,955 | 282,708,289 | ||||
Maturity Date | Nov. 13, 2017 | |||||
Amortization Provisions, Term | 18 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | |||||
Crowne Plaza Hampton Marina [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 0 | 2,584,633 | ||||
Prepayment Penalties | None | |||||
Maturity Date | Nov. 1, 2019 | Nov. 1, 2019 | ||||
Amortization Provisions, Term | 3 years | |||||
Interest rate applicable to the mortgage loan | 5.00% | |||||
Crowne Plaza Tampa Westshore [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 15,353,500 | 15,561,400 | ||||
Prepayment Penalties | None | |||||
Maturity Date | Jun. 30, 2019 | |||||
Amortization Provisions, Term | 25 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.75% | |||||
The DeSoto [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 34,845,934 | 30,000,000 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Jul. 1, 2026 | |||||
Amortization Provisions, Term | 25 years | |||||
Interest rate applicable to the mortgage loan | 4.25% | |||||
Double Tree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 35,422,241 | 19,291,716 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Jul. 11, 2024 | |||||
Amortization Provisions, Term | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.88% | |||||
Double Tree by Hilton Laurel [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 9,182,987 | 9,329,005 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Aug. 5, 2021 | |||||
Amortization Provisions, Term | 25 years | |||||
Interest rate applicable to the mortgage loan | 5.25% | |||||
Double Tree By Hilton Philadelphia Airport [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 30,646,946 | 31,261,991 | ||||
Prepayment Penalties | None | |||||
Maturity Date | Apr. 1, 2019 | |||||
Amortization Provisions, Term | 25 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.00% | |||||
Doubletree By Hilton Raleigh Brownstone - University [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 14,571,181 | 14,773,885 | ||||
Prepayment Penalties | n/a | |||||
Maturity Date | Aug. 1, 2018 | |||||
Amortization Provisions, Term | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.78% | |||||
DoubleTree Resort by Hilton Hollywood Beach [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 58,249,890 | 58,935,818 | ||||
Prepayment Penalties | n/a | |||||
Maturity Date | Oct. 1, 2025 | |||||
Amortization Provisions, Term | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.913% | |||||
Georgian Terrace [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 45,230,148 | 45,826,038 | ||||
Prepayment Penalties | n/a | |||||
Maturity Date | Jun. 1, 2025 | |||||
Amortization Provisions, Term | 30 years | |||||
Interest rate applicable to the mortgage loan | 4.42% | |||||
Hilton Wilmington Riverside [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 30,000,000 | 30,000,000 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Jan. 1, 2027 | |||||
Amortization Provisions, Term | 25 years | |||||
Interest rate applicable to the mortgage loan | 4.25% | |||||
Sheraton Louisville Riverside [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 11,771,942 | 11,977,557 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Dec. 1, 2026 | Dec. 1, 2026 | ||||
Amortization Provisions, Term | 25 years | 25 years | ||||
Interest rate applicable to the mortgage loan | 4.27% | |||||
The Whitehall [Member] | Mortgage Loans [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 15,000,000 | $ 15,000,000 | ||||
Prepayment Penalties | Yes | |||||
Maturity Date | Oct. 12, 2021 | |||||
Amortization Provisions, Term | 18 years | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% |
Debt - Schedule of Mortgage D44
Debt - Schedule of Mortgage Debt Obligations on Hotels (Parenthetical) (Detail) - USD ($) | Nov. 03, 2016 | Oct. 12, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Feb. 07, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 20,500,000 | $ 300,274,769 | $ 284,542,043 | |||
Proceeds of mortgage debt | 15,000,000 | $ 40,500,000 | $ 45,700,000 | |||
Mortgage loan additional earn-out provision | $ 5,500,000 | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | |||||
Fixed interest rate | 4.00% | |||||
Amortization Period | 18 years | |||||
Floating interest rate period | 1 month | |||||
Mortgage Loans [Member] | Crowne Plaza Hampton Marina [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 0 | 2,584,633 | ||||
Amortization Period | 3 years | |||||
Interest rate | 5.00% | |||||
Interest rate applicable to the mortgage loan | 5.00% | |||||
Mortgage Loans [Member] | Crowne Plaza Tampa Westshore [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 15,353,500 | 15,561,400 | ||||
Proceeds of mortgage debt | 15,700,000 | |||||
Mortgage loan additional earn-out provision | $ 3,300,000 | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.75% | |||||
Fixed interest rate | 3.75% | |||||
Amortization Period | 25 years | |||||
Mortgage Loans [Member] | Double Tree by Hilton Jacksonville Riverfront [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 35,422,241 | 19,291,716 | ||||
Amortization Period | 30 years | |||||
Prepayment date before maturity in which prepayment is allowed with penalty | Mar. 31, 2024 | |||||
Interest rate applicable to the mortgage loan | 4.88% | |||||
Mortgage Loans [Member] | Double Tree by Hilton Jacksonville Riverfront [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument prepayment date | Aug. 31, 2019 | |||||
Mortgage Loans [Member] | The DeSoto [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 34,845,934 | 30,000,000 | ||||
Proceeds of mortgage debt | 30,000,000 | |||||
Mortgage loan additional earn-out provision | $ 5,000,000 | |||||
Amortization Period | 25 years | |||||
Period subject to certain terms and conditions | 1 year | |||||
Period before maturity in which prepayment is allowed with out penalty | 120 days | |||||
Interest rate applicable to the mortgage loan | 4.25% | |||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 9,182,987 | 9,329,005 | ||||
Amortization Period | 25 years | |||||
Prepayment date before maturity in which prepayment is allowed without penalty | Apr. 30, 2021 | |||||
Interest rate | 3.00% | |||||
Treasury floor rate of interest | 5.25% | |||||
Interest rate applicable to the mortgage loan | 5.25% | |||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment date before maturity in which prepayment is allowed without penalty | Aug. 31, 2017 | |||||
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment date before maturity in which prepayment is allowed without penalty | Apr. 30, 2017 | |||||
Mortgage Loans [Member] | Double Tree By Hilton Philadelphia Airport [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 30,646,946 | 31,261,991 | ||||
Excess Interest rate over LIBOR on mortgage debt | 3.00% | |||||
Amortization Period | 25 years | |||||
Mortgage Loans [Member] | Double Tree By Hilton Philadelphia Airport [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 3.50% | |||||
Mortgage Loans [Member] | Doubletree By Hilton Raleigh Brownstone - University [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 14,571,181 | 14,773,885 | ||||
Amortization Period | 30 years | |||||
Number of months for prepayment before maturity | 2 months | |||||
Interest rate applicable to the mortgage loan | 4.78% | |||||
Mortgage Loans [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 58,249,890 | 58,935,818 | ||||
Amortization Period | 30 years | |||||
Prepayment date before maturity | Jun. 30, 2025 | |||||
Interest rate applicable to the mortgage loan | 4.913% | |||||
Mortgage Loans [Member] | Georgian Terrace [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 45,230,148 | 45,826,038 | ||||
Amortization Period | 30 years | |||||
Prepayment date before maturity | Feb. 28, 2025 | |||||
Interest rate applicable to the mortgage loan | 4.42% | |||||
Mortgage Loans [Member] | Hilton Wilmington Riverside [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 30,000,000 | 30,000,000 | ||||
Proceeds of mortgage debt | 30,000,000 | |||||
Mortgage loan additional earn-out provision | $ 5,000,000 | |||||
Amortization Period | 25 years | |||||
Period subject to certain terms and conditions | 1 year | |||||
Period before maturity in which prepayment is allowed with out penalty | 120 days | |||||
Interest rate applicable to the mortgage loan | 4.25% | |||||
Mortgage Loans [Member] | Sheraton Louisville Riverside [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 11,771,942 | 11,977,557 | ||||
Proceeds of mortgage debt | $ 12,000,000 | |||||
Amortization Period | 25 years | 25 years | ||||
Interest rate | 4.27% | |||||
Interest rate applicable to the mortgage loan | 4.27% | |||||
Mortgage Loans [Member] | The Whitehall [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Mortgage loans | $ 15,000,000 | $ 15,000,000 | ||||
Proceeds of mortgage debt | 15,000,000 | |||||
Mortgage loan additional earn-out provision | $ 5,500,000 | |||||
Excess Interest rate over LIBOR on mortgage debt | 3.50% | |||||
Fixed interest rate | 4.00% | |||||
Amortization Period | 18 years | |||||
Floating interest rate period | 1 month | |||||
Mortgage Loans [Member] | The Whitehall [Member] | Prepayment Penalty Before to First Anniversary [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment penalty percentage | 3.00% | |||||
Mortgage Loans [Member] | The Whitehall [Member] | Prepayment Penalty Second Anniversary [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment penalty percentage | 2.00% | |||||
Mortgage Loans [Member] | The Whitehall [Member] | Prepayment Penalty After Third Anniversary | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment penalty percentage | 1.00% |
Debt - Schedule of Future Mortg
Debt - Schedule of Future Mortgage Debt Maturities (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Oct. 12, 2016 |
Debt Disclosure [Abstract] | |||
For the remaining three months ending: December 31, 2017 | $ 1,682,647 | ||
December 31, 2018 | 23,696,155 | ||
December 31, 2019 | 52,902,464 | ||
December 31, 2020 | 9,012,007 | ||
December 31, 2021 | 30,769,803 | ||
December 31, 2022 and thereafter | 182,211,693 | ||
Total future maturities | $ 300,274,769 | $ 284,542,043 | $ 20,500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)ft²shares | Sep. 30, 2016USD ($) | Dec. 29, 2016USD ($) | Jan. 01, 2016USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | $ 5,000,000 | ||||
Total number of ESOP shares | shares | 8,424 | 25,408 | ||||
Fair value of ESOP released from suspense account and recognized compensation cost | $ 60,075 | $ 178,137 | ||||
Number of non committed, unearned ESOP shares | shares | 657,092 | 657,092 | ||||
Fair value of unallocated ESOP shares | $ 3,870,272 | $ 3,870,272 | ||||
Number of ESOP shares allocated | shares | 9,473 | 9,473 | ||||
Number of ESOP shares committed to be released | shares | 15,935 | 15,935 | ||||
ESOP [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of common stock, shares purchased | shares | 682,500 | |||||
Purchased common stock, value | $ 4,900,000 | |||||
Crowne Plaza Houston Downtown [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Franchise agreement expire date | Apr. 12, 2016 | |||||
Hilton Savannah DeSoto [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Franchise agreement expire date | Jul. 31, 2017 | |||||
Hilton Wilmington Riverside [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||
The DeSoto [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||
DoubleTree by Hilton Brownstone-University [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||
Double Tree by Hilton Jacksonville Riverside [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||
DoubleTree Resort by Hilton Hollywood Beach [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||
Whitehall [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Georgian Terrace [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Restricted cash reserve | Amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties | |||||
Double Tree By Hilton Philadelphia Airport [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Monthly contribution of room revenues | 4.00% | |||||
Minimum [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Franchise fees of room revenues | 2.50% | |||||
Additional fees of room revenues | 2.50% | |||||
Franchise agreement expiry date | 2017-07 | |||||
Maximum [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Franchise fees of room revenues | 5.00% | |||||
Additional fees of room revenues | 6.00% | |||||
Franchise agreement expiry date | 2030-10 | |||||
Maximum [Member] | ESOP [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Borrowed amount | $ 5,000,000 | |||||
Chesapeake Hospitality [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Expiry date of master management agreement | between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. | |||||
Williamsburg Virginia [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Area of commercial space leased | ft² | 5,216 | |||||
Rent expense | $ 22,224 | $ 22,552 | $ 67,327 | $ 68,451 | ||
Commencement date of agreement | Sep. 1, 2009 | |||||
Lease renewable expiration date | Aug. 31, 2018 | |||||
Hyde Resort and Residences in Hollywood Beach, Florida [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating lease, expiring date | Feb. 28, 2037 | |||||
Rent expense | 60,000 | $ 140,000 | ||||
Lease agreement | 20 years | |||||
Operating lease monthly payments | $ 20,000 | |||||
The DeSoto Hotel Property [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Area of commercial space leased | ft² | 2,086 | |||||
Operating lease, expiring date | Oct. 31, 2006 | |||||
Duration period under renewal option second | 5 years | |||||
Expiration date one under renewal option second | Oct. 31, 2011 | |||||
Expiration date two under renewal option second | Oct. 31, 2016 | |||||
Expiration date three under renewal option second | Oct. 31, 2021 | |||||
Rent expense | 18,245 | 18,245 | $ 54,738 | 54,738 | ||
Doubletree By Hilton Raleigh Brownstone - University [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Duration of operating lease term | 50 years | |||||
Operating lease, expiring date | Aug. 31, 2016 | |||||
Duration period under renewal option second | 10 years | |||||
Expiration date one under renewal option second | Aug. 31, 2026 | |||||
Expiration date two under renewal option second | Aug. 31, 2036 | |||||
Expiration date three under renewal option second | Aug. 31, 2046 | |||||
Rent expense | 41,184 | 23,871 | $ 88,925 | 71,612 | ||
Option to purchase leased land, date | Aug. 1, 2018 | |||||
Land leased under second amendment dated | Apr. 28, 1998 | |||||
Land lease originally dated | May 25, 1966 | |||||
Purchase of leased land at fair market value subject to annual fee payment | $ 9,000 | |||||
Crowne Plaza Tampa Westshore [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating lease, expiring date | Jul. 31, 2019 | |||||
Rent expense | $ 651 | $ 651 | $ 1,952 | $ 1,952 | ||
Lease agreement | 5 years | |||||
Commencement date of agreement | Jul. 31, 2009 | |||||
Annual payment | $ 2,432 | |||||
Additional renewal of agreement | 5 years | |||||
Furniture, Fixtures and Equipment [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Financing arrangement expiration date | 2017-08 | |||||
Financing arrangement expiration date | 2019-03 | |||||
Six Year Operating Lease Property [Member] | The DeSoto Hotel Property [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Duration of operating lease term | 6 years | |||||
Ninety Nine Year Operating Lease Property [Member] | The DeSoto Hotel Property [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Duration of operating lease term | 99 years | |||||
Operating lease, expiring date | Jul. 31, 2086 | |||||
Rental income recognized during period | $ 0 | |||||
Original lump sum rent payment received | $ 990 |
Commitments and Contingencies47
Commitments and Contingencies - Schedule of Minimum Future Lease Payments (Detail) | Sep. 30, 2017USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
For the remaining three months ending: December 31, 2017 | $ 156,035 |
December 31, 2018 | 573,451 |
December 31, 2019 | 391,266 |
December 31, 2020 | 351,464 |
December 31, 2021 | 351,464 |
December 31, 2022 and thereafter | 4,271,629 |
Total | $ 6,095,309 |
Preferred Stock and Units - Add
Preferred Stock and Units - Additional Information (Detail) - USD ($) | Aug. 23, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Preferred Units [Line Items] | |||||||||
Preferred stock, shares authorized | 11,000,000 | 11,000,000 | |||||||
Preferred stock, shares issued | 1,610,000 | 1,610,000 | 1,610,000 | 1,610,000 | |||||
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 | 1,610,000 | 1,610,000 | |||||
Preferred stock, dividend rate percentage | 8.00% | ||||||||
Proceeds from sale of preferred stock, net | $ 37,774,229 | ||||||||
Preferred stock, liquidation preference per share | $ 25 | $ 25 | |||||||
Sotherly Hotels LP [Member] | |||||||||
Preferred Units [Line Items] | |||||||||
Proceeds from sale of preferred stock, net | $ 37,774,229 | ||||||||
Operating partnership preferred partnership units issued | 1,610,000 | 1,610,000 | 1,610,000 | 1,610,000 | |||||
Operating partnership preferred partnership units outstanding | 1,610,000 | 1,610,000 | 1,610,000 | 1,610,000 | |||||
Sotherly Hotels LP [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Units [Member] | |||||||||
Preferred Units [Line Items] | |||||||||
Preferred units, dividend rate percentage | 8.00% | 8.00% | |||||||
Preferred units, liquidation preference per units | $ 25 | $ 25 | $ 25 | $ 25 | |||||
Preferred dividend distributed | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.50 | $ 0.211 | ||||
Series B Preferred Stock [Member] | |||||||||
Preferred Units [Line Items] | |||||||||
Preferred stock, shares issued | 1,610,000 | ||||||||
Preferred stock, par value | $ 0.01 | ||||||||
Preferred stock, dividend rate percentage | 8.00% | ||||||||
Proceeds from sale of preferred stock, net | $ 37,800,000 |
Common Stock and Units - Additi
Common Stock and Units - Additional Information (Detail) | Feb. 15, 2017shares | Dec. 02, 2016USD ($)$ / shares | Feb. 02, 2016shares | Feb. 01, 2016shares | Jan. 01, 2016shares | Feb. 28, 2017USD ($)shares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares |
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized | 49,000,000 | 49,000,000 | 49,000,000 | ||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Voting right | Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. | ||||||||
Repurchased common stock, value | $ | $ 3,200,000 | ||||||||
Number of common stock shares repurchased | 0 | 0 | 481,100 | ||||||
Number of common stock, shares purchased | 682,500 | ||||||||
Purchased common stock, value | $ | $ 4,900,000 | $ 4,874,758 | |||||||
Number of non-committed, unearned ESOP shares | 657,092 | 657,092 | |||||||
Common stock, shares outstanding | 13,823,459 | 13,823,459 | 14,468,551 | ||||||
Common stock exchange ratio | 1 | 1 | |||||||
Redemption of units in operating partnership | 0 | ||||||||
Operating Partnership common units not owned | 1,778,140 | 1,778,140 | 1,778,140 | ||||||
Common Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of common stock, shares purchased | 682,500 | ||||||||
Purchased common stock, value | $ | $ 6,825 | ||||||||
Restricted shares issued | 12,000 | ||||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 422,687 | ||||||||
Common Stock [Member] | Executive Officer [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Non-restricted shares issued | 22,000 | ||||||||
Common Stock [Member] | Director [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Restricted shares issued | 12,000 | ||||||||
Non-restricted shares issued | 2,250 | ||||||||
Sotherly Hotels LP [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Operating Partnership common units outstanding | 16,258,691 | 16,258,691 | 16,246,691 | ||||||
Fair market value | $ | $ 10,500,000 | $ 10,500,000 | $ 12,100,000 | ||||||
Sotherly Hotels LP [Member] | Common Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of issued unit in Operating Partnership | 12,000 | 36,250 | |||||||
Restricted shares issued | 12,000 | ||||||||
Maximum [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Repurchased common stock, value | $ | $ 10,000,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Feb. 01, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |||||||
Accounts receivable-affiliate | $ 493,895 | $ 493,895 | $ 4,175 | ||||
ESOP [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Loan receivable outstanding | $ 4,700,000 | $ 4,700,000 | |||||
Chesapeake Hospitality [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Company's outstanding common stock owned by members of Chesapeake Hospitality | 12.20% | 12.20% | |||||
Operating Partnership units owned by members of Chesapeake Hospitality | 652,326 | 652,326 | |||||
Company's common stock shares owned by members of Chesapeake Hospitality | 1,686,442 | 1,686,442 | |||||
Accounts receivable-affiliate | $ 94,425 | $ 94,425 | 0 | ||||
Initial terms of master management agreements | 5 years | ||||||
Expiry date of master management agreement | between January 1, 2020 and January 30, 2022, and may be extended for up to two additional periods of five years each subject to the approval of both parties. | ||||||
Period subject to certain terms and conditions | 5 years | ||||||
Agreement term | 5 years | ||||||
Incentive management fee equal to increase in gross operating profit percentage | 10.00% | 10.00% | |||||
Maximum incentive management fee of gross revenues | 0.25% | 0.25% | |||||
Base management and administrative fees earned by related party | $ 976,232 | $ 944,939 | $ 3,042,840 | $ 2,927,333 | |||
Incentive management fees earned by related party | 23,634 | 13,634 | 51,751 | 60,636 | |||
Employee medical benefits paid | $ 1,292,287 | 1,267,721 | 3,962,161 | 3,813,333 | |||
Chesapeake Hospitality [Member] | Crowne Plaza Hampton Marina [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Termination fee | $ 0 | ||||||
Chesapeake Hospitality [Member] | Fiscal Year 2017 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.65% | 2.65% | |||||
Chesapeake Hospitality [Member] | Fiscal Year 2017 and Thereafter [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | Individual Hotel Management Agreements [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Management fee of gross revenues for first full fiscal year | 2.00% | 2.00% | |||||
Management fee of gross revenues for second full fiscal year | 2.25% | 2.25% | |||||
Management fee of gross revenues for every year thereafter | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | July 2015 through July 2016 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.00% | 2.00% | |||||
Chesapeake Hospitality [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | July 2016 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.25% | 2.25% | |||||
Chesapeake Hospitality [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | July 2017 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member] | July 2017 and Thereafter [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2015 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.00% | 2.00% | |||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2016 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.25% | 2.25% | |||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2017 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | Whitehall and Georgian Terrace Hotel [Member] | Fiscal Year 2017 and Thereafter [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2017 through January 2018 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.00% | 2.00% | |||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2018 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.25% | 2.25% | |||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2019 [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Chesapeake Hospitality [Member] | Hyde Resort & Residences [Member] | January 2019 and Thereafter [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fee due | 2.50% | 2.50% | |||||
Sotherly Foundation [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Amount loaned to related party | $ 180,000 | ||||||
Loan receivable outstanding | $ 80,000 | $ 80,000 | $ 80,000 | ||||
Immediate Family Members of Chief Executive Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Total compensation for related parties | 87,915 | 79,453 | 267,557 | 246,084 | |||
Director [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 322,687 | ||||||
Previous Director [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Conversion of units in Operating Partnership to shares of common stock, shares | 100,000 | ||||||
Partnership controlled by Chief Executive Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Business-related air travel expense reimbursed to partnership | $ 26,233 | $ 31,803 | $ 132,239 | $ 101,571 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 29, 2016 | Jan. 01, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||||||
Employer contribution for first 3% of employee contributions | 100.00% | ||||||
Employer contribution for next 2% of employee contributions | 50.00% | ||||||
Percentage of first specified employee contributions | 3.00% | ||||||
Percentage of next specified employee contributions | 2.00% | ||||||
Contribution for retirement plan | $ 11,659 | $ 10,177 | $ 57,516 | $ 56,122 | |||
Maximum amount allocated to purchase common stock under ESOP | $ 5,000,000 | $ 5,000,000 | |||||
Number of common stock, shares purchased | 682,500 | ||||||
Purchased common stock, value | $ 4,900,000 | $ 4,874,758 |
Retirement Plans - Summary of S
Retirement Plans - Summary of Shares Allocations are Accounted For Fair Value on The Date of Allocations (Detail) | Sep. 30, 2017USD ($)shares |
Compensation And Retirement Disclosure [Abstract] | |
Number of ESOP shares allocated | shares | 9,473 |
Number of ESOP shares committed to be released | shares | 15,935 |
Total number of ESOP allocated and committed-to-be-released | shares | 25,408 |
Number of non committed, unearned ESOP shares | shares | 657,092 |
Total number of ESOP shares | shares | 682,500 |
Fair value of ESOP allocated shares | $ | $ 64,321 |
Fair value of ESOP Committed-to-be released shares | $ | 113,816 |
Total fair value of ESOP allocated and committed-to-be-released | $ | 178,137 |
Fair value of ESOP unallocated shares | $ | 3,870,272 |
Total fair value of ESOP shares | $ | $ 4,048,409 |
Indirect Hotel Operating Expe53
Indirect Hotel Operating Expenses - Summary of Indirect Hotel Operating Expenses (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | $ 15,209,249 | $ 14,603,034 | $ 45,019,742 | $ 43,827,294 |
General and Administrative [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 3,194,007 | 2,962,097 | 9,788,564 | 9,092,373 |
Sales and Marketing [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 3,397,811 | 3,348,577 | 10,547,138 | 10,312,982 |
Repairs and Maintenance [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,805,103 | 1,825,829 | 5,174,066 | 5,527,727 |
Utilities [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,568,324 | 1,751,562 | 4,394,631 | 4,799,329 |
Franchise Fees [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 888,460 | 968,801 | 3,061,535 | 3,177,780 |
Management Fees, Including Incentive [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 999,866 | 958,572 | 3,090,515 | 2,987,969 |
Property Taxes [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 1,539,066 | 1,675,917 | 4,518,267 | 4,501,154 |
Insurance [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 620,244 | 618,599 | 1,845,702 | 1,984,269 |
Information and Telecommunications [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | 412,714 | 409,631 | 1,243,847 | 1,246,670 |
Other [Member] | ||||
Component Of Operating Cost And Expense [Line Items] | ||||
Total indirect hotel operating expenses | $ 783,654 | $ 83,449 | $ 1,355,477 | $ 197,041 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Provision (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Current: | ||||
Federal | $ (10,184) | |||
State | 97,641 | $ 63,429 | $ 197,881 | $ 147,791 |
Total | 87,457 | 63,429 | 197,881 | 147,791 |
Deferred: | ||||
Federal | (879,206) | (437,390) | (661,787) | (429,257) |
State | (158,561) | (11,184) | (117,984) | (26,932) |
Total | (1,037,767) | (448,574) | (779,771) | (456,189) |
Income tax provision | $ (950,310) | $ (385,145) | $ (581,890) | $ (308,398) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax Provision (Benefit) (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Statutory federal income tax provision (benefit) | $ (641,346) | $ (650,790) | $ 851,313 | $ 233,267 |
Effect of non-taxable REIT income (loss) | (248,043) | 76,172 | (1,513,100) | (662,524) |
State income tax provision (benefit) | (60,921) | 189,473 | 79,897 | 120,859 |
Income tax provision | $ (950,310) | $ (385,145) | $ (581,890) | $ (308,398) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Income Taxes [Line Items] | ||
Deferred tax asset | $ 7,729,111 | $ 6,949,340 |
Accumulated net operating losses | 6,800,000 | 6,000,000 |
Start-up expense related to company | $ 200,000 | 200,000 |
Amortized period | 15 years | |
Loss carryforwards, expired | 2,028 | |
TRS Lessee [Member] | ||
Income Taxes [Line Items] | ||
Accumulated net operating losses | $ 6,800,000 | $ 6,000,000 |
Income Per Share and Per Unit -
Income Per Share and Per Unit - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017shares | |
Earnings Per Share [Line Items] | |
Number of non-committed, unearned ESOP shares | 657,092 |
ESOP [Member] | |
Earnings Per Share [Line Items] | |
Number of ESOP units | 0 |
Income Per Share and Per Unit58
Income Per Share and Per Unit - Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator | ||||
Net income (loss) available to common stockholders for basic computation | $ (1,550,555) | $ (1,716,234) | $ 597,385 | $ 527,971 |
Denominator | ||||
Weighted average number of common shares outstanding for basic computation | 13,822,543 | 14,949,651 | 13,873,175 | 14,897,595 |
Basic net income (loss) per share | $ (0.11) | $ (0.11) | $ 0.04 | $ 0.04 |
Weighted average number of common shares outstanding for diluted computation | 13,822,543 | 14,949,651 | 13,885,290 | 14,897,595 |
Diluted net income (loss) per share | $ (0.11) | $ (0.11) | $ 0.04 | $ 0.04 |
Income Per Share and Per Unit59
Income Per Share and Per Unit - Computation of Basic and Diluted Net Income Per Unit (Detail) - Sotherly Hotels LP [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | ||||
Net income (loss) available to common unitholders for basic computation | $ (1,741,000) | $ (1,889,080) | $ 670,751 | $ 634,348 |
Weighted average number of units outstanding | 16,258,691 | 16,727,791 | 16,256,713 | 16,723,557 |
Basic and diluted net income (loss) per unit | $ (0.11) | $ (0.11) | $ 0.04 | $ 0.04 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | Oct. 23, 2017 | Oct. 17, 2017 | Oct. 16, 2017 | Oct. 12, 2017 | Oct. 11, 2017 | Aug. 23, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Nov. 21, 2014 |
Subsequent Event [Line Items] | ||||||||||
Preferred stock, shares sale and issuance | 1,610,000 | 1,610,000 | ||||||||
Preferred stock, dividend rate percentage | 8.00% | |||||||||
Proceeds from sale of preferred stock | $ 37,774,229 | |||||||||
8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Preferred stock, shares sale and issuance | 1,610,000 | |||||||||
Preferred stock, dividend rate percentage | 8.00% | |||||||||
Proceeds from sale of preferred stock | $ 37,800,000 | |||||||||
7.0% Senior Unsecured Notes [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate principal amount intent to redeem | $ 25,300,000 | |||||||||
Interest rate on loan | 7.00% | |||||||||
Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Dividend paid | $ 0.11 | |||||||||
Dividend record date | Dec. 15, 2017 | Sep. 15, 2017 | ||||||||
Preferred dividend paid | $ 0.50 | |||||||||
Dividend distributed | $ 0.11 | |||||||||
Dividend payment date | Jan. 11, 2018 | |||||||||
Subsequent Event [Member] | 8% Series B Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Dividend record date | Dec. 29, 2017 | Sep. 29, 2017 | ||||||||
Dividend payment date | Jan. 16, 2018 | |||||||||
Preferred dividend distributed | $ 0.50 | |||||||||
Subsequent Event [Member] | 7.0% Senior Unsecured Notes [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate principal amount intent to redeem | $ 25,300,000 | |||||||||
Interest rate on loan | 7.00% | |||||||||
Debt instrument maturity year | 2,019 | |||||||||
Debt instrument redeemed date | Nov. 15, 2017 | |||||||||
Percentage of redemption price equal to principal amount | 101.00% | |||||||||
Subsequent Event [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Preferred stock, shares sale and issuance | 100,000 | 1,200,000 | ||||||||
Preferred stock, dividend rate percentage | 7.875% | |||||||||
Proceeds from sale of preferred stock | $ 2,400,000 | $ 28,000,000 | ||||||||
Dividend record date | Dec. 29, 2017 | |||||||||
Dividend payment date | Jan. 16, 2018 | |||||||||
Preferred dividend distributed | $ 0.43203 |