Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 06, 2020 | Jun. 30, 2019 | |
Document Entity Information | |||
Entity Registrant Name | Carey Watermark Investors 2 Inc | ||
Entity Central Index Key | 0001609471 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 0 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Common Class A | |||
Document Entity Information | |||
Entity Common Stock, Shares Outstanding | 33,186,460 | ||
Common Class T | |||
Document Entity Information | |||
Entity Common Stock, Shares Outstanding | 61,196,124 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Investments in real estate: | |||
Hotels, at cost | $ 1,468,888 | $ 1,464,933 | |
Accumulated depreciation | (157,581) | (113,184) | |
Net investments in hotels | 1,311,307 | 1,351,749 | |
Equity investments in real estate | 113,169 | 121,456 | |
Cash and cash equivalents | 81,713 | 76,823 | |
Restricted cash | 30,062 | 27,114 | |
Accounts receivable, net | 25,719 | 18,826 | |
Other assets | 15,012 | 9,346 | |
Total assets | [1] | 1,576,982 | 1,605,314 |
Liabilities and Equity | |||
Non-recourse debt, net | 840,465 | 833,836 | |
Accounts payable, accrued expenses and other liabilities | 59,471 | 61,913 | |
Due to related parties and affiliates | 2,786 | 1,984 | |
Distributions payable | 11,616 | 11,178 | |
Total liabilities | [1] | 914,338 | 908,911 |
Commitments and contingencies (Note 9) | |||
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued | 0 | 0 | |
Additional paid-in capital | 852,051 | 825,896 | |
Distributions and accumulated losses | (210,224) | (156,823) | |
Accumulated other comprehensive (loss) income | (157) | 1,205 | |
Total stockholders’ equity | 641,764 | 670,368 | |
Noncontrolling interests | 20,880 | 26,035 | |
Total equity | 662,644 | 696,403 | |
Total liabilities and equity | 1,576,982 | 1,605,314 | |
Common Class A | |||
Liabilities and Equity | |||
Common stock | 33 | 31 | |
Common Class T | |||
Liabilities and Equity | |||
Common stock | $ 61 | $ 59 | |
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Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par share value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, share issued (shares) | 0 | 0 |
Common Class A | ||
Common stock, par share value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 320,000,000 | 320,000,000 |
Common shares, outstanding (shares) | 32,762,005 | 31,023,863 |
Common Class T | ||
Common stock, par share value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 80,000,000 | 80,000,000 |
Common shares, outstanding (shares) | 60,623,093 | 59,006,632 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Hotel Revenues | |||
Revenue from customer contracts | $ 367,207 | $ 362,332 | $ 340,810 |
Business interruption income | 809 | 934 | 0 |
Expenses | |||
General and administrative | 33,694 | 32,455 | 29,817 |
Sales and marketing | 31,601 | 30,562 | 30,218 |
Property taxes, insurance, rent and other | 22,918 | 19,973 | 18,061 |
Repairs and maintenance | 12,848 | 12,099 | 11,377 |
Depreciation | 47,611 | 46,137 | 43,729 |
Total Hotel Operating Expenses | 299,108 | 293,534 | 279,389 |
Asset management fees to affiliate and other expenses | 10,802 | 10,932 | 8,995 |
Corporate general and administrative expenses | 7,623 | 7,464 | 6,403 |
Transaction costs | 4,499 | 1,177 | 6,511 |
(Gain) loss on hurricane-related property damage | (10) | 682 | 2,699 |
Total Expenses | 322,022 | 313,789 | 303,997 |
Operating Income | 45,185 | 48,543 | 36,813 |
Interest expense | (39,902) | (40,226) | (35,824) |
Equity in losses of equity method investment in real estate, net | (5,209) | (5,819) | (1,482) |
Other income | 965 | 792 | 155 |
Loss on extinguishment of debt | (5) | (380) | (256) |
Income (loss) before income taxes | 1,034 | 2,910 | (594) |
Provision for income taxes | (85) | (3,259) | (3,900) |
Net Income (Loss) | 949 | (349) | (4,494) |
Income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $6,262, $5,467 and $5,078, respectively) | (8,567) | (7,438) | (991) |
Net Loss Attributable to CWI 2 Stockholders | (7,618) | (7,787) | (5,485) |
Common Class A | |||
Expenses | |||
Net Loss Attributable to CWI 2 Stockholders | $ (2,509) | $ (2,443) | $ (1,740) |
Basic and diluted weighted-average shares outstanding (shares) | 32,260,398 | 30,390,179 | 27,825,037 |
Basic and diluted income (loss) (usd per share) | $ (0.08) | $ (0.08) | $ (0.06) |
Common Class T | |||
Expenses | |||
Net Loss Attributable to CWI 2 Stockholders | $ (5,109) | $ (5,344) | $ (3,745) |
Basic and diluted weighted-average shares outstanding (shares) | 60,499,745 | 58,842,820 | 54,686,084 |
Basic and diluted income (loss) (usd per share) | $ (0.08) | $ (0.09) | $ (0.07) |
Rooms | |||
Hotel Revenues | |||
Revenue from customer contracts | $ 253,044 | $ 247,099 | $ 229,109 |
Expenses | |||
Costs related to sales | 56,189 | 57,008 | 53,554 |
Food and beverage | |||
Hotel Revenues | |||
Revenue from customer contracts | 92,400 | 93,555 | 92,150 |
Expenses | |||
Costs related to sales | 67,857 | 68,132 | 66,337 |
Other operating revenue | |||
Hotel Revenues | |||
Revenue from customer contracts | 20,954 | 20,744 | 19,551 |
Expenses | |||
Costs related to sales | 4,612 | 5,292 | 5,674 |
Management fees | |||
Expenses | |||
Costs related to sales | 13,046 | 13,014 | 12,148 |
Utilities | |||
Expenses | |||
Costs related to sales | $ 8,732 | $ 8,862 | $ 8,474 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Advisor | |||
Available cash distribution | $ 6,262 | $ 5,467 | $ 5,078 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Comprehensive Loss | |||
Net Income (Loss) | $ 949 | $ (349) | $ (4,494) |
Other Comprehensive (Loss) Income | |||
Unrealized (loss) gain on derivative instruments | (1,309) | (171) | 484 |
Comprehensive Loss | (360) | (520) | (4,010) |
Amounts Attributable to Noncontrolling Interests | |||
Net income | (8,567) | (7,438) | (991) |
Unrealized (gain) loss on derivative instruments | (53) | 3 | (7) |
Comprehensive income attributable to noncontrolling interests | (8,620) | (7,435) | (998) |
Comprehensive Loss Attributable to CWI 2 Stockholders | $ (8,980) | $ (7,955) | $ (5,008) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Class A | Common Class T | Total CWI 2 Stockholders’ Equity | Common StockCommon Class A | Common StockCommon Class T | Additional Paid-In Capital | Distributions and Accumulated Losses | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Beginning balance, value at Dec. 31, 2016 | $ 550,109 | $ 514,978 | $ 22 | $ 40 | $ 573,135 | $ (59,115) | $ 896 | $ 35,131 | ||
Beginning balance, shares at Dec. 31, 2016 | 22,414,128 | 40,447,362 | ||||||||
Statement of Equity | ||||||||||
Net (loss) income | (4,494) | (5,485) | (5,485) | 991 | ||||||
Shares issued, net of offering costs, value | 232,850 | 232,850 | $ 6 | $ 17 | 232,827 | |||||
Shares issued, net of offering costs, shares | 6,027,028 | 17,129,299 | ||||||||
Shares issued to affiliates, value | 11,394 | 11,394 | $ 1 | 11,393 | ||||||
Shares issued to affiliates, shares | 1,064,066 | |||||||||
Distributions to noncontrolling interests | (8,372) | (8,372) | ||||||||
Purchase of membership interest from noncontrolling interest | (3,524) | (3,524) | (3,524) | |||||||
Shares issued under share incentive plans, value | 190 | 190 | 190 | |||||||
Shares issued under share incentive plans, shares | 14,071 | |||||||||
Stock based compensation to directors, value | 165 | 165 | 165 | |||||||
Stock based compensation to directors, shares | 15,384 | |||||||||
Stock dividends issued, value | 1 | 1 | $ 1 | |||||||
Stock dividends issued, shares | 320,922 | 615,421 | ||||||||
Distributions declared | (40,209) | (40,209) | (40,209) | |||||||
Other comprehensive income (loss) | 484 | 477 | 477 | 7 | ||||||
Repurchase of shares, value | (6,809) | (6,809) | (6,809) | |||||||
Repurchase of shares, shares | (344,685) | (320,370) | ||||||||
Ending balance, value at Dec. 31, 2017 | 731,785 | 704,028 | $ 29 | $ 58 | 807,377 | (104,809) | 1,373 | 27,757 | ||
Ending balance, shares at Dec. 31, 2017 | 29,510,914 | 57,871,712 | ||||||||
Statement of Equity | ||||||||||
Net (loss) income | (349) | (7,787) | (7,787) | 7,438 | ||||||
Shares issued, net of offering costs, value | 27,069 | 27,069 | $ 1 | $ 1 | 27,067 | |||||
Shares issued, net of offering costs, shares | 769,324 | 1,640,727 | ||||||||
Shares issued to affiliates, value | 10,393 | 10,393 | $ 1 | 10,392 | ||||||
Shares issued to affiliates, shares | 943,271 | |||||||||
Distributions to noncontrolling interests | (9,157) | (9,157) | ||||||||
Purchase of membership interest from noncontrolling interest | (3,500) | |||||||||
Shares issued under share incentive plans, value | 216 | 216 | 216 | |||||||
Shares issued under share incentive plans, shares | 17,535 | |||||||||
Stock based compensation to directors, value | 171 | 171 | 171 | |||||||
Stock based compensation to directors, shares | 15,384 | |||||||||
Stock dividends issued, value | 2 | 2 | $ 1 | $ 1 | ||||||
Stock dividends issued, shares | 370,644 | 719,272 | ||||||||
Distributions declared | (44,227) | (44,227) | (44,227) | |||||||
Other comprehensive income (loss) | (171) | (168) | (168) | (3) | ||||||
Repurchase of shares, value | (19,329) | (19,329) | $ (1) | $ (1) | (19,327) | |||||
Repurchase of shares, shares | (603,209) | (1,225,079) | ||||||||
Ending balance, value at Dec. 31, 2018 | 696,403 | 670,368 | $ 31 | $ 59 | 825,896 | (156,823) | 1,205 | 26,035 | ||
Ending balance, shares at Dec. 31, 2018 | 31,023,863 | 59,006,632 | 31,023,863 | 59,006,632 | ||||||
Statement of Equity | ||||||||||
Net (loss) income | 949 | (7,618) | (7,618) | 8,567 | ||||||
Shares issued, net of offering costs, value | 26,140 | 26,140 | $ 1 | $ 2 | 26,137 | |||||
Shares issued, net of offering costs, shares | 726,688 | 1,581,775 | ||||||||
Shares issued to affiliates, value | 10,708 | 10,708 | $ 1 | 10,707 | ||||||
Shares issued to affiliates, shares | 944,647 | |||||||||
Distributions to noncontrolling interests | (13,478) | (13,478) | ||||||||
Purchase of membership interest from noncontrolling interest | (297) | (297) | ||||||||
Shares issued under share incentive plans, value | 248 | 248 | 248 | |||||||
Shares issued under share incentive plans, shares | 19,352 | |||||||||
Stock based compensation to directors, value | 210 | 210 | 210 | |||||||
Stock based compensation to directors, shares | 18,476 | |||||||||
Stock dividends issued, value | 1 | 1 | $ 1 | |||||||
Stock dividends issued, shares | 378,971 | 712,942 | ||||||||
Distributions declared | (45,783) | $ (18,100) | $ (27,700) | (45,783) | (45,783) | |||||
Other comprehensive income (loss) | (1,309) | (1,362) | (1,362) | 53 | ||||||
Repurchase of shares, value | (11,148) | (11,148) | $ (1) | (11,147) | ||||||
Repurchase of shares, shares | (349,992) | (678,256) | ||||||||
Ending balance, value at Dec. 31, 2019 | $ 662,644 | $ 641,764 | $ 33 | $ 61 | $ 852,051 | $ (210,224) | $ (157) | $ 20,880 | ||
Ending balance, shares at Dec. 31, 2019 | 32,762,005 | 60,623,093 | 32,762,005 | 60,623,093 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common Class A | ||||
Statement of Equity | ||||
Distributions declared per share (usd per share) | $ 0.1749 | $ 0.6996 | $ 0.6996 | $ 0.6955 |
Common Class T | ||||
Statement of Equity | ||||
Distributions declared per share (usd per share) | $ 0.1493 | $ 0.5968 | $ 0.5959 | $ 0.5919 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows — Operating Activities | |||
Net Income (Loss) | $ 949 | $ (349) | $ (4,494) |
Adjustments to net income (loss): | |||
Depreciation | 47,611 | 46,137 | 43,729 |
Asset management fees to affiliates settled in shares | 10,734 | 10,400 | 8,670 |
Equity in losses of equity method investments in real estate, net | 5,209 | 5,819 | 1,482 |
Amortization of deferred financing costs, deferred key money and other | 1,149 | 1,297 | 830 |
Business interruption income | (809) | (934) | 0 |
Amortization of stock-based compensation | 566 | 486 | 436 |
(Gain) loss on hurricane-related property damage | (10) | 682 | 2,699 |
Loss on extinguishment of debt | 5 | 380 | 254 |
Net changes in other assets and liabilities | (5,341) | 2,436 | 1,360 |
Business interruption insurance proceeds | 1,690 | 53 | 0 |
Distributions of earnings from equity method investments | 1,342 | 2,305 | 1,310 |
Receipt of key money and other deferred incentive payments | 305 | 0 | 2,688 |
Increase (decrease) in due to related parties and affiliates | 102 | 407 | (7,786) |
Funding of hurricane-related remediation work | 0 | (163) | (1,458) |
Net Cash Provided by Operating Activities | 63,502 | 68,956 | 49,720 |
Cash Flows — Investing Activities | |||
Capital expenditures | (10,607) | (16,915) | (17,049) |
Distributions from equity investments in excess of cumulative equity income | 7,418 | 5,619 | 0 |
Capital contributions to equity investments in real estate | (5,745) | (486) | (2,433) |
Payment of Watermark commitment fee | (2,050) | 0 | 0 |
Acquisitions of hotels | 0 | 0 | (168,884) |
Purchase of equity interest | 0 | 0 | (96,288) |
Deposits released for hotel investments | 0 | 0 | 1,521 |
Hurricane-related property insurance proceeds | 0 | 0 | 7 |
Net Cash Used in Investing Activities | (10,984) | (11,782) | (283,126) |
Cash Flows — Financing Activities | |||
Proceeds from mortgage financing | 90,000 | 49,000 | 301,900 |
Scheduled payments and prepayments of mortgage principal | (83,299) | (47,502) | (42,000) |
Distributions paid | (45,345) | (44,004) | (36,446) |
Net proceeds from issuance of shares | 20,531 | 20,670 | 237,650 |
Distributions to noncontrolling interests | (13,478) | (9,157) | (8,372) |
Repurchase of shares | (11,148) | (19,327) | (6,809) |
Deferred financing costs | (1,521) | (809) | (2,090) |
Purchase of membership interest from noncontrolling interest | (297) | 0 | (3,524) |
Withholding on restricted stock units | (108) | (99) | (81) |
Purchase of interest rate cap | (15) | (118) | (16) |
Repayment of notes payable to affiliate | 0 | 0 | (210,000) |
Deposits released for mortgage financing | 0 | 0 | 2,235 |
Deposits for mortgage financing | 0 | 0 | (725) |
Net Cash (Used in) Provided by Financing Activities | (44,680) | (51,346) | 231,722 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 7,838 | 5,828 | (1,684) |
Change in Cash and Cash Equivalents and Restricted Cash During the Year | |||
Cash and cash equivalents and restricted cash, beginning of year | 103,937 | 98,109 | 99,793 |
Cash and cash equivalents and restricted cash, end of year | $ 111,775 | $ 103,937 | $ 98,109 |
Consolidated Statement of Cas_2
Consolidated Statement of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 37,963 | $ 38,193 | $ 33,135 |
Supplemental Cash Flow Information | |||
Income taxes paid | $ 4,429 | $ 2,248 | $ 4,721 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Business and Organization Organization Carey Watermark Investors 2 Incorporated (“CWI 2”) is a publicly owned, non-traded real estate investment trust (“REIT”) that, together with its consolidated subsidiaries, invests in, manages and seeks to enhance the value of, interests in lodging and lodging-related properties in the United States. We conduct substantially all of our investment activities and own all of our assets through CWI 2 OP, LP (the “Operating Partnership”). We are a general partner and a limited partner of, and own a 99.985% capital interest in, the Operating Partnership. Carey Watermark Holdings 2, LLC (“Carey Watermark Holdings 2”), which is owned indirectly by W. P. Carey Inc. (“WPC”), holds a special general partner interest in the Operating Partnership. We are managed by Carey Lodging Advisors, LLC (our “Advisor”), an indirect subsidiary of WPC. Our Advisor manages our overall portfolio, including providing oversight and strategic guidance to the independent hotel operators that manage our hotels. CWA 2, LLC (the “Subadvisor”), a subsidiary of Watermark Capital Partners LLC (“Watermark Capital Partners” or “Watermark”), provides services to our Advisor, primarily relating to acquiring, managing, financing and disposing of our hotels and overseeing the independent operators that manage the day-to-day operations of our hotels. In addition, the Subadvisor provides us with the services of Mr. Michael G. Medzigian, our Chief Executive Officer, subject to the approval of our independent directors. We held ownership interests in 12 hotels at December 31, 2019 , including ten hotels that we consolidate (“Consolidated Hotels”) and two hotels that we record as equity investments (“Unconsolidated Hotels”), at December 31, 2019 . Public Offering We raised offering proceeds in our initial public offering of $280.3 million from our Class A common stock and $571.0 million from our Class T common stock. The offering commenced on May 22, 2014 and closed on July 31, 2017. We have fully invested the proceeds from our initial public offering. In addition, from inception through December 31, 2019 , $28.9 million and $58.2 million of distributions were reinvested in our Class A and Class T common stock, respectively, as a result of our distribution reinvestment plan. Proposed Merger On October 22, 2019, we and Carey Watermark Investors Incorporated (“CWI 1”) announced that we had entered into a definitive merger agreement under which we will merge in an all-stock transaction, with CWI 1 surviving the merger as our wholly-owned subsidiary (the “Proposed Merger”). On January 13, 2020, the joint proxy statement/prospectus on Form S-4 previously filed with the SEC by us and CWI 1 was declared effective. The Proposed Merger is expected to close in the first quarter of 2020, subject to the approval of our stockholders and CWI 1’s stockholders, among other conditions. The special stockholder meetings for both us and CWI 1 are currently scheduled for March 26, 2020. Following the close of the Proposed Merger, the combined company will complete an internalization transaction with our Advisor and Subadvisor, as a result of which the combined company will become self-managed. The Proposed Merger is expected to be accounted for as a business combination in accordance with current authoritative accounting guidance. We expect to conclude that CWI 1 will be the accounting acquiror in the merger as (i) CWI 1’s pre-merger stockholders will have a majority of the voting power in the combined company after the merger and (ii) CWI 1 is significantly larger than us when considering assets and revenues. As CWI 1 is expected to be the accounting acquiror while we will be the legal acquiror, the merger will be accounted for as a reverse acquisition, and therefore, the historical financial information included in the combined company’s financial statements would represent the pre-merger information of CWI 1. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Critical Accounting Policies and Estimates Accounting for Acquisitions In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, we account for the transaction or other event as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions. We immediately expense acquisition-related costs and fees associated with business combinations, which are included in Transaction costs in the consolidated statements of operations. Impairments We periodically assess whether there are any indicators that the value of our long-lived real estate and related intangible assets may be impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, when a hotel property experiences a current or projected loss from operations, when it becomes more likely than not that a hotel property will be sold before the end of its useful life, or when there are adverse changes in the demand for lodging due to declining national or local economic conditions. We may incur impairment charges on long-lived assets, including real estate, related intangible assets, assets held for sale and equity investments. Our policies and estimates for evaluating whether these assets are impaired are presented below. Real Estate — For real estate assets held for investment and related intangible assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of, among other things, net operating income (“NOI”), residual values and holding periods. Our investment objective is to hold properties on a long-term basis. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the loss as the excess of the carrying value of the property’s asset group over its estimated fair value. The estimated fair value of the property’s asset group is primarily determined using market information from outside sources such as broker quotes or recent comparable sales. If relevant market information is not available or is not deemed appropriate, we perform a future net cash flow analysis, discounted for the inherent risk associated with each investment. Equity Investments in Real Estate — We evaluate our equity investments in real estate on a periodic basis to determine if there are any indicators that the value of our equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, we measure the charge as the excess of the carrying value of our investment over its estimated fair value. Other Accounting Policies Basis of Consolidation — Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity (“VIE”), and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply the accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Certain decision-making rights within a loan or joint-venture agreement can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets. At December 31, 2019 and 2018, we considered two and four entities to be VIEs, of which we consolidated one and three , respectively, as we are considered the primary beneficiary. The following table presents a summary of selected financial data of consolidated VIEs included in the consolidated balance sheets (in thousands): December 31, 2019 2018 Net investments in hotels $ 123,833 $ 566,272 Total assets 145,218 603,403 Non-recourse debt, net $ 88,747 $ 320,603 Total liabilities 104,046 350,920 Reclassifications — Certain prior period amounts have been reclassified to conform to the current period presentation. Use of Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Restricted Cash — Restricted cash consists primarily of amounts escrowed pursuant to the terms of our mortgage debt to fund planned renovations and improvements, property taxes, insurance, and normal replacement of furniture, fixtures and equipment at our hotels. The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands): December 31, 2019 2018 2017 Cash and cash equivalents $ 81,713 $ 76,823 $ 68,527 Restricted cash 30,062 27,114 29,582 Total cash and cash equivalents and restricted cash $ 111,775 $ 103,937 $ 98,109 Share Repurchases — Share repurchases are recorded as a reduction of common stock par value and additional paid-in capital under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders, subject to certain exceptions, conditions, and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. Real Estate — We carry land, buildings and personal property at cost less accumulated depreciation. We capitalize improvements and we expense replacements, maintenance and repairs that do not improve or extend the life of the respective assets as incurred. Renovations and/or replacements at the hotel properties that improve or extend the life of the assets are capitalized and depreciated over their useful lives, and repairs and maintenance are expensed as incurred. We capitalize interest and certain other costs, such as incremental labor costs relating to hotels undergoing major renovations and redevelopments. Gain/Loss on Sale — We recognize gains and losses on the sale of properties when the transaction meets the definition of a contract, criteria are met for the sale of one or more distinct assets and control of the properties is transferred. Equity Investments in Real Estate — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities. Cash — Our cash is held in the custody of several financial institutions, and these balances, at times, exceed federally-insurable limits. We seek to mitigate this risk by depositing funds only with major financial institutions. Other Assets and Liabilities — At both December 31, 2019 and 2018, Other assets consists primarily of prepaid expenses, deferred tax assets and hotel inventories in the consolidated financial statements. At December 31, 2019, Other assets also included deferred costs related to an agreement entered into with Watermark and Mr. Medzigian (see Note 3 for further discussion). At both December 31, 2019 and 2018, Other liabilities, which are included in Accounts payable, accrued expenses and other liabilities, consists primarily of unamortized key money and other deferred incentive payments, hotel advance deposits, accrued distribution and shareholder servicing fees and sales and use and occupancy taxes payable. Deferred Financing Costs — Deferred financing costs represent costs to obtain mortgage financing. We amortize these charges to interest expense over the term of the related mortgage using a method which approximates the effective interest method. Deferred financing costs are presented in the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability. Segments — We operate in one business segment, hospitality, with domestic investments. Hotel Revenue Recognition — Revenue consists of amounts derived from hotel operations, including the sale of rooms, food and beverage and revenue from other operating departments, such as parking, spa, resort fees and gift shops, and is presented on a disaggregated basis on the consolidated statements of operations. These revenues are recorded net of any sales or occupancy taxes, which are collected from our guests as earned. All rebates or discounts are recorded as a reduction in revenue and there are no material contingent obligations with respect to rebates or discounts offered by us. We recognize revenue when control of the promised good or service is transferred to the guest, in an amount that reflects the consideration we expect to receive in exchange for the promised good or service. Room revenue is generated through contracts with guests whereby the guest agrees to pay a daily rate for the right to use a hotel room and applicable amenities for an agreed upon length of stay. Our contract performance obligations are fulfilled at the end of the day that the guest is provided the room and revenue is recognized daily at the contract rate. Food and beverage revenue, including restaurant and banquet and catering services, are recognized at a point in time once food and beverage has been provided. Other operating department revenue for services such as parking, spa and other ancillary services, is recognized at a point in time when the goods and services are provided to the guest. We may engage third parties to provide certain services at the hotel, for example, audiovisual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenues as appropriate (i.e., gross vs. net). Payment is due at the time that goods or services are rendered or billed. For room revenue, payment is typically due and paid in full at the end of the stay with some guests prepaying for their rooms prior to the stay. For package revenue, where ancillary guest services are included with the guests’ hotel reservations in a package arrangement, we allocate revenue based on the stand-alone selling price for each of the components of the package. We applied a practical expedient to not disclose the value of unsatisfied performance obligations for contracts that have an original expected length of one year or less. Any contracts that have an original expected length of greater than one year are insignificant. Asset Retirement Obligations — Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal operation of a long-lived asset. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the capitalized cost is depreciated over the estimated remaining life of the related long-lived asset. Revisions to estimated retirement obligations result in adjustments to the related capitalized asset and corresponding liability. In order to determine the fair value of the asset retirement obligations, we make certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective. Capitalized Costs — We capitalize interest and certain other costs, such as property taxes, land leases, property insurance and incremental labor costs relating to hotels undergoing major renovations and redevelopments. We begin capitalizing interest as we incur disbursements, and capitalize other costs when activities necessary to prepare the asset ready for its intended use are underway. We cease capitalizing these costs when construction is substantially complete. Depreciation and Amortization — We compute depreciation for hotels and related building improvements using the straight-line method over the estimated useful lives of the properties (limited to 40 years for buildings and ranging from four years up to the remaining life of the building at the time of addition for building improvements), site improvements (generally four to 15 years ), and furniture, fixtures and equipment (generally one to 12 years ). Organization and Offering Costs — During our offering period, costs incurred in connection with the raising of capital were recorded as deferred offering costs. Upon receipt of offering proceeds, we charged the deferred costs to stockholders’ equity. Under the terms of the Advisory Agreement as described in Note 3 , we reimbursed our Advisor for organization and offering costs incurred up to regulatory limits. Organization costs were expensed as incurred and are included in corporate general and administrative expenses in the financial statements. Derivative Instruments — We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive loss until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. In accordance with fair value measurement guidance, counterparty credit risk is measured on a net portfolio position basis. Income Taxes — We elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, we are required, among other things, to distribute at least 90% of our REIT net taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to federal income taxes on our income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We believe that we have operated, and we intend to continue to operate, in a manner that allows us to continue to qualify as a REIT. We conduct business in various states and municipalities within the United States, and, as a result, we or one or more of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. As a result, we are subject to certain state and local taxes and a provision for such taxes is included in the consolidated financial statements. We elect to treat certain of our corporate subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, a TRS may perform additional services for our investments and generally may engage in any real estate or non-real estate-related business (except for the operation or management of health care facilities or lodging facilities or providing to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal, state and local income taxes. Significant judgment is required in determining our tax provision and in evaluating our tax positions. We establish tax reserves based on a benefit recognition model, which could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. We derecognize the tax position when it is no longer more likely than not of being sustained. Our earnings and profits, which determine the taxability of distributions to stockholders, differ from net income reported for financial reporting purposes due primarily to differences in depreciation and timing differences of certain income and expense recognitions, for federal income tax purposes. Deferred income taxes relate primarily to our TRSs and are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of our TRSs and their respective tax bases and for their operating loss and tax credit carry forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors ( Note 12 ). We recognize deferred income taxes in certain of our subsidiaries taxable in the United States. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes as described in Note 12 ). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. Deferred income taxes are computed under the asset and liability method. The asset and liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between tax bases and financial bases of assets and liabilities. We provide a valuation allowance against our deferred income tax assets when we believe that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). Share-Based Payments — We have granted Class A restricted stock units (“RSUs”) to certain employees of the Subadvisor. RSUs issued to employees of the Subadvisor generally vest over three years, and are subject to continued employment. We also issued Class A common stock to our directors as part of their director compensation. The expense recognized for share-based payment transactions for awards made to directors is based on the grant date fair value estimated in accordance with current accounting guidance for share-based payments. Share-based payment transactions for awards made to employees of the Subadvisor are based on the fair value of the services received. We recognize these compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award. We include share-based payment transactions within Corporate general and administrative expense. Transaction Costs — Transaction costs for the year ended December 31, 2019 are costs incurred in connection with the Proposed Merger and related transactions, discussed in Note 1 , and included legal, accounting, financial advisory and other transaction costs. For the years ended December 31, 2018 and 2017, transaction costs represented acquisition-related costs and fees associated with acquisitions of our Consolidated Hotels that were accounted for as business combinations. These costs are expensed as incurred in the consolidated statements of operations. Income Attributable to Noncontrolling Interests — Earnings attributable to noncontrolling interests are recognized in accordance with each respective investment agreement and, where applicable, based upon the allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. Loss Per Share — Loss per share, as presented, represents both basic and diluted per-share amounts for all periods presented in the consolidated financial statements. We calculate loss per share using the two-class method to reflect the different classes of our outstanding common stock. Loss per basic share of common stock is calculated by dividing Net loss attributable to CWI 2 by the weighted-average number of shares of common stock issued and outstanding during the year. The allocation of Net loss attributable to CWI 2 is calculated based on the weighted-average shares outstanding for Class A common stock and Class T common stock for the years ended December 31, 2019 , 2018 and 2017 . Recent Accounting Requirements The following ASUs, promulgated by the Financial Accounting Standards Board (“FASB”), are applicable to us: Pronouncements Adopted as of December 31, 2019 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. We elected the package of practical expedients as permitted under the transition guidance, which allowed us to not reassess: (i) whether arrangements contain leases, (ii) lease classification and (iii) initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. On January 1, 2019, we recognized a right-of-use asset and a corresponding lease liability related to our operating leases of $1.5 million and $2.3 million , respectively, in Other assets and Accounts payable, accrued expenses and other liabilities, respectively, in our consolidated balance sheet. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. We adopted this guidance for our interim and annual periods beginning January 1, 2019. The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions in exchange for goods and services from nonemployees, which will align the accounting for such payments to nonemployees with the existing requirements for share-based payments granted to employees (with certain exceptions). These share-based payments will now be measured at the grant-date fair value of the equity instrument issued. We adopted this guidance for our interim and annual periods beginning January 1, 2019. The adoption of this standard did not have a material impact on our consolidated financial statements. |
Agreements and Transactions wit
Agreements and Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Agreements and Transactions with Related Parties | Agreements and Transactions with Related Parties Agreements with Our Advisor and Affiliates We have an advisory agreement with our Advisor (the “Advisory Agreement”) to perform certain services for us under a fee arrangement, including managing our overall business, our investments, and certain administrative duties. The agreement that is currently in effect will expire on March 31, 2020, unless renewed or extended pursuant to its terms. Our Advisor also has a subadvisory agreement with the Subadvisor (the “Subadvisory Agreement”) whereby our Advisor pays 25% of its fees that it earns under the Advisory Agreement and Available Cash Distributions (as defined below) and 30% of the subordinated incentive distributions to the Subadvisor in return for certain personnel services. The following tables present a summary of fees we paid, expenses we reimbursed and distributions we made to our Advisor, the Subadvisor and other affiliates, as described below, in accordance with the terms of those agreements (in thousands): Years Ended December 31, 2019 2018 2017 Amounts Included in the Consolidated Statements of Operations Asset management fees $ 10,734 $ 10,400 $ 8,670 Available Cash Distributions 6,262 5,467 5,078 Personnel and overhead reimbursements 4,170 4,069 3,514 Acquisition fees — — 4,415 Interest expense — — 332 Accretion of interest on annual distribution and shareholder servicing fee (a) — — 198 $ 21,166 $ 19,936 $ 22,207 Other Transaction Fees Incurred Watermark commitment agreement $ 2,850 $ — $ — Capitalized loan refinancing fees 225 245 280 Selling commissions and dealer manager fees — — 13,199 Annual distribution and shareholder servicing fee (a) — — 8,439 Capitalized acquisition fees for equity method investment (b) — — 6,195 Organization and offering costs — — 1,453 $ 3,075 $ 245 $ 29,566 ___________ (a) Starting with the payment of the third quarter 2017 distribution and shareholder servicing fee (which was paid in October 2017), we began making payments directly to selected dealers rather than through Carey Financial, LLC (“Carey Financial”), a subsidiary of WPC and the former dealer manager of our offering; therefore, this activity is no longer considered a related party transaction. (b) Our Advisor elected to receive 50% of the acquisition fee related to our investment in the Ritz-Carlton Bacara, Santa Barbara Venture in shares of our Class A common stock and 50% in cash. The following table presents a summary of amounts included in Due to related parties and affiliates in the consolidated financial statements (in thousands): December 31, 2019 2018 Amounts Due to Related Parties and Affiliates Reimbursable costs due to our Advisor $ 956 $ 1,100 Asset management fees and other due to our Advisor 894 884 Watermark commitment agreement 800 — Due to other related parties and affiliates 136 — $ 2,786 $ 1,984 Asset Management Fees, Disposition Fees and Loan Refinancing Fees We pay our Advisor an annual asset management fee equal to 0.55% of the aggregate Average Market Value of our Investments (as defined in the Advisory Agreement). Our Advisor is also entitled to receive disposition fees of up to 1.5% of the contract sales price of a property, as well as a loan refinancing fee of up to 1.0% of the principal amount of a refinanced loan, if certain conditions described in the Advisory Agreement are met. If our Advisor elects to receive all or a portion of its fees in shares of our Class A common stock, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share (“NAV”) for Class A shares. For the years ended December 31, 2019, 2018 and 2017, we settled $10.7 million , $10.4 million and $8.3 million , respectively, of asset management fees in shares of our Class A common stock at our Advisor’s election. At December 31, 2019 , our Advisor owned 3,506,798 shares ( 3.8% ) of our total outstanding common stock. Asset management fees are included in Asset management fees to affiliate and other expenses in the consolidated financial statements. Acquisition Fees to our Advisor Pursuant to our Advisory Agreement, our Advisor is entitled to acquisition fees of 2.5% of the total investment cost of the properties acquired, including on our proportionate share of equity method investments and loans originated by us. The total fees to be paid may not exceed 6% of the aggregate contract purchase price of all investments, as measured over a period specified in our Advisory Agreement. Available Cash Distributions Carey Watermark Holdings 2’s special general partner interest entitles it to receive distributions of 10% of Available Cash, as defined in the agreement of limited partnership of the Operating Partnership (“Available Cash Distributions”) generated by the Operating Partnership, subject to certain limitations. Available Cash Distributions are included in Income attributable to noncontrolling interests in the consolidated financial statements. Personnel and Overhead Reimbursements Under the terms of the Advisory Agreement, our Advisor generally allocates expenses of dedicated and shared resources, including the cost of personnel, rent and related office expenses, between us and our affiliate CWI 1, based on total pro rata hotel revenues on a quarterly basis. Pursuant to the Subadvisory Agreement, after we reimburse our Advisor, it will subsequently reimburse the Subadvisor for personnel costs and other charges, including the services of our Chief Executive Officer, subject to the approval of our board of directors. These reimbursements are included in Corporate general and administrative expenses and Due to related parties and affiliates in the consolidated financial statements and are settled in cash. We have also granted RSUs to employees of the Subadvisor pursuant to our 2015 Equity Incentive Plan. Selling Commissions and Dealer Manager Fees Pursuant to our former dealer manager agreement with Carey Financial, Carey Financial received a selling commission for sales of our Class A and Class T common stock. From March 2016 to April 2017, Carey Financial received a selling commission of $0.82 and $0.22 per share sold and a dealer manager fee of $0.35 and $0.30 per share sold for the Class A and Class T common stock, respectively. In connection with the extension of our initial public offering in 2017, we adjusted our offering prices in April 2017 to reflect our NAVs as of December 31, 2016, with a selling commission of $0.84 and $0.23 per share sold and a dealer manager fee of $0.36 and $0.31 per share sold for the Class A and Class T common stock, respectively, which were paid through the termination of our offering on July 31, 2017. The selling commissions were re-allowed and a portion of the dealer manager fees could have been re-allowed to selected dealers. These amounts are recorded in Additional paid-in capital in the consolidated financial statements. During the year ended December 31, 2017, we paid selling commissions and dealer manager fees totaling $13.2 million . Through June 30, 2017, Carey Financial was entitled to receive an annual distribution and shareholder servicing fee in connection with our Class T common stock, which it may have re-allowed to selected dealers. Beginning with the payment for the third quarter of 2017, which was paid in October 2017, the distribution and shareholder servicing fee was paid by us directly to selected dealers rather than through Carey Financial; therefore, this activity is no longer considered a related party transaction. The amount of the distribution and shareholder servicing fee is 1.0% of the NAV of our Class T common stock. The distribution and shareholder servicing fee accrues daily and is payable quarterly in arrears. We currently expect that we will cease incurring the distribution and shareholder servicing fee during the third quarter of 2020, at which time the total underwriting compensation paid in respect of the offering will reach 10.0% of the gross offering proceeds. During the year ended December 31, 2017, $9.0 million of distribution and shareholder servicing fees were charged to stockholder’s equity and $3.6 million of such fees were paid to Carey Financial, which it may have re-allowed to selected dealers. During the years ended December 31, 2019, 2018 and 2017, we paid $5.6 million , $5.8 million and $1.5 million , respectively, of distribution and shareholder servicing fees to selected dealers. Organization and Offering Costs Pursuant to the Advisory Agreement, we were liable for certain expenses related to our public offering, which were deducted from the gross proceeds of the offering. We reimbursed Carey Financial and selected dealers for reasonable bona fide due diligence expenses incurred that were supported by a detailed and itemized invoice. Our Advisor was reimbursed for all organization expenses and offering costs incurred in connection with our offering (excluding selling commissions and the dealer manager fees), which terminated on July 31, 2017. Through the life of our initial public offering, our Advisor incurred organization and offering costs on our behalf of approximately $9.1 million , all of which has been paid. During the offering period, costs incurred in connection with raising of capital are recorded as deferred offering costs. Upon receipt of offering proceeds, we charged the deferred offering costs to stockholders’ equity. During the year ended December 31, 2017, $2.8 million of deferred offering costs were charged to stockholders’ equity. Other Transactions with Affiliates Proposed Merger In connection with the Proposed Merger, we have entered into an internalization agreement with WPC and Watermark, as well as separate transition services agreements with each. Immediately following the closing of the Proposed Merger: (i) the advisory agreements with WPC for both us and CWI 1 will terminate; (ii) the operating partnerships of both us and CWI 1 will redeem the special general partnership interests that WPC and Watermark currently hold, for which they will receive, in the aggregate, approximately $97.4 million in consideration, comprised of $65.0 million in shares of our preferred stock and 2,840,549 shares in our Class A common stock valued at approximately $32.4 million . Watermark will receive 2,417,996 limited partnership units in our Operating Partnership with an aggregate value of $27.6 million ; (iii) the combined company will internalize the management services currently provided by WPC; (iv) WPC will provide certain transition services at cost to us for periods generally up to 12 months from the closing of the Proposed Merger; and (v) Watermark will provide certain transition services at cost to us and we will provide certain transaction services at cost to them for periods generally up to six months from the closing of the Proposed Merger. Commitment Agreement On October 1, 2019, we, CWI 1, Watermark and Mr. Medzigian, the chief executive officer of both us and CWI 1 entered into a commitment agreement pursuant to which we and CWI 1 agreed to pay Watermark a total of $6.95 million in consideration of the commitments of Watermark and Mr. Medzigian to wind down and ultimately liquidate a private fund that was formed to raise capital to invest in lodging properties, and to devote their business activities exclusively to the affairs of us and CWI 1 and certain other activities set forth in the commitment agreement, with the exception of the wind-down of the private fund and performing asset management services for two hotels owned by WPC (one of which was subsequently sold). Of the total $6.95 million , $5.0 million was paid on October 25, 2019, of which $2.0 million was allocated to and paid by us, and was included in Other assets in the consolidated balance sheet at December 31, 2019 as a deferred cost. The remaining balance of $1.95 million was paid on January 15, 2020, of which $0.8 million was allocated to and paid by us, and was included as a payable in Due to other related parties and affiliates and a deferred cost in Other assets in the consolidated balance sheet at December 31, 2019. Working Capital Facility In October 19, 2017, our Operating Partnership entered into a $25.0 million secured credit facility with WPC to fund our working capital needs (the “Working Capital Facility”). The Working Capital Facility was scheduled to mature on December 31, 2019 and was extended to the later of March 31, 2020 or the closing date of the Proposed Merger, which is currently expected to occur during the first quarter of 2020. The interest rate for any borrowing made under the Working Capital Facility during this extension would increase to the London Interbank Offered Rate (“LIBOR”) plus 3.0% from the current interest rate of LIBOR plus 1.0% . If the Advisory Agreement expires or is terminated, the Working Capital Facility would mature at that time. We serve as guarantor of the Working Capital Facility and have pledged our unencumbered equity interest in certain properties as collateral, as further described in the related pledge and security agreement. At both December 31, 2019 and 2018 , no amounts were outstanding under the Working Capital Facility. Jointly-Owned Investments At December 31, 2019 , we owned interests in three ventures with CWI 1: the Marriott Sawgrass Golf Resort & Spa, a Consolidated Hotel, and the Ritz-Carlton Key Biscayne and the Ritz-Carlton Bacara, Santa Barbara, both Unconsolidated Hotels. A third-party also owns an interest in the Ritz-Carlton Key Biscayne. |
Net Investments in Hotels
Net Investments in Hotels | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Net Investments in Hotels | Net Investments in Hotels Net investments in hotels are summarized as follows (in thousands): December 31, 2019 2018 Buildings $ 1,090,693 $ 1,093,865 Land 236,078 236,078 Furniture, fixtures and equipment 93,333 93,766 Building and site improvements 42,318 38,670 Construction in progress 6,466 2,554 Hotels, at cost 1,468,888 1,464,933 Less: Accumulated depreciation (157,581 ) (113,184 ) Net investments in hotels $ 1,311,307 $ 1,351,749 During the years ended December 31, 2019 and 2018, we retired fully depreciated furniture, fixtures and equipment aggregating $3.2 million and $1.0 million , respectively. Hurricane-Related Disruption The Marriott Sawgrass Golf Resort & Spa was impacted by Hurricane Irma when it made landfall in September 2017. The hotel sustained damage and was forced to close for a short period of time. Below is a summary of the items that comprised the (gain) loss recognized by the venture related to Hurricane Irma (in thousands): (in thousands) Years Ended December 31, 2019 2018 2017 Net write-off (write-up) of fixed assets (a) $ 3,476 $ (173 ) $ 4,938 Remediation work performed — 133 1,476 (Increase) decrease to property damage insurance receivables (3,486 ) 722 (3,715 ) (Gain) loss on hurricane-related property damage $ (10 ) $ 682 $ 2,699 ___________ (a) Includes write-offs totaling $1.4 million during the year ended December 31, 2018 resulting from pre-existing damage (which was discovered as a result of Hurricane Irma and was not covered by insurance). During the year ended December 31, 2018, $0.9 million was recorded in the consolidated financial statements as Business interruption income related to Hurricane Irma. We did not record business interruption income related to Hurricane Irma during either the years ended December 31, 2019 or 2017. As the restoration work continues to be performed, the estimated total cost will change. Any changes to property damage estimates will be recorded in the periods in which they are determined and any additional remediation work will be recorded in the periods in which it is performed. Construction in Progress At December 31, 2019 and 2018, construction in progress, recorded at cost, was $6.5 million and $2.6 million , respectively, and related to renovations at certain of our hotels. Upon substantial completion of renovation work, costs are reclassified from construction in progress to buildings, building and site improvements and furniture, fixture and equipment, as applicable, and depreciation will commence. We capitalize qualifying interest expense and certain other costs, such as property taxes, property insurance, utilities expense and hotel incremental labor costs, related to hotels undergoing major renovations. We capitalized $0.1 million , $0.3 million and $0.4 million of such costs during the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019, 2018 and 2017, accrued capital expenditures were $1.4 million , $1.4 million and $0.5 million , respectively, representing non-cash investing activity. Pro Forma Financial Information The following unaudited consolidated pro forma financial information presents our financial results as if the acquisition that we completed during the year ended December 31, 2017, and the new financing related to this acquisition, had occurred on January 1, 2016. This transaction was accounted for as a business combination. The pro forma financial information is not necessarily indicative of what the actual results would have been had the acquisition actually occurred on the dates listed above, nor does it purport to represent the results of operations for future periods. (Dollars in thousands) Year Ended December 31, 2017 Pro forma total revenues $ 356,634 Pro forma net income $ 1,391 Pro forma income attributable to noncontrolling interests (991 ) Pro forma net income attributable to CWI 2 stockholders $ 400 Class A Common Stock Pro forma net income attributable to CWI 2 stockholders $ 260 Class T Common Stock Pro forma net income attributable to CWI 2 stockholders $ 140 All acquisition costs for the acquisition we completed during the year ended December 31, 2017 are presented as if they were incurred on January 1, 2016. |
Equity Investments in Real Esta
Equity Investments in Real Estate | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments in Real Estate | Equity Investments in Real Estate At December 31, 2019 , we owned equity interests in two Unconsolidated Hotels, one with CWI 1 and one together with CWI 1 and an unrelated third party. We do not control the ventures that own these hotels, but we exercise significant influence over them. We account for these investments under the equity method of accounting (i.e., at cost, increased or decreased by our share of earnings or losses, less distributions, plus contributions and other adjustments required by equity method accounting, such as basis differences from acquisition costs paid to our Advisor that we incur and other-than-temporary impairment charges, if any). Under the conventional approach of accounting for equity method investments, an investor applies its percentage ownership interest to the venture’s net income or loss to determine the investor’s share of the earnings or losses of the venture. This approach is inappropriate if the venture’s capital structure gives different rights and priorities to its investors. Therefore, we follow the hypothetical liquidation at book value (“HLBV”) method in determining our share of these ventures’ earnings or losses for the reporting period as this method better reflects our claim on the ventures’ book value at the end of each reporting period. Earnings for our equity method investments are recognized in accordance with each respective investment agreement and, where applicable, based upon the allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. The following table sets forth our ownership interests in our equity investments in real estate and their respective carrying values. The carrying values of these ventures are affected by the timing and nature of distributions (dollars in thousands): Unconsolidated Hotels State Number of Rooms % Owned Hotel Type Carrying Value at December 31, 2019 2018 Ritz-Carlton Bacara, Santa Barbara Venture (a) (b) CA 358 60 % Resort $ 77,837 $ 85,110 Ritz-Carlton Key Biscayne Venture (c) (d) FL 443 19.3 % Resort 35,332 36,346 801 $ 113,169 $ 121,456 ___________ (a) This investment represents a tenancy-in-common interest; the remaining 40% interest is owned by CWI 1. (b) We received $1.3 million of net cash distributions from this investment during the year ended December 31, 2019 , which included our share of key money received from Marriott during the third quarter of 2019. (c) CWI 1 acquired a 47.4% interest in the venture on the same date. The remaining 33.3% interest is retained by the original owner. The number of rooms presented includes 141 condo-hotel units that participate in the resort rental program. This investment is considered a VIE ( Note 2 ). We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity. (d) We received cash distributions of $1.7 million from this investment during the year ended December 31, 2019 . The following table sets forth our share of equity in (losses) earnings from our Unconsolidated Hotels, which is based on the HLBV model, as well as amortization adjustments related to basis differentials from acquisitions of investments (in thousands): Years Ended December 31, 2019 2018 2017 Ritz-Carlton Bacara, Santa Barbara Venture $ (5,918 ) $ (7,314 ) $ (4,235 ) Ritz-Carlton Key Biscayne Venture 709 1,495 2,753 Total equity in losses of equity method investments in real estate, net $ (5,209 ) $ (5,819 ) $ (1,482 ) No other-than-temporary impairment charges were recognized during the years ended December 31, 2019 , 2018 and 2017 . At December 31, 2019 and 2018, the unamortized basis differences on our equity investments were $7.5 million and $7.8 million , respectively. Net amortization of the basis differences reduced the carrying values of our equity investments by $0.2 million , $0.3 million and $0.1 million during the years ended December 31, 2019, 2018 and 2017, respectively. Hurricane-Related Disruption The Ritz-Carlton Key Biscayne was impacted by Hurricane Irma when it made landfall in September 2017. The hotel sustained damage and was forced to close for a short period of time. During the years ended December 31, 2019, 2018, and 2017, the venture recorded a loss on hurricane-related property damage of less than $0.1 million , a gain of $0.8 million and a loss of $3.6 million , respectively; however, there was no net impact to our investment in the venture under the HLBV method of accounting as a result of our priority return on investment. The following tables present combined summarized financial information of our equity method investments in real estate. Amounts provided are the total amounts attributable to the ventures and do not represent our proportionate share (in thousands): 2019 2018 2017 Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture (a) Ritz-Carlton Key Biscayne Venture Balance Sheet – As of December 31, Real estate, net $ 636,372 $ 358,723 $ 277,649 $ 643,145 $ 362,386 $ 280,759 $ 646,943 $ 367,035 $ 279,908 Other assets 64,130 20,049 44,081 66,027 20,093 45,934 78,059 28,294 49,765 Total assets 700,502 378,772 321,730 709,172 382,479 326,693 725,002 395,329 329,673 Debt 413,538 228,434 185,104 415,973 227,535 188,438 416,335 226,636 189,699 Other liabilities 50,973 30,350 20,623 42,099 23,092 19,007 34,567 16,382 18,185 Total liabilities 464,511 258,784 205,727 458,072 250,627 207,445 450,902 243,018 207,884 Members’ equity 235,991 119,988 116,003 251,100 131,852 119,248 274,100 152,311 121,789 Percentage of ownership in equity investee 60 % 19.3 % 60 % 19.3 % 60 % 19.3 % Pro-rata equity carrying value 94,382 71,993 22,389 102,126 79,111 23,015 114,892 91,387 23,505 Basis differential adjustment 7,602 5,844 1,758 7,757 5,999 1,758 8,026 6,197 1,829 HLBV adjustment 11,185 — 11,185 11,573 — 11,573 11,820 — 11,820 Carrying value $ 113,169 $ 77,837 $ 35,332 $ 121,456 $ 85,110 $ 36,346 $ 134,738 $ 97,584 $ 37,154 2019 2018 2017 Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture (a) Ritz-Carlton Key Biscayne Venture Income Statement – For the year ended December 31, Hotel revenues $ 174,282 $ 83,247 $ 91,035 $ 179,199 $ 81,670 $ 97,529 $ 99,800 $ 15,269 $ 84,531 Hotel operating expenses 158,535 78,474 80,061 164,601 79,955 84,646 95,423 18,906 76,517 Other operating expenses 67 8 59 179 86 93 59 52 7 Other income and (expenses) (b) (21,818 ) (14,203 ) (7,615 ) (20,384 ) (13,494 ) (6,890 ) (14,395 ) (3,161 ) (11,234 ) (Provision for) benefit from income taxes (410 ) (166 ) (244 ) (141 ) — (141 ) 1,121 (208 ) 1,329 Net (loss) income (6,548 ) (9,604 ) 3,056 (6,106 ) (11,865 ) 5,759 (8,956 ) (7,058 ) (1,898 ) Percentage of ownership in equity investee 60 % 19.3 % 60 % 19.3 % 60 % 19.3 % Pro-rata equity in (losses) earnings of equity method investments in real estate (5,172 ) (5,762 ) 590 (6,008 ) (7,119 ) 1,111 (4,601 ) (4,235 ) (366 ) Basis differential adjustment (227 ) (156 ) (71 ) (266 ) (195 ) (71 ) (71 ) — (71 ) HLBV adjustment 190 — 190 455 — 455 3,190 — 3,190 Equity in (losses) earnings of equity method investments in real estate $ (5,209 ) $ (5,918 ) $ 709 $ (5,819 ) $ (7,314 ) $ 1,495 $ (1,482 ) $ (4,235 ) $ 2,753 ___________ (a) We purchased our 60% interest in this venture on September 28, 2017. (b) Other income and (expenses) for the years ended December 31, 2019 and 2018 for the Ritz-Carlton Bacara, Santa Barbara Venture is primarily comprised of interest expense related to its outstanding mortgage loans. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments, including interest rate caps and swaps; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. Items Measured at Fair Value on a Recurring Basis Derivative Assets — Our derivative assets, which are included in Other assets in the consolidated financial statements, are comprised of interest rate caps and swaps ( Note 7 ). The valuation of our derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative instruments for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings and thresholds. These derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. We did not have any transfers into or out of Level 1, Level 2 and Level 3 category of measurements during the years ended December 31, 2019 or 2018 . Gains and losses (realized and unrealized) recognized on items measured at fair value on a recurring basis included in earnings are reported in Other income and (expenses) in the consolidated financial statements. Our non-recourse debt, which we have classified as Level 3, had a carrying value of $840.5 million and $833.8 million at December 31, 2019 and 2018, respectively, and an estimated fair value of $844.2 million and $825.8 million at December 31, 2019 and 2018, respectively. We determined the estimated fair value using a discounted cash flow model with rates that take into account the interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral and the then-current interest rate. We estimated that our other financial assets and liabilities had fair values that approximated their carrying values at both December 31, 2019 and 2018 . Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges) We periodically assess whether there are any indicators that the value of our real estate investments may be impaired or that the carrying value may not be recoverable. Where the undiscounted cash flows for an asset are less than the asset’s carrying value when considering and evaluating the various alternative courses of action that may occur, we recognize an impairment charge to reduce the carrying value of the asset to its estimated fair value. Further, when we classify an asset as held for sale, we carry the asset at the lower of its carrying value or its fair value, less estimated cost to sell. The estimated fair value is primarily determined using market information from outside sources such as broker quotes or recent comparable sales. If relevant market information is not available or is not deemed appropriate, we perform a future net cash flow analysis, discounted for the inherent risk associated with each investment. We determined that the significant inputs used to value these investments fall within Level 3 for fair value reporting. We did not recognize any impairment charges during the years ended December 31, 2019, 2018, or 2017. |
Risk Management and Use of Deri
Risk Management and Use of Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management and Use of Derivative Financial Instruments | Risk Management and Use of Derivative Financial Instruments Risk Management In the normal course of our ongoing business operations, we encounter economic risk. There are two main components of economic risk that impact us: interest rate risk and market risk. We are primarily subject to interest rate risk on our interest-bearing assets and liabilities. Market risk includes changes in the value of our properties and related loans. Derivative Financial Instruments When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates. We have not entered into, and do not plan to enter into, financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts, which are considered to be derivative instruments. The primary risks related to our use of derivative instruments include: (i) a counterparty to a hedging arrangement defaulting on its obligation and (ii) a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment, as well as the approval, reporting and monitoring of derivative financial instrument activities. We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated, and that qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive loss until the hedged item is recognized in earnings. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings. The following table sets forth certain information regarding our derivative instruments on our Consolidated Hotels (in thousands): Derivatives Designated as Hedging Instruments Asset Derivatives Fair Value at December 31, Balance Sheet Location 2019 2018 Interest rate swaps Other assets $ 121 $ 1,368 Interest rate caps Other assets — 57 $ 121 $ 1,425 All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis in our consolidated financial statements. At both December 31, 2019 and 2018, no cash collateral had been posted nor received for any of our derivative positions. We recognized unrealized losses of $0.3 million , and unrealized gains of $0.5 million and $0.3 million in Other comprehensive loss on derivatives in connection with our interest rate swaps and caps during the years ended December 31, 2019, 2018, and 2017, respectively. We reclassified $1.0 million , $ 0.7 million , and $0.2 million from Other comprehensive loss on derivatives into Interest expense during the years ended December 31, 2019, 2018 and 2017, respectively. Amounts reported in Other comprehensive loss related to our interest rate swaps and caps will be reclassified to Interest expense as interest expense or income is incurred on our variable-rate debt. At December 31, 2019 , we estimated that less than $0.1 million will be reclassified as Interest income during the next 12 months related to our interest rate swaps and caps. Interest Rate Swaps and Caps We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our investment partners may obtain variable-rate non-recourse mortgage loans and, as a result, may enter into interest rate swap or cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. An interest rate cap limits the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements. The interest rate swaps and caps that we had outstanding on our Consolidated Hotels at December 31, 2019 were designated as cash flow hedges and are summarized as follows (dollars in thousands): Number of Notional Fair Value at Interest Rate Derivatives Instruments Amount December 31, 2019 Interest rate swaps 2 $ 187,910 $ 121 Interest rate caps 3 171,385 — $ 121 Credit Risk-Related Contingent Features We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of December 31, 2019 . At December 31, 2019 , both our total credit exposure and the maximum exposure to any single counterparty were $0.2 million . Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At December 31, 2019 , we had not been declared in default on any of our derivative obligations. At both December 31, 2019 and 2018, we had no derivatives that were in a net liability position. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Our debt consists of mortgage notes payable, which are collateralized by the assignment of hotel properties. The following table presents the non-recourse debt on our Consolidated Hotels (dollars in thousands): Carrying Amount at December 31, Consolidated Hotels Interest Rate Rate Type Maturity Date 2019 2018 Seattle Marriott Bellevue (a) (b) (c) 3.88% Variable 1/2020 $ 97,895 $ 99,719 Le Méridien Arlington (b) (c) 4.44% Variable 6/2020 34,755 34,787 San Jose Marriott (b) (c) 4.44% Variable 7/2020 87,460 87,880 Renaissance Atlanta Midtown Hotel (b) (d) 3.96% Variable 8/2021 48,589 48,332 Ritz-Carlton San Francisco 4.59% Fixed 2/2022 142,923 142,887 Charlotte Marriott City Center 4.53% Fixed 6/2022 102,636 102,488 Courtyard Nashville Downtown 4.15% Fixed 9/2022 54,965 55,051 Marriott Sawgrass Golf Resort & Spa (b) (d) 3.76% Variable 11/2022 88,747 77,997 Embassy Suites by Hilton Denver-Downtown/Convention Center 3.90% Fixed 12/2022 98,073 99,818 San Diego Marriott La Jolla 4.13% Fixed 8/2023 84,422 84,877 $ 840,465 $ 833,836 ___________ (a) On January 22, 2020, we refinanced this loan with a new $98.8 million non-recourse mortgage loan. The loan has a floating annual interest rate of LIBOR plus 2.7% , which has effectively been fixed at 4.2% through an interest rate swap agreement, and a maturity date of January 22, 2023. (b) These mortgage loans have variable interest rates, which have effectively been capped or converted to fixed rates through the use of interest rate caps or swaps ( Note 7 ). The interest rates presented for these mortgage loans reflect the rates in effect at December 31, 2019 through the use of an interest rate cap or swap, as applicable. (c) These mortgage loans have one -year extension options, which are subject to certain conditions. The maturity dates in the table do not reflect the extension options. (d) These mortgage loans have two one -year extension options, which are subject to certain conditions. The maturity dates in the table do not reflect the extension options. Covenants Pursuant to our mortgage loan agreements, our consolidated subsidiaries are subject to various operational and financial covenants, including minimum debt service coverage ratios. Most of our mortgage loan agreements contain “lock-box” provisions, which permit the lender to access or sweep a hotel’s excess cash flow and could be triggered by the lender under limited circumstances, including the failure to maintain minimum debt service coverage ratios. If a lender requires that we enter into a cash management agreement, we would generally be permitted to spend an amount equal to our budgeted hotel operating expenses, taxes, insurance and capital expenditure reserves for the relevant hotel. The lender would then hold all excess cash flow after the payment of debt service in an escrow account until certain performance hurdles are met. At December 31, 2019 , we were in compliance with the applicable covenants for each of our mortgage loans. Financing Activity During 2019 On November 1, 2019, we refinanced the $78.0 million Marriott Sawgrass Golf Resort & Spa mortgage loan with a new mortgage loan of $90.0 million . The loan has a floating annual interest rate of LIBOR plus 2.3% , which has effectively been fixed at 3.8% through an interest rate swap agreement, and a maturity date of November 1, 2022. We recognized a net loss on extinguishment of debt of less than $0.1 million on this refinancing during the year ended December 31, 2019. Financing Activity During 2018 On August 8, 2018, we refinanced the Renaissance Atlanta Midtown senior mortgage and mezzanine loans totaling $34.0 million and $13.5 million , respectively, with one non-recourse mortgage loan totaling $49.0 million , which has a floating annual interest rate of LIBOR plus 2.3% (with the interest rate decreasing to LIBOR plus 2.0% upon achieving a specific minimum debt service coverage ratio as described in the loan agreement). We have entered into an interest rate cap agreement with respect to this variable rate loan. The new loan matures in August 2021. We recognized a net loss on extinguishment of debt of $0.4 million on this refinancing during the year ended December 31, 2018. Scheduled Debt Principal Payments Scheduled debt principal payments during each of the next five calendar years following December 31, 2019 are as follows (in thousands): Years Ending December 31, Total 2020 (a) $ 224,614 2021 53,497 2022 485,618 2023 79,878 2024 — Total principal payments 843,607 Unamortized deferred financing costs (3,142 ) Total $ 840,465 __________ (a) Balance included a $97.7 million scheduled balloon payment on a consolidated mortgage loan, which was refinanced on January 22, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At December 31, 2019 , we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us, including liens for which we may obtain a bond, provide collateral or provide an indemnity, but we do not expect the results of such proceedings to have a material adverse effect on our consolidated financial position, results of operations or cash flows. Hotel Management Agreements As of December 31, 2019 , our Consolidated Hotel properties were operated pursuant to long-term management agreements with three different management companies, with initial terms ranging from five to 40 years . For hotels operated with separate franchise agreements, each management company receives a base management fee, generally ranging from 2.5% to 3.0% of hotel revenues. Six of our management agreements contain the right and license to operate the hotels under specified brands; no separate franchise agreements exist and no separate franchise fee is required for these hotels. The management agreements that include the benefit of a franchise agreement incur a base management fee ranging from 3.0% to 7.0% of hotel revenues. The management companies are generally also eligible to receive an incentive management fee, which is typically calculated as a percentage of operating profit, either (i) in excess of projections with a cap or (ii) after the owner has received a priority return on its investment in the hotel. We incurred management fee expense, including amortization of deferred management fees, of $13.0 million , $13.0 million and $12.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. Franchise Agreements Four of our Consolidated Hotels operated under franchise or license agreements with national brands that are separate from our management agreements. As of December 31, 2019 , we had three franchise agreements with Marriott-owned brands and one with a Hilton-owned brand related to our Consolidated Hotels. Our typical franchise agreement provides for a term of 20 to 25 years . Typically, our franchise agreements provide for a license fee, or royalty, of 3.0% to 6.0% of room revenues and, if applicable, 3.0% of food and beverage revenue. In addition, we generally pay 1.0% to 4.0% of room revenues as marketing and reservation system contributions for the system-wide benefit of brand hotels. Franchise fees are included in sales and marketing expense in our consolidated financial statements. We incurred franchise fee expense, including amortization of deferred franchise fees, of $5.5 million , $5.6 million and $6.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. Capital Expenditures and Reserve Funds With respect to our hotels that are operated under management or franchise agreements with major international hotel brands and for most of our hotels subject to mortgage loans, we are obligated to maintain furniture, fixtures and equipment reserve accounts for future capital expenditures at these hotels, sufficient to cover the cost of routine improvements and alterations at the hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective hotels and typically ranges between 3.0% and 5.0% of the respective hotel’s total gross revenue. As of December 31, 2019 and 2018, $26.7 million and $20.4 million , respectively, was held in furniture, fixtures and equipment reserve accounts for future capital expenditures and is included in Restricted cash in the consolidated financial statements. Renovation Commitments Certain of our hotel franchise and loan agreements require us to make planned renovations to our hotels. Additionally, from time to time, certain of our hotels may undergo renovations as a result of our decision to upgrade portions of the hotels, such as guestrooms, public space, meeting space, and/or restaurants, in order to better compete with other hotels and alternative lodging options in our markets. At December 31, 2019 , we had various contracts outstanding with third parties in connection with the renovation of certain of our hotels. The remaining commitments under these contracts at December 31, 2019 totaled $11.5 million . Funding for a renovation will first come from our furniture, fixtures and equipment reserve accounts, to the extent permitted by the terms of the management agreement. Should these reserves be unavailable or insufficient to cover the cost of the renovation, we will fund all or the remaining portion of the renovation with existing cash resources, proceeds available under our Working Capital Facility and/or other sources of available capital, including cash flow from operations. Ritz-Carlton San Francisco NOI Guarantee Reserve In connection with our acquisition of the Ritz-Carlton San Francisco on December 30, 2016, at closing we funded a $10.0 million NOI guarantee reserve into a restricted cash account, which guaranteed us minimum predetermined NOI amounts over a period of approximately two years, with any remaining funds at the end of the two year period to be remitted back to the seller. Throughout the two year period, we made draws against this reserve and at December 31, 2018 (the end of the two year period), we estimated that a total of $1.2 million would be remitted to the seller and recorded a liability in Accounts payable, accrued expenses and other liabilities and a corresponding amount in Transaction costs in the consolidated financial statements. During the second quarter of 2019, $1.2 million was remitted to the seller. |
Loss Per Share and Equity
Loss Per Share and Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Loss Per Share and Equity | Loss Per Share and Equity Loss Per Share The following table presents loss per share (in thousands, except share and per share amounts): Year Ended December 31, 2019 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Class A common stock 32,260,398 $ (2,509 ) $ (0.08 ) Class T common stock 60,499,745 (5,109 ) (0.08 ) Net loss attributable to CWI 2 stockholders $ (7,618 ) Year Ended December 31, 2018 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Class A common stock 30,390,179 $ (2,443 ) $ (0.08 ) Class T common stock 58,842,820 (5,344 ) (0.09 ) Net loss attributable to CWI 2 stockholders $ (7,787 ) Year Ended December 31, 2017 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Class A common stock 27,825,037 $ (1,740 ) $ (0.06 ) Class T common stock 54,686,084 (3,745 ) (0.07 ) Net loss attributable to CWI 2 stockholders $ (5,485 ) The allocation of Net loss attributable to CWI 2 stockholders is calculated based on the weighted-average shares outstanding for Class A common stock and Class T common stock for the period. The allocation for the Class A common stock excludes the accretion of interest on the annual distribution and shareholder servicing fee of $0.4 million , $0.6 million and $0.3 million for the years ended December 31, 2019, 2018 and 2017, respectively, since this fee is only applicable to holders of Class T common stock ( Note 3 ). Reclassifications Out of Accumulated Other Comprehensive (Loss) Income The following tables present a reconciliation of changes in Accumulated other comprehensive (loss) income by component for the periods presented (in thousands): Years Ended December 31, Gains and Losses on Derivative Instruments 2019 2018 2017 Beginning balance $ 1,205 $ 1,373 $ 896 Other comprehensive (loss) income before reclassifications (335 ) 544 265 Amounts reclassified from accumulated other comprehensive income to: Interest expense (1,004 ) (715 ) 219 Equity in losses of equity method investments in real estate, net 30 — — Total (974 ) (715 ) 219 Net current period other comprehensive (loss) income (1,309 ) (171 ) 484 Net current period other comprehensive (income) loss attributable to noncontrolling interests (53 ) 3 (7 ) Ending balance $ (157 ) $ 1,205 $ 1,373 Distributions Distributions paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. Our distributions per share are summarized as follows: Years Ended December 31, 2019 2018 2017 Class A Class T Class A Class T Class A Class T Return of capital $ 0.4679 $ 0.3826 $ 0.4656 $ 0.3817 $ 0.3541 $ 0.2866 Ordinary income 0.0961 0.0785 0.0984 0.0807 0.2037 0.1649 Total distributions paid $ 0.5640 $ 0.4611 $ 0.5640 $ 0.4624 $ 0.5578 $ 0.4515 The following table presents the quarterly per share distributions declared by our board of directors for the fourth quarter of 2019 , payable in cash and in shares of our Class A and Class T common stock to stockholders of record on December 31, 2019 : Class A Common Stock Class T Common Stock Cash Shares Total Cash Shares Total $ 0.1410 $ 0.0339 $ 0.1749 $ 0.1154 $ 0.0339 $ 0.1493 These distributions were paid on January 15, 2020 in the aggregate amount of $11.6 million . Distributions that are payable in shares of our Class A and Class T common stock are recorded at par value in our consolidated financial statements. During the year ended December 31, 2019 , our board of directors declared distributions in the aggregate amount of $18.1 million for our Class A common stock and $27.7 million for our Class T common stock, which equates to $0.6996 per share and $0.5968 per share, respectively. Purchases of Membership Interests On October 16, 2019, we purchased the membership interest in the Seattle Marriott Bellevue venture that we did not already own from an unaffiliated third party for $0.3 million , which equaled the carrying value of the noncontrolling interest, and increased our ownership interest in the hotel from 95.4% to 100.0% . On March 30, 2017, we purchased the membership interest in the Courtyard Nashville Downtown venture from an unaffiliated third party for $3.5 million . Our acquisition of the membership interest is accounted for as an equity transaction, and we recorded an adjustment of approximately $3.5 million to Additional paid-in capital in our consolidated statement of equity for the year ended December 31, 2017 related to the difference between the carrying value and the purchase price. No gain or loss was recognized in the consolidated statement of operations. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments 2015 Equity Incentive Plan We maintain the 2015 Equity Incentive Plan, which authorizes the issuance of shares of stock-based awards to our officers and employees of the Subadvisor who perform services on our behalf. The 2015 Equity Incentive Plan provides for the grant of RSUs and dividend equivalent rights. A maximum of 2,000,000 shares may be granted, of which 1,838,894 shares remained available for future grants at December 31, 2019 . A summary of the RSU activity for the years ended December 31, 2019 , 2018 and 2017 follows: RSU Awards Weighted-Average Grant Date Shares Fair Value Nonvested at January 1, 2017 56,153 $ 10.36 Granted 49,344 10.74 Vested (a) (21,745) 10.31 Forfeited (24,747) 10.57 Nonvested at January 1, 2018 59,005 10.61 Granted 34,295 11.11 Vested (a) (26,403 ) 10.51 Forfeited (3,909 ) 10.96 Nonvested at January 1, 2019 62,988 10.90 Granted 42,541 11.41 Vested (a) (28,801 ) 10.82 Forfeited (2,653 ) 10.68 Nonvested at December 31, 2019 (b) 74,075 $ 11.23 ___________ (a) RSUs generally vest over three years , are subject to continued employment and are forfeited upon the recipient’s employment termination prior to vesting. The total fair value of shares vested during the year ended December 31, 2019, 2018 and 2017 was $0.3 million , $0.3 million and $0.2 million , respectively. (b) We currently expect to recognize stock-based compensation expense totaling approximately $0.5 million over the remaining vesting period. The awards to employees of the Subadvisor had a weighted-average remaining contractual term of 1.7 years at December 31, 2019 . Shares Granted to Directors As part of their director compensation, we issued shares to our independent directors. During the year ended December 31, 2019, we issued a total of 18,475 shares of Class A common stock to our independent directors comprised of 2,700 shares at $11.11 per share and 15,775 shares at $11.41 per share. During the years ended December 31, 2018 and 2017, we issued 15,384 shares and 15,384 shares, respectively, of Class A common stock to our independent directors, at $11.11 and $10.74 per share, respectively. Stock-Based Compensation Expense For the years ended December 31, 2019, 2018 and 2017, we recognized stock-based compensation expense related to RSU awards to employees of the Subadvisor under the 2015 Equity Incentive Plan and equity compensation issued to our independent directors aggregating $0.6 million , $0.5 million and $0.4 million , respectively. Stock-based compensation expense is included within Corporate general and administrative expenses in the consolidated financial statements. We have not recognized any income tax benefit in earnings for our share-based compensation arrangements since the inception of this plan. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As a REIT, we are permitted to own lodging properties but are prohibited from operating these properties. In order to comply with applicable REIT qualification rules, we enter into leases for each of our lodging properties with TRS lessees. The TRS lessees in turn contract with independent hotel management companies that manage day-to-day operations of our hotels under the oversight of the Subadvisor. The components of our provision for income taxes for the periods presented are as follows (in thousands): Years Ended December 31, 2019 2018 2017 Federal Current $ 1,953 $ 2,227 $ 2,787 Deferred (1,873 ) 141 248 80 2,368 3,035 State and Local Current 425 873 880 Deferred (420 ) 18 (15 ) 5 891 865 Total Provision $ 85 $ 3,259 $ 3,900 Deferred income taxes at December 31, 2019 and 2018 consist of the following (in thousands): At December 31, 2019 2018 Deferred Tax Assets Deferred revenue — key money $ 1,478 $ 1,696 Accrued vacation payable and deferred rent 1,544 1,265 Net operating loss carryforwards 785 617 Interest expense limitation 39 — Gift card liability 1 2 Other 403 453 Total deferred income taxes 4,250 4,033 Valuation allowance (782 ) (2,956 ) Total deferred tax assets 3,468 1,077 Deferred Tax Liabilities Deferred rent (119 ) — Other (80 ) (100 ) Total deferred tax liabilities (199 ) (100 ) Net Deferred Tax Asset $ 3,269 $ 977 A reconciliation of the provision for income taxes with the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the periods presented is as follows (dollars in thousands): Years Ended December 31, 2019 2018 2017 Pre-tax income from taxable subsidiaries $ 12,016 $ 13,768 $ 9,581 Federal provision at statutory tax rate (a) $ 2,524 $ 2,892 $ 3,353 Valuation allowance (2,174 ) (127 ) (1,020 ) Income not subject to federal tax (513 ) (555 ) (1,102 ) State and local taxes, net of federal provision 387 539 644 Other (174 ) 477 126 Non-deductible expenses 35 33 42 Revaluation of deferred taxes due to Tax Cuts and Jobs Act (b) — — 1,857 Total provision $ 85 $ 3,259 $ 3,900 ___________ (a) The applicable statutory tax rate was 21% , 21% , and 35% for the years ended December 31, 2019, 2018 and 2017, respectively. (b) The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, lowered the U.S. corporate income tax rate from 35% to 21%. This amount reflects the net impact of the Tax Cuts and Jobs Act on our domestic TRSs. The utilization of net operating losses may be subject to certain limitations under the tax laws of the relevant jurisdiction. At December 31, 2019, we had federal net operating losses that may be carried forward indefinitely and no state or local net operating losses. As of December 31, 2019 and 2018, we recorded a valuation allowance of $0.8 million and $3.0 million , respectively, related to these net operating loss carryforwards and other deferred tax assets. The decrease in the valuation allowance was primarily the result of the release of a $2.3 million valuation allowance for deferred tax assets during the first quarter of 2019 related to Marriott Sawgrass Golf Resort & Spa, due to, in part, the TRS achieving three years of cumulative pre-tax income during the current year period. We determined that there was sufficient positive evidence to conclude that it is more likely than not that the deferred taxes of $2.3 million are realizable. The net deferred tax assets in the table above are comprised of deferred tax asset balances, net of certain deferred tax liabilities and valuation allowances, of $3.3 million and $1.0 million at December 31, 2019 and 2018, respectively, which are included in Other assets in the consolidated balance sheets. Our taxable subsidiaries recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. We had no unrecognized tax benefits at December 31, 2019 and 2018 . Our tax returns are subject to audit by taxing authorities. The statute of limitations varies by jurisdiction and ranges from three to four years. Such audits can often take years to complete and settle. The tax years 2015 through 2018 remain open to examination by the major taxing jurisdictions to which we are subject. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Revenues $ 96,006 $ 95,094 $ 88,432 $ 87,675 Operating expenses 80,597 80,997 79,452 80,976 Net income (loss) 5,453 2,799 (2,325 ) (4,978 ) Income attributable to noncontrolling interests (4,429 ) (1,840 ) (369 ) (1,929 ) Net income (loss) attributable to CWI 2 stockholders $ 1,024 $ 959 $ (2,694 ) $ (6,907 ) Basic and diluted income (loss) per share — Class A common stock (a) $ 0.01 $ 0.01 $ (0.03 ) $ (0.07 ) Basic and diluted income (loss) per share — Class T common stock (a) $ 0.01 $ 0.01 $ (0.03 ) $ (0.07 ) Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Revenues $ 91,179 $ 98,100 $ 87,177 $ 85,876 Operating expenses 77,622 81,784 76,650 77,733 Net income (loss) 1,584 4,334 (1,411 ) (4,856 ) Income attributable to noncontrolling interests (3,078 ) (1,249 ) (1,194 ) (1,917 ) Net (loss) income attributable to CWI 2 stockholders $ (1,494 ) $ 3,085 $ (2,605 ) $ (6,773 ) Basic and diluted (loss) income per share — Class A common stock (a) $ (0.02 ) $ 0.04 $ (0.03 ) $ (0.07 ) Basic and diluted (loss) income per share — Class T common stock (a) $ (0.02 ) $ 0.03 $ (0.03 ) $ (0.08 ) ___________ (a) Income (loss) per share in each quarter is computed using the weighted-average number of shares outstanding during that quarter while income (loss) per share for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters income (loss) per share may not equal the full-year income (loss) per share. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2019 , 2018 and 2017 (in thousands) Description Balance at Beginning of Year Other Additions Deductions Balance at End of Year Year Ended December 31, 2019 Valuation reserve for deferred tax assets $ 2,956 $ 150 $ (2,324 ) $ 782 Year Ended December 31, 2018 Valuation reserve for deferred tax assets $ 3,083 $ 632 $ (759 ) $ 2,956 Year Ended December 31, 2017 Valuation reserve for deferred tax assets $ 4,102 $ — $ (1,019 ) $ 3,083 |
Schedule III - Real Estate and
Schedule III - Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III - Real Estate and Accumulated Depreciation | SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2019 (in thousands) Initial Cost to Company Costs Capitalized Subsequent to Acquisition (a) (Decrease) Increase In Net Investments (b) Gross Amount at which Carried at Close of Period (c) Life on which Depreciation in Latest Statement of Income is Computed Description Encumbrances Land Buildings Land Buildings Total Accumulated Depreciation (c) Date of Construction Date Acquired Marriott Sawgrass Golf Resort & Spa $ 88,747 $ 26,400 $ 93,551 $ 23,755 $ (7,710 ) $ 26,400 $ 109,596 $ 135,996 $ 17,482 1987 Apr 2015 4 – 40 yrs. Courtyard Nashville Downtown 54,965 8,500 47,443 2,291 51 8,500 49,785 58,285 6,359 1998 May 2015 4 – 40 yrs. Embassy Suites by Hilton Denver-Downtown/Convention Center 98,073 13,000 153,358 2,921 — 13,000 156,279 169,279 16,814 2010 Nov 2015 4 – 40 yrs. Seattle Marriott Bellevue 97,895 19,500 149,111 391 — 19,500 149,502 169,002 14,712 2015 Jan 2016 4 – 40 yrs. Le Méridien Arlington 34,755 8,900 43,191 1,593 — 8,900 44,784 53,684 4,363 2007 Jun 2016 4 – 40 yrs. San Jose Marriott 87,460 7,509 138,319 1,635 — 7,509 139,954 147,463 12,319 2003 Jul 2016 4 – 40 yrs. San Diego Marriott La Jolla 84,422 20,264 110,300 5,365 32 20,264 115,697 135,961 10,554 1985 Jul 2016 4 – 40 yrs. Renaissance Atlanta Midtown Hotel 48,589 8,600 64,441 3,448 — 8,600 67,889 76,489 5,955 2009 Aug 2016 4 – 40 yrs. Ritz-Carlton San Francisco 142,923 98,605 170,372 1,620 — 98,605 171,992 270,597 13,116 1991 Dec 2016 4 – 40 yrs. Charlotte Marriott City Center 102,636 24,800 127,287 246 — 24,800 127,533 152,333 8,286 1983 Jun 2017 4 – 40 yrs. $ 840,465 $ 236,078 $ 1,097,373 $ 43,265 $ (7,627 ) $ 236,078 $ 1,133,011 $ 1,369,089 $ 109,960 ___________ (a) Consists of the cost of improvements subsequent to acquisition, including construction costs primarily for renovations pursuant to our contractual obligations. (b) The decrease in net investment of the Marriott Sawgrass Golf Resort & Spa was related primarily to the net write-off of assets damaged by Hurricane Irma ( Note 4 ). (c) A reconciliation of hotels and accumulated depreciation follows: NOTES TO SCHEDULE III — REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Reconciliation of Hotels Years Ended December 31, 2019 2018 2017 Beginning balance $ 1,368,613 $ 1,357,258 $ 1,191,218 Improvements 3,664 11,250 18,587 (Write-off) write-up of assets damaged by hurricane ( Note 4 ) (3,170 ) 105 (4,633 ) Write-off of fully depreciated assets (18 ) — — Additions — — 152,086 Ending balance $ 1,369,089 $ 1,368,613 $ 1,357,258 Reconciliation of Accumulated Depreciation for Hotels Years Ended December 31, 2019 2018 2017 Beginning balance $ 78,078 $ 47,221 $ 18,506 Depreciation expense 31,900 30,857 28,715 Write-off of fully depreciated assets (18 ) — — Ending balance $ 109,960 $ 78,078 $ 47,221 At December 31, 2019 , the aggregate cost of real estate that we and our consolidated subsidiaries own for federal income tax purposes was approximately $1.5 billion . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting for Acquisitions | Accounting for Acquisitions In accordance with the guidance for business combinations, we determine whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, we account for the transaction or other event as an asset acquisition. Under both methods, we recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity. In addition, for transactions that are business combinations, we evaluate the existence of goodwill or a gain from a bargain purchase. We capitalize acquisition-related costs and fees associated with asset acquisitions. We immediately expense acquisition-related costs and fees associated with business combinations, which are included in Transaction costs in the consolidated statements of operations. Transaction Costs — Transaction costs for the year ended December 31, 2019 are costs incurred in connection with the Proposed Merger and related transactions, discussed in Note 1 , and included legal, accounting, financial advisory and other transaction costs. For the years ended December 31, 2018 and 2017, transaction costs represented acquisition-related costs and fees associated with acquisitions of our Consolidated Hotels that were accounted for as business combinations. These costs are expensed as incurred in the consolidated statements of operations. |
Impairments | Impairments We periodically assess whether there are any indicators that the value of our long-lived real estate and related intangible assets may be impaired or that their carrying value may not be recoverable. These impairment indicators include, but are not limited to, when a hotel property experiences a current or projected loss from operations, when it becomes more likely than not that a hotel property will be sold before the end of its useful life, or when there are adverse changes in the demand for lodging due to declining national or local economic conditions. We may incur impairment charges on long-lived assets, including real estate, related intangible assets, assets held for sale and equity investments. Our policies and estimates for evaluating whether these assets are impaired are presented below. Real Estate — For real estate assets held for investment and related intangible assets in which an impairment indicator is identified, we follow a two-step process to determine whether an asset is impaired and to determine the amount of the charge. First, we compare the carrying value of the property’s asset group to the estimated future net undiscounted cash flow that we expect the property’s asset group will generate, including any estimated proceeds from the eventual sale of the property’s asset group. The undiscounted cash flow analysis requires us to make our best estimate of, among other things, net operating income (“NOI”), residual values and holding periods. Our investment objective is to hold properties on a long-term basis. Depending on the assumptions made and estimates used, the future cash flow projected in the evaluation of long-lived assets and associated intangible assets can vary within a range of outcomes. We consider the likelihood of possible outcomes in determining our estimate of future cash flows and, if warranted, we apply a probability-weighted method to the different possible scenarios. If the future net undiscounted cash flow of the property’s asset group is less than the carrying value, the carrying value of the property’s asset group is considered not recoverable. We then measure the loss as the excess of the carrying value of the property’s asset group over its estimated fair value. The estimated fair value of the property’s asset group is primarily determined using market information from outside sources such as broker quotes or recent comparable sales. If relevant market information is not available or is not deemed appropriate, we perform a future net cash flow analysis, discounted for the inherent risk associated with each investment. Equity Investments in Real Estate — We evaluate our equity investments in real estate on a periodic basis to determine if there are any indicators that the value of our equity investment may be impaired and whether or not that impairment is other-than-temporary. To the extent an impairment has occurred and is determined to be other-than-temporary, we measure the charge as the excess of the carrying value of our investment over its estimated fair value. |
Basis of Consolidation | Basis of Consolidation — Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. |
Variable Interest Entity | When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity (“VIE”), and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply the accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Certain decision-making rights within a loan or joint-venture agreement can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE, and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets. |
Reclassifications | Reclassifications — Certain prior period amounts have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. |
Restricted Cash | Restricted Cash — Restricted cash consists primarily of amounts escrowed pursuant to the terms of our mortgage debt to fund planned renovations and improvements, property taxes, insurance, and normal replacement of furniture, fixtures and equipment at our hotels. |
Shares Repurchases | Share Repurchases — Share repurchases are recorded as a reduction of common stock par value and additional paid-in capital under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders, subject to certain exceptions, conditions, and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. |
Real Estate | Real Estate — We carry land, buildings and personal property at cost less accumulated depreciation. We capitalize improvements and we expense replacements, maintenance and repairs that do not improve or extend the life of the respective assets as incurred. Renovations and/or replacements at the hotel properties that improve or extend the life of the assets are capitalized and depreciated over their useful lives, and repairs and maintenance are expensed as incurred. We capitalize interest and certain other costs, such as incremental labor costs relating to hotels undergoing major renovations and redevelopments. Gain/Loss on Sale — We recognize gains and losses on the sale of properties when the transaction meets the definition of a contract, criteria are met for the sale of one or more distinct assets and control of the properties is transferred. |
Equity Method Investments in Real Estate | Equity Investments in Real Estate — We classify distributions received from equity method investments using the cumulative earnings approach. Distributions received are considered returns on the investment and classified as cash inflows from operating activities. If, however, the investor’s cumulative distributions received, less distributions received in prior periods determined to be returns of investment, exceeds cumulative equity in earnings recognized, the excess is considered a return of investment and is classified as cash inflows from investing activities. Under the conventional approach of accounting for equity method investments, an investor applies its percentage ownership interest to the venture’s net income or loss to determine the investor’s share of the earnings or losses of the venture. This approach is inappropriate if the venture’s capital structure gives different rights and priorities to its investors. Therefore, we follow the hypothetical liquidation at book value (“HLBV”) method in determining our share of these ventures’ earnings or losses for the reporting period as this method better reflects our claim on the ventures’ book value at the end of each reporting period. Earnings for our equity method investments are recognized in accordance with each respective investment agreement and, where applicable, based upon the allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. |
Cash | Cash — Our cash is held in the custody of several financial institutions, and these balances, at times, exceed federally-insurable limits. We seek to mitigate this risk by depositing funds only with major financial institutions. |
Other Assets and Liabilities | Other Assets and Liabilities — At both December 31, 2019 and 2018, Other assets consists primarily of prepaid expenses, deferred tax assets and hotel inventories in the consolidated financial statements. At December 31, 2019, Other assets also included deferred costs related to an agreement entered into with Watermark and Mr. Medzigian (see Note 3 for further discussion). At both December 31, 2019 and 2018, Other liabilities, which are included in Accounts payable, accrued expenses and other liabilities, consists primarily of unamortized key money and other deferred incentive payments, hotel advance deposits, accrued distribution and shareholder servicing fees and sales and use and occupancy taxes payable. |
Deferred Financing Cost | Deferred Financing Costs — Deferred financing costs represent costs to obtain mortgage financing. We amortize these charges to interest expense over the term of the related mortgage using a method which approximates the effective interest method. Deferred financing costs are presented in the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability. |
Hotel Revenue Recognition | Hotel Revenue Recognition — Revenue consists of amounts derived from hotel operations, including the sale of rooms, food and beverage and revenue from other operating departments, such as parking, spa, resort fees and gift shops, and is presented on a disaggregated basis on the consolidated statements of operations. These revenues are recorded net of any sales or occupancy taxes, which are collected from our guests as earned. All rebates or discounts are recorded as a reduction in revenue and there are no material contingent obligations with respect to rebates or discounts offered by us. We recognize revenue when control of the promised good or service is transferred to the guest, in an amount that reflects the consideration we expect to receive in exchange for the promised good or service. Room revenue is generated through contracts with guests whereby the guest agrees to pay a daily rate for the right to use a hotel room and applicable amenities for an agreed upon length of stay. Our contract performance obligations are fulfilled at the end of the day that the guest is provided the room and revenue is recognized daily at the contract rate. Food and beverage revenue, including restaurant and banquet and catering services, are recognized at a point in time once food and beverage has been provided. Other operating department revenue for services such as parking, spa and other ancillary services, is recognized at a point in time when the goods and services are provided to the guest. We may engage third parties to provide certain services at the hotel, for example, audiovisual services. We evaluate each of these contracts to determine if the hotel is the principal or the agent in the transaction, and record the revenues as appropriate (i.e., gross vs. net). Payment is due at the time that goods or services are rendered or billed. For room revenue, payment is typically due and paid in full at the end of the stay with some guests prepaying for their rooms prior to the stay. For package revenue, where ancillary guest services are included with the guests’ hotel reservations in a package arrangement, we allocate revenue based on the stand-alone selling price for each of the components of the package. We applied a practical expedient to not disclose the value of unsatisfied performance obligations for contracts that have an original expected length of one year or less. Any contracts that have an original expected length of greater than one year are insignificant. |
Asset Retirement Obligations | Asset Retirement Obligations — Asset retirement obligations relate to the legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal operation of a long-lived asset. The fair value of a liability for an asset retirement obligation is recorded in the period in which it is incurred and the cost of such liability is recorded as an increase in the carrying amount of the related long-lived asset by the same amount. The liability is accreted each period and the capitalized cost is depreciated over the estimated remaining life of the related long-lived asset. Revisions to estimated retirement obligations result in adjustments to the related capitalized asset and corresponding liability. In order to determine the fair value of the asset retirement obligations, we make certain estimates and assumptions including, among other things, projected cash flows, the borrowing interest rate and an assessment of market conditions that could significantly impact the estimated fair value. These estimates and assumptions are subjective. |
Capitalized Costs | Capitalized Costs — We capitalize interest and certain other costs, such as property taxes, land leases, property insurance and incremental labor costs relating to hotels undergoing major renovations and redevelopments. We begin capitalizing interest as we incur disbursements, and capitalize other costs when activities necessary to prepare the asset ready for its intended use are underway. We cease capitalizing these costs when construction is substantially complete. |
Depreciation and Amortization | Depreciation and Amortization — We compute depreciation for hotels and related building improvements using the straight-line method over the estimated useful lives of the properties (limited to 40 years for buildings and ranging from four years up to the remaining life of the building at the time of addition for building improvements), site improvements (generally four to 15 years ), and furniture, fixtures and equipment (generally one to 12 years ). |
Organization and Offering Cost | Organization and Offering Costs — During our offering period, costs incurred in connection with the raising of capital were recorded as deferred offering costs. Upon receipt of offering proceeds, we charged the deferred costs to stockholders’ equity. Under the terms of the Advisory Agreement as described in Note 3 , we reimbursed our Advisor for organization and offering costs incurred up to regulatory limits. Organization costs were expensed as incurred and are included in corporate general and administrative expenses in the financial statements. |
Derivative Instruments | Derivative Instruments — We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive loss until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. In accordance with fair value measurement guidance, counterparty credit risk is measured on a net portfolio position basis. |
Income Taxes | Income Taxes — We elect to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code. In order to maintain our qualification as a REIT, we are required, among other things, to distribute at least 90% of our REIT net taxable income to our stockholders and meet certain tests regarding the nature of our income and assets. As a REIT, we are not subject to federal income taxes on our income and gains that we distribute to our stockholders as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, as well as other factors. We believe that we have operated, and we intend to continue to operate, in a manner that allows us to continue to qualify as a REIT. We conduct business in various states and municipalities within the United States, and, as a result, we or one or more of our subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. As a result, we are subject to certain state and local taxes and a provision for such taxes is included in the consolidated financial statements. We elect to treat certain of our corporate subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, a TRS may perform additional services for our investments and generally may engage in any real estate or non-real estate-related business (except for the operation or management of health care facilities or lodging facilities or providing to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal, state and local income taxes. Significant judgment is required in determining our tax provision and in evaluating our tax positions. We establish tax reserves based on a benefit recognition model, which could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, we recognize the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. We derecognize the tax position when it is no longer more likely than not of being sustained. Our earnings and profits, which determine the taxability of distributions to stockholders, differ from net income reported for financial reporting purposes due primarily to differences in depreciation and timing differences of certain income and expense recognitions, for federal income tax purposes. Deferred income taxes relate primarily to our TRSs and are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of our TRSs and their respective tax bases and for their operating loss and tax credit carry forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors ( Note 12 ). We recognize deferred income taxes in certain of our subsidiaries taxable in the United States. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes as described in Note 12 ). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. Deferred income taxes are computed under the asset and liability method. The asset and liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between tax bases and financial bases of assets and liabilities. We provide a valuation allowance against our deferred income tax assets when we believe that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). |
Share-Based Payments | Share-Based Payments — We have granted Class A restricted stock units (“RSUs”) to certain employees of the Subadvisor. RSUs issued to employees of the Subadvisor generally vest over three years, and are subject to continued employment. We also issued Class A common stock to our directors as part of their director compensation. The expense recognized for share-based payment transactions for awards made to directors is based on the grant date fair value estimated in accordance with current accounting guidance for share-based payments. Share-based payment transactions for awards made to employees of the Subadvisor are based on the fair value of the services received. We recognize these compensation costs only for those shares expected to vest on a straight-line basis over the requisite service period of the award. We include share-based payment transactions within Corporate general and administrative expense. |
Income Attributable to Noncontrolling Interests | Income Attributable to Noncontrolling Interests — Earnings attributable to noncontrolling interests are recognized in accordance with each respective investment agreement and, where applicable, based upon the allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period. |
Loss Per Share | Loss Per Share — Loss per share, as presented, represents both basic and diluted per-share amounts for all periods presented in the consolidated financial statements. We calculate loss per share using the two-class method to reflect the different classes of our outstanding common stock. Loss per basic share of common stock is calculated by dividing Net loss attributable to CWI 2 by the weighted-average number of shares of common stock issued and outstanding during the year. The allocation of Net loss attributable to CWI 2 is calculated based on the weighted-average shares outstanding for Class A common stock and Class T common stock for the years ended December 31, 2019 , 2018 and 2017 . |
Recent Accounting Requirements | Recent Accounting Requirements The following ASUs, promulgated by the Financial Accounting Standards Board (“FASB”), are applicable to us: Pronouncements Adopted as of December 31, 2019 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 modifies the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract: the lessee and the lessor. ASU 2016-02 provides new guidelines that change the accounting for leasing arrangements for lessees, whereby their rights and obligations under substantially all leases, existing and new, are capitalized and recorded on the balance sheet. For lessors, however, the new standard remains generally consistent with existing guidance, but has been updated to align with certain changes to the lessee model and ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . We adopted this guidance for our interim and annual periods beginning January 1, 2019 using the modified retrospective method, applying the transition provisions at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. We elected the package of practical expedients as permitted under the transition guidance, which allowed us to not reassess: (i) whether arrangements contain leases, (ii) lease classification and (iii) initial direct costs. The adoption of the lease standard did not result in a cumulative effect adjustment recognized in the opening balance of retained earnings as of January 1, 2019. On January 1, 2019, we recognized a right-of-use asset and a corresponding lease liability related to our operating leases of $1.5 million and $2.3 million , respectively, in Other assets and Accounts payable, accrued expenses and other liabilities, respectively, in our consolidated balance sheet. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . ASU 2017-12 makes more financial and nonfinancial hedging strategies eligible for hedge accounting. It also amends the presentation and disclosure requirements and changes how companies assess hedge effectiveness. It is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. We adopted this guidance for our interim and annual periods beginning January 1, 2019. The adoption of ASU 2017-12 did not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions in exchange for goods and services from nonemployees, which will align the accounting for such payments to nonemployees with the existing requirements for share-based payments granted to employees (with certain exceptions). These share-based payments will now be measured at the grant-date fair value of the equity instrument issued. We adopted this guidance for our interim and annual periods beginning January 1, 2019. The adoption of this standard did not have a material impact on our consolidated financial statements. |
Fair Value Measurements | The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments, including interest rate caps and swaps; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. Items Measured at Fair Value on a Recurring Basis Derivative Assets — Our derivative assets, which are included in Other assets in the consolidated financial statements, are comprised of interest rate caps and swaps ( Note 7 ). The valuation of our derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative instruments for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings and thresholds. These derivative instruments were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Variable Interest Entities | The following table presents a summary of selected financial data of consolidated VIEs included in the consolidated balance sheets (in thousands): December 31, 2019 2018 Net investments in hotels $ 123,833 $ 566,272 Total assets 145,218 603,403 Non-recourse debt, net $ 88,747 $ 320,603 Total liabilities 104,046 350,920 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands): December 31, 2019 2018 2017 Cash and cash equivalents $ 81,713 $ 76,823 $ 68,527 Restricted cash 30,062 27,114 29,582 Total cash and cash equivalents and restricted cash $ 111,775 $ 103,937 $ 98,109 |
Restricted Cash | The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the consolidated statements of cash flows (in thousands): December 31, 2019 2018 2017 Cash and cash equivalents $ 81,713 $ 76,823 $ 68,527 Restricted cash 30,062 27,114 29,582 Total cash and cash equivalents and restricted cash $ 111,775 $ 103,937 $ 98,109 |
Agreements and Transactions w_2
Agreements and Transactions with Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables present a summary of fees we paid, expenses we reimbursed and distributions we made to our Advisor, the Subadvisor and other affiliates, as described below, in accordance with the terms of those agreements (in thousands): Years Ended December 31, 2019 2018 2017 Amounts Included in the Consolidated Statements of Operations Asset management fees $ 10,734 $ 10,400 $ 8,670 Available Cash Distributions 6,262 5,467 5,078 Personnel and overhead reimbursements 4,170 4,069 3,514 Acquisition fees — — 4,415 Interest expense — — 332 Accretion of interest on annual distribution and shareholder servicing fee (a) — — 198 $ 21,166 $ 19,936 $ 22,207 Other Transaction Fees Incurred Watermark commitment agreement $ 2,850 $ — $ — Capitalized loan refinancing fees 225 245 280 Selling commissions and dealer manager fees — — 13,199 Annual distribution and shareholder servicing fee (a) — — 8,439 Capitalized acquisition fees for equity method investment (b) — — 6,195 Organization and offering costs — — 1,453 $ 3,075 $ 245 $ 29,566 ___________ (a) Starting with the payment of the third quarter 2017 distribution and shareholder servicing fee (which was paid in October 2017), we began making payments directly to selected dealers rather than through Carey Financial, LLC (“Carey Financial”), a subsidiary of WPC and the former dealer manager of our offering; therefore, this activity is no longer considered a related party transaction. (b) Our Advisor elected to receive 50% of the acquisition fee related to our investment in the Ritz-Carlton Bacara, Santa Barbara Venture in shares of our Class A common stock and 50% in cash. The following table presents a summary of amounts included in Due to related parties and affiliates in the consolidated financial statements (in thousands): December 31, 2019 2018 Amounts Due to Related Parties and Affiliates Reimbursable costs due to our Advisor $ 956 $ 1,100 Asset management fees and other due to our Advisor 894 884 Watermark commitment agreement 800 — Due to other related parties and affiliates 136 — $ 2,786 $ 1,984 |
Net Investments in Hotels (Tabl
Net Investments in Hotels (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Real Estate [Abstract] | |
Schedule of Hotel Properties | Net investments in hotels are summarized as follows (in thousands): December 31, 2019 2018 Buildings $ 1,090,693 $ 1,093,865 Land 236,078 236,078 Furniture, fixtures and equipment 93,333 93,766 Building and site improvements 42,318 38,670 Construction in progress 6,466 2,554 Hotels, at cost 1,468,888 1,464,933 Less: Accumulated depreciation (157,581 ) (113,184 ) Net investments in hotels $ 1,311,307 $ 1,351,749 |
Hurricane-Related Disruption | Below is a summary of the items that comprised the (gain) loss recognized by the venture related to Hurricane Irma (in thousands): (in thousands) Years Ended December 31, 2019 2018 2017 Net write-off (write-up) of fixed assets (a) $ 3,476 $ (173 ) $ 4,938 Remediation work performed — 133 1,476 (Increase) decrease to property damage insurance receivables (3,486 ) 722 (3,715 ) (Gain) loss on hurricane-related property damage $ (10 ) $ 682 $ 2,699 ___________ (a) Includes write-offs totaling $1.4 million during the year ended December 31, 2018 resulting from pre-existing damage (which was discovered as a result of Hurricane Irma and was not covered by insurance). |
Pro Forma Information | (Dollars in thousands) Year Ended December 31, 2017 Pro forma total revenues $ 356,634 Pro forma net income $ 1,391 Pro forma income attributable to noncontrolling interests (991 ) Pro forma net income attributable to CWI 2 stockholders $ 400 Class A Common Stock Pro forma net income attributable to CWI 2 stockholders $ 260 Class T Common Stock Pro forma net income attributable to CWI 2 stockholders $ 140 |
Equity Investments in Real Es_2
Equity Investments in Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The following tables present combined summarized financial information of our equity method investments in real estate. Amounts provided are the total amounts attributable to the ventures and do not represent our proportionate share (in thousands): 2019 2018 2017 Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture (a) Ritz-Carlton Key Biscayne Venture Balance Sheet – As of December 31, Real estate, net $ 636,372 $ 358,723 $ 277,649 $ 643,145 $ 362,386 $ 280,759 $ 646,943 $ 367,035 $ 279,908 Other assets 64,130 20,049 44,081 66,027 20,093 45,934 78,059 28,294 49,765 Total assets 700,502 378,772 321,730 709,172 382,479 326,693 725,002 395,329 329,673 Debt 413,538 228,434 185,104 415,973 227,535 188,438 416,335 226,636 189,699 Other liabilities 50,973 30,350 20,623 42,099 23,092 19,007 34,567 16,382 18,185 Total liabilities 464,511 258,784 205,727 458,072 250,627 207,445 450,902 243,018 207,884 Members’ equity 235,991 119,988 116,003 251,100 131,852 119,248 274,100 152,311 121,789 Percentage of ownership in equity investee 60 % 19.3 % 60 % 19.3 % 60 % 19.3 % Pro-rata equity carrying value 94,382 71,993 22,389 102,126 79,111 23,015 114,892 91,387 23,505 Basis differential adjustment 7,602 5,844 1,758 7,757 5,999 1,758 8,026 6,197 1,829 HLBV adjustment 11,185 — 11,185 11,573 — 11,573 11,820 — 11,820 Carrying value $ 113,169 $ 77,837 $ 35,332 $ 121,456 $ 85,110 $ 36,346 $ 134,738 $ 97,584 $ 37,154 2019 2018 2017 Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture Ritz-Carlton Key Biscayne Venture Total Ritz-Carlton Bacara, Santa Barbara Venture (a) Ritz-Carlton Key Biscayne Venture Income Statement – For the year ended December 31, Hotel revenues $ 174,282 $ 83,247 $ 91,035 $ 179,199 $ 81,670 $ 97,529 $ 99,800 $ 15,269 $ 84,531 Hotel operating expenses 158,535 78,474 80,061 164,601 79,955 84,646 95,423 18,906 76,517 Other operating expenses 67 8 59 179 86 93 59 52 7 Other income and (expenses) (b) (21,818 ) (14,203 ) (7,615 ) (20,384 ) (13,494 ) (6,890 ) (14,395 ) (3,161 ) (11,234 ) (Provision for) benefit from income taxes (410 ) (166 ) (244 ) (141 ) — (141 ) 1,121 (208 ) 1,329 Net (loss) income (6,548 ) (9,604 ) 3,056 (6,106 ) (11,865 ) 5,759 (8,956 ) (7,058 ) (1,898 ) Percentage of ownership in equity investee 60 % 19.3 % 60 % 19.3 % 60 % 19.3 % Pro-rata equity in (losses) earnings of equity method investments in real estate (5,172 ) (5,762 ) 590 (6,008 ) (7,119 ) 1,111 (4,601 ) (4,235 ) (366 ) Basis differential adjustment (227 ) (156 ) (71 ) (266 ) (195 ) (71 ) (71 ) — (71 ) HLBV adjustment 190 — 190 455 — 455 3,190 — 3,190 Equity in (losses) earnings of equity method investments in real estate $ (5,209 ) $ (5,918 ) $ 709 $ (5,819 ) $ (7,314 ) $ 1,495 $ (1,482 ) $ (4,235 ) $ 2,753 ___________ (a) We purchased our 60% interest in this venture on September 28, 2017. (b) Other income and (expenses) for the years ended December 31, 2019 and 2018 for the Ritz-Carlton Bacara, Santa Barbara Venture is primarily comprised of interest expense related to its outstanding mortgage loans. The following table sets forth our ownership interests in our equity investments in real estate and their respective carrying values. The carrying values of these ventures are affected by the timing and nature of distributions (dollars in thousands): Unconsolidated Hotels State Number of Rooms % Owned Hotel Type Carrying Value at December 31, 2019 2018 Ritz-Carlton Bacara, Santa Barbara Venture (a) (b) CA 358 60 % Resort $ 77,837 $ 85,110 Ritz-Carlton Key Biscayne Venture (c) (d) FL 443 19.3 % Resort 35,332 36,346 801 $ 113,169 $ 121,456 ___________ (a) This investment represents a tenancy-in-common interest; the remaining 40% interest is owned by CWI 1. (b) We received $1.3 million of net cash distributions from this investment during the year ended December 31, 2019 , which included our share of key money received from Marriott during the third quarter of 2019. (c) CWI 1 acquired a 47.4% interest in the venture on the same date. The remaining 33.3% interest is retained by the original owner. The number of rooms presented includes 141 condo-hotel units that participate in the resort rental program. This investment is considered a VIE ( Note 2 ). We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity. (d) We received cash distributions of $1.7 million from this investment during the year ended December 31, 2019 . The following table sets forth our share of equity in (losses) earnings from our Unconsolidated Hotels, which is based on the HLBV model, as well as amortization adjustments related to basis differentials from acquisitions of investments (in thousands): Years Ended December 31, 2019 2018 2017 Ritz-Carlton Bacara, Santa Barbara Venture $ (5,918 ) $ (7,314 ) $ (4,235 ) Ritz-Carlton Key Biscayne Venture 709 1,495 2,753 Total equity in losses of equity method investments in real estate, net $ (5,209 ) $ (5,819 ) $ (1,482 ) |
Risk Management and Use of De_2
Risk Management and Use of Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments on our Consolidated Hotels | The following table sets forth certain information regarding our derivative instruments on our Consolidated Hotels (in thousands): Derivatives Designated as Hedging Instruments Asset Derivatives Fair Value at December 31, Balance Sheet Location 2019 2018 Interest rate swaps Other assets $ 121 $ 1,368 Interest rate caps Other assets — 57 $ 121 $ 1,425 |
Schedule of Derivative Instruments | The interest rate swaps and caps that we had outstanding on our Consolidated Hotels at December 31, 2019 were designated as cash flow hedges and are summarized as follows (dollars in thousands): Number of Notional Fair Value at Interest Rate Derivatives Instruments Amount December 31, 2019 Interest rate swaps 2 $ 187,910 $ 121 Interest rate caps 3 171,385 — $ 121 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table presents the non-recourse debt on our Consolidated Hotels (dollars in thousands): Carrying Amount at December 31, Consolidated Hotels Interest Rate Rate Type Maturity Date 2019 2018 Seattle Marriott Bellevue (a) (b) (c) 3.88% Variable 1/2020 $ 97,895 $ 99,719 Le Méridien Arlington (b) (c) 4.44% Variable 6/2020 34,755 34,787 San Jose Marriott (b) (c) 4.44% Variable 7/2020 87,460 87,880 Renaissance Atlanta Midtown Hotel (b) (d) 3.96% Variable 8/2021 48,589 48,332 Ritz-Carlton San Francisco 4.59% Fixed 2/2022 142,923 142,887 Charlotte Marriott City Center 4.53% Fixed 6/2022 102,636 102,488 Courtyard Nashville Downtown 4.15% Fixed 9/2022 54,965 55,051 Marriott Sawgrass Golf Resort & Spa (b) (d) 3.76% Variable 11/2022 88,747 77,997 Embassy Suites by Hilton Denver-Downtown/Convention Center 3.90% Fixed 12/2022 98,073 99,818 San Diego Marriott La Jolla 4.13% Fixed 8/2023 84,422 84,877 $ 840,465 $ 833,836 ___________ (a) On January 22, 2020, we refinanced this loan with a new $98.8 million non-recourse mortgage loan. The loan has a floating annual interest rate of LIBOR plus 2.7% , which has effectively been fixed at 4.2% through an interest rate swap agreement, and a maturity date of January 22, 2023. (b) These mortgage loans have variable interest rates, which have effectively been capped or converted to fixed rates through the use of interest rate caps or swaps ( Note 7 ). The interest rates presented for these mortgage loans reflect the rates in effect at December 31, 2019 through the use of an interest rate cap or swap, as applicable. (c) These mortgage loans have one -year extension options, which are subject to certain conditions. The maturity dates in the table do not reflect the extension options. (d) These mortgage loans have two one -year extension options, which are subject to certain conditions. The maturity dates in the table do not reflect the extension options. |
Debt Maturity Schedule | Scheduled debt principal payments during each of the next five calendar years following December 31, 2019 are as follows (in thousands): Years Ending December 31, Total 2020 (a) $ 224,614 2021 53,497 2022 485,618 2023 79,878 2024 — Total principal payments 843,607 Unamortized deferred financing costs (3,142 ) Total $ 840,465 __________ (a) Balance included a $97.7 million scheduled balloon payment on a consolidated mortgage loan, which was refinanced on January 22, 2020. |
Loss Per Share and Equity (Tabl
Loss Per Share and Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents loss per share (in thousands, except share and per share amounts): Year Ended December 31, 2019 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Class A common stock 32,260,398 $ (2,509 ) $ (0.08 ) Class T common stock 60,499,745 (5,109 ) (0.08 ) Net loss attributable to CWI 2 stockholders $ (7,618 ) Year Ended December 31, 2018 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Class A common stock 30,390,179 $ (2,443 ) $ (0.08 ) Class T common stock 58,842,820 (5,344 ) (0.09 ) Net loss attributable to CWI 2 stockholders $ (7,787 ) Year Ended December 31, 2017 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Class A common stock 27,825,037 $ (1,740 ) $ (0.06 ) Class T common stock 54,686,084 (3,745 ) (0.07 ) Net loss attributable to CWI 2 stockholders $ (5,485 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following tables present a reconciliation of changes in Accumulated other comprehensive (loss) income by component for the periods presented (in thousands): Years Ended December 31, Gains and Losses on Derivative Instruments 2019 2018 2017 Beginning balance $ 1,205 $ 1,373 $ 896 Other comprehensive (loss) income before reclassifications (335 ) 544 265 Amounts reclassified from accumulated other comprehensive income to: Interest expense (1,004 ) (715 ) 219 Equity in losses of equity method investments in real estate, net 30 — — Total (974 ) (715 ) 219 Net current period other comprehensive (loss) income (1,309 ) (171 ) 484 Net current period other comprehensive (income) loss attributable to noncontrolling interests (53 ) 3 (7 ) Ending balance $ (157 ) $ 1,205 $ 1,373 |
Distributions | Distributions paid to stockholders consist of ordinary income, capital gains, return of capital or a combination thereof for income tax purposes. Our distributions per share are summarized as follows: Years Ended December 31, 2019 2018 2017 Class A Class T Class A Class T Class A Class T Return of capital $ 0.4679 $ 0.3826 $ 0.4656 $ 0.3817 $ 0.3541 $ 0.2866 Ordinary income 0.0961 0.0785 0.0984 0.0807 0.2037 0.1649 Total distributions paid $ 0.5640 $ 0.4611 $ 0.5640 $ 0.4624 $ 0.5578 $ 0.4515 |
Schedule of Dividends Payable | The following table presents the quarterly per share distributions declared by our board of directors for the fourth quarter of 2019 , payable in cash and in shares of our Class A and Class T common stock to stockholders of record on December 31, 2019 : Class A Common Stock Class T Common Stock Cash Shares Total Cash Shares Total $ 0.1410 $ 0.0339 $ 0.1749 $ 0.1154 $ 0.0339 $ 0.1493 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of RSU Activity | A summary of the RSU activity for the years ended December 31, 2019 , 2018 and 2017 follows: RSU Awards Weighted-Average Grant Date Shares Fair Value Nonvested at January 1, 2017 56,153 $ 10.36 Granted 49,344 10.74 Vested (a) (21,745) 10.31 Forfeited (24,747) 10.57 Nonvested at January 1, 2018 59,005 10.61 Granted 34,295 11.11 Vested (a) (26,403 ) 10.51 Forfeited (3,909 ) 10.96 Nonvested at January 1, 2019 62,988 10.90 Granted 42,541 11.41 Vested (a) (28,801 ) 10.82 Forfeited (2,653 ) 10.68 Nonvested at December 31, 2019 (b) 74,075 $ 11.23 ___________ (a) RSUs generally vest over three years , are subject to continued employment and are forfeited upon the recipient’s employment termination prior to vesting. The total fair value of shares vested during the year ended December 31, 2019, 2018 and 2017 was $0.3 million , $0.3 million and $0.2 million , respectively. (b) We currently expect to recognize stock-based compensation expense totaling approximately $0.5 million over the remaining vesting period. The awards to employees of the Subadvisor had a weighted-average remaining contractual term of 1.7 years at December 31, 2019 . |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of our provision for income taxes for the periods presented are as follows (in thousands): Years Ended December 31, 2019 2018 2017 Federal Current $ 1,953 $ 2,227 $ 2,787 Deferred (1,873 ) 141 248 80 2,368 3,035 State and Local Current 425 873 880 Deferred (420 ) 18 (15 ) 5 891 865 Total Provision $ 85 $ 3,259 $ 3,900 |
Schedule of Deferred Tax Assets and Liabilities | Deferred income taxes at December 31, 2019 and 2018 consist of the following (in thousands): At December 31, 2019 2018 Deferred Tax Assets Deferred revenue — key money $ 1,478 $ 1,696 Accrued vacation payable and deferred rent 1,544 1,265 Net operating loss carryforwards 785 617 Interest expense limitation 39 — Gift card liability 1 2 Other 403 453 Total deferred income taxes 4,250 4,033 Valuation allowance (782 ) (2,956 ) Total deferred tax assets 3,468 1,077 Deferred Tax Liabilities Deferred rent (119 ) — Other (80 ) (100 ) Total deferred tax liabilities (199 ) (100 ) Net Deferred Tax Asset $ 3,269 $ 977 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes with the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the periods presented is as follows (dollars in thousands): Years Ended December 31, 2019 2018 2017 Pre-tax income from taxable subsidiaries $ 12,016 $ 13,768 $ 9,581 Federal provision at statutory tax rate (a) $ 2,524 $ 2,892 $ 3,353 Valuation allowance (2,174 ) (127 ) (1,020 ) Income not subject to federal tax (513 ) (555 ) (1,102 ) State and local taxes, net of federal provision 387 539 644 Other (174 ) 477 126 Non-deductible expenses 35 33 42 Revaluation of deferred taxes due to Tax Cuts and Jobs Act (b) — — 1,857 Total provision $ 85 $ 3,259 $ 3,900 ___________ (a) The applicable statutory tax rate was 21% , 21% , and 35% for the years ended December 31, 2019, 2018 and 2017, respectively. (b) The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017, lowered the U.S. corporate income tax rate from 35% to 21%. This amount reflects the net impact of the Tax Cuts and Jobs Act on our domestic TRSs. |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | (Dollars in thousands, except per share amounts) Three Months Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Revenues $ 96,006 $ 95,094 $ 88,432 $ 87,675 Operating expenses 80,597 80,997 79,452 80,976 Net income (loss) 5,453 2,799 (2,325 ) (4,978 ) Income attributable to noncontrolling interests (4,429 ) (1,840 ) (369 ) (1,929 ) Net income (loss) attributable to CWI 2 stockholders $ 1,024 $ 959 $ (2,694 ) $ (6,907 ) Basic and diluted income (loss) per share — Class A common stock (a) $ 0.01 $ 0.01 $ (0.03 ) $ (0.07 ) Basic and diluted income (loss) per share — Class T common stock (a) $ 0.01 $ 0.01 $ (0.03 ) $ (0.07 ) Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Revenues $ 91,179 $ 98,100 $ 87,177 $ 85,876 Operating expenses 77,622 81,784 76,650 77,733 Net income (loss) 1,584 4,334 (1,411 ) (4,856 ) Income attributable to noncontrolling interests (3,078 ) (1,249 ) (1,194 ) (1,917 ) Net (loss) income attributable to CWI 2 stockholders $ (1,494 ) $ 3,085 $ (2,605 ) $ (6,773 ) Basic and diluted (loss) income per share — Class A common stock (a) $ (0.02 ) $ 0.04 $ (0.03 ) $ (0.07 ) Basic and diluted (loss) income per share — Class T common stock (a) $ (0.02 ) $ 0.03 $ (0.03 ) $ (0.08 ) ___________ (a) Income (loss) per share in each quarter is computed using the weighted-average number of shares outstanding during that quarter while income (loss) per share for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters income (loss) per share may not equal the full-year income (loss) per share. |
Business and Organization - Nar
Business and Organization - Narratives (Details) $ in Millions | 38 Months Ended | 67 Months Ended |
Jul. 31, 2017USD ($) | Dec. 31, 2019USD ($)property | |
Business | ||
Capital interest ownership in operating partnership | 99.985% | |
Common Class A | ||
Business | ||
Proceeds from issuance initial public offering | $ 280.3 | |
Proceeds from follow on offering | $ 28.9 | |
Common Class T | ||
Business | ||
Proceeds from issuance initial public offering | $ 571 | |
Proceeds from follow on offering | $ 58.2 | |
Hotel | ||
Business | ||
Number of real estate properties | property | 12 | |
Consolidated Properties | Hotel | ||
Business | ||
Number of real estate properties | property | 10 | |
Unconsolidated Properties | Hotel | ||
Business | ||
Number of real estate properties | property | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narratives (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019viesegment | Jan. 01, 2019USD ($) | Dec. 31, 2018vie | |
Summary of Significant Accounting Policies | |||
Variable interest entities, count | vie | 2 | 4 | |
Variable interest entities consolidated, count | vie | 1 | 3 | |
Number of segments | segment | 1 | ||
ASU 2016-02 | |||
Depreciation and Amortization | |||
Right-of-use asset | $ | $ 1.5 | ||
Lease liability | $ | $ 2.3 | ||
RSU | |||
Depreciation and Amortization | |||
Vesting period | 3 years | ||
Building | Maximum | |||
Depreciation and Amortization | |||
Fixed assets useful life | 40 years | ||
Building Improvements | Minimum | |||
Depreciation and Amortization | |||
Fixed assets useful life | 4 years | ||
Site Improvements | Minimum | |||
Depreciation and Amortization | |||
Fixed assets useful life | 4 years | ||
Site Improvements | Maximum | |||
Depreciation and Amortization | |||
Fixed assets useful life | 15 years | ||
Furniture, Fixtures, and Equipment | Minimum | |||
Depreciation and Amortization | |||
Fixed assets useful life | 1 year | ||
Furniture, Fixtures, and Equipment | Maximum | |||
Depreciation and Amortization | |||
Fixed assets useful life | 12 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Variable Interest Entity Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Net investments in hotels | $ 1,311,307 | $ 1,351,749 | |
Total assets | [1] | 1,576,982 | 1,605,314 |
Liabilities | |||
Non-recourse debt, net | 840,465 | 833,836 | |
Total liabilities | [1] | 914,338 | 908,911 |
Variable Interest Entity, Primary Beneficiary | |||
Assets | |||
Net investments in hotels | 123,833 | 566,272 | |
Total assets | 145,218 | 603,403 | |
Liabilities | |||
Non-recourse debt, net | 88,747 | 320,603 | |
Total liabilities | $ 104,046 | $ 350,920 | |
[1] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmQzZDgwZjVlMzM5NzQ3MDhhNTY1YWUxNmNhMmE0NmJlfFRleHRTZWxlY3Rpb246N0ExMDgwQUJDQzY4QjI5QTU5MUUzNjdBQkYyRjRCQkYM} |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash Equivalents Reconciliation (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 81,713 | $ 76,823 | $ 68,527 | |
Restricted cash | 30,062 | 27,114 | 29,582 | |
Total cash and cash equivalents and restricted cash | $ 111,775 | $ 103,937 | $ 98,109 | $ 99,793 |
Agreements and Transactions w_3
Agreements and Transactions with Related Parties - Narratives (Details) | Jan. 15, 2020USD ($) | Oct. 25, 2019USD ($) | Oct. 01, 2019USD ($)property | Oct. 19, 2017USD ($) | Mar. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)propertyinvestmentshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Sep. 30, 2017 | Apr. 30, 2017$ / shares | Mar. 31, 2016$ / shares |
Related Party Transaction | |||||||||||
Percentage of fees earned by advisor paid to subadvisor | 25.00% | ||||||||||
Subordinated incentive distribution | 30.00% | ||||||||||
Percentage of asset management fees | 0.55% | ||||||||||
Percentage of subordinated disposition fees | 1.50% | ||||||||||
Loan refinancing fee, percentage | 1.00% | ||||||||||
Acquisition fees to affiliates settled | $ 10,700,000 | $ 10,400,000 | $ 8,300,000 | ||||||||
Percentage of available cash distribution to advisor | 10.00% | ||||||||||
Selling commission and dealer manager fees paid | 13,200,000 | ||||||||||
Underwriting compensation limit | 10.00% | ||||||||||
Distribution and shareholder servicing fee charged to shareholders equity | 9,000,000 | ||||||||||
Payment of distributions and shareholder servicing fees | $ 5,600,000 | 5,800,000 | 1,500,000 | ||||||||
Cumulative offering costs incurred though inception | $ 9,100,000 | ||||||||||
Deferred offering costs | $ 2,800,000 | ||||||||||
Payment for business liquidation services | $ 2,000,000 | ||||||||||
Subsequent Event | |||||||||||
Related Party Transaction | |||||||||||
Payment for business liquidation services | $ 800,000 | ||||||||||
Hotel | |||||||||||
Related Party Transaction | |||||||||||
Number of real estate properties | property | 12 | ||||||||||
CWI 1 and CWI 2 Merged entity | |||||||||||
Related Party Transaction | |||||||||||
Payment for business liquidation services | $ 5,000,000 | ||||||||||
CWI 1 and CWI 2 Merged entity | Subsequent Event | |||||||||||
Related Party Transaction | |||||||||||
Payment for business liquidation services | $ 1,950,000 | ||||||||||
CWI 1 and CWI 2 Merged entity | CEO | |||||||||||
Related Party Transaction | |||||||||||
Watermark commitment agreement | $ 6,950,000 | ||||||||||
W.P. Carey | Hotel | |||||||||||
Related Party Transaction | |||||||||||
Number of real estate properties | property | 2 | ||||||||||
W.P. Carey | CWI 1 and CWI 2 Merged entity | Plan | Subsequent Event | |||||||||||
Related Party Transaction | |||||||||||
Value of shares issued as consideration | $ 97,400,000 | ||||||||||
CWI | Carey Watermark Investors 2 Operating Partnership | CWI 1 and CWI 2 Merged entity | Plan | Subsequent Event | |||||||||||
Related Party Transaction | |||||||||||
Value of shares issued as consideration | $ 27,600,000 | ||||||||||
Shares issued as consideration (shares) | shares | 2,417,996 | ||||||||||
Revolving Credit Facility | Working Capital Facility | |||||||||||
Related Party Transaction | |||||||||||
Line of credit maximum borrowing capacity | $ 25,000,000 | ||||||||||
Notes payable, related party | $ 0 | $ 0 | |||||||||
Revolving Credit Facility | Working Capital Facility | LIBOR | |||||||||||
Related Party Transaction | |||||||||||
Spread on variable rate (percent) | 1.00% | ||||||||||
Revolving Credit Facility | Working Capital Facility | LIBOR | Forecast | |||||||||||
Related Party Transaction | |||||||||||
Spread on variable rate (percent) | 3.00% | ||||||||||
Common Class A | |||||||||||
Related Party Transaction | |||||||||||
Common shares, outstanding (shares) | shares | 32,762,005 | 31,023,863 | |||||||||
Common Class T | |||||||||||
Related Party Transaction | |||||||||||
Common shares, outstanding (shares) | shares | 60,623,093 | 59,006,632 | |||||||||
Preferred stock | W.P. Carey | CWI 1 and CWI 2 Merged entity | Plan | Subsequent Event | |||||||||||
Related Party Transaction | |||||||||||
Value of shares issued as consideration | $ 65,000,000 | ||||||||||
Common Stock | W.P. Carey | CWI 1 and CWI 2 Merged entity | Plan | Subsequent Event | |||||||||||
Related Party Transaction | |||||||||||
Value of shares issued as consideration | $ 32,400,000 | ||||||||||
Shares issued as consideration (shares) | shares | 2,840,549 | ||||||||||
Invested asset | |||||||||||
Related Party Transaction | |||||||||||
Percentage of acquisition fees | 2.50% | ||||||||||
Contract purchase price | Maximum | |||||||||||
Related Party Transaction | |||||||||||
Percentage of acquisition fees | 6.00% | ||||||||||
Advisor | |||||||||||
Related Party Transaction | |||||||||||
Common shares, outstanding (shares) | shares | 3,506,798 | ||||||||||
Percentage of common stock held by related party | 3.80% | ||||||||||
Carey Financial | |||||||||||
Related Party Transaction | |||||||||||
Distribution and shareholder servicing fee charged to shareholders equity | $ 3,600,000 | ||||||||||
Carey Financial | Common Class A | |||||||||||
Related Party Transaction | |||||||||||
Selling commission fee (usd per share) | $ / shares | $ 0.84 | $ 0.82 | |||||||||
Dealer manager fee (usd per share) | $ / shares | 0.36 | 0.35 | |||||||||
Carey Financial | Common Class T | |||||||||||
Related Party Transaction | |||||||||||
Selling commission fee (usd per share) | $ / shares | 0.23 | 0.22 | |||||||||
Dealer manager fee (usd per share) | $ / shares | $ 0.31 | $ 0.30 | |||||||||
Shareholder servicing fee, percentage | 1.00% | ||||||||||
CWI | |||||||||||
Related Party Transaction | |||||||||||
Number of jointly owned investments | investment | 3 | ||||||||||
Ritz-Carlton Bacara, Santa Barbara Venture | |||||||||||
Related Party Transaction | |||||||||||
Percentage of acquisition fees settled in shares | 50.00% | ||||||||||
Percentage of acquisition fees settled in cash | 50.00% |
Agreements and Transactions w_4
Agreements and Transactions with Related Parties - Related Party Income (Details) - Affiliated Entity - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Amounts Included in the Consolidated Statements of Operations | |||
Available Cash Distributions | $ 6,262 | $ 5,467 | $ 5,078 |
Personnel and overhead reimbursements | 4,170 | 4,069 | 3,514 |
Acquisition fees | 0 | 0 | 4,415 |
Interest expense | 0 | 0 | 332 |
Accretion of interest on annual distribution and shareholder servicing fee (a) | 0 | 0 | 198 |
Related party expenses included operating expenses | 21,166 | 19,936 | 22,207 |
Other Transaction Fees Incurred | |||
Watermark commitment agreement | 2,850 | 0 | 0 |
Capitalized loan refinancing fees | 225 | 245 | 280 |
Selling commissions and dealer manager fees | 0 | 0 | 13,199 |
Annual distribution and shareholder servicing fee | 0 | 0 | 8,439 |
Capitalized acquisition fees for equity method investment | 0 | 0 | 6,195 |
Organization and offering costs | 0 | 0 | 1,453 |
Transaction Fees Incurred | 3,075 | 245 | 29,566 |
Asset management fees | |||
Amounts Included in the Consolidated Statements of Operations | |||
Operating expenses | $ 10,734 | $ 10,400 | $ 8,670 |
Agreements and Transactions w_5
Agreements and Transactions with Related Parties - Due to Affiliates (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Reimbursable costs due to our Advisor | $ 956 | $ 1,100 |
Asset management fees and other due to our Advisor | 894 | 884 |
Watermark commitment agreement | 800 | 0 |
Due to other related parties and affiliates | 136 | 0 |
Due to related parties and affiliates | $ 2,786 | $ 1,984 |
Net Investments in Hotels - Nar
Net Investments in Hotels - Narratives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition | |||
Assets retired | $ 3,200 | $ 1,000 | |
Business interruption income related to hurricane Irma | 809 | 934 | $ 0 |
Construction in progress | 6,466 | 2,554 | |
Interest cost capitalized | 100 | 300 | 400 |
Increase in accrued capital expenditures | 1,400 | 1,400 | 500 |
Marriott Sawgrass Golf Resort and Spa | |||
Business Acquisition | |||
Net write-off of fixed assets | $ 3,476 | (173) | $ 4,938 |
Marriott Sawgrass Golf Resort and Spa | Building | |||
Business Acquisition | |||
Net write-off of fixed assets | $ 1,400 |
Net Investments in Hotels - Pro
Net Investments in Hotels - Property Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment, Net | ||
Buildings | $ 1,090,693 | $ 1,093,865 |
Land | 236,078 | 236,078 |
Furniture, fixtures and equipment | 93,333 | 93,766 |
Building and site improvements | 42,318 | 38,670 |
Construction in progress | 6,466 | 2,554 |
Hotels, at cost | 1,468,888 | 1,464,933 |
Less: Accumulated depreciation | (157,581) | (113,184) |
Net investments in hotels | $ 1,311,307 | $ 1,351,749 |
Net Investments in Hotels - Hur
Net Investments in Hotels - Hurricane Related Disruption (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weather Interruptions | |||
(Gain) loss on hurricane-related property damage | $ (10) | $ 682 | $ 2,699 |
Marriott Sawgrass Golf Resort and Spa | |||
Weather Interruptions | |||
Net write-off (write-up) of fixed assets | 3,476 | (173) | 4,938 |
Remediation work performed | 0 | 133 | 1,476 |
(Increase) decrease to property damage insurance receivables | (3,486) | 722 | (3,715) |
(Gain) loss on hurricane-related property damage | $ (10) | $ 682 | $ 2,699 |
Net Investments in Hotels - P_2
Net Investments in Hotels - Pro Forma Financial Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Pro Forma Financial Information | |
Pro forma total revenues | $ 356,634 |
Pro forma net income | 1,391 |
Pro forma income attributable to noncontrolling interests | (991) |
Pro forma net income (loss) attributable to CWI 2 stockholders | 400 |
Common Class A | |
Pro Forma Financial Information | |
Pro forma net income (loss) attributable to CWI 2 stockholders | 260 |
Common Class T | |
Pro Forma Financial Information | |
Pro forma net income (loss) attributable to CWI 2 stockholders | $ 140 |
Equity Investments in Real Es_3
Equity Investments in Real Estate - Narratives (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)roomproperty | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 28, 2017 | May 29, 2015room | |
Equity Method Investments | |||||
Number of rooms | room | 801 | ||||
Equity method investment, other than temporary impairment | $ 0 | $ 0 | $ 0 | ||
Aggregate unamortized basis difference on equity investments | 7,500,000 | 7,800,000 | |||
Amortization of basis differences | 200,000 | 300,000 | 100,000 | ||
(Gain) loss on hurricane-related property damage | $ (10,000) | $ 682,000 | $ 2,699,000 | ||
Hotel | |||||
Equity Method Investments | |||||
Number of real estate properties | property | 12 | ||||
Unconsolidated Properties | Ritz-Carlton Bacara, Santa Barbara Venture | |||||
Equity Method Investments | |||||
Percentage of ownership in equity investee | 60.00% | 60.00% | 60.00% | 60.00% | |
Proceeds from equity method investments | $ 1,300,000 | ||||
Number of rooms | room | 358 | ||||
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | |||||
Equity Method Investments | |||||
Percentage of ownership in equity investee | 19.30% | 19.30% | 19.30% | ||
Proceeds from equity method investments | $ 1,700,000 | ||||
Number of rooms | room | 443 | ||||
(Gain) loss on hurricane-related property damage | $ 100,000 | $ (800,000) | $ 3,600,000 | ||
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | Condo | |||||
Equity Method Investments | |||||
Number of rooms | room | 141 | ||||
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | Counterparty | |||||
Equity Method Investments | |||||
Percentage of ownership in equity investee | 33.30% | ||||
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | CWI | |||||
Equity Method Investments | |||||
Percentage of ownership in equity investee | 47.40% | ||||
Unconsolidated Properties | CWI | Ritz-Carlton Bacara, Santa Barbara Venture | |||||
Equity Method Investments | |||||
Percentage of ownership in equity investee | 40.00% | ||||
Unconsolidated Properties | Hotel | |||||
Equity Method Investments | |||||
Number of real estate properties | property | 2 | ||||
Unconsolidated Properties | Hotel | CWI | |||||
Equity Method Investments | |||||
Number of real estate properties | property | 1 | ||||
Unconsolidated Properties | Hotel | CWI | Third Party | |||||
Equity Method Investments | |||||
Number of real estate properties | property | 1 |
Equity Investments in Real Es_4
Equity Investments in Real Estate - Ownership Interest in Equity Investments (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)room | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 28, 2017 | |
Equity Method Investments | ||||
Number of rooms | room | 801 | |||
Carrying Value | $ 113,169 | $ 121,456 | ||
Unconsolidated Properties | ||||
Equity Method Investments | ||||
Carrying Value | $ 113,169 | $ 121,456 | $ 134,738 | |
Unconsolidated Properties | Ritz-Carlton Bacara, Santa Barbara Venture | ||||
Equity Method Investments | ||||
Number of rooms | room | 358 | |||
Owned | 60.00% | 60.00% | 60.00% | 60.00% |
Hotel Type | Resort | |||
Carrying Value | $ 77,837 | $ 85,110 | $ 97,584 | |
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | ||||
Equity Method Investments | ||||
Number of rooms | room | 443 | |||
Owned | 19.30% | 19.30% | 19.30% | |
Hotel Type | Resort | |||
Carrying Value | $ 35,332 | $ 36,346 | $ 37,154 |
Equity Investments in Real Es_5
Equity Investments in Real Estate - Earnings From Unconsolidated Hotel (Details ) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity Method Investment, Financial Statement, Reported Amounts | |||
Equity in losses of equity method investment in real estate, net | $ (5,209) | $ (5,819) | $ (1,482) |
Unconsolidated Properties | |||
Equity Method Investment, Financial Statement, Reported Amounts | |||
Equity in losses of equity method investment in real estate, net | (5,209) | (5,819) | (1,482) |
Unconsolidated Properties | Ritz-Carlton Bacara, Santa Barbara Venture | |||
Equity Method Investment, Financial Statement, Reported Amounts | |||
Equity in losses of equity method investment in real estate, net | (5,918) | (7,314) | (4,235) |
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | |||
Equity Method Investment, Financial Statement, Reported Amounts | |||
Equity in losses of equity method investment in real estate, net | $ 709 | $ 1,495 | $ 2,753 |
Equity Investments in Real Es_6
Equity Investments in Real Estate - Summarized Balance Sheet of Equity Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 28, 2017 |
Equity Method Investment, Summarized Financial Information | ||||
Carrying Value | $ 113,169 | $ 121,456 | ||
Unconsolidated Properties | ||||
Equity Method Investment, Summarized Financial Information | ||||
Real estate, net | 636,372 | 643,145 | $ 646,943 | |
Other assets | 64,130 | 66,027 | 78,059 | |
Total assets | 700,502 | 709,172 | 725,002 | |
Debt | 413,538 | 415,973 | 416,335 | |
Other liabilities | 50,973 | 42,099 | 34,567 | |
Total liabilities | 464,511 | 458,072 | 450,902 | |
Members’ equity | 235,991 | 251,100 | 274,100 | |
Pro-rata equity carrying value | 94,382 | 102,126 | 114,892 | |
Basis differential adjustment | 7,602 | 7,757 | 8,026 | |
HLBV adjustment | 11,185 | 11,573 | 11,820 | |
Carrying Value | 113,169 | 121,456 | 134,738 | |
Unconsolidated Properties | Ritz-Carlton Bacara, Santa Barbara Venture | ||||
Equity Method Investment, Summarized Financial Information | ||||
Real estate, net | 358,723 | 362,386 | 367,035 | |
Other assets | 20,049 | 20,093 | 28,294 | |
Total assets | 378,772 | 382,479 | 395,329 | |
Debt | 228,434 | 227,535 | 226,636 | |
Other liabilities | 30,350 | 23,092 | 16,382 | |
Total liabilities | 258,784 | 250,627 | 243,018 | |
Members’ equity | $ 119,988 | $ 131,852 | $ 152,311 | |
Percentage of ownership in equity investee | 60.00% | 60.00% | 60.00% | 60.00% |
Pro-rata equity carrying value | $ 71,993 | $ 79,111 | $ 91,387 | |
Basis differential adjustment | 5,844 | 5,999 | 6,197 | |
HLBV adjustment | 0 | 0 | 0 | |
Carrying Value | 77,837 | 85,110 | 97,584 | |
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | ||||
Equity Method Investment, Summarized Financial Information | ||||
Real estate, net | 277,649 | 280,759 | 279,908 | |
Other assets | 44,081 | 45,934 | 49,765 | |
Total assets | 321,730 | 326,693 | 329,673 | |
Debt | 185,104 | 188,438 | 189,699 | |
Other liabilities | 20,623 | 19,007 | 18,185 | |
Total liabilities | 205,727 | 207,445 | 207,884 | |
Members’ equity | $ 116,003 | $ 119,248 | $ 121,789 | |
Percentage of ownership in equity investee | 19.30% | 19.30% | 19.30% | |
Pro-rata equity carrying value | $ 22,389 | $ 23,015 | $ 23,505 | |
Basis differential adjustment | 1,758 | 1,758 | 1,829 | |
HLBV adjustment | 11,185 | 11,573 | 11,820 | |
Carrying Value | $ 35,332 | $ 36,346 | $ 37,154 |
Equity Investments in Real Es_7
Equity Investments in Real Estate - Summarized Income Statement of Equity Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 28, 2017 | |
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
Equity in losses of equity method investment in real estate, net | $ (5,209) | $ (5,819) | $ (1,482) | |
Unconsolidated Properties | ||||
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
Revenues | 174,282 | 179,199 | 99,800 | |
Hotel operating expenses | 158,535 | 164,601 | 95,423 | |
Other operating expenses | 67 | 179 | 59 | |
Other income and (expenses) | (21,818) | (20,384) | (14,395) | |
(Provision for) benefit from income taxes | (410) | (141) | 1,121 | |
Net loss attributable to equity method investment | (6,548) | (6,106) | (8,956) | |
Pro-rata equity in (losses) earnings of equity method investments in real estate | (5,172) | (6,008) | (4,601) | |
Basis differential adjustment | (227) | (266) | (71) | |
HLBV adjustment | 190 | 455 | 3,190 | |
Equity in losses of equity method investment in real estate, net | (5,209) | (5,819) | (1,482) | |
Unconsolidated Properties | Ritz-Carlton Bacara, Santa Barbara Venture | ||||
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
Revenues | 83,247 | 81,670 | 15,269 | |
Hotel operating expenses | 78,474 | 79,955 | 18,906 | |
Other operating expenses | 8 | 86 | 52 | |
Other income and (expenses) | (14,203) | (13,494) | (3,161) | |
(Provision for) benefit from income taxes | (166) | 0 | (208) | |
Net loss attributable to equity method investment | $ (9,604) | $ (11,865) | $ (7,058) | |
Percentage of ownership in equity investee | 60.00% | 60.00% | 60.00% | 60.00% |
Pro-rata equity in (losses) earnings of equity method investments in real estate | $ (5,762) | $ (7,119) | $ (4,235) | |
Basis differential adjustment | (156) | (195) | 0 | |
HLBV adjustment | 0 | 0 | 0 | |
Equity in losses of equity method investment in real estate, net | (5,918) | (7,314) | (4,235) | |
Unconsolidated Properties | Ritz-Carlton Key Biscayne Venture | ||||
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
Revenues | 91,035 | 97,529 | 84,531 | |
Hotel operating expenses | 80,061 | 84,646 | 76,517 | |
Other operating expenses | 59 | 93 | 7 | |
Other income and (expenses) | (7,615) | (6,890) | (11,234) | |
(Provision for) benefit from income taxes | (244) | (141) | 1,329 | |
Net loss attributable to equity method investment | $ 3,056 | $ 5,759 | $ (1,898) | |
Percentage of ownership in equity investee | 19.30% | 19.30% | 19.30% | |
Pro-rata equity in (losses) earnings of equity method investments in real estate | $ 590 | $ 1,111 | $ (366) | |
Basis differential adjustment | (71) | (71) | (71) | |
HLBV adjustment | 190 | 455 | 3,190 | |
Equity in losses of equity method investment in real estate, net | $ 709 | $ 1,495 | $ 2,753 |
Fair Value Measurements - Narra
Fair Value Measurements - Narratives (Details) - Level 3 - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Reported Value | ||
Debt Instrument, Fair Value Disclosure | ||
Non recourse debt | $ 840.5 | $ 833.8 |
Fair Value | ||
Debt Instrument, Fair Value Disclosure | ||
Non recourse debt | $ 844.2 | $ 825.8 |
Risk Management and Use of De_3
Risk Management and Use of Derivative Financial Instruments - Narratives (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative | |||
Collateral posted | $ 0 | $ 0 | |
Interest expense | 39,902,000 | 40,226,000 | $ 35,824,000 |
Estimated amount of derivative income to be classified from OCI to income | 100,000 | ||
Maximum credit exposure | 0 | ||
Derivatives in net liability position | 0 | 0 | |
Single counterparty | |||
Derivative | |||
Maximum credit exposure | 200,000 | ||
AOCI Including Portion Attributable to Noncontrolling Interest | |||
Derivative | |||
Other comprehensive (loss) income before reclassifications | (335,000) | 544,000 | 265,000 |
AOCI Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income | |||
Derivative | |||
Interest expense | $ (1,004,000) | $ (715,000) | $ 219,000 |
Risk Management and Use of De_4
Risk Management and Use of Derivative Financial Instruments - Information Regarding Derivative Instruments (Details) - Designated as hedging instrument - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value | ||
Asset derivative at fair value | $ 121 | $ 1,425 |
Other assets | Interest rate swaps | ||
Derivatives, Fair Value | ||
Asset derivative at fair value | 121 | 1,368 |
Other assets | Interest rate caps | ||
Derivatives, Fair Value | ||
Asset derivative at fair value | $ 0 | $ 57 |
Risk Management and Use of De_5
Risk Management and Use of Derivative Financial Instruments - Interest Rate Swap and Caps Summary (Details) - Designated as hedging instrument - Cash Flow Hedging $ in Thousands | Dec. 31, 2019USD ($)instrument |
Derivative | |
Fair Value | $ 121 |
Interest rate swaps | |
Derivative | |
Number of Instruments | instrument | 2 |
Derivative, Notional Amount | $ 187,910 |
Fair Value | $ 121 |
Interest rate caps | |
Derivative | |
Number of Instruments | instrument | 3 |
Derivative, Notional Amount | $ 171,385 |
Fair Value | $ 0 |
Debt - Narratives (Details)
Debt - Narratives (Details) | Jan. 22, 2020USD ($) | Nov. 01, 2019USD ($) | Aug. 08, 2018USD ($) | Dec. 31, 2019USD ($)extension | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition | ||||||
Option extension period | 1 year | |||||
Number of extension options | extension | 2 | |||||
Non-recourse and limited-recourse debt, net | $ 840,465,000 | $ 833,836,000 | ||||
Repayments of secured debt | 83,299,000 | 47,502,000 | $ 42,000,000 | |||
Loss on extinguishment of debt | 5,000 | 380,000 | $ 256,000 | |||
Deferred financing costs | 3,142,000 | |||||
Debt scheduled for repayment 2020 | 224,614,000 | |||||
Mortgage loan | ||||||
Business Acquisition | ||||||
Debt scheduled for repayment 2020 | 97,700,000 | |||||
Seattle Marriott Bellevue | ||||||
Business Acquisition | ||||||
Non-recourse and limited-recourse debt, net | $ 97,895,000 | 99,719,000 | ||||
Effective interest rate (percent) | 3.88% | |||||
Marriott Sawgrass Golf Resort & Spa | ||||||
Business Acquisition | ||||||
Non-recourse and limited-recourse debt, net | $ 88,747,000 | 77,997,000 | ||||
Repayments of secured debt | $ 78,000,000 | |||||
Debt instrument face amount | $ 90,000,000 | |||||
Effective interest rate (percent) | 3.80% | 3.76% | ||||
Loss on extinguishment of debt | $ 100,000 | |||||
Marriott Sawgrass Golf Resort & Spa | LIBOR | ||||||
Business Acquisition | ||||||
Spread on variable rate (percent) | 2.30% | |||||
Renaissance Atlanta Midtown Hotel | ||||||
Business Acquisition | ||||||
Non-recourse and limited-recourse debt, net | $ 48,589,000 | 48,332,000 | ||||
Debt instrument face amount | $ 49,000,000 | |||||
Effective interest rate (percent) | 3.96% | |||||
Loss on extinguishment of debt | $ 400,000 | |||||
Renaissance Atlanta Midtown Hotel | LIBOR | ||||||
Business Acquisition | ||||||
Spread on variable rate (percent) | 2.00% | |||||
Renaissance Atlanta Midtown Hotel | Non Recourse Loan | ||||||
Business Acquisition | ||||||
Repayments of secured debt | $ 34,000,000 | |||||
Renaissance Atlanta Midtown Hotel | Non Recourse Loan Two | ||||||
Business Acquisition | ||||||
Repayments of secured debt | $ 13,500,000 | |||||
Renaissance Atlanta Midtown Hotel | Previously Reported | LIBOR | ||||||
Business Acquisition | ||||||
Spread on variable rate (percent) | 2.30% | |||||
Subsequent Event | Seattle Marriott Bellevue | ||||||
Business Acquisition | ||||||
Debt instrument face amount | $ 98,800,000 | |||||
Spread on variable rate (percent) | 2.70% | |||||
Effective interest rate (percent) | 4.20% |
Debt - Summary of Non-recourse
Debt - Summary of Non-recourse and Limited-recourse Debt on Consolidated Hotels (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Nov. 01, 2019 | Dec. 31, 2018 | |
Hotel Details | |||
Non-recourse debt, net | $ 840,465 | $ 833,836 | |
Seattle Marriott Bellevue | |||
Hotel Details | |||
Interest Rate | 3.88% | ||
Rate Type | Variable | ||
Non-recourse debt, net | $ 97,895 | 99,719 | |
Le Méridien Arlington | |||
Hotel Details | |||
Interest Rate | 4.44% | ||
Rate Type | Variable | ||
Non-recourse debt, net | $ 34,755 | 34,787 | |
San Jose Marriott | |||
Hotel Details | |||
Interest Rate | 4.44% | ||
Rate Type | Variable | ||
Non-recourse debt, net | $ 87,460 | 87,880 | |
Renaissance Atlanta Midtown Hotel | |||
Hotel Details | |||
Interest Rate | 3.96% | ||
Rate Type | Variable | ||
Non-recourse debt, net | $ 48,589 | 48,332 | |
Ritz-Carlton San Francisco | |||
Hotel Details | |||
Interest Rate | 4.59% | ||
Rate Type | Fixed | ||
Non-recourse debt, net | $ 142,923 | 142,887 | |
Charlotte Marriott City Center | |||
Hotel Details | |||
Interest Rate | 4.53% | ||
Rate Type | Fixed | ||
Non-recourse debt, net | $ 102,636 | 102,488 | |
Courtyard Nashville Downtown | |||
Hotel Details | |||
Interest Rate | 4.15% | ||
Rate Type | Fixed | ||
Non-recourse debt, net | $ 54,965 | 55,051 | |
Marriott Sawgrass Golf Resort & Spa | |||
Hotel Details | |||
Interest Rate | 3.76% | 3.80% | |
Rate Type | Variable | ||
Non-recourse debt, net | $ 88,747 | 77,997 | |
Embassy Suites by Hilton Denver-Downtown/Convention Center | |||
Hotel Details | |||
Interest Rate | 3.90% | ||
Rate Type | Fixed | ||
Non-recourse debt, net | $ 98,073 | 99,818 | |
San Diego Marriott La Jolla | |||
Hotel Details | |||
Interest Rate | 4.13% | ||
Rate Type | Fixed | ||
Non-recourse debt, net | $ 84,422 | $ 84,877 |
Debt - Scheduled Debt Principal
Debt - Scheduled Debt Principal Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term Debt | ||
2020 | $ 224,614 | |
2021 | 53,497 | |
2021 | 485,618 | |
2022 | 79,878 | |
2023 | 0 | |
Total principal payments | 843,607 | |
Unamortized deferred financing costs | (3,142) | |
Total | $ 840,465 | $ 833,836 |
Commitments and Contingencies -
Commitments and Contingencies - Narratives (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)propertymanagement_companyagreement | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 30, 2016USD ($) | |
Loss Contingencies | |||||
Number of management companies | management_company | 3 | ||||
Number of management agreements | agreement | 6 | ||||
Properties under franchise or license agreement (properties) | property | 4 | ||||
Contractual obligation | $ 11,500 | ||||
Accounts payable, accrued expenses and other liabilities | 59,471 | $ 61,913 | |||
Ritz-Carlton San Francisco | |||||
Loss Contingencies | |||||
NOI guarantee | $ 10,000 | ||||
Accounts payable, accrued expenses and other liabilities | 1,200 | ||||
Transaction costs | $ 1,200 | ||||
Furniture, fixtures, and equipment | |||||
Loss Contingencies | |||||
Restricted cash | $ 26,700 | 20,400 | |||
Food and Beverage Revenue | |||||
Loss Contingencies | |||||
License and royalty fees, percentage | 3.00% | ||||
Marriott Brand | |||||
Loss Contingencies | |||||
Franchise agreements, count | agreement | 3 | ||||
Hilton Brand | |||||
Loss Contingencies | |||||
Franchise agreements, count | agreement | 1 | ||||
Management fees | |||||
Loss Contingencies | |||||
Costs related to sales | $ 13,046 | 13,014 | $ 12,148 | ||
Franchise | |||||
Loss Contingencies | |||||
Costs related to sales | $ 5,500 | $ 5,600 | $ 6,200 | ||
Minimum | |||||
Loss Contingencies | |||||
Hotel management contract term | 5 years | ||||
Base hotel management fee, percentage | 2.50% | ||||
Base hotel management fee Including benefit of franchise agreement, percentage | 3.00% | ||||
Franchise agreement initial term | 20 years | ||||
Marketing and reservation contribution rate | 1.00% | ||||
Required FF&E percentages for future capital expenditures | 3.00% | ||||
Minimum | Room Revenue | |||||
Loss Contingencies | |||||
License and royalty fees, percentage | 3.00% | ||||
Maximum | |||||
Loss Contingencies | |||||
Hotel management contract term | 40 years | ||||
Base hotel management fee, percentage | 3.00% | ||||
Base hotel management fee Including benefit of franchise agreement, percentage | 7.00% | ||||
Franchise agreement initial term | 25 years | ||||
Marketing and reservation contribution rate | 4.00% | ||||
Required FF&E percentages for future capital expenditures | 5.00% | ||||
Maximum | Room Revenue | |||||
Loss Contingencies | |||||
License and royalty fees, percentage | 6.00% |
Loss Per Share and Equity - Sum
Loss Per Share and Equity - Summary of Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Class of Stock | |||||||||||
Allocation of Loss | $ (6,907) | $ (2,694) | $ 959 | $ 1,024 | $ (6,773) | $ (2,605) | $ 3,085 | $ (1,494) | $ (7,618) | $ (7,787) | $ (5,485) |
Common Class A | |||||||||||
Class of Stock | |||||||||||
Basic and Diluted Weighted-Average Shares Outstanding (shares) | 32,260,398 | 30,390,179 | 27,825,037 | ||||||||
Allocation of Loss | $ (2,509) | $ (2,443) | $ (1,740) | ||||||||
Basic and Diluted Loss Per Share (usd per share) | $ (0.07) | $ (0.03) | $ 0.01 | $ 0.01 | $ (0.07) | $ (0.03) | $ 0.04 | $ (0.02) | $ (0.08) | $ (0.08) | $ (0.06) |
Common Class T | |||||||||||
Class of Stock | |||||||||||
Basic and Diluted Weighted-Average Shares Outstanding (shares) | 60,499,745 | 58,842,820 | 54,686,084 | ||||||||
Allocation of Loss | $ (5,109) | $ (5,344) | $ (3,745) | ||||||||
Basic and Diluted Loss Per Share (usd per share) | $ (0.07) | $ (0.03) | $ 0.01 | $ 0.01 | $ (0.08) | $ (0.03) | $ 0.03 | $ (0.02) | $ (0.08) | $ (0.09) | $ (0.07) |
Loss Per Share and Equity - Nar
Loss Per Share and Equity - Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 16, 2019 | Mar. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 |
Distributions Per Share | |||||||
Distributions payable | $ 11,616 | $ 11,616 | $ 11,178 | ||||
Distributions declared | 45,783 | 44,227 | $ 40,209 | ||||
Purchase of membership interest from noncontrolling interest | 297 | 3,524 | |||||
Additional Paid-In Capital | |||||||
Distributions Per Share | |||||||
Purchase of membership interest from noncontrolling interest | 3,500 | 3,524 | |||||
Courtyard Nashville Downtown | |||||||
Distributions Per Share | |||||||
Capital contributions to equity investments in real estate | $ 3,500 | ||||||
Seattle Marriott Bellevue | |||||||
Distributions Per Share | |||||||
Capital contributions to equity investments in real estate | $ 300 | ||||||
Ownership interest (percent) | 100.00% | 95.40% | |||||
Common Class A | |||||||
Distributions Per Share | |||||||
Interest expense incurred from shareholder servicing fee | 400 | $ 600 | $ 300 | ||||
Distributions declared | $ 18,100 | ||||||
Distributions declared per share (usd per share) | $ 0.1749 | $ 0.6996 | $ 0.6996 | $ 0.6955 | |||
Common Class T | |||||||
Distributions Per Share | |||||||
Distributions declared | $ 27,700 | ||||||
Distributions declared per share (usd per share) | $ 0.1493 | $ 0.5968 | $ 0.5959 | $ 0.5919 |
Loss Per Share and Equity - Rec
Loss Per Share and Equity - Reclassifications of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation Of Accumulated Comprehensive Income | |||
Beginning balance, value | $ 696,403 | $ 731,785 | $ 550,109 |
Interest expense | 39,902 | 40,226 | 35,824 |
Equity in losses of equity method investments in real estate, net | (5,209) | (5,819) | (1,482) |
Net current period other comprehensive (loss) income | (1,309) | (171) | 484 |
Ending balance, value | 662,644 | 696,403 | 731,785 |
Accumulated Other Comprehensive Income (Loss) | |||
Reconciliation Of Accumulated Comprehensive Income | |||
Beginning balance, value | 1,205 | 1,373 | 896 |
Net current period other comprehensive (loss) income | (1,362) | (168) | 477 |
Ending balance, value | (157) | 1,205 | 1,373 |
AOCI Including Portion Attributable to Noncontrolling Interest | |||
Reconciliation Of Accumulated Comprehensive Income | |||
Other comprehensive (loss) income before reclassifications | (335) | 544 | 265 |
Total | (974) | (715) | 219 |
Net current period other comprehensive (loss) income | (1,309) | (171) | 484 |
AOCI Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income | |||
Reconciliation Of Accumulated Comprehensive Income | |||
Interest expense | (1,004) | (715) | 219 |
Equity in losses of equity method investments in real estate, net | 30 | 0 | 0 |
AOCI Attributable to Noncontrolling Interest | |||
Reconciliation Of Accumulated Comprehensive Income | |||
Net current period other comprehensive (income) loss attributable to noncontrolling interests | $ (53) | $ 3 | $ (7) |
Loss Per Share and Equity - Dis
Loss Per Share and Equity - Distributions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common Class A | |||
Distributions Per Share | |||
Total distributions paid (usd per share) | $ 0.5640 | $ 0.5640 | $ 0.5578 |
Common Class A | Return of capital | |||
Distributions Per Share | |||
Total distributions paid (usd per share) | 0.4679 | 0.4656 | 0.3541 |
Common Class A | Ordinary income | |||
Distributions Per Share | |||
Total distributions paid (usd per share) | 0.0961 | 0.0984 | 0.2037 |
Common Class T | |||
Distributions Per Share | |||
Total distributions paid (usd per share) | 0.4611 | 0.4624 | 0.4515 |
Common Class T | Return of capital | |||
Distributions Per Share | |||
Total distributions paid (usd per share) | 0.3826 | 0.3817 | 0.2866 |
Common Class T | Ordinary income | |||
Distributions Per Share | |||
Total distributions paid (usd per share) | $ 0.0785 | $ 0.0807 | $ 0.1649 |
Loss Per Share and Equity - D_2
Loss Per Share and Equity - Distribution Declared (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common Class A | ||||
Class of Stock | ||||
Distributions declared per share (usd per share) | $ 0.1749 | $ 0.6996 | $ 0.6996 | $ 0.6955 |
Common Class T | ||||
Class of Stock | ||||
Distributions declared per share (usd per share) | 0.1493 | $ 0.5968 | $ 0.5959 | $ 0.5919 |
Cash | Common Class A | ||||
Class of Stock | ||||
Distributions declared per share (usd per share) | 0.141 | |||
Cash | Common Class T | ||||
Class of Stock | ||||
Distributions declared per share (usd per share) | 0.1154 | |||
Shares | Common Class A | ||||
Class of Stock | ||||
Distributions declared per share (usd per share) | 0.0339 | |||
Shares | Common Class T | ||||
Class of Stock | ||||
Distributions declared per share (usd per share) | $ 0.0339 |
Share-Based Payments - Narrativ
Share-Based Payments - Narratives (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Share-based compensation | $ 0.6 | $ 0.5 | $ 0.4 |
Director | Common Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (shares) | 18,475 | 15,384 | 15,384 |
Shares issued (usd per share) | $ 11.11 | $ 10.74 | |
Director | Common Class A | Share-based Payment Arrangement, Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (shares) | 2,700 | ||
Shares issued (usd per share) | $ 11.11 | ||
Director | Common Class A | Share-based Payment Arrangement, Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Granted (shares) | 15,775 | ||
Shares issued (usd per share) | $ 11.41 | ||
RSU | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period | 3 years | ||
Fair value of vested stock | $ 0.3 | $ 0.3 | $ 0.2 |
Granted (shares) | 42,541 | 34,295 | 49,344 |
Shares issued (usd per share) | $ 11.41 | $ 11.11 | $ 10.74 |
RSU | Subadvisors | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Weighted-average remaining contractual term | 1 year 8 months 8 days | ||
2015 Equity Investment Plan | Subadvisors | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Stock based compensation not yet recognized | $ 0.5 | ||
2015 Equity Investment Plan | RSU | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Maximum shares authorized for share based compensation (shares) | 2,000,000 | ||
Shares available for grant (shares) | 1,838,894 |
Share-Based Payments - Summary
Share-Based Payments - Summary of the RSU (Details) - RSU Awards - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares | |||
Beginning balance (shares) | 62,988 | 59,005 | 56,153 |
Granted (shares) | 42,541 | 34,295 | 49,344 |
Vested (shares) | (28,801) | (26,403) | (21,745) |
Forfeited (shares) | (2,653) | (3,909) | (24,747) |
Ending balance (shares) | 74,075 | 62,988 | 59,005 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | |||
Beginning Balance, weighted average grant date fair value (usd per share) | $ 10.90 | $ 10.61 | $ 10.36 |
Shares granted, weighted average grant date fair value (usd per share) | 11.41 | 11.11 | 10.74 |
Shares vested, weighted average grant date fair value (usd per share) | 10.82 | 10.51 | 10.31 |
Shares forfeited, weighted average grant date fair value (usd per share) | 10.68 | 10.96 | 10.57 |
Ending Balance, weighted average grant date fair value (usd per share) | $ 11.23 | $ 10.90 | $ 10.61 |
Income Taxes - Narratives (Deta
Income Taxes - Narratives (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ 782,000 | $ 2,956,000 | |
Decrease to deferred tax asset valuation allowance | $ 2,300,000 | ||
Net deferred tax asset | $ 2,300,000 | 3,269,000 | 977,000 |
Unrecognized tax benefits | $ 0 | $ 0 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal | |||
Current | $ 1,953 | $ 2,227 | $ 2,787 |
Deferred | (1,873) | 141 | 248 |
Total | 80 | 2,368 | 3,035 |
State and Local | |||
Current | 425 | 873 | 880 |
Deferred | (420) | 18 | (15) |
Total | 5 | 891 | 865 |
Total Provision | $ 85 | $ 3,259 | $ 3,900 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Deferred Tax Assets | |||
Deferred revenue — key money | $ 1,478 | $ 1,696 | |
Accrued vacation payable and deferred rent | 1,544 | 1,265 | |
Net operating loss carryforwards | 785 | 617 | |
Interest expense limitation | 39 | 0 | |
Gift card liability | 1 | 2 | |
Other | 403 | 453 | |
Total deferred income taxes | 4,250 | 4,033 | |
Valuation allowance | (782) | (2,956) | |
Total deferred tax assets | 3,468 | 1,077 | |
Deferred Tax Liabilities | |||
Deferred rent | (119) | 0 | |
Other | (80) | (100) | |
Total deferred tax liabilities | (199) | (100) | |
Net Deferred Tax Asset | $ 3,269 | $ 2,300 | $ 977 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount | |||
Pre-tax income from taxable subsidiaries | $ 12,016 | $ 13,768 | $ 9,581 |
Federal provision at statutory tax rate | 2,524 | 2,892 | 3,353 |
Valuation allowance | (2,174) | (127) | (1,020) |
Income not subject to federal tax | (513) | (555) | (1,102) |
State and local taxes, net of federal provision | 387 | 539 | 644 |
Other | (174) | 477 | 126 |
Non-deductible expenses | 35 | 33 | 42 |
Revaluation of deferred taxes due to Tax Cuts and Jobs Act | 0 | 0 | 1,857 |
Total Provision | $ 85 | $ 3,259 | $ 3,900 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selected Quarterly Financial Data | |||||||||||
Revenues | $ 87,675 | $ 88,432 | $ 95,094 | $ 96,006 | $ 85,876 | $ 87,177 | $ 98,100 | $ 91,179 | $ 367,207 | $ 362,332 | $ 340,810 |
Operating expenses | 80,976 | 79,452 | 80,997 | 80,597 | 77,733 | 76,650 | 81,784 | 77,622 | 322,022 | 313,789 | 303,997 |
Net (loss) income | (4,978) | (2,325) | 2,799 | 5,453 | (4,856) | (1,411) | 4,334 | 1,584 | 949 | (349) | (4,494) |
Income attributable to noncontrolling interests | (1,929) | (369) | (1,840) | (4,429) | (1,917) | (1,194) | (1,249) | (3,078) | (8,567) | (7,438) | (991) |
Net Loss Attributable to CWI 2 Stockholders | $ (6,907) | $ (2,694) | $ 959 | $ 1,024 | $ (6,773) | $ (2,605) | $ 3,085 | $ (1,494) | (7,618) | (7,787) | (5,485) |
Common Class A | |||||||||||
Selected Quarterly Financial Data | |||||||||||
Net Loss Attributable to CWI 2 Stockholders | $ (2,509) | $ (2,443) | $ (1,740) | ||||||||
Basic and diluted income (loss) (usd per share) | $ (0.07) | $ (0.03) | $ 0.01 | $ 0.01 | $ (0.07) | $ (0.03) | $ 0.04 | $ (0.02) | $ (0.08) | $ (0.08) | $ (0.06) |
Common Class T | |||||||||||
Selected Quarterly Financial Data | |||||||||||
Net Loss Attributable to CWI 2 Stockholders | $ (5,109) | $ (5,344) | $ (3,745) | ||||||||
Basic and diluted income (loss) (usd per share) | $ (0.07) | $ (0.03) | $ 0.01 | $ 0.01 | $ (0.08) | $ (0.03) | $ 0.03 | $ (0.02) | $ (0.08) | $ (0.09) | $ (0.07) |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - Valuation reserve for deferred tax assets - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Valuation Allowances and Reserves | |||
Balance at Beginning of Year | $ 2,956 | $ 3,083 | $ 4,102 |
Other Additions | 150 | 632 | 0 |
Deductions | (2,324) | (759) | (1,019) |
Balance at End of Year | $ 782 | $ 2,956 | $ 3,083 |
Schedule III - Real Estate an_2
Schedule III - Real Estate and Accumulated Depreciation - Narratives (Details) $ in Billions | Dec. 31, 2019USD ($) |
SEC Schedule III, Real Estate and Accumulated Depreciation, Other Required Disclosures | |
Federal income tax basis | $ 1.5 |
Schedule III - Real Estate an_3
Schedule III - Real Estate and Accumulated Depreciation - Properties (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 840,465 | |||
Initial Cost to Company | ||||
Land | 236,078 | |||
Buildings | 1,097,373 | |||
Costs Capitalized Subsequent to Acquisition | 43,265 | |||
(Decrease) Increase In Net Investments | (7,627) | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 236,078 | |||
Buildings | 1,133,011 | |||
Total | 1,369,089 | $ 1,368,613 | $ 1,357,258 | $ 1,191,218 |
Accumulated Depreciation | 109,960 | $ 78,078 | $ 47,221 | $ 18,506 |
Marriott Sawgrass Golf Resort & Spa | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | 88,747 | |||
Initial Cost to Company | ||||
Land | 26,400 | |||
Buildings | 93,551 | |||
Costs Capitalized Subsequent to Acquisition | 23,755 | |||
(Decrease) Increase In Net Investments | (7,710) | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 26,400 | |||
Buildings | 109,596 | |||
Total | 135,996 | |||
Accumulated Depreciation | $ 17,482 | |||
Marriott Sawgrass Golf Resort & Spa | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Marriott Sawgrass Golf Resort & Spa | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Courtyard Nashville Downtown | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 54,965 | |||
Initial Cost to Company | ||||
Land | 8,500 | |||
Buildings | 47,443 | |||
Costs Capitalized Subsequent to Acquisition | 2,291 | |||
(Decrease) Increase In Net Investments | 51 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 8,500 | |||
Buildings | 49,785 | |||
Total | 58,285 | |||
Accumulated Depreciation | $ 6,359 | |||
Courtyard Nashville Downtown | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Courtyard Nashville Downtown | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Embassy Suites by Hilton Denver-Downtown/Convention Center | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 98,073 | |||
Initial Cost to Company | ||||
Land | 13,000 | |||
Buildings | 153,358 | |||
Costs Capitalized Subsequent to Acquisition | 2,921 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 13,000 | |||
Buildings | 156,279 | |||
Total | 169,279 | |||
Accumulated Depreciation | $ 16,814 | |||
Embassy Suites by Hilton Denver-Downtown/Convention Center | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Embassy Suites by Hilton Denver-Downtown/Convention Center | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Seattle Marriott Bellevue | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 97,895 | |||
Initial Cost to Company | ||||
Land | 19,500 | |||
Buildings | 149,111 | |||
Costs Capitalized Subsequent to Acquisition | 391 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 19,500 | |||
Buildings | 149,502 | |||
Total | 169,002 | |||
Accumulated Depreciation | $ 14,712 | |||
Seattle Marriott Bellevue | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Seattle Marriott Bellevue | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Le Méridien Arlington | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 34,755 | |||
Initial Cost to Company | ||||
Land | 8,900 | |||
Buildings | 43,191 | |||
Costs Capitalized Subsequent to Acquisition | 1,593 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 8,900 | |||
Buildings | 44,784 | |||
Total | 53,684 | |||
Accumulated Depreciation | $ 4,363 | |||
Le Méridien Arlington | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Le Méridien Arlington | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
San Jose Marriott | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 87,460 | |||
Initial Cost to Company | ||||
Land | 7,509 | |||
Buildings | 138,319 | |||
Costs Capitalized Subsequent to Acquisition | 1,635 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 7,509 | |||
Buildings | 139,954 | |||
Total | 147,463 | |||
Accumulated Depreciation | $ 12,319 | |||
San Jose Marriott | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
San Jose Marriott | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
San Diego Marriott La Jolla | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 84,422 | |||
Initial Cost to Company | ||||
Land | 20,264 | |||
Buildings | 110,300 | |||
Costs Capitalized Subsequent to Acquisition | 5,365 | |||
(Decrease) Increase In Net Investments | 32 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 20,264 | |||
Buildings | 115,697 | |||
Total | 135,961 | |||
Accumulated Depreciation | $ 10,554 | |||
San Diego Marriott La Jolla | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
San Diego Marriott La Jolla | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Renaissance Atlanta Midtown Hotel | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 48,589 | |||
Initial Cost to Company | ||||
Land | 8,600 | |||
Buildings | 64,441 | |||
Costs Capitalized Subsequent to Acquisition | 3,448 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 8,600 | |||
Buildings | 67,889 | |||
Total | 76,489 | |||
Accumulated Depreciation | $ 5,955 | |||
Renaissance Atlanta Midtown Hotel | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Renaissance Atlanta Midtown Hotel | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Ritz-Carlton San Francisco | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 142,923 | |||
Initial Cost to Company | ||||
Land | 98,605 | |||
Buildings | 170,372 | |||
Costs Capitalized Subsequent to Acquisition | 1,620 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 98,605 | |||
Buildings | 171,992 | |||
Total | 270,597 | |||
Accumulated Depreciation | $ 13,116 | |||
Ritz-Carlton San Francisco | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Ritz-Carlton San Francisco | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years | |||
Charlotte Marriott City Center | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation | ||||
Encumbrances | $ 102,636 | |||
Initial Cost to Company | ||||
Land | 24,800 | |||
Buildings | 127,287 | |||
Costs Capitalized Subsequent to Acquisition | 246 | |||
(Decrease) Increase In Net Investments | 0 | |||
Gross Amount at which Carried at Close of Period | ||||
Land | 24,800 | |||
Buildings | 127,533 | |||
Total | 152,333 | |||
Accumulated Depreciation | $ 8,286 | |||
Charlotte Marriott City Center | Minimum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 4 years | |||
Charlotte Marriott City Center | Maximum | ||||
Gross Amount at which Carried at Close of Period | ||||
Life on which Depreciation in Latest Statement of Income is Computed | 40 years |
Schedule III - Real Estate an_4
Schedule III - Real Estate and Accumulated Depreciation - Accumulated Depreciation Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule III, Reconciliation of Carrying Amount of Real Estate Investments | |||
Beginning balance | $ 1,368,613 | $ 1,357,258 | $ 1,191,218 |
Improvements | 3,664 | 11,250 | 18,587 |
(Write-off) write-up of assets damaged by hurricane (Note 4) | (3,170) | 105 | (4,633) |
Write-off of fully depreciated assets | (18) | 0 | 0 |
Additions | 0 | 0 | 152,086 |
Ending balance | 1,369,089 | 1,368,613 | 1,357,258 |
SEC Schedule III, Reconciliation of Real Estate Accumulated Depreciation | |||
Beginning balance | 78,078 | 47,221 | 18,506 |
Depreciation expense | 31,900 | 30,857 | 28,715 |
Write-off of fully depreciated assets | (18) | 0 | 0 |
Ending balance | $ 109,960 | $ 78,078 | $ 47,221 |