Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 08, 2021 | |
Entity Registrant Name | Moody National REIT II, Inc. | |
Entity Central Index Key | 0001615222 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55778 | |
Entity Incorporation, State or Country Code | MD | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Reporting Company | true | |
Entity Emerging Growth | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,635,429 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Class A Shares [Member] | ||
Entity Common Stock, Shares Outstanding | 12,995,645 | |
Class I Shares [Member] | ||
Entity Common Stock, Shares Outstanding | 159,092 | |
Class T Shares [Member] | ||
Entity Common Stock, Shares Outstanding | 480,692 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Investment in hotel properties, net | $ 423,990 | $ 427,801 |
Cash and cash equivalents | 4,897 | 4,642 |
Restricted cash | 4,686 | 5,860 |
Investment in marketable securities | 2,037 | |
Accounts receivable, net of allowance of $35 as of March 31, 2021 and December 31, 2020 | 1,014 | 568 |
Prepaid expenses and other assets | 2,886 | 3,024 |
Deferred franchise costs, net of accumulated amortization of $320 and $300 at March 31, 2021 and December 31, 2020, respectively | 747 | 767 |
Total Assets | 438,220 | 444,699 |
Liabilities: | ||
Note payable, net of unamortized debt issuance costs of $2,446 and $2,614 as of March 31, 2021 and December 31, 2020 | 236,783 | 237,516 |
Note payable to related party | 8,000 | |
Accounts payable and accrued expenses | 15,668 | 17,360 |
Due to related parties, net | 5,406 | 8,461 |
Dividends payable | 70 | 70 |
Total Liabilities | 265,927 | 263,407 |
Special Limited Partnership Interests | 1 | 1 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share; 100,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.01 par value per share; 1,000,000 shares authorized, 13,635 and 13,630 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 136 | 136 |
Additional paid-in capital | 305,478 | 305,446 |
Accumulated deficit | (136,512) | (127,686) |
Total stockholders' equity | 169,102 | 177,896 |
Noncontrolling interests in Operating Partnership | 3,190 | 3,395 |
Total Equity | 172,292 | 181,291 |
Total Liabilities and Equity | $ 438,220 | $ 444,699 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 35 | $ 35 |
Accumulated amortization, deferred franchise costs | 320 | 300 |
Unamortized debt issuance costs, note payable | $ 2,446 | $ 2,614 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 100,000,000 | 100,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 13,635,000 | 13,630,000 |
Common stock, outstanding | 13,635,000 | 13,630,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | ||
Total hotel revenue | $ 9,670 | $ 15,243 |
Interest and dividend income | 1 | 4 |
Total revenue | 9,671 | 15,247 |
Expenses | ||
Hotel operating expenses | 8,251 | 11,200 |
Property taxes, insurance and other | 1,896 | 1,761 |
Depreciation and amortization | 3,865 | 3,839 |
Corporate general and administrative | 1,989 | 1,806 |
Total expenses | 16,001 | 18,606 |
Operating loss | (6,330) | (3,359) |
Other expenses | ||
Interest expense and amortization of debt issuance costs | 2,934 | 3,035 |
Loss on sale of marketable securities | 245 | 37 |
Unrealized (gain) loss on change in fair value of investment in marketable securities | (397) | 3,811 |
Total other expenses | 2,782 | 6,883 |
Loss before income taxes | (9,112) | (10,242) |
Income tax (credit) expense | (81) | 13 |
Net loss | (9,031) | (10,255) |
Loss attributable to noncontrolling interests in Operating Partnership | 205 | 236 |
Net loss attributable to common stockholders | $ (8,826) | $ (10,019) |
Per-share information - basic and diluted: | ||
Net loss attributable to common stockholders (in dollars per share) | $ (0.65) | $ (0.75) |
Dividends declared (in dollars per share) | $ 0.29 | |
Weighted average common shares outstanding (in shares) | 13,635,000 | 13,427,000 |
Room Revenue [Member] | ||
Revenue | ||
Total hotel revenue | $ 8,987 | $ 14,180 |
Other Hotel Revenue [Member] | ||
Revenue | ||
Total hotel revenue | $ 683 | $ 1,063 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY (unaudited) - 3 months ended Mar. 31, 2021 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Noncontrolling Interest in Operating Partnership [Member] | Total |
Balance at beginning at Dec. 31, 2020 | $ 136 | $ 305,446 | $ (127,686) | $ 3,395 | $ 181,291 | |
Balance at beginning (in shares) at Dec. 31, 2020 | 13,630,000 | |||||
Balance at beginning (in units) at Dec. 31, 2020 | 316 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Redemption of common stock | ||||||
Stock-based compensation | 32 | 32 | ||||
Stock-based compensation (in shares) | 5,000 | |||||
Net loss | (8,826) | $ (205) | (9,031) | |||
Balance at end at Mar. 31, 2021 | $ 136 | $ 305,478 | $ (136,512) | $ 3,190 | $ 172,292 | |
Balance at end (in shares) at Mar. 31, 2021 | 13,635,000 | |||||
Balance at end (in units) at Mar. 31, 2021 | 316,000 | 316,037 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (9,031) | $ (10,255) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,865 | 3,839 |
Amortization of debt issuance costs | 168 | 169 |
Loss on sale of securities | 245 | 37 |
Unrealized (gain) loss on change in fair value of investment in marketable securities | (397) | 3,811 |
Stock-based compensation | 32 | 64 |
Changes in operating assets and liabilities | ||
Accounts receivable | (446) | 115 |
Prepaid expenses and other assets | 137 | (757) |
Accounts payable and accrued expenses | (1,694) | (1,873) |
Due from related parties | (3,055) | 1,091 |
Net cash used in operating activities | (10,176) | (3,759) |
Cash flows from investing activities | ||
Proceeds of sales of marketable securities | 2,188 | |
Investment in marketable securities | (958) | |
Improvements and additions to hotel properties | (30) | (1,507) |
Net cash provided by (used in) investing activities | 2,158 | (2,465) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 10,259 | |
Redemptions of common stock | (2,748) | |
Dividends paid | (4,404) | |
Operating partnership distributions paid | (138) | |
Repayment of notes payable | (901) | (1,093) |
Proceeds of note payable to related party | 8,000 | |
Repayment of note payable to related party | (2,708) | |
Net cash provided by (used in) financing activities | 7,099 | (832) |
Net change in cash and cash equivalents and restricted cash | (919) | (7,056) |
Cash and cash equivalents and restricted cash at beginning of period | 10,502 | 15,948 |
Cash and cash equivalents and restricted cash at end of period | 9,583 | 8,892 |
Supplemental Disclosure of Cash Flow Activity | ||
Interest paid | 3,166 | 2,872 |
Supplemental Disclosure of Non-Cash Financing Activity | ||
Increase in accrued offering costs due to related party | 314 | |
Issuance of common stock from dividend reinvestment plan | 1,393 | |
Dividends payable | $ 70 | $ 70 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization As discussed in Note 5, “Equity,” Moody National REIT II, Inc. (the “Company”) was initially capitalized by Moody National REIT Sponsor, LLC (the “Sponsor”). The Company’s fiscal year end is December 31. As of March 31, 2021, the Company owned interests in fifteen hotel properties located in six states comprising a total of 2,123 rooms. For more information on the Company’s real estate investments, see Note 3, “Investment in Hotel Properties.” On January 20, 2015, the Securities and Exchange Commission (the “SEC”) declared the Company’s registration statement on Form S-11 effective, and the Company commenced its initial public offering of up to $1.1 billion in shares of common stock consisting of up to $1.0 billion in shares of the Company’s common stock offered to the public, and up to $100.0 million in shares offered to the Company’s stockholders pursuant to its distribution reinvestment plan (the “DRP”). On June 26, 2017, the Company reallocated the Company’s shares of common stock as Class A common stock, $0.01 par value per share (“Class A Shares”), Class D common stock, $0.01 par value per share (“Class D Shares”), Class I common stock, $0.01 par value per share (“Class I Shares”), and Class T common stock, $0.01 par value per share (“Class T Shares” and, together with the Class A Shares, the Class D Shares and the Class I Shares, the “Shares”). On January 16, 2018, the Advisor (as defined below) assumed responsibility for the payment of all selling commissions, dealer manager fees and stockholder servicing fees paid in connection with the Company’s public offering; provided, however On January 18, 2018, the Company filed a registration statement on Form S-11 (Registration No. 333-222610) registering $990.0 million in any combination of the Shares to be sold on a “best efforts” basis in the Company’s follow-on public offering. The SEC declared the registration statement effective on July 19, 2018. The registration statement provided for the Company to continue to offer Shares in the follow-on offering on a continuous basis until July 19, 2021, subject to extension for an additional year by the Company’s board of directors (“Board”). The Company’s follow-on public offering was terminated (including pursuant to the DRP) effective as of March 25, 2020 due to the impact that the COVID-19 pandemic is having and is expected to continue to have in the Company’s hotel properties. The Company accepted investors’ subscriptions for and issued an aggregate of 10.2 million shares in the Company’s initial public offering and follow-on offering, excluding shares issued in connection with the Company’s merger with Moody National REIT I, Inc. and including 567,000 shares pursuant to the DRP, resulting in gross offering proceeds of $234.6 million. The Company accepted investors’ subscriptions for and issued 4.1 million shares in the follow-on offering, including 352,000 shares pursuant to the DRP, resulting in gross offering proceeds of $87.2 million for the follow-on offering. The Company’s advisor is Moody National Advisor II, LLC (the “Advisor”), a Delaware limited liability company and an affiliate of the Sponsor. Pursuant to an advisory agreement among the Company, the OP (defined below) and the Advisor (the “Advisory Agreement”), and subject to certain restrictions and limitations therein, the Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company. Substantially all of the Company’s business is conducted through Moody National Operating Partnership II, LP, a Delaware limited partnership (the “OP”). The Company is the sole general partner of the OP. The initial limited partners of the OP were Moody OP Holdings II, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Moody Holdings II”), and Moody National LPOP II, LLC (“Moody LPOP II”), an affiliate of the Advisor. Moody Holdings II initially invested $1,000 in the OP in exchange for limited partnership interests, and Moody LPOP II invested $1,000 in the OP in exchange for a separate class of limited partnership interests (the “Special Limited Partnership Interests”). As the Company accepted subscriptions for shares of common stock, it transferred substantially all of the net proceeds from such sales to the OP as a capital contribution. The limited partnership agreement of the OP provides that the OP will be operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the OP will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the OP being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the OP in acquiring and operating real properties, the OP pays all of the Company’s administrative costs and expenses, and such expenses are treated as expenses of the OP. COVID-19 Pandemic The global COVID-19 pandemic has had, and is expected to continue to have, a significant adverse effect on the Company’s financial condition and operating results. Since its discovery in December 2019, COVID-19 has spread globally, including to every state in the United States. The spread of COVID-19 has been declared a pandemic by the World Health Organization and in the United States the Health and Human Services Secretary has declared a public health emergency with respect to COVID-19 COVID-19 has dramatically reduced travel, which has had an unprecedented adverse impact on the hotel industry. As a result, the COVID-19 pandemic has had, and is expected to continue to have, a significant adverse effect on the operating results of the Company’s hotel properties, which depend primarily upon revenues driven by business and leisure travel, and on the Company’s business, financial performance and operating results. Since March 2020, the Company has experienced a significant decline in bookings, occupancy and revenues across the Company’s hotel properties, which the Company expects to continue for an indefinite period of time. The Company’s hotel properties have operated at a property net operating loss since the outbreak of COVID-19, which has had an adverse impact on the Company’s results of operations and cash flow from operations. In addition, the Company has reduced certain services and amenities at the Company’s hotel properties. Although all of the Company’s hotel properties are currently open and operational, the Company may be required, or elect, to temporarily suspend operations at one or more of the Company’s hotel properties in the future depending on the length and severity of the COVID-19 pandemic and its related effects. If operations at any of the Company’s hotel properties are suspended, the Company cannot give any assurance as to when operations at such hotel properties will resume at a full or reduced level. Each of the Company’s hotel properties is subject to a mortgage loan secured by the Company’s ownership interest in the property. If the Company is unable to service the mortgage loan secured by a hotel property due to decreased revenues generated by such property, the lender with respect to such mortgage loan may initiate foreclosure procedures with respect to the property or initiate other available remedies. As of the date of this Quarterly Report, the Company is not current with respect to the payments due under the mortgage loans secured by the Company’s hotel properties and are engaged in discussions regarding modification of the terms of such mortgage loans with the lenders. As discussed in Note 4, “Debt,” certain of the Company’s lenders have already agreed to limited loan modifications, including temporary deferrals of interest and principal payments. As of the date of this Quarterly Report, no lenders have accelerated the maturity of any of the loans secured by the Company’s properties or initiated foreclosure procedures with respect to any of the Company’s properties. In accordance with local government recommendations and guidance, many of the employees of the Advisor have been working remotely since March 2020. Although the Advisor has implemented protocols for remote work and is leveraging technology to ensure that its employees remain connected and productive, there can be no guarantee that such work conditions will not have an adverse impact on the ability of the Advisor to effectively perform its duties. In response to the COVID-19 pandemic, the Company terminated its public offering of common stock (including pursuant to the DRP), effective as of March 2020. The Company is not currently raising capital through the sale of its securities and the Company does not intend to begin to do so in the near term. The Company has also indefinitely suspended the payment of distributions to stockholders effective as of March 2020 and the operation of the Company’s share repurchase program effective as of April 2020. The Board and the Company’s management continue to evaluate the Company’s financial condition and the overall economic environment to determine if and when the Company will seek to resume raising capital, resume the payment of distributions and reinstate the Company’s share repurchase program. Specifically, the Board, in consultation with management, will continue to monitor the Company’s operations and intends to resume distributions at a time and level determined to be prudent in relation to the Company’s other cash requirements or in order to maintain the Company’s REIT status for federal income tax purposes. However, it is impossible to predict if or when the Company will be able to resume the payment of distributions or return to normal operations. The COVID-19 pandemic is a continually evolving situation that presents material uncertainty and risk. The extent and duration of the impacts of COVID-19 on the Company’s business, financial condition, results of operations and cash flows is dependent on future developments that are highly uncertain and cannot be accurately predicted at this time, including without limitation the scope, severity and duration of the pandemic, the extent and effectiveness of the actions taken to contain the pandemic or mitigate its impact, the speed of the development and distribution of vaccines for COVID-19 and the efficacy and availability of such vaccines, the extent to which the general population is willing to be vaccinated, the effectiveness of currently available vaccines against emerging variants of COVID-19, the potential for hotel closures that may be mandated or advisable, whether based on increased COVID-19 cases, new variants or other factors, the reduction or reversal of previously implemented containment measures in certain states and cities, and the direct and indirect economic effects of the pandemic. As a result, the Company cannot provide an estimate of the overall impact of COVID-19 on the Company’s business, financial condition, results of operations and cash flows or when, if at all, the Company will be able to resume pre-COVID-19 levels of operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries over which it has control. All intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Organization and Offering Costs Organization and offering costs of the Company are paid directly by the Company or incurred by the Advisor on behalf of the Company. Pursuant to the Advisory Agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs incurred by the Advisor associated with each of the Company’s public offerings, provided that within 60 days of the last day of the month in which a public offering ends, the Advisor is obligated to reimburse the Company to the extent aggregate organization and offering costs incurred by the Company in connection with the completed public offering exceed 15.0% of the gross offering proceeds from the sale of the Company’s shares of common stock in the completed public offering. Such organization and offering costs include selling commissions and dealer manager fees paid to a dealer manager, legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of the Advisor’s employees and employees of the Advisor’s affiliates and others. Any reimbursement of the Advisor or its affiliates for organization and offering costs will not exceed actual expenses incurred by the Advisor. The Company’s organization and offering costs incurred in connection with the Company’s initial public offering did not exceed 15% of the gross offering proceeds from the sale of shares of common stock in such offering. All offering costs, including selling commissions and dealer manager fees, are recorded as an offset to additional paid-in-capital, and all organization costs are recorded as an expense when the Company has an obligation to reimburse the Advisor. As of March 31, 2021, total offering costs for the initial public offering and the follow-on offering were $21.1 million, comprised of $12.3 million of offering costs incurred directly by the Company and $8.8 million in offering costs incurred by and reimbursable to the Advisor. Total offering costs for the initial public offering were $18.4 million, comprised of $12.3 million of offering costs incurred directly by the Company and $6.1 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, total offering costs for the follow-on offering were $2.7 million, comprised of $0 of offering costs incurred directly by the Company and $2.7 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, the Company had $0 due to the Advisor for reimbursable offering costs. Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2016. The Company did not meet all of the qualifications to be a REIT under the Internal Revenue Code for the years ended December 31, 2015 and 2014, including not having 100 shareholders for a sufficient number of days in 2015. Prior to qualifying to be taxed as a REIT, the Company was subject to normal federal and state corporation income taxes. Provided that the Company continues to qualify as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90% of its REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and satisfies the other organizational and operational requirements for qualification as a REIT. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company leases the hotels it acquires to a wholly-owned taxable REIT subsidiary (“TRS”) that is subject to federal, state and local income taxes. The Company accounts for income taxes of its TRS using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period prior to when the new rates become effective. The Company records a valuation allowance for net deferred tax assets that are not expected to be realized. The Company has reviewed tax positions under GAAP guidance that clarify the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the consolidated financial statements if it is more likely than not that the tax position will be sustained upon examination. The Company had no material uncertain tax positions as of March 31, 2021. The preparation of the Company’s various tax returns requires the use of estimates for federal and state income tax purposes. These estimates may be subjected to review by the respective taxing authorities. A revision to an estimate may result in an assessment of additional taxes, penalties and interest. At this time, a range in which the Company’s estimates may change is not expected to be material. The Company will account for interest and penalties relating to uncertain tax positions in the current period results of operations, if necessary. The Company has tax years 2015 through 2019 remaining subject to examination by various federal and state tax jurisdictions. For more information, see Note 10, “Income Taxes.” Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost approach: Amount required to replace the service capacity of an asset (replacement cost). Income approach: Techniques used to convert future income amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company has elected the fair value option in recording its investment in marketable securities whereby unrealized holding gains and losses on available-for-sale securities are included in earnings. With the exception of the Company’s fixed-rate notes payable, the carrying amounts of other financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, notes payable, and accounts payable and accrued expenses, approximate their fair values due to their short-term nature. For the fair value of the Company’s notes payable, see Note 4, “Debt.” Concentration of Risk As of March 31, 2021, the Company had cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. The Company diversifies its cash and cash equivalents with several banking institutions in an attempt to minimize exposure to any one of these institutions. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash. The Company is exposed to geographic risk in that nine of its fifteen hotel properties are located in one state, Texas. Valuation and Allocation of Hotel Properties — Acquisition Upon acquisition, the purchase price of hotel properties is allocated to the tangible assets acquired, consisting of land, buildings and furniture, fixtures and equipment, any assumed debt, identified intangible assets and asset retirement obligations, if any, based on their fair values. Acquisition costs are charged to expense as incurred. Initial valuations are subject to change during the measurement period, but the measurement period ends as soon as the information is available. The measurement period shall not exceed one year from the acquisition date. Land values are derived from appraisals and building values are calculated as replacement cost less depreciation or estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. The value of furniture, fixtures and equipment is based on their fair value using replacement costs less depreciation. Any difference between the fair value of the hotel property acquired and the purchase price of the hotel property is recorded as goodwill or gain on acquisition of hotel property. The Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that the Company believes it could obtain at the date of acquisition. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan as a component of interest expense. In allocating the purchase price of each of the Company’s properties, the Company makes assumptions and uses various estimates, including, but not limited to, the estimated useful lives of the assets, the cost of replacing certain assets and discount rates used to determine present values. The Company uses Level 3 inputs to value acquired properties. Many of these estimates are obtained from independent third-party appraisals. However, the Company is responsible for the source and use of these estimates. These estimates require judgment and are subject to being imprecise; accordingly, if different estimates and assumptions were derived, the valuation of the various categories of the Company’s hotel properties or related intangibles could in turn result in a difference in the depreciation or amortization expense recorded in the Company’s consolidated financial statements. These variances could be material to the Company’s results of operations and financial condition. Valuation and Allocation of Hotel Properties — Ownership Investment in hotel properties is recorded at cost less accumulated depreciation. Major improvements that extend the life of an asset are capitalized and depreciated over a period equal to the shorter of the life of the improvement or the remaining useful life of the asset. The costs of ordinary repairs and maintenance are charged to expense when incurred. Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: Estimated Useful Lives (years) Buildings and improvements 39-40 Exterior improvements 10-20 Furniture, fixtures and equipment 5-10 Impairments The Company monitors events and changes in circumstances indicating that the carrying amount of a hotel property may not be recoverable. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing estimated future undiscounted cash flows expected to be generated over the life of the asset from operating activities and from its eventual disposition, to the carrying amount of the asset. In the event that the carrying amount exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss to adjust the carrying amount of the asset to estimated fair value for assets held for use and fair value less costs to sell for assets held for sale. There were no such impairment losses for the three months ended March 31, 2021 and 2020. In evaluating a hotel property for impairment, the Company makes several estimates and assumptions, including, but not limited to, the projected date of disposition of the property, the estimated future cash flows of the property during the Company’s ownership and the projected sales price of the property. A change in these estimates and assumptions could result in a change in the estimated undiscounted cash flows or fair value of the Company’s hotel property which could then result in different conclusions regarding impairment and material changes to the Company’s consolidated financial statements. Revenue Recognition Hotel revenues, including room, food, beverage and other ancillary revenues, are recognized as the related services are delivered. Revenue is recorded net of any sales and other taxes collected from customers. Interest income is recognized when earned. Amounts received prior to guest arrival are recorded as advances from the customer and are recognized at the time of occupancy. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand or held in banks and short-term investments with an initial maturity of years or less at the date of purchase. Restricted Cash Restricted cash includes reserves for property taxes, as well as reserves for property improvements, replacement of furniture, fixtures, and equipment and debt service, as required by certain management or mortgage and term debt agreements restrictions and provisions. Investment in Marketable Securities Investment in marketable securities of $0 and $2.0 million at March 31, 2021 and December 31, 2020, respectively, consisted primarily of common stock investments in other REITs and which are classified as available-for-sale securities and recorded at fair value. The Company has elected the fair value option whereby unrealized holding gains and losses on available-for-sale securities are included in earnings. All of the Company’s investment in marketable securities was sold during the three months ended March 31, 2021. For the three months ended March 31, 2021 and 2020, unrealized gain (loss) change in fair value of investment in marketable securities was $397,000 and $(3.8) million, respectively. For the three months ended March 31, 2021 and 2020, realized loss on sale of marketable securities was $245,000 and $37,000, respectively. Dividend income is recognized when earned. For the three months ended March 31, 2021 and 2020, dividend income of $1,000 and $4,000, respectively, was recognized and is included in interest and dividend income on the consolidated statements of operations. Accounts Receivable The Company takes into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, payment history and financial strength of the customer, which, taken as a whole, determines the valuation. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. Deferred Franchise Costs Deferred franchise costs are recorded at cost and amortized over the term of the respective franchise contract on a straight-line basis. Accumulated amortization of deferred franchise costs was $320,000 and $300,000 as of March 31, 2021 and December 31, 2020, respectively. Expected future amortization of deferred franchise costs as of March 31, 2021 is as follows (in thousands): Years Ending December 31, 2021 $ 62 2022 82 2023 77 2024 77 2025 77 Thereafter 372 Total $ 747 Debt Issuance Costs Debt issuance costs are presented as a direct deduction from the carrying value of the notes payable on the consolidated balance sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. Accumulated amortization of debt issuance costs was $4.9 million and $4.7 million as of March 31, 2021 and December 31, 2020, respectively. Expected future amortization of debt issuance costs as of March 31, 2021 is as follows (in thousands): Years Ending December 31, 2021 $ 509 2022 677 2023 632 2024 440 2025 152 Thereafter 36 Total $ 2,446 Earnings (Loss) per Share Earnings (loss) per share (“EPS”) is calculated based on the weighted average number of shares outstanding during each period. Basic and diluted EPS are the same for all periods presented. Non-vested shares of restricted common stock totaling 3,750 and 5,000 shares as of March 31, 2021 and December 31, 2020, respectively, held by the Company’s independent directors are included in the calculation of basic EPS because such shares have been issued and participate in dividends. |
Investment in Hotel Properties
Investment in Hotel Properties | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Investment in Hotel Properties | 3. Investment in Hotel Properties The following table sets forth summary information regarding the Company’s investment in hotel properties as of March 31, 2021 (all $ amounts in thousands): Property Name Date Acquired Location Ownership Interest Original Purchase Price (1) Rooms Mortgage Debt Outstanding (2) Residence Inn Austin October 15, 2015 Austin, Texas 100 % $ 27,500 112 $ 16,169 Springhill Suites Seattle May 24, 2016 Seattle, Washington 100 % 74,100 234 43,717 Homewood Suites Woodlands September 27, 2017 (5) The Woodlands, Texas 100 % 17,356 91 8,717 Hyatt Place Germantown September 27, 2017 (5) Germantown, Tennessee 100 % 16,074 127 6,755 Hyatt Place North September 27, 2017 (5) North Charleston, South Carolina 100 % 13,806 113 6,845 Hampton Inn Austin September 27, 2017 (5) Austin, Texas 100 % 19,328 123 10,358 Residence Inn Grapevine September 27, 2017 (5) Grapevine, Texas 100 % 25,245 133 12,016 Marriott Courtyard September 27, 2017 (5) Lyndhurst, (3) 39,547 227 18,729 Hilton Garden Inn Austin September 27, 2017 (5) Austin, Texas 100 % 29,288 138 17,997 Hampton Inn Great Valley September 27, 2017 (5) Frazer, Pennsylvania 100 % 15,285 125 7,804 Embassy Suites Nashville September 27, 2017 (5) Nashville, Tennessee 100 % 82,207 208 40,502 Homewood Suites Austin September 27, 2017 (5) Austin, Texas 100 % 18,835 96 10,541 Townplace Suites September 27, 2017 (5) Fort Worth, Texas (4) 11,242 95 5,882 Hampton Inn Houston September 27, 2017 (5) Houston, Texas 100 % 9,958 119 4,343 Residence Inn Houston Medical Center April 29, 2019 (6) Houston, Texas 100 % 52,000 182 28,854 Totals $ 451,771 2,123 $ 239,229 (1) Excludes closing costs and includes gain on acquisition. (2) As of March 31, 2021. (3) The Marriott Courtyard Lyndhurst is owned by MN Lyndhurst Venture, LLC, of which the OP is a member and holds 100% of the Class B membership interests therein. See Note 4, “Debt.” (4) The Townplace Suites Fort Worth is owned by MN Fort Worth Venture, LLC, of which the OP is a member and holds 100% of the Class B membership interests therein. See Note 4, “Debt.” (5) Property acquired on September 27, 2017 as a result of the merger of Moody National REIT I, Inc. (“Moody I”) with and into the Company (the “Merger”) and the merger of Moody National Operating Partnership I, L.P., the operating partnership of Moody I (“Moody I OP”), with and into the OP (the “Partnership Merger,” and together with the Merger, the “Mergers”). Investment in hotel properties consisted of the following at March 31, 2021 and December 31, 2020 (all amounts in thousands): March 31, 2021 December 31, 2020 Land $ 76,936 $ 76,936 Buildings and improvements 338,729 338,729 Furniture, fixtures and equipment 60,189 60,155 Total cost 475,854 475,820 Accumulated depreciation (51,864 ) (48,019 ) Investment in hotel properties, net $ 423,990 $ 427,801 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 4. Debt The Company’s aggregate borrowings are reviewed by the Board at least quarterly. Under the Company’s Articles of Amendment and Restatement (as amended, the “Charter”), the Company is prohibited from borrowing in excess of 300% of the value of the Company’s net assets. “Net assets” for purposes of this calculation is defined to be the Company’s total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts and other non-cash reserves, less total liabilities. However, the Company may temporarily borrow in excess of these amounts if such excess is approved by a majority of the Company’s independent directors and disclosed to stockholders in the Company’s next quarterly report, along with an explanation for such excess. As of March 31, 2021, the Company’s debt levels did not exceed 300% of the value of the Company’s net assets, as defined above. As of March 31, 2021 and December 31, 2020, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): Loan Principal as of March 31, 2021 Principal as of December 31, 2020 Interest Rate at March 31, 2021 Maturity Date Loan Modifications Residence Inn Austin (1) $ 16,169 $ 16,169 4.580 % November 1, 2025 Springhill Suites Seattle (1) 43,717 43,856 4.380 % October 1, 2026 Three months deferral of interest and principal payments from June to August, 2020. Four months interest only payments from September to December, 2020. Homewood Suites Woodlands (1) 8,717 8,759 4.690 % April 11, 2025 Hyatt Place Germantown (1) 6,755 6,755 4.300 % May 6, 2023 Hyatt Place North Charleston (1) 6,845 6,873 5.193 % August 1, 2023 Payment of $100,000 cash deposit and may make interest and principal payments from restricted cash for six months from April to September, 2020. Hampton Inn Austin (1) 10,358 10,359 5.426 % January 6, 2024 Four-month deferral of principal and interest payments for August to November, 2020. Residence Inn Grapevine (1) 12,016 12,016 5.250 % April 6, 2024 Marriott Courtyard Lyndhurst (1) 18,729 18,833 4.700 % September 27, 2024 Six months payment of interest only from April to September, 2020. Hilton Garden Inn Austin (1) 17,997 17,997 4.530 % December 11, 2024 Hampton Inn Great Valley (1) 7,804 7,804 4.700 % April 11, 2025 Embassy Suites Nashville (1) 40,502 41,057 4.2123 % July 11, 2025 April 2020 payment of principal and interest deferred. August 2020 to December 2020 interest only. Special servicer fee of $205,285 to be paid on or before April 30, 2021. Homewood Suites Austin (1) 10,541 10,541 4.650 % August 11, 2025 Townplace Suites Fort Worth (1) 5,882 5,915 4.700 % September 27, 2024 April 2020 payment was interest only. Six-month deferral of principal from April to September 2020. Two months deferral of interest payments for May and June, 2020.Three months interest only payments from July to September, 2020. Hampton Inn Houston (1) 4,343 4,342 5.250 % April 28, 2023 Seven-month deferral of principal and interest payments for payments due March 28, 2020 through September 28, 2020. Six months interest only for payments due October 28, 2020 through March 28, 2021. Residence Inn Houston (2) 28,854 28,854 5.000 % October 1, 2024 Deferral of principal and interest payments for six months from April to September, 2020. Interest only payments for an additional twelve months form October 2020 to September 2021. Total notes payable 239,229 240,130 Less unamortized debt (2,446 ) (2,614 ) Total notes payable, net of unamortized debt issuance costs $ 236,783 $ 237,516 (1) Monthly payments of principal and interest are due and payable until the maturity date. (2) Monthly payments of interest were due and payable until October 2019. Monthly payments of principal and interest are due and payable beginning in November 2019 until the maturity date. Hotel properties secure their respective loans. Scheduled maturities of the Company’s notes payable as of March 31, 2021 are as follows (all amounts in thousands): Years ending December 31, 2021 $ 3,519 2022 5,009 2023 21,629 2024 91,251 2025 78,083 Thereafter 39,738 Total $ 239,229 Note Payable to Related Party On March 30, 2021, Moody National Capital, LLC (“Moody Capital”), an affiliate of the Company, loaned the Company $8 million pursuant to a promissory note (the “Related Party Note”). Pursuant to the terms of the Related Party Note, the Company may borrow up to an additional $2.0 million from Moody Capital, for a maximum aggregate loan amount of $10 million. All amounts borrowed under the Related Party Note plus all accrued interest thereon, will be due and payable in full on March 29, 2024, provided that the Company may extend such maturity date for up to two years at the Company’s discretion. The principal amount of the loans under the Related Party Note will bear interest at a rate per annum equal LIBOR plus 4.75%; provided, however, that such interest rate will be increased to a rate per annum equal to LIBOR plus 6.75% if the Related Party Note is subordinated to another lender. Interest will be paid as permitted by available cash flow of the Company, after the payment of expenses and amounts due to any senior lender, if applicable, and will be compounded semiannually. The Company expects to enter into a mutually agreeable subordination agreement with any such senior lender. The Company may prepay the amounts due under the Related Party Note without any prepayment penalty. The estimated fair value of the Company’s notes payable as of March 31, 2021 and December 31, 2020, was $239 million and $240 million, respectively. The fair value of the notes payable was estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing arrangements as of the respective reporting dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | 5. Equity Capitalization Under its Charter, the Company has the authority to issue one billion shares of common stock and 100 million shares of preferred stock. All shares of such stock have a par value of $0.01 per share. On August 15, 2014, the Company sold 8,000 shares of common stock to the Sponsor at a purchase price of $25.00 per share for an aggregate purchase price of $200,000, which was paid in cash. As of March 31, 2021, there were a total of 13.6 million shares of the Company’s common stock issued and outstanding, including 10.2 million shares, net of redemptions, issued in the Company’s public offerings, 3.3 million shares, net of redemptions, issued in connection with the Mergers, the 8,000 shares sold to Sponsor and 60,000 shares of restricted stock issued to the Company’s directors, as discussed in Note 8, “Incentive Award Plan,” as follows (in thousands): Class Shares Outstanding as of March 31, 2021 Class A Shares 12,995 Class T Shares 481 Class I Shares 159 Total 13,635 The Board is authorized to amend the Charter without the approval of the stockholders to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. Distributions The Company first paid distributions on September 15, 2015. On March 24, 2020, the Board unanimously approved the suspension of (i) the payment of distributions to the Company’s stockholders, effective immediately, and (ii) the operation of the DRP, effective as of April 6, 2020, due to the impact that the COVID-19 pandemic is having and is expected to continue to have in the Company’s hotel properties. The payment of distributions and the operation of the DRP will remain suspended until such time as the Board approves their resumption. The following table summarizes distributions paid in cash and pursuant to the DRP for the three months ended March 31, 2021 and 2020 (all amounts in in thousands): Period Cash Distribution Distribution Paid Pursuant to DRP (1) Total Amount of Distribution First Quarter 2021 $ — $ — $ — First Quarter 2020 $ 4,404 $ 1,393 $ 5,797 (1) Amount of distributions paid in shares of common stock pursuant to the DRP. Noncontrolling Interest in Operating Partnership Noncontrolling interest in the OP at March 31, 2021 and December 31, 2020 was $3.2 million and $3.4 million, respectively, which represented 316,037 common units in the OP issued in connection with the acquisition of the Springhill Suites Seattle and the Partnership Merger, and is reported in equity in the consolidated balance sheets. Loss from the OP attributable to these noncontrolling interests was $205,000 and $236,000 for the three months ended March 31, 2021 and 2020, respectively. |
Related Party Arrangements
Related Party Arrangements | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Arrangements | 6. Related Party Arrangements Pursuant to the Advisory Agreement, the Advisor and certain affiliates of Advisor receive fees and compensation in connection with the acquisition, management and sale of the Company’s real estate investments. In addition, in exchange for $1,000 and in consideration of services to be provided by the Advisor, the OP has issued an affiliate of the Advisor, Moody LPOP II, a separate, special limited partnership interest, in the form of Special Limited Partnership Interests. For further detail, please see Note 8, “Subordinated Participation Interest.” Sales Commissions and Dealer Manager Fees From January 1, 2017 through June 12, 2017, the Company paid Moody Securities an up-front selling commission of up to 7.0% of the gross proceeds of what are now the Class A Shares sold in the primary offering and a dealer manager fee of up to 3.0% of the gross proceeds of what are now the Class A Shares sold in the primary offering. Beginning on June 12, 2017, the Company reallocated its common shares into four separate share classes, Class A Shares, Class T Shares, Class I Shares and Class D Shares, with the differing fees for each class of shares Beginning January 16, 2018, the Advisor assumed responsibility for the payment of all selling commissions, dealer manager fees and stockholder servicing fees paid in connection with the Company’s public offering; provided, however Organization and Offering Expenses The Advisor will receive reimbursement for organizational and offering expenses incurred on the Company’s behalf, but only to the extent that such reimbursements do not exceed actual expenses incurred by Advisor and do not cause the cumulative organization and offering expenses borne by the Company to exceed 15.0% of gross offering proceeds from the sale of shares in the Company’s follow-on offering as of the date of reimbursement. As of March 31, 2021, total offering costs for the initial public offering and the follow-on offering were $21.1 million, comprised of $12.3 million of offering costs incurred directly by the Company and $8.8 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, total offering costs for the initial public offering were $18.4 million, comprised of $12.3 million of offering costs incurred directly by the Company and $6.1 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, total offering costs for the follow-on offering were $2.7 million, comprised of $0 of offering costs incurred directly by the Company and $2.7 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, the Company had $0 due to the Advisor for reimbursable offering costs. Acquisition Fees As of January 16, 2018, the Advisor assumed responsibility for the payment of all selling commissions, dealer manager fees and stockholder servicing fees in connection with the Company’s public offering. In connection therewith, as of January 16, 2018, the acquisition fee payable to the Advisor was increased from 1.5% to up to a maximum of 3.85% of (1) the cost of all investments the Company acquires (including the Company’s pro rata share of any indebtedness assumed or incurred in respect of the investment and exclusive of acquisition and financing coordination fees), (2) the Company’s allocable cost of investments acquired in a joint venture (including Reimbursement of Acquisition Expenses The Advisor may also be reimbursed by the Company for actual expenses related to the evaluation, selection and acquisition of real estate investments, regardless of whether the Company actually acquires the related assets. The Company did not reimburse the Advisor for any acquisition expenses during the three months ended March 31, 2021 and 2020. Financing Coordination Fee The Advisor also receives financing coordination fees of 1% of the amount available under any loan or line of credit made available to the Company and 0.75% of the amount available or outstanding under any refinanced loan or line of credit. The Advisor will pay some or all of these fees to third parties with whom it subcontracts to coordinate financing for the Company. The Company did not incur any financing coordination fees payable to the Advisor during the three months ended March 31, 2021 and 2020. Property Management Fee The Company pays Moody National Hospitality Management, LLC (“Property Manager”) a monthly hotel management fee equal to 4.0% of the monthly gross operating revenues from the properties managed by Property Manager for services it provides in connection with operating and managing properties. The hotel management agreements between the Company and the Property Manager generally have initial terms of ten years. Property Manager may pay some or all of the compensation it receives from the Company to a third-party property manager for management or leasing services. In the event that the Company contracts directly with a non-affiliated third-party property manager, the Company will pay Property Manager a market-based oversight fee. The Company will reimburse the costs and expenses incurred by Property Manager on the Company’s behalf, including legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties, but the Company will not reimburse Property Manager for general overhead costs or personnel costs other than employees or subcontractors who are engaged in the on-site operation, management, maintenance or access control of the properties. For the three months ended March 31, 2021 and 2020, the Company incurred property management fees to Property Manager of $861,000 and $610,000, respectively, and accounting fees of $112,000 and $112,000, respectively, pursuant to the terms of a hotel management agreement, and which are included in hotel operating expenses in the accompanying consolidated statements of operations. The Company pays an annual incentive fee to Property Manager. Such annual incentive fee is equal to 15% of the amount by which the operating profit from the properties managed by Property Manager for such fiscal year (or partial fiscal year) exceeds 8.5% of the total investment of such properties. Property Manager may pay some or all of this annual incentive fee to third-party sub-property managers for management services. Asset Management Fee The Company pays the Advisor a monthly asset management fee of one-twelfth of 1.0% of the cost of investment of all real estate investments the Company acquires. For the three months ended March 31, 2021 and 2020, the Company incurred asset management fees of $1.2 million payable to the Advisor, which are recorded in corporate general and administrative expenses in the accompanying consolidated statements of operations. Disposition Fee The Company also pays the Advisor or its affiliates a disposition fee in an amount of up to one-half of the brokerage commission paid on the sale of an asset, but in no event greater than 3% of the contract sales price of each property or other investment sold; provided, however, in no event may the aggregate disposition fees paid to the Advisor and any real estate commissions paid to unaffiliated third parties exceed 6% of the contract sales price. As of March 31, 2021, the Company had not incurred any disposition fees payable to the Advisor. Operating Expense Reimbursement The Company will reimburse the Advisor for all expenses paid or incurred by the Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s aggregate operating expenses (including the asset management fee payable to the Advisor) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of the Company’s average invested assets, or (2) 25% of the Company’s net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% Limitation”). Notwithstanding the above, the Company may reimburse the Advisor for expenses in excess of the 2%/25% Limitation if a majority of the Company’s independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. For the four fiscal quarters ended March 31, 2021, total operating expenses of the Company were $6.7 million, which included $5.1 million in operating expenses incurred directly by the Company and $1.6 million incurred by the Advisor on behalf of the Company. Of the $6.7 million in total operating expenses incurred during the four fiscal quarters ended March 31, 2021, $0 exceeded the 2%/25% Limitation. The Company reimbursed the Advisor $1.6 million during the four fiscal quarters ended March 31, 2021. As of March 31, 2021, the Company had $382,000 due to the Advisor for operating expense reimbursement. |
Incentive Award Plan
Incentive Award Plan | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Incentive Award Plan | 7. Incentive Award Plan The Company has adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. Shares of common stock will be authorized and reserved for issuance under the Incentive Award Plan. The Company has also adopted an independent directors compensation plan (the “Independent Directors Compensation Plan”) pursuant to which each of the Company’s independent directors was entitled, subject to the Independent Directors Compensation Plan’s conditions and restrictions, to receive an initial grant of 5,000 shares of restricted stock when the Company raised the minimum offering amount of $2,000,000 in the Company’s initial public offering. Each new independent director who subsequently joins the Board will receive a grant of 5,000 shares of restricted stock upon his or her election to the Board. In addition, on the date of each of the first four annual meetings of the Company’s stockholders at which an independent director is re-elected to the Board, he or she will receive an additional grant of 2,500 shares of restricted stock. Subject to certain conditions, the non-vested shares of restricted stock granted pursuant to the Independent Directors Compensation Plan will vest and become non-forfeitable in four equal quarterly installments beginning on the first day of the first quarter following the date of grant; provided, however, that the restricted stock will become fully vested on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company. As of March 31, 2021, there were 1,940,000 common shares remaining available for future issuance under the Incentive Award Plan and the Independent Directors Compensation Plan. The Company recorded compensation expense related to shares of restricted stock issued pursuant to the Independent Directors Compensation Plan of $32,000 and $64,000 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, there were 3,750 non-vested shares of restricted common stock granted pursuant to the Independent Directors Compensation Plan. The remaining unrecognized compensation expense associated with the 3,750 non-vested shares of $66,000 will be recognized during the second and third quarters of 2021. The following is a summary of activity under the Independent Directors Compensation Plan for the three months ended March 31, 2021 and year ended December 31, 2020: Number of Weighted Average Grant Date Fair Value Balance of non-vested shares as of December 31, 2019 7,500 $ 23.32 Shares granted on November 12, 2020 5,000 $ 23.50 Shares vested (7,500 ) $ 23.22 Balance of non-vested shares as of December 31, 2020 5,000 $ 23.50 Shares vested (1,250 ) $ 23.50 Balance of non-vested shares as of March 31, 2021 3,750 $ 23.50 |
Subordinated Participation Inte
Subordinated Participation Interest | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Subordinated Participation Interest | 8. Subordinated Participation Interest Pursuant to the limited partnership agreement for the OP, Moody LPOP II, the holder of the Special Limited Partnership Interests, is entitled to receive distributions equal to 15.0% of the OP’s net cash flows, whether from continuing operations, the repayment of loans, the disposition of assets or otherwise, but only after the Company’s stockholders (and current and future limited partnership interest holders of the OP other than the former limited partners of Moody I OP) have received, in the aggregate, cumulative distributions equal to their total invested capital plus a 6.0% cumulative, non-compounded annual pre-tax return on such aggregated invested capital. Former limited partners of Moody I OP must have received a cumulative annual return of 8.0%, which is equal to the same return to which such holders were entitled before distributions to the special limited partner of Moody I OP could have been paid under the limited partnership agreement of Moody I OP. In addition, Moody LPOP II is entitled to a separate payment if it redeems its Special Limited Partnership Interests. The Special Limited Partnership Interests may be redeemed upon: (1) the listing of the Company’s common stock on a national securities exchange or (2) the occurrence of certain events that result in the termination or non-renewal of the Advisory Agreement, in each case for an amount that Moody LPOP II would have been entitled to receive had the OP disposed of all of its assets at the enterprise valuation as of the date of the event triggering the redemption. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Restricted Cash Under certain management and debt agreements existing at March 31, 2021, the Company escrows payments required for property improvement plans, real estate taxes, replacement of hotel furniture and fixtures, debt service and rent holdback. The composition of the Company’s restricted cash as of March 31, 2021 and December 31, 2020 are as follows (all amounts in in thousands): March 31, December 31, 2021 2020 Real estate taxes $ 67 $ 2,235 Insurance — 148 Hotel furniture and fixtures 2,997 1,762 Debt service 1,394 1,557 Property improvement plan 228 158 Total restricted cash $ 4,686 $ 5,860 Franchise Agreements As March 31, 2021, all of the Company’s hotel properties, including those acquired as part of the Moody I portfolio in the Mergers, are operated under franchise agreements with initial terms ranging from 10 to 20 years. The franchise agreements allow the properties to operate under the franchisor’s brand. Pursuant to the franchise agreements, the Company pays a royalty fee generally between 3.0% and 6.0% of room revenue, plus additional fees for marketing, central reservation systems and other franchisor costs that amount to between 1.5% and 4.3% of room revenue. The Company incurred franchise fee expense of $856,000 and $1.3 million for the three months ended March 31, 2021 and 2020, respectively, which amounts are included in hotel operating expenses in the accompanying consolidated statements of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company has formed a TRS that is treated as a C-corporation for federal income tax purposes and uses the asset and liability method of accounting for income taxes. Tax return positions are recognized in the consolidated financial statements when they are “more-likely-than-not” to be sustained upon examination by the taxing authority. Deferred income tax assets and liabilities result from temporary differences. Temporary differences are differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future periods. A valuation allowance may be placed on deferred income tax assets, if it is determined that it is more likely than not that a deferred tax asset may not be realized. As of March 31, 2021, the Company had operating loss carry-forwards of $6.0 million. The Company had deferred tax assets of $2.3 million as of March 31, 2021 and December 31, 2020, net of a valuation allowance of $11.5 million and $10.0 million as of March 31, 2021 and December 31, 2020, respectively, related to net operating loss carry forwards of the TRS which are included in prepaid expenses and other assets on the consolidated balance sheets. As of March 31, 2021, the TRS had a net operating loss carry-forward of $26.7 million, of which $7.3 million was transferred from Moody I’s taxable REIT subsidiaries when they were merged into the Company’s TRS on the date of the closing of the Mergers. The income tax expense for the three months ended March 31, 2021 and 2020 consisted of the following (in thousands): Three months ended March 31, 2021 2020 Current (benefit) expense $ (81 ) $ 13 Deferred benefit (1,582 ) (1,097 ) Valuation provision for deferred benefit 1,582 1,097 Total (benefit) expense $ (81 ) $ 13 Federal $ (1,582 ) $ (1,097 ) Valuation provision for federal taxes 1,582 1,097 State (81 ) 13 Total tax expense (benefit) $ (81 ) $ 13 On March 31, 2021, the Company had net deferred tax assets of $2.3 million primarily due to past years’ federal and state tax operating losses of the TRS. These loss carryforwards will generally expire in 2033 through 2038 if not utilized by then. The Company analyzes state loss carryforwards on a state by state basis and records a valuation allowance when management deems it more likely than not that future results will not generate sufficient taxable income in the respective state to realize the deferred tax asset prior to the expiration of the loss carryforwards. Management believes that it is more likely than not that the results of future operations of the TRS will generate sufficient taxable income to realize the deferred tax assets, in excess of the valuation allowance, related to federal and state loss carryforwards prior to the expiration of the loss carryforwards and has determined that no valuation allowance is necessary. From time to time, the Company may be subjected to federal, state or local tax audits in the normal course of business. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events The COVID-19 pandemic has had, and is expected to continue to have, a significant adverse effect on the operating results of the Company’s hotel properties and overall financial condition. See Note 1, “Organization.” |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include its accounts and the accounts of its subsidiaries over which it has control. All intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Organization and Offering Costs | Organization and Offering Costs Organization and offering costs of the Company are paid directly by the Company or incurred by the Advisor on behalf of the Company. Pursuant to the Advisory Agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs incurred by the Advisor associated with each of the Company’s public offerings, provided that within 60 days of the last day of the month in which a public offering ends, the Advisor is obligated to reimburse the Company to the extent aggregate organization and offering costs incurred by the Company in connection with the completed public offering exceed 15.0% of the gross offering proceeds from the sale of the Company’s shares of common stock in the completed public offering. Such organization and offering costs include selling commissions and dealer manager fees paid to a dealer manager, legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of the Advisor’s employees and employees of the Advisor’s affiliates and others. Any reimbursement of the Advisor or its affiliates for organization and offering costs will not exceed actual expenses incurred by the Advisor. The Company’s organization and offering costs incurred in connection with the Company’s initial public offering did not exceed 15% of the gross offering proceeds from the sale of shares of common stock in such offering. All offering costs, including selling commissions and dealer manager fees, are recorded as an offset to additional paid-in-capital, and all organization costs are recorded as an expense when the Company has an obligation to reimburse the Advisor. As of March 31, 2021, total offering costs for the initial public offering and the follow-on offering were $21.1 million, comprised of $12.3 million of offering costs incurred directly by the Company and $8.8 million in offering costs incurred by and reimbursable to the Advisor. Total offering costs for the initial public offering were $18.4 million, comprised of $12.3 million of offering costs incurred directly by the Company and $6.1 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, total offering costs for the follow-on offering were $2.7 million, comprised of $0 of offering costs incurred directly by the Company and $2.7 million in offering costs incurred by and reimbursable to the Advisor. As of March 31, 2021, the Company had $0 due to the Advisor for reimbursable offering costs. |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the taxable year ended December 31, 2016. The Company did not meet all of the qualifications to be a REIT under the Internal Revenue Code for the years ended December 31, 2015 and 2014, including not having 100 shareholders for a sufficient number of days in 2015. Prior to qualifying to be taxed as a REIT, the Company was subject to normal federal and state corporation income taxes. Provided that the Company continues to qualify as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90% of its REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) and satisfies the other organizational and operational requirements for qualification as a REIT. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. The Company leases the hotels it acquires to a wholly-owned taxable REIT subsidiary (“TRS”) that is subject to federal, state and local income taxes. The Company accounts for income taxes of its TRS using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period prior to when the new rates become effective. The Company records a valuation allowance for net deferred tax assets that are not expected to be realized. The Company has reviewed tax positions under GAAP guidance that clarify the relevant criteria and approach for the recognition and measurement of uncertain tax positions. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition of a tax position taken, or expected to be taken, in a tax return. A tax position may only be recognized in the consolidated financial statements if it is more likely than not that the tax position will be sustained upon examination. The Company had no material uncertain tax positions as of March 31, 2021. The preparation of the Company’s various tax returns requires the use of estimates for federal and state income tax purposes. These estimates may be subjected to review by the respective taxing authorities. A revision to an estimate may result in an assessment of additional taxes, penalties and interest. At this time, a range in which the Company’s estimates may change is not expected to be material. The Company will account for interest and penalties relating to uncertain tax positions in the current period results of operations, if necessary. The Company has tax years 2015 through 2019 remaining subject to examination by various federal and state tax jurisdictions. For more information, see Note 10, “Income Taxes.” |
Fair Value Measurement | Fair Value Measurement Fair value measures are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Directly or indirectly observable inputs, other than quoted prices in active markets. Level 3: Unobservable inputs in which there is little or no market data, which require a reporting entity to develop its own assumptions. Assets and liabilities measured at fair value are based on one or more of the following valuation techniques: Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Cost approach: Amount required to replace the service capacity of an asset (replacement cost). Income approach: Techniques used to convert future income amounts to a single amount based on market expectations (including present-value, option-pricing, and excess-earnings models). The Company’s estimates of fair value were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The Company classifies assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company has elected the fair value option in recording its investment in marketable securities whereby unrealized holding gains and losses on available-for-sale securities are included in earnings. With the exception of the Company’s fixed-rate notes payable, the carrying amounts of other financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, notes payable, and accounts payable and accrued expenses, approximate their fair values due to their short-term nature. For the fair value of the Company’s notes payable, see Note 4, “Debt.” |
Concentration of Risk | Concentration of Risk As of March 31, 2021, the Company had cash and cash equivalents and restricted cash deposited in certain financial institutions in excess of federally insured levels. The Company diversifies its cash and cash equivalents with several banking institutions in an attempt to minimize exposure to any one of these institutions. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash. The Company is exposed to geographic risk in that nine of its fifteen hotel properties are located in one state, Texas. |
Valuation and Allocation of Hotel Properties - Acquisition | Valuation and Allocation of Hotel Properties — Acquisition Upon acquisition, the purchase price of hotel properties is allocated to the tangible assets acquired, consisting of land, buildings and furniture, fixtures and equipment, any assumed debt, identified intangible assets and asset retirement obligations, if any, based on their fair values. Acquisition costs are charged to expense as incurred. Initial valuations are subject to change during the measurement period, but the measurement period ends as soon as the information is available. The measurement period shall not exceed one year from the acquisition date. Land values are derived from appraisals and building values are calculated as replacement cost less depreciation or estimates of the relative fair value of these assets using discounted cash flow analyses or similar methods. The value of furniture, fixtures and equipment is based on their fair value using replacement costs less depreciation. Any difference between the fair value of the hotel property acquired and the purchase price of the hotel property is recorded as goodwill or gain on acquisition of hotel property. The Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using interest rates for debt with similar terms and remaining maturities that the Company believes it could obtain at the date of acquisition. Any difference between the fair value and stated value of the assumed debt is recorded as a discount or premium and amortized over the remaining life of the loan as a component of interest expense. In allocating the purchase price of each of the Company’s properties, the Company makes assumptions and uses various estimates, including, but not limited to, the estimated useful lives of the assets, the cost of replacing certain assets and discount rates used to determine present values. The Company uses Level 3 inputs to value acquired properties. Many of these estimates are obtained from independent third-party appraisals. However, the Company is responsible for the source and use of these estimates. These estimates require judgment and are subject to being imprecise; accordingly, if different estimates and assumptions were derived, the valuation of the various categories of the Company’s hotel properties or related intangibles could in turn result in a difference in the depreciation or amortization expense recorded in the Company’s consolidated financial statements. These variances could be material to the Company’s results of operations and financial condition. |
Valuation and Allocation of Hotel Properties - Ownership | Valuation and Allocation of Hotel Properties — Ownership Investment in hotel properties is recorded at cost less accumulated depreciation. Major improvements that extend the life of an asset are capitalized and depreciated over a period equal to the shorter of the life of the improvement or the remaining useful life of the asset. The costs of ordinary repairs and maintenance are charged to expense when incurred. Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: Estimated Useful Lives (years) Buildings and improvements 39-40 Exterior improvements 10-20 Furniture, fixtures and equipment 5-10 |
Impairments | Impairments The Company monitors events and changes in circumstances indicating that the carrying amount of a hotel property may not be recoverable. When such events or changes in circumstances are present, the Company assesses potential impairment by comparing estimated future undiscounted cash flows expected to be generated over the life of the asset from operating activities and from its eventual disposition, to the carrying amount of the asset. In the event that the carrying amount exceeds the estimated future undiscounted cash flows, the Company recognizes an impairment loss to adjust the carrying amount of the asset to estimated fair value for assets held for use and fair value less costs to sell for assets held for sale. There were no such impairment losses for the three months ended March 31, 2021 and 2020. In evaluating a hotel property for impairment, the Company makes several estimates and assumptions, including, but not limited to, the projected date of disposition of the property, the estimated future cash flows of the property during the Company’s ownership and the projected sales price of the property. A change in these estimates and assumptions could result in a change in the estimated undiscounted cash flows or fair value of the Company’s hotel property which could then result in different conclusions regarding impairment and material changes to the Company’s consolidated financial statements. |
Revenue Recognition | Revenue Recognition Hotel revenues, including room, food, beverage and other ancillary revenues, are recognized as the related services are delivered. Revenue is recorded net of any sales and other taxes collected from customers. Interest income is recognized when earned. Amounts received prior to guest arrival are recorded as advances from the customer and are recognized at the time of occupancy. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash on hand or held in banks and short-term investments with an initial maturity of years or less at the date of purchase. |
Restricted Cash | Restricted Cash Restricted cash includes reserves for property taxes, as well as reserves for property improvements, replacement of furniture, fixtures, and equipment and debt service, as required by certain management or mortgage and term debt agreements restrictions and provisions. |
Investment in Marketable Securities | Investment in Marketable Securities Investment in marketable securities of $0 and $2.0 million at March 31, 2021 and December 31, 2020, respectively, consisted primarily of common stock investments in other REITs and which are classified as available-for-sale securities and recorded at fair value. The Company has elected the fair value option whereby unrealized holding gains and losses on available-for-sale securities are included in earnings. All of the Company’s investment in marketable securities was sold during the three months ended March 31, 2021. For the three months ended March 31, 2021 and 2020, unrealized gain (loss) change in fair value of investment in marketable securities was $397,000 and $(3.8) million, respectively. For the three months ended March 31, 2021 and 2020, realized loss on sale of marketable securities was $245,000 and $37,000, respectively. Dividend income is recognized when earned. For the three months ended March 31, 2021 and 2020, dividend income of $1,000 and $4,000, respectively, was recognized and is included in interest and dividend income on the consolidated statements of operations. |
Accounts Receivable | Accounts Receivable The Company takes into consideration certain factors that require judgments to be made as to the collectability of receivables. Collectability factors taken into consideration are the amounts outstanding, payment history and financial strength of the customer, which, taken as a whole, determines the valuation. Ongoing credit evaluations are performed and an allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible. |
Deferred Franchise Costs | Deferred Franchise Costs Deferred franchise costs are recorded at cost and amortized over the term of the respective franchise contract on a straight-line basis. Accumulated amortization of deferred franchise costs was $320,000 and $300,000 as of March 31, 2021 and December 31, 2020, respectively. Expected future amortization of deferred franchise costs as of March 31, 2021 is as follows (in thousands): Years Ending December 31, 2021 $ 62 2022 82 2023 77 2024 77 2025 77 Thereafter 372 Total $ 747 |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are presented as a direct deduction from the carrying value of the notes payable on the consolidated balance sheets. Debt issuance costs are amortized as a component of interest expense over the term of the related debt using the straight-line method, which approximates the interest method. Accumulated amortization of debt issuance costs was $4.9 million and $4.7 million as of March 31, 2021 and December 31, 2020, respectively. Expected future amortization of debt issuance costs as of March 31, 2021 is as follows (in thousands): Years Ending December 31, 2021 $ 509 2022 677 2023 632 2024 440 2025 152 Thereafter 36 Total $ 2,446 |
Earnings (Loss) per Share | Earnings (Loss) per Share Earnings (loss) per share (“EPS”) is calculated based on the weighted average number of shares outstanding during each period. Basic and diluted EPS are the same for all periods presented. Non-vested shares of restricted common stock totaling 3,750 and 5,000 shares as of March 31, 2021 and December 31, 2020, respectively, held by the Company’s independent directors are included in the calculation of basic EPS because such shares have been issued and participate in dividends. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives, real property | Depreciation expense is computed using the straight-line method based upon the following estimated useful lives: Estimated Useful Lives (years) Buildings and improvements 39-40 Exterior improvements 10-20 Furniture, fixtures and equipment 5-10 |
Schedule of expected future amortization of deferred franchise costs | Expected future amortization of deferred franchise costs as of March 31, 2021 is as follows (in thousands): Years Ending December 31, 2021 $ 62 2022 82 2023 77 2024 77 2025 77 Thereafter 372 Total $ 747 |
Schedule of expected future amortization of deferred issuance costs | Expected future amortization of debt issuance costs as of March 31, 2021 is as follows (in thousands): Years Ending December 31, 2021 $ 509 2022 677 2023 632 2024 440 2025 152 Thereafter 36 Total $ 2,446 |
Investments in Hotel Properties
Investments in Hotel Properties (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Real Estate [Abstract] | |
Schedule of investments in hotel properties | The following table sets forth summary information regarding the Company’s investment in hotel properties as of March 31, 2021 (all $ amounts in thousands): Property Name Date Acquired Location Ownership Interest Original Purchase Price (1) Rooms Mortgage Debt Outstanding (2) Residence Inn Austin October 15, 2015 Austin, Texas 100 % $ 27,500 112 $ 16,169 Springhill Suites Seattle May 24, 2016 Seattle, Washington 100 % 74,100 234 43,717 Homewood Suites Woodlands September 27, 2017 (5) The Woodlands, Texas 100 % 17,356 91 8,717 Hyatt Place Germantown September 27, 2017 (5) Germantown, Tennessee 100 % 16,074 127 6,755 Hyatt Place North September 27, 2017 (5) North Charleston, South Carolina 100 % 13,806 113 6,845 Hampton Inn Austin September 27, 2017 (5) Austin, Texas 100 % 19,328 123 10,358 Residence Inn Grapevine September 27, 2017 (5) Grapevine, Texas 100 % 25,245 133 12,016 Marriott Courtyard September 27, 2017 (5) Lyndhurst, (3) 39,547 227 18,729 Hilton Garden Inn Austin September 27, 2017 (5) Austin, Texas 100 % 29,288 138 17,997 Hampton Inn Great Valley September 27, 2017 (5) Frazer, Pennsylvania 100 % 15,285 125 7,804 Embassy Suites Nashville September 27, 2017 (5) Nashville, Tennessee 100 % 82,207 208 40,502 Homewood Suites Austin September 27, 2017 (5) Austin, Texas 100 % 18,835 96 10,541 Townplace Suites September 27, 2017 (5) Fort Worth, Texas (4) 11,242 95 5,882 Hampton Inn Houston September 27, 2017 (5) Houston, Texas 100 % 9,958 119 4,343 Residence Inn Houston Medical Center April 29, 2019 (6) Houston, Texas 100 % 52,000 182 28,854 Totals $ 451,771 2,123 $ 239,229 (1) Excludes closing costs and includes gain on acquisition. (2) As of March 31, 2021. (3) The Marriott Courtyard Lyndhurst is owned by MN Lyndhurst Venture, LLC, of which the OP is a member and holds 100% of the Class B membership interests therein. See Note 4, “Debt.” (4) The Townplace Suites Fort Worth is owned by MN Fort Worth Venture, LLC, of which the OP is a member and holds 100% of the Class B membership interests therein. See Note 4, “Debt.” (5) Property acquired on September 27, 2017 as a result of the merger of Moody National REIT I, Inc. (“Moody I”) with and into the Company (the “Merger”) and the merger of Moody National Operating Partnership I, L.P., the operating partnership of Moody I (“Moody I OP”), with and into the OP (the “Partnership Merger,” and together with the Merger, the “Mergers”). |
Schedule of components of the investments in hotel properties | Investment in hotel properties consisted of the following at March 31, 2021 and December 31, 2020 (all amounts in thousands): March 31, 2021 December 31, 2020 Land $ 76,936 $ 76,936 Buildings and improvements 338,729 338,729 Furniture, fixtures and equipment 60,189 60,155 Total cost 475,854 475,820 Accumulated depreciation (51,864 ) (48,019 ) Investment in hotel properties, net $ 423,990 $ 427,801 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of mortgage notes payable secured by the respective assets | As of March 31, 2021 and December 31, 2020, the Company’s mortgage notes payable secured by the respective assets, consisted of the following ($ amounts in thousands): Loan Principal as of March 31, 2021 Principal as of December 31, 2020 Interest Rate at March 31, 2021 Maturity Date Loan Modifications Residence Inn Austin (1) $ 16,169 $ 16,169 4.580 % November 1, 2025 Springhill Suites Seattle (1) 43,717 43,856 4.380 % October 1, 2026 Three months deferral of interest and principal payments from June to August, 2020. Four months interest only payments from September to December, 2020. Homewood Suites Woodlands (1) 8,717 8,759 4.690 % April 11, 2025 Hyatt Place Germantown (1) 6,755 6,755 4.300 % May 6, 2023 Hyatt Place North Charleston (1) 6,845 6,873 5.193 % August 1, 2023 Payment of $100,000 cash deposit and may make interest and principal payments from restricted cash for six months from April to September, 2020. Hampton Inn Austin (1) 10,358 10,359 5.426 % January 6, 2024 Four-month deferral of principal and interest payments for August to November, 2020. Residence Inn Grapevine (1) 12,016 12,016 5.250 % April 6, 2024 Marriott Courtyard Lyndhurst (1) 18,729 18,833 4.700 % September 27, 2024 Six months payment of interest only from April to September, 2020. Hilton Garden Inn Austin (1) 17,997 17,997 4.530 % December 11, 2024 Hampton Inn Great Valley (1) 7,804 7,804 4.700 % April 11, 2025 Embassy Suites Nashville (1) 40,502 41,057 4.2123 % July 11, 2025 April 2020 payment of principal and interest deferred. August 2020 to December 2020 interest only. Special servicer fee of $205,285 to be paid on or before April 30, 2021. Homewood Suites Austin (1) 10,541 10,541 4.650 % August 11, 2025 Townplace Suites Fort Worth (1) 5,882 5,915 4.700 % September 27, 2024 April 2020 payment was interest only. Six-month deferral of principal from April to September 2020. Two months deferral of interest payments for May and June, 2020.Three months interest only payments from July to September, 2020. Hampton Inn Houston (1) 4,343 4,342 5.250 % April 28, 2023 Seven-month deferral of principal and interest payments for payments due March 28, 2020 through September 28, 2020. Six months interest only for payments due October 28, 2020 through March 28, 2021. Residence Inn Houston (2) 28,854 28,854 5.000 % October 1, 2024 Deferral of principal and interest payments for six months from April to September, 2020. Interest only payments for an additional twelve months form October 2020 to September 2021. Total notes payable 239,229 240,130 Less unamortized debt (2,446 ) (2,614 ) Total notes payable, net of unamortized debt issuance costs $ 236,783 $ 237,516 (1) Monthly payments of principal and interest are due and payable until the maturity date. (2) Monthly payments of interest were due and payable until October 2019. Monthly payments of principal and interest are due and payable beginning in November 2019 until the maturity date. |
Schedule of maturities of notes payable | Scheduled maturities of the Company’s notes payable as of March 31, 2021 are as follows (all amounts in thousands): Years ending December 31, 2021 $ 3,519 2022 5,009 2023 21,629 2024 91,251 2025 78,083 Thereafter 39,738 Total $ 239,229 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of outstanding shares of Incentive Award Plan | As of March 31, 2021, there were a total of 13.6 million shares of the Company’s common stock issued and outstanding, including 10.2 million shares, net of redemptions, issued in the Company’s public offerings, 3.3 million shares, net of redemptions, issued in connection with the Mergers, the 8,000 shares sold to Sponsor and 60,000 shares of restricted stock issued to the Company’s directors, as discussed in Note 8, “Incentive Award Plan,” as follows (in thousands): Class Shares Outstanding as of March 31, 2021 Class A Shares 12,995 Class T Shares 481 Class I Shares 159 Total 13,635 |
Schedule of distributions paid in cash and pursuant to the DRP | The following table summarizes distributions paid in cash and pursuant to the DRP for the three months ended March 31, 2021 and 2020 (all amounts in in thousands): Period Cash Distribution Distribution Paid Pursuant to DRP (1) Total Amount of Distribution First Quarter 2021 $ — $ — $ — First Quarter 2020 $ 4,404 $ 1,393 $ 5,797 (1) Amount of distributions paid in shares of common stock pursuant to the DRP. |
Incentive Award Plan (Tables)
Incentive Award Plan (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of activity under the Independent Directors Compensation Plan | The following is a summary of activity under the Independent Directors Compensation Plan for the three months ended March 31, 2021 and year ended December 31, 2020: Number of Weighted Average Grant Date Fair Value Balance of non-vested shares as of December 31, 2019 7,500 $ 23.32 Shares granted on November 12, 2020 5,000 $ 23.50 Shares vested (7,500 ) $ 23.22 Balance of non-vested shares as of December 31, 2020 5,000 $ 23.50 Shares vested (1,250 ) $ 23.50 Balance of non-vested shares as of March 31, 2021 3,750 $ 23.50 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of composition of restricted cash | The composition of the Company’s restricted cash as of March 31, 2021 and December 31, 2020 are as follows (all amounts in in thousands): March 31, December 31, 2021 2020 Real estate taxes $ 67 $ 2,235 Insurance — 148 Hotel furniture and fixtures 2,997 1,762 Debt service 1,394 1,557 Property improvement plan 228 158 Total restricted cash $ 4,686 $ 5,860 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefit) | The income tax expense for the three months ended March 31, 2021 and 2020 consisted of the following (in thousands): Three months ended March 31, 2021 2020 Current (benefit) expense $ (81 ) $ 13 Deferred benefit (1,582 ) (1,097 ) Valuation provision for deferred benefit 1,582 1,097 Total (benefit) expense $ (81 ) $ 13 Federal $ (1,582 ) $ (1,097 ) Valuation provision for federal taxes 1,582 1,097 State (81 ) 13 Total tax expense (benefit) $ (81 ) $ 13 |
Organization (Details Narrative
Organization (Details Narrative) $ / shares in Units, $ in Thousands | Jan. 18, 2018USD ($) | Mar. 31, 2021USD ($)Number$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Jun. 26, 2017$ / shares | Jan. 20, 2015USD ($) |
Number of rooms | Number | 2,123 | ||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||
Value of shares issueable under registration statement | $ 990,000 | ||||
Special Limited Partnership Interests | $ 1 | $ 1 | |||
Marketable securities | $ 2,037 | ||||
Class A Shares [Member] | |||||
Common stock, par value | $ / shares | $ 0.01 | ||||
Class D Shares [Member] | |||||
Common stock, par value | $ / shares | 0.01 | ||||
Class I Shares [Member] | |||||
Common stock, par value | $ / shares | 0.01 | ||||
Class T Shares [Member] | |||||
Common stock, par value | $ / shares | $ 0.01 | ||||
Initial Public Offering [Member] | |||||
Common stock, authorized, value | $ 1,000,000 | ||||
Common stock authorized in distribution reinvestment plan, value | 100,000 | ||||
Initial Public Offering [Member] | Maximum [Member] | |||||
Common stock, authorized, value | $ 1,100,000 | ||||
Initial Public Offering And Follow On Offering [Member] | |||||
Issuance of common stock, net of offering costs (in shares) | shares | 10,200,000 | ||||
Issuance of common stock pursuant to dividend reinvestment plan (in shares) | shares | 567,000 | ||||
Proceeds from stock and DRIP offering | $ 234,600 | ||||
Follow On Offering [Member] | |||||
Issuance of common stock, net of offering costs (in shares) | shares | 4,100,000 | ||||
Issuance of common stock pursuant to dividend reinvestment plan (in shares) | shares | 352,000 | ||||
Proceeds from stock and DRIP offering | $ 87,200 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Buildings and Improvements [Member] | Minimum [Member] | |
Estimated useful lives | 39 years |
Buildings and Improvements [Member] | Maximum [Member] | |
Estimated useful lives | 40 years |
Exterior Improvements [Member] | Minimum [Member] | |
Estimated useful lives | 10 years |
Exterior Improvements [Member] | Maximum [Member] | |
Estimated useful lives | 20 years |
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 5 years |
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Expected future amortization of deferred franchise costs, year ending December 31, | ||
Total | $ 747 | $ 767 |
Franchise Costs [Member] | ||
Expected future amortization of deferred franchise costs, year ending December 31, | ||
2021 | 62 | |
2022 | 82 | |
2023 | 77 | |
2024 | 77 | |
2025 | 77 | |
Thereafter | 372 | |
Total | $ 747 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Expected future amortization of deferred loan costs, year ending December 31, | ||
2021 | $ 509 | |
2022 | 677 | |
2023 | 632 | |
2024 | 440 | |
2025 | 152 | |
Thereafter | 36 | |
Total | $ 2,446 | $ 2,614 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Marketable securities | $ 2,037 | ||
Marketable securities, unrealized gain (loss) | $ 397 | $ (3,811) | |
Marketable securities, realized gain (loss) | (245) | (37) | |
Dividend income | 1,000 | 4,000 | |
Deferred franchise costs, accumulated amortization | 320 | 300 | |
Debt issuance costs, accumulated amortization | $ 4,900 | $ 4,700 | |
Nonvested restricted stock included in earnings per share | 3,750 | 5,000 | |
Marketable Securities [Member] | |||
Marketable securities, unrealized gain (loss) | $ 397,000 | (3,800) | |
Marketable securities, realized gain (loss) | $ 245,000 | $ 37,000 | |
Advisor [Member] | |||
Percentage of organization and offering costs | 15.00% | ||
Total offering costs | $ 21,100 | ||
Offering cost directly incurred by company | 12,300 | ||
Offering cost reimbursed to advisor | 8,800 | ||
Payable to Advisor for offering costs | 0 | ||
Advisor [Member] | Initial Public Offering [Member] | |||
Total offering costs | 18,400 | ||
Offering cost directly incurred by company | 12,300 | ||
Offering cost reimbursed to advisor | 6,100 | ||
Advisor [Member] | Follow On Offering [Member] | |||
Total offering costs | 2,700 | ||
Offering cost directly incurred by company | 0 | ||
Offering cost reimbursed to advisor | $ 2,700 |
Investment in Hotel Properties
Investment in Hotel Properties (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)Number | ||
Original Purchase Price | $ 451,771 | [1] |
Rooms | Number | 2,123 | |
Mortgage Debt Outstanding | $ 239,229 | [2] |
Residence Inn Austin [Member] | Texas [Member] | ||
Property Name | Residence Inn Austin | |
Date Acquired | Oct. 15, 2015 | |
Location | Austin, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 27,500 | [1] |
Rooms | Number | 112 | |
Mortgage Debt Outstanding | $ 16,169 | [2] |
Springhill Suites Seattle [Member] | Washington [Member] | ||
Property Name | Springill Suites Seattle | |
Date Acquired | May 24, 2016 | |
Location | Seattle, Washington | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 74,100 | [1] |
Rooms | Number | 234 | |
Mortgage Debt Outstanding | $ 43,717 | [2] |
Homewood Suites Woodlands [Member] | Texas [Member] | ||
Property Name | Homewood Suites Woodlands | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | The Woodlands, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 17,356 | [1] |
Rooms | Number | 91 | |
Mortgage Debt Outstanding | $ 8,717 | [2] |
Hyatt Place Germantown [Member] | Tennessee [Member] | ||
Property Name | Hyatt Place Germantown | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Germantown, Tennessee | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 16,074 | [1] |
Rooms | Number | 127 | |
Mortgage Debt Outstanding | $ 6,755 | [2] |
Hyatt Place North Charleston [Member] | South Carolina [Member] | ||
Property Name | Hyatt Place North Charleston | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | North Charleston, South Carolina | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 13,806 | [1] |
Rooms | Number | 113 | |
Mortgage Debt Outstanding | $ 6,845 | [2] |
Hampton Inn Austin [Member] | Texas [Member] | ||
Property Name | Hampton Inn Austin | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Austin, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 19,328 | [1] |
Rooms | Number | 123 | |
Mortgage Debt Outstanding | $ 10,358 | [2] |
Residence Inn Grapevine [Member] | Texas [Member] | ||
Property Name | Residence Inn Grapevine | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Grapevine, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 25,245 | [1] |
Rooms | Number | 133 | |
Mortgage Debt Outstanding | $ 12,016 | [2] |
Marriott Courtyard Inn Lyndhurst [Member] | New Jersey [Member] | ||
Property Name | Marriott Courtyard Lyndhurst | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Lyndhurst, New Jersey | |
Original Purchase Price | $ 39,547 | [1] |
Rooms | Number | 227 | |
Mortgage Debt Outstanding | $ 18,729 | [2] |
Hilton Garden Inn Austin [Member] | Texas [Member] | ||
Property Name | Hilton Garden Inn Austin | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Austin, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 29,288 | [1] |
Rooms | Number | 138 | |
Mortgage Debt Outstanding | $ 17,997 | [2] |
Hampton Inn Great Valley [Member] | Pennsylvania [Member] | ||
Property Name | Hampton Inn Great Valley | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Frazer, Pennsylvania | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 15,285 | [1] |
Rooms | Number | 125 | |
Mortgage Debt Outstanding | $ 7,804 | [2] |
Embassy Suites Nashville [Member] | Tennessee [Member] | ||
Property Name | Embassy Suites Nashville | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Nashville, Tennessee | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 82,207 | [1] |
Rooms | Number | 208 | |
Mortgage Debt Outstanding | $ 40,502 | [2] |
Homewood Suites Austin [Member] | Texas [Member] | ||
Property Name | Homewood Suites Austin | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Austin, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 18,835 | [1] |
Rooms | Number | 96 | |
Mortgage Debt Outstanding | $ 10,541 | [2] |
Townplace Suites Fort Worth [Member] | Texas [Member] | ||
Property Name | Townplace Suites Fort Worth | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Fort Worth, Texas | |
Original Purchase Price | $ 11,242 | [1] |
Rooms | Number | 95 | |
Mortgage Debt Outstanding | $ 5,882 | [2] |
Hampton Inn Houston [Member] | Texas [Member] | ||
Property Name | Hampton Inn Houston | |
Date Acquired | Sep. 27, 2017 | [3] |
Location | Houston, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 9,958 | [1] |
Rooms | Number | 119 | |
Mortgage Debt Outstanding | $ 4,343 | [2] |
Residence Inn Houston Medical Center [Member] | Texas [Member] | ||
Property Name | Residence Inn Houston Medical Center | |
Date Acquired | Apr. 29, 2019 | |
Location | Houston, Texas | |
Ownership percentage | 100.00% | |
Original Purchase Price | $ 52,000 | [1] |
Rooms | Number | 182 | |
Mortgage Debt Outstanding | $ 28,854 | [2] |
[1] | Excludes closing costs and includes gain on acquisition. | |
[2] | As of March 31, 2021. | |
[3] | Property acquired on September 27, 2017 as a result of the merger of Moody National REITI, Inc. ("Moody I") with and into the Company (the "Merger") and the merger of Moody National Operating Partnership I, L.P., the operating partnership of Moody I ("Moody I OP"), with and into the OP (the "Partnership Merger," and together with the Merger, the "Mergers"). |
Investment in Hotel Propertie_2
Investment in Hotel Properties (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
Land | $ 76,936 | $ 76,936 |
Buildings and improvements | 338,729 | 338,729 |
Furniture, fixtures and equipment | 60,189 | 60,155 |
Total cost | 475,854 | 475,820 |
Accumulated depreciation | (51,864) | (48,019) |
Investment in hotel properties, net | $ 423,990 | $ 427,801 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Short-term Debt [Line Items] | |||
Principal Amount | $ 239,229 | $ 240,130 | |
Less unamortized debt issuance costs | (2,446) | (2,614) | |
Total notes payable, net of unamortized debt issuance costs | 236,783 | 237,516 | |
Residence Inn Austin [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 16,169 | 16,169 |
Interest Rate | [1] | 4.58% | |
Maturity Date | [1] | Nov. 1, 2025 | |
Springhill Suites Seattle [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 43,717 | 43,856 |
Interest Rate | [1] | 4.38% | |
Maturity Date | [1] | Oct. 1, 2026 | |
Description of loan modifications | Three months deferral of interest and principal payments from June to August, 2020. Four months interest only payments from September to December, 2020. | ||
Homewood Suites Woodlands [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 8,717 | 8,759 |
Interest Rate | [1] | 4.69% | |
Maturity Date | [1] | Apr. 11, 2025 | |
Hyatt Place Germantown [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 6,755 | 6,755 |
Interest Rate | [1] | 4.30% | |
Maturity Date | [1] | May 6, 2023 | |
Hyatt Place North Charleston [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 6,845 | 6,873 |
Interest Rate | [1] | 5.193% | |
Maturity Date | [1] | Aug. 1, 2023 | |
Description of loan modifications | Payment of $100,000 cash deposit and may make interest and principal payments from restricted cash for six months from April to September, 2020. | ||
Hampton Inn Austin [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 10,358 | 10,359 |
Interest Rate | [1] | 5.426% | |
Maturity Date | [1] | Jan. 6, 2024 | |
Description of loan modifications | Four-month deferral of principal and interest payments for August to November, 2020. | ||
Residence Inn Grapevine [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 12,016 | 12,016 |
Interest Rate | [1] | 5.25% | |
Maturity Date | [1] | Apr. 6, 2024 | |
Marriott Courtyard Lyndhurst [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 18,729 | 18,833 |
Interest Rate | [1] | 4.70% | |
Maturity Date | [1] | Sep. 27, 2024 | |
Description of loan modifications | Six months payment of interest only from April to September, 2020. | ||
Hilton Garden Inn Austin [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 17,997 | 17,997 |
Interest Rate | [1] | 4.53% | |
Maturity Date | [1] | Dec. 11, 2024 | |
Hampton Inn Great Valley [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 7,804 | 7,804 |
Interest Rate | [1] | 4.70% | |
Maturity Date | [1] | Apr. 11, 2025 | |
Embassy Suites Nashville [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 40,502 | 41,057 |
Interest Rate | [1] | 4.2123% | |
Maturity Date | [1] | Jul. 11, 2025 | |
Description of loan modifications | April 2020 payment of principal and interest deferred. August 2020 to December 2020 interest only. Special servicer fee of $205,285 to be paid on or before April 30, 2021. | ||
Homewood Suites Austin [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 10,541 | 10,541 |
Interest Rate | [1] | 4.65% | |
Maturity Date | [1] | Aug. 11, 2025 | |
Townplace Suites Fort Worth [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 5,882 | 5,915 |
Interest Rate | [1] | 4.70% | |
Maturity Date | [1] | Sep. 27, 2024 | |
Description of loan modifications | April 2020 payment was interest only. Six-month deferral of principal from April to September 2020. Two months deferral of interest payments for May and June, 2020.Three months interest only payments from July to September, 2020. | ||
Hampton Inn Houston [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [1] | $ 4,343 | 4,342 |
Interest Rate | [1] | 5.25% | |
Maturity Date | [1] | Apr. 28, 2023 | |
Description of loan modifications | Seven-month deferral of principal and interest payments for payments due March 28, 2020 through September 28, 2020. Six months interest only for payments due October 28, 2020 through March 28, 2021. | ||
Residence Inn Houston Medical Center [Member] | |||
Short-term Debt [Line Items] | |||
Principal Amount | [2] | $ 28,854 | $ 28,854 |
Interest Rate | [2] | 5.00% | |
Maturity Date | [2] | Oct. 1, 2024 | |
Description of loan modifications | Deferral of principal and interest payments for six months from April to September, 2020. Interest only payments for an additional twelve months form October 2020 to September 2021. | ||
[1] | Monthly payments of principal and interest are due and payable until the maturity date. | ||
[2] | Monthly payments of interest were due and payable until October 2019. Monthly payments of principal and interest are due and payable beginning in November 2019 until the maturity date. |
Debt (Details 1)
Debt (Details 1) $ in Thousands | Mar. 31, 2021USD ($) |
Maturities of notes payable for the year ending December 31, | |
2020 | $ 3,519 |
2021 | 5,009 |
2022 | 21,629 |
2023 | 91,251 |
2024 | 78,083 |
Thereafter | 39,738 |
Total | $ 239,229 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | ||
Borrowings maximum percentage of net assets | 300.00% | ||
Principal amount | $ 239,229 | ||
Fair value of notes payable | $ 239,000 | $ 240,000 | |
Hyatt Place North Charleston [Member] | |||
Maturity date | [1] | Aug. 1, 2023 | |
Promissory Note [Member] | Hyatt Place North Charleston [Member] | |||
Payment cash deposit | $ 100,000 | ||
Special servicer fee | 205,285 | ||
Moody National Capital, LLC [Member] | Promissory Note [Member] | |||
Principal amount | 8,000 | ||
Additional borrowings | 2,000 | ||
Maximum aggregate loan amount | $ 10,000 | ||
Maturity date | Mar. 29, 2024 | ||
Extend maturity date | 2 years | ||
Green Bank, N.A [Member] | Promissory Note [Member] | |||
Frequency of periodic payment | monthly | ||
Basis spread interest rate | 4.75% | ||
Interest rate increased | 6.75% | ||
[1] | Monthly payments of principal and interest are due and payable until the maturity date. |
Equity (Details)
Equity (Details) - shares | Mar. 31, 2021 | Dec. 31, 2020 |
Shares Outstanding | 13,635,000 | 13,630,000 |
Class A Shares [Member] | ||
Shares Outstanding | 12,995 | |
Class T Shares [Member] | ||
Shares Outstanding | 481 | |
Class I Shares [Member] | ||
Shares Outstanding | 159 |
Equity (Details 1)
Equity (Details 1) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Stockholders' Equity Note [Abstract] | |||
Cash Distribution | $ 4,404 | ||
Distribution Paid Pursuant to DRIP | [1] | 1,393 | |
Total Amount of Distribution | $ 0 | $ 5,797 | |
[1] | Amount of distributions paid in shares of common stock pursuant to the DRP. |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Aug. 15, 2014 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 26, 2017 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 | |||
Preferred stock, authorized | 100,000,000 | 100,000,000 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Common stock, shares issued | 13,635,000 | 13,630,000 | |||
Common stock, shares outstanding | 13,635,000 | 13,630,000 | |||
Outstanding shares of restricted stock | 60,000 | ||||
Noncontrolling interest in operating partnership | $ 3,190 | $ 3,395 | |||
Ownership units | 316,037 | ||||
Income (loss) attributable to noncontrolling interest in operating partnership | $ (205) | $ (236) | |||
Class A Shares [Member] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
Common stock, shares outstanding | 12,995 | ||||
Sponsor [Member] | |||||
Issuance of common stock, net of offering costs (in shares) | 8,000 | ||||
Issuance of common stock, net of offering costs | $ 200 | ||||
Share Price (in dollars per share) | $ 25 | ||||
Common stock, shares issued | 8,000 | ||||
Public Offerings [Member] | |||||
Common stock, shares issued | 10,200 | ||||
IPO [Member] | Class A Shares [Member] | |||||
Issuance of common stock in connection with Merger (in shares) | 3,300 |
Related Party Arrangements (Det
Related Party Arrangements (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | ||
Jan. 16, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 12, 2017 | Dec. 31, 2020 | |
Additional paid-in capital | $ 305,478 | $ 305,446 | |||
Operating expenses | 6,700 | ||||
The Company [Member] | |||||
Operating expenses | 5,100 | ||||
Moody Securities [Member] | |||||
Percentage of selling commissions on gross offering | 6.00% | 7.00% | |||
Percentage of dealers manager fee on gross offering | 2.50% | 3.00% | |||
Advisor [Member] | |||||
Payments for commissions | 9,700 | ||||
Dealer manager fees | $ 8,500 | ||||
Percent of organization and offering costs | 15.00% | ||||
Total offering costs | $ 21,100 | ||||
Offering cost directly incurred by company | 12,300 | ||||
Offering cost reimbursed to advisor | 8,800 | ||||
Payable to advisor for offering costs | $ 0 | ||||
Percentage of acquisition fee | 3.85% | ||||
Percentage of base acquisition fee | 1.50% | ||||
Percentage of contingent advisor payment | 2.35% | ||||
Debt financing fee percentage | 1.00% | ||||
Debt financing fee refinanced percentage | 0.75% | ||||
Asset management fee percentage | 1.00% | ||||
Advisor expense reimbursement - alternative 1 | 2.00% | ||||
Advisor expense reimbursement - alternative 2 | 25.00% | ||||
Operating expenses reimbursed | $ 1,600 | ||||
Operating expense reimbursement receivable | 382 | ||||
Operating expenses | 1,600 | ||||
Advisor [Member] | Asset Management [Member] | |||||
Property manager property management fees | 861 | $ 610 | |||
Accounting fees | 112 | 112 | |||
Advisor [Member] | IPO [Member] | |||||
Total offering costs | 18,400 | ||||
Offering cost directly incurred by company | 12,300 | ||||
Offering cost reimbursed to advisor | 6,100 | ||||
Advisor [Member] | Follow On Offering [Member] | |||||
Total offering costs | 2,700 | ||||
Offering cost directly incurred by company | 0 | ||||
Offering cost reimbursed to advisor | $ 2,700 | ||||
Moody National Hospitality Management, LLC - Property Manager (Member] | |||||
Monthly hotel management fee percentage | 4.00% | ||||
Percentage of annual incentive fee | 15.00% | ||||
Asset management fee percentage | 8.50% | ||||
Agreement term | 10 years | ||||
Moody National Hospitality Management, LLC - Property Manager (Member] | Management And Administrative Service [Member] | |||||
Property manager property management fees | $ 1,200 | $ 1,200 | |||
Advisory Agreement [Member] | |||||
Advisory service amount | $ 1 |
Incentive Award Plan (Details)
Incentive Award Plan (Details) - Independent Directors Compensation Plan [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Balance of non-vested shares at beginning | 5,000 | 7,500 |
Shares granted | 5,000 | |
Shares vested | (1,250) | (7,500) |
Balance of non-vested shares at end | 3,750 | 5,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Balance of non-vested shares at beginning | $ 23.50 | $ 23.32 |
Shares granted | 23.50 | |
Shares vested | 23.50 | 23.22 |
Balance of non-vested shares at end | $ 23.50 | $ 23.50 |
Incentive Award Plan (Details N
Incentive Award Plan (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock-based compensation | $ 32 | $ 64 |
Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | Board of Directors [Member] | ||
Stock-based compensation | $ 32 | $ 64 |
Nonvested of restricted stock common stock | 3,750 | |
Remaining unrecognized compensation expense non-vested shares | 3,750 | |
Unrecognized compensation expense | $ 66 | |
Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | Board of Directors [Member] | IPO [Member] | ||
Entitlement number of shares issued, minimum offering exceeds certain specified limit | 5,000 | |
Minimum offering amount threshold | $ 2,000 | |
Number of shares issued to new joining directors | 5,000 | |
Entitlement number of shares issued, reelection of directors at annual general meeting | 2,500 | |
Incentive Award Plan and Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | ||
Shares available for issuance | 1,940,000 |
Subordinated Participation In_2
Subordinated Participation Interest (Details Narrative) | Mar. 31, 2021 |
Debt Disclosure [Abstract] | |
Maximum percentage of income received to special unit holders | 15.00% |
Percentage of additional operating income received | 6.00% |
Percentage of cumulative annual return received | 8.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Real estate taxes | $ 67 | $ 2,235 |
Insurance | 148 | |
Hotel furniture and fixtures | 2,997 | 1,762 |
Debt service | 1,394 | 1,557 |
Property improvement plan | 228 | 158 |
Total restricted cash | $ 4,686 | $ 5,860 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - Moody National REIT I, Inc [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Franchise fees | $ 856 | $ 1,300 |
Minimum [Member] | ||
Term of franchise agreements | 10 years | |
Royalty fees on room revenue | 3.00% | |
Additional franchise fees on room revenue | 1.50% | |
Maximum [Member] | ||
Term of franchise agreements | 20 years | |
Royalty fees on room revenue | 6.00% | |
Additional franchise fees on room revenue | 4.30% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Components of income tax expense | ||
Current (benefit) expense | $ (81) | $ 13 |
Deferred benefit | (1,582) | (1,097) |
Valuation provision for deferred benefit | 1,582 | 1,097 |
Total (benefit) expense | (81) | 13 |
Income tax by jurisdiction | ||
Federal | (1,582) | (1,097) |
Valuation provision for federal taxes | 1,582 | 1,097 |
State | (81) | 13 |
Total tax expense (benefit) | $ (81) | $ 13 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry-forwards | $ 6,000 | |
Deferred tax assets | 2,300 | $ 2,300 |
Deferred tax assets, valuation allowance | 11,500 | $ 10,000 |
Net deferred tax assets | $ 2,300 | |
Description of loss carryforwards expire | 2033 through 2038 if not utilized by then. | |
TRS [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry-forwards | $ 26,700 | |
TRS [Member] | Moody National REIT I, Inc [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carry-forwards | $ 7,300 |