Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 25, 2022 | Jun. 30, 2021 | |
Document Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-56272 | ||
Entity Registrant Name | PROCACCIANTI HOTEL REIT, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 81-3661609 | ||
Entity Address, Address Line One | 1140 Reservoir Avenue | ||
Entity Address, City or Town | Cranston | ||
Entity Address, State or Province | RI | ||
Entity Address, Postal Zip Code | 02920-6320 | ||
City Area Code | 401 | ||
Local Phone Number | 946-4600 | ||
Entity Central Index Key | 0001692345 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 49,618,054 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Boston, Massachusetts | ||
Class K Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 3,952,987 | ||
Class K-I Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 1,321,914 | ||
Class K-T Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 63,200 | ||
Class A Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 581,410 | ||
Class B Common Stock | |||
Document Information | |||
Entity Common Stock, Shares Outstanding | 125,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Property and equipment, net | $ 102,236,979 | $ 89,588,704 |
Cash | 6,850,026 | 7,404,266 |
Restricted cash | 2,988,376 | 2,865,681 |
Accounts receivable, net | 453,979 | 124,902 |
Due from related parties | 153,113 | 68,050 |
Prepaid expenses and other assets, net | 978,905 | 902,543 |
Total Assets | 113,661,378 | 100,954,146 |
Liabilities | ||
Mortgage notes payable, net | 64,141,964 | 56,747,853 |
Other debt | 942,605 | 1,018,917 |
Accounts payable, accrued expenses and other, net | 2,700,281 | 2,705,897 |
Due to related parties | 1,885,559 | 2,648,575 |
Total Liabilities | 69,670,409 | 63,121,242 |
Commitments and Contingencies | ||
Commitments and Contingencies | ||
Noncontrolling interest of the Operating Partnership | 1,226,417 | 1,172,329 |
Stockholders' Equity | ||
Additional paid-in capital | 47,930,212 | 40,343,076 |
Cumulative loss | (3,500,228) | (6,092,421) |
Cumulative distributions | (7,428,718) | (3,528,321) |
Total Stockholders' Equity | 37,061,591 | 30,772,185 |
Noncontrolling interest | 5,702,961 | 5,888,390 |
Total Equity | 42,764,552 | 36,660,575 |
Total Liabilities and Stockholders' Equity | 113,661,378 | 100,954,146 |
Class K Common Stock | ||
Stockholders' Equity | ||
Common stock, value, issued | 39,477 | 36,081 |
Class K-I Common Stock | ||
Stockholders' Equity | ||
Common stock, value, issued | 13,155 | 6,668 |
Class K-T Common Stock | ||
Stockholders' Equity | ||
Common stock, value, issued | 629 | 478 |
Class A Common Stock | ||
Stockholders' Equity | ||
Common stock, value, issued | 5,814 | 5,374 |
Class B Common Stock | ||
Stockholders' Equity | ||
Common stock, value, issued | $ 1,250 | $ 1,250 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock, shares authorized | 248,125,000 | |
Class K Common Stock | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 55,500,000 | 55,500,000 |
Common stock, shares issued | 3,947,642 | 3,608,062 |
Common Stock, shares outstanding | 3,947,642 | 3,608,062 |
Class K-I Common Stock | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 55,500,000 | 55,500,000 |
Common stock, shares issued | 1,315,534 | 666,728 |
Common Stock, shares outstanding | 1,315,534 | 666,728 |
Class K-T Common Stock | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 116,000,000 | 116,000,000 |
Common stock, shares issued | 62,946 | 47,769 |
Common Stock, shares outstanding | 62,946 | 47,769 |
Class A Common Stock | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 21,000,000 | 21,000,000 |
Common stock, shares issued | 581,410 | 537,410 |
Common Stock, shares outstanding | 581,410 | 537,410 |
Class B Common Stock | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000 | 125,000 |
Common stock, shares issued | 125,000 | 125,000 |
Common Stock, shares outstanding | 125,000 | 125,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | ||
Total revenues | $ 24,913,826 | $ 13,091,480 |
Expenses | ||
Other property expenses | 8,093,696 | 5,772,767 |
Property management fees to affiliates | 747,948 | 393,134 |
Corporate general and administrative | 1,448,648 | 1,488,376 |
Other fees to affiliates | 1,076,785 | 979,460 |
Acquisition costs | 94,133 | |
Depreciation and amortization | 3,362,538 | 3,011,904 |
Total expenses | 20,644,722 | 14,882,055 |
Loss on acquisition | (133,521) | |
Operating income (loss) | 4,269,104 | (1,924,096) |
Gain on loan extinguishment | 1,502,984 | |
Interest expense, net | (2,703,758) | (2,642,094) |
Gain on interest rate swap | 295,087 | 30,663 |
Net income (loss) before income taxes | 3,363,417 | (4,535,527) |
Income tax expense | (25,745) | (609) |
Net income (loss) | 3,337,672 | (4,536,136) |
Net income (loss) attributable to noncontrolling interest | 745,479 | (709,531) |
Net income (loss) attributable to common stockholders | 2,592,193 | (3,826,605) |
Class K Common Stock | ||
Expenses | ||
Net income (loss) attributable to common stockholders | $ 1,807,855 | $ (2,660,810) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 3,815,288 | 3,281,469 |
Weighted average number of common shares outstanding - diluted (in shares) | 3,815,288 | 3,281,469 |
Class K-I Common Stock | ||
Expenses | ||
Net income (loss) attributable to common stockholders | $ 511,947 | $ (504,295) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 1,080,372 | 622,428 |
Weighted average number of common shares outstanding - diluted (in shares) | 1,080,372 | 622,428 |
Class K-T Common Stock | ||
Expenses | ||
Net income (loss) attributable to common stockholders | $ 26,172 | $ (38,783) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 55,231 | 47,741 |
Weighted average number of common shares outstanding - diluted (in shares) | 55,231 | 47,741 |
Class A Common Stock | ||
Expenses | ||
Net income (loss) attributable to common stockholders | $ 274,490 | $ (436,740) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 579,119 | 537,410 |
Weighted average number of common shares outstanding - diluted (in shares) | 579,119 | 537,410 |
Class B Common Stock | ||
Expenses | ||
Net income (loss) attributable to common stockholders | $ (28,271) | $ (185,977) |
Net income (loss) per common share, basic (in dollars per share) | $ (0.23) | $ (1.49) |
Net income (loss) per common share, diluted (in dollars per share) | $ (0.23) | $ (1.49) |
Weighted average number of common shares outstanding - basic (in shares) | 125,000 | 125,000 |
Weighted average number of common shares outstanding - diluted (in shares) | 125,000 | 125,000 |
Rooms | ||
Revenues | ||
Total revenues | $ 22,342,543 | $ 11,467,514 |
Expenses | ||
Costs | 4,625,510 | 2,387,384 |
Food and beverage | ||
Revenues | ||
Total revenues | 1,950,667 | 1,195,057 |
Expenses | ||
Costs | 1,289,597 | 754,897 |
Other operating | ||
Revenues | ||
Total revenues | $ 620,616 | $ 428,909 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND NONCONTROLLING INTEREST - USD ($) | Class K Common StockCommon Stock [Member] | Class K Common Stock | Class K-I Common StockCommon Stock [Member] | Class K-I Common Stock | Class K-T Common StockCommon Stock [Member] | Class K-T Common Stock | Class A Common StockCommon Stock [Member] | Class A Common Stock | Class B Common StockCommon Stock [Member] | Class B Common Stock | Additional Paid-in Capital | Cumulative Loss | Cumulative Distributions | Total Procaccianti Hotel REIT, Inc. Stockholders' Equity | Noncontrolling Interest | Total |
BALANCE at Dec. 31, 2019 | $ 26,808 | $ 4,917 | $ 456 | $ 5,374 | $ 1,250 | $ 31,607,360 | $ (2,265,816) | $ (1,631,573) | $ 27,748,776 | $ 6,564,956 | $ 34,313,732 | |||||
BALANCE (in shares) at Dec. 31, 2019 | 2,680,845 | 491,718 | 45,616 | 537,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | $ 9,410 | $ 1,732 | $ 20 | 10,464,841 | 10,476,003 | 10,476,003 | ||||||||||
Issuance of common stock (in shares) | 940,938 | 173,199 | 2,000 | |||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | $ 123 | $ 82 | $ 12 | 183,359 | 183,576 | 183,576 | ||||||||||
Issuance of common stock pursuant to distribution reinvestment plan (in shares) | 12,279 | 8,143 | 1,153 | |||||||||||||
Commissions on sales of common stock and related dealer manager fees and stockholder servicing fees | (898,901) | (898,901) | (898,901) | |||||||||||||
Repurchase of common stock | $ (260) | $ (63) | $ (10) | (313,546) | (313,879) | (313,879) | ||||||||||
Repurchase of common stock (in shares) | (26,000) | (6,332) | (1,000) | |||||||||||||
Other offering costs to affiliates | (700,037) | (700,037) | (700,037) | |||||||||||||
Net Income (Loss) | (3,826,605) | (3,826,605) | (600,616) | (4,427,221) | ||||||||||||
Distributions paid | (1,896,748) | (1,896,748) | (196,000) | (2,092,748) | ||||||||||||
Contributions | 120,050 | 120,050 | ||||||||||||||
BALANCE at Dec. 31, 2020 | $ 36,081 | $ 6,668 | $ 478 | $ 5,374 | $ 1,250 | 40,343,076 | (6,092,421) | (3,528,321) | 30,772,185 | 5,888,390 | 36,660,575 | |||||
BALANCE (in shares) at Dec. 31, 2020 | 3,608,062 | 3,608,062 | 666,728 | 666,728 | 47,769 | 47,769 | 537,410 | 537,410 | 125,000 | 125,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | $ 3,997 | $ 6,261 | $ 124 | $ 440 | 9,284,487 | 9,295,309 | 9,295,309 | |||||||||
Issuance of common stock (in shares) | 399,708 | 626,169 | 12,468 | 44,000 | ||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | $ 435 | $ 226 | $ 27 | 643,253 | 643,941 | 643,941 | ||||||||||
Issuance of common stock pursuant to distribution reinvestment plan (in shares) | 43,451 | 22,637 | 2,709 | |||||||||||||
Commissions on sales of common stock and related dealer manager fees and stockholder servicing fees | (508,460) | (508,460) | (508,460) | |||||||||||||
Repurchase of common stock | $ (1,036) | (944,842) | (945,878) | (945,878) | ||||||||||||
Repurchase of common stock (in shares) | (103,579) | |||||||||||||||
Other offering costs to affiliates | (887,302) | (887,302) | (887,302) | |||||||||||||
Net Income (Loss) | 2,592,193 | 2,592,193 | 691,391 | 3,283,584 | ||||||||||||
Distributions paid | (3,900,397) | (3,900,397) | (876,820) | (4,777,217) | ||||||||||||
BALANCE at Dec. 31, 2021 | $ 39,477 | $ 13,155 | $ 629 | $ 5,814 | $ 1,250 | $ 47,930,212 | $ (3,500,228) | $ (7,428,718) | $ 37,061,591 | $ 5,702,961 | $ 42,764,552 | |||||
BALANCE (in shares) at Dec. 31, 2021 | 3,947,642 | 3,947,642 | 1,315,534 | 1,315,534 | 62,946 | 62,946 | 581,410 | 581,410 | 125,000 | 125,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ 3,337,672 | $ (4,536,136) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,362,538 | 3,011,904 |
Amortization of deferred financing costs and debt discount as interest | 6,276 | 9,009 |
Amortization of key money loans | (56,779) | (53,485) |
Loss on acquisition | 133,521 | |
Gain on loan extinguishment | (1,502,984) | |
Gain on interest rate swap | (295,087) | (30,663) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (329,077) | 110,010 |
Due from related parties | (56,950) | (367,641) |
Prepaid expenses and other assets | (91,838) | (69,101) |
Accounts payable, accrued expenses and other | 346,248 | (25,361) |
Due to related parties | (641,229) | 1,340,151 |
Net cash provided by (used in) operating activities | 4,078,790 | (477,792) |
Cash Flows from Investing Activities: | ||
Acquisition of hotel property, net | (15,062,376) | (12,240,256) |
Loan receivable origination | (7,689,594) | |
Loan receivable payment | 7,689,594 | |
Capital improvements | (932,960) | (209,583) |
Net cash used in investing activities | (15,995,336) | (12,449,839) |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of common stock | 9,295,309 | 10,476,003 |
Payment of commissions and dealer manager fees and stockholder servicing fees | (508,460) | (898,901) |
Payment of other offering costs to affiliates | (1,037,201) | |
Proceeds from mortgage note | 12,000,000 | 2,000,000 |
Proceeds from other debt | 1,426,672 | 1,018,917 |
Payments of mortgage notes principal | (4,397,358) | (202,467) |
Payment of deferred financing costs | (214,807) | (94,770) |
Distributions to stockholders | (3,256,456) | (1,713,172) |
Distributions to noncontrolling interest | (876,820) | (196,000) |
Contributions from noncontrolling interests | 120,050 | |
Repurchase of common stock | (945,878) | (313,879) |
Net cash provided by financing activities | 11,485,001 | 10,195,781 |
Decrease in cash and cash equivalents and restricted cash | (431,545) | (2,731,850) |
Cash and cash equivalents and restricted cash, beginning of period | 10,269,947 | 13,001,797 |
Cash and cash equivalents and restricted cash, end of period | $ 9,838,402 | $ 10,269,947 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Disclosure of Cash Flow Information | ||
Cash and cash equivalents | $ 6,850,026 | $ 7,404,266 |
Restricted cash | 2,988,376 | 2,865,681 |
Total cash and cash equivalents and restricted cash shown on the consolidated statements of cash flows | 9,838,402 | 10,269,947 |
Cash paid for interest | 2,749,799 | 2,171,118 |
Cash paid for income taxes | 1,750 | 29,918 |
Supplemental Disclosure of Noncash Transactions | ||
Common stock issued pursuant to distribution reinvestment plan | $ 643,941 | 183,576 |
Other offering costs paid to affiliates | (274,877) | |
Decrease in due from related parties | 274,877 | |
Assumption of mortgage note payable | $ 15,598,479 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1 - Organization and Description of Business Procaccianti Hotel REIT, Inc. (the “Company”) was incorporated under the general corporation laws of the State of Maryland on August 24, 2016. The Company used the proceeds from its Private Offering (defined below) and used the proceeds from its Public Offering (defined below), which terminated on August 13, 2021, to acquire and own a diverse portfolio of hospitality properties consisting primarily of select-service, extended-stay, and compact full-service hotel properties throughout the United States ("U.S."). The Company elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2018. Substantially all of the Company’s business is conducted through Procaccianti Hotel REIT, L.P., a Delaware limited partnership (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership. As of December 31, 2021, the Company owned interests in five select-service hotels located in four states with a total of 559 rooms. For more information on the Company’s real estate portfolio, see Note 3 – “Investments in Hotels.” On September 30, 2016, the Company commenced a private offering (“Private Offering”) of shares of Class K common stock, $0.01 par value per share (“K Shares”), and units, which are comprised of four K Shares and one share of Class A common stock (“A Shares”), each with a $0.01 par value per share (“Units”), for $10.00 per K Share and $50.00 per Unit, with a targeted maximum offering of $150,000,000 in K Shares (including K Shares sold as part of a Unit) to accredited investors only pursuant to a confidential private placement memorandum exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The Company terminated its Private Offering prior to the commencement of the Public Offering, and, as of such termination, received approximately $15,582,755 in gross proceeds from the sale of K Shares and A Shares, including Units, in the Private Offering. Of the $15,582,755 in gross proceeds raised, $2,954,095 was from the sale of A Shares to TPG Hotel REIT Investor, LLC (“THR”) to fund organization and offering expenses associated with the K Shares and Units. With the A Share proceeds from the Private Offering, the Company paid $782,705 in selling commissions, $275,794 in dealer manager fees and recognized $1,083,912 in other offering costs for the duration of the Private Offering. On August 14, 2018, the Company commenced its initial public offering (“Public Offering”) pursuant to a registration statement on Form S-11 (Registration No. 333-217578) (“Registration Statement”), filed under the Securities Act with the U.S. Securities and Exchange Commission (“SEC”), to offer up to $550,000,000 in shares of common stock, including $500,000,000 in shares of common stock pursuant to the primary offering, consisting of the following three share classes: K Shares, at an initial offering price of $10.00 per K Share, Class K-I common stock, (“K-I Shares”), at an initial offering price of $9.50 per K-I Share and Class K-T common stock (“K-T Shares”), at an initial offering price of $10.00 per K-T Share and $50,000,000 in shares of common stock pursuant to the Company’s distribution reinvestment plan (the “DRIP”) at $9.50 per K Share, $9.50 per K-I Share and $9.50 per K-T Share. On November 16, 2018, the Company revised the offering price per K-I Share in the primary offering from $9.50 to $9.30 per K-I Share, exclusive of the DRIP, which remained at $9.50 per K-I Share. On April 7, 2020, in response to the global pandemic of the novel coronavirus (“COVID-19”), the Company’s board of directors unanimously approved the temporary suspension of (i) the sale of K Shares, K- I Shares and K-T Shares in the Public Offering, effective as of April 7, 2020 and (ii) the operation of the DRIP, effective as of April 17, 2020. On June 10, 2020, the Company’s board of directors determined an estimated net asset value (“NAV”) per share of all classes of the Company’s capital stock, each calculated as of March 31, 2020, as follows: (i) $8.56 per K-Share; (ii) $8.55 per K-I Share; (iii) $8.56 per K-T Share; (iv) $0.00 per A Share; and (v) $0.00 per B Share and unanimously approved the resumption of the acceptance of subscriptions and the resumption of the operation of the DRIP, which became effective with the next authorized payment of distributions. On June 9, 2021, the Company’s board of directors determined an estimated NAV per share of all classes of the Company’s capital stock, each calculated as of March 31, 2021, as follows: (i) $9.85 per K Share, (ii) $9.77 per K-I Share (iii) $9.85 per K-T Share, (iv) $0.00 per A Share, and (v) $0.00 per B Share (as defined below) and revised the public offering share prices. Commencing June 10, 2021, the offering and total dollar amount available for purchase per class in the primary portion of the Public Offering are as follows: $9.85 per K Share (up to $125,000,000 in shares), $9.77 per K-I Share (up to $125,000,000 in shares) and $9.85 per K-T Share (up to $250,000,000 in shares). The DRIP offering prices and total dollar amount available for purchase in the Company’s DRIP are as follows: $9.36 per K Share (up to $12,500,000 in shares), $9.36 per K-I Share (up to $12,500,000 in shares), and $9.36 per K-T Share (up to $25,000,000 in shares). The Company, with the approval of its board of directors, terminated the Public Offering on August 13, 2021. On June 24, 2021, the Company filed a Registration Statement on Form S-3 to register approximately 4,273,505 K shares K-I Shares common stock DRIP Offering The Company received approximately $39,689,008 in gross proceeds including the sale of K Shares, K-I Shares and K-T Shares through its Public Offering, including $538,633, $314,340 and $35,873 of gross proceeds from K Shares, K-I Shares and K-T Shares, respectively, issued pursuant to the DRIP through December 31, 2021. Additionally, the Company received $2,630,000 from the sale of A Shares to THR from a private placement, proceeds of which were used to fund the payment of organization and offering expenses related to the Public Offering and also to account for the difference between the applicable estimated NAV per K Share and the applicable offering price of K-I Shares sold in the primary offering and any amount equal to any discount to the applicable offering price of K Shares, K-I Shares and K-T Shares (excluding volume discounts). On February 27, 2020, as partial consideration for the Company’s acquisition of the Hilton Garden Inn hotel property located in Providence, Rhode Island (“Hilton Garden Inn Providence”), the Operating Partnership issued 128,124 Class K units of limited partnership interests in the Operating Partnership (“Class K OP Units”) valued at $10.00 per Class K OP Unit. Such issuance represents a total investment of $1,281,244 in Class K OP Units. Individuals with direct or indirect interests in the sellers of the Hilton Garden Inn Providence who are direct or indirect owners of the Procaccianti Companies, Inc. (the “Sponsor”) and Procaccianti Hotel Advisors, LLC (“PHA”) received only Class K OP Units and no cash as consideration. The Company is externally managed by PHA pursuant to an Advisory Agreement by and among the Company, its Operating Partnership and PHA. PHA is an affiliate of the Company’s Sponsor. Novel Coronavirus (COVID-19) In December 2019, the novel strain of coronavirus (“COVID-19”) was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses in every state in the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Since late February 2020, COVID-19 has had and continues to have a significant effect on the hospitality industry. Thus far, responses to the COVID-19 outbreak have included mandates from federal, state and/or local authorities that have restricted travel and the conduct of business, such as stay-at-home orders, quarantines, travel bans, border closings, business closures and other similar measures, which have significantly reduced overall lodging demand. In response to a government mandates and health official orders, one of the Company’s hotels properties was instructed to close effective March 30, 2020 and remained closed until May 1, 2020, and other of the Company’s hotel properties were required to close food and beverage outlets. Since the beginning of March 2020, the Company has experienced significant declines in occupancy and revenue per available room (“RevPAR”) associated with COVID-19 throughout its hotel portfolio, which has had a negative impact on the Company’s operations and financial results. Given the current availability and effectiveness of the COVID-19 vaccines, in addition to a decrease in government related mandates, the Company continues to experience an improvement in traveler sentiment. However, while the development and distribution of vaccines have helped contribute to improved conditions over the course of 2021, there can be no assurances that the vaccines will contain the spread of the virus and its variants and allow the economy to fully recover. Therefore, while the Company has experienced continued improvement in its operations throughout 2021, future results of operations, financial position and cash flow could be negatively impacted by, among other things, historical seasonal trends, an increase in COVID-19 cases, quarantines, travel bans, border closings, business closures, deterioration of consumer sentiment or significant inflationary pressures. Accordingly, the Company expects that COVID-19 and the associated response could continue to negatively affect the Company’s results of operations, financial position and cash flow for a period of time. The Company believes cash and restricted cash on hand, cash generated from operations, and borrowings from other sources, including advances from the Company’s Sponsor, if necessary, will be sufficient to meet the Company’s anticipated cash needs for at least the next 12 months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The Company consolidates variable interest entities (“VIEs”) as defined under the Consolidation Topic (“Topic 810”) of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) when it has the power to direct the activities that most significantly impact the VIE’s performance and the obligation to absorb losses or the right to receive benefits from the VIE that could be significant. At December 31, 2021, the assets of our VIEs were $65,357,202, and consist primarily of land, building, furniture, fixtures, and equipment and are available to satisfy our VIEs' obligations. The liabilities of our VIEs were $43,713,850 at December 31, 2021 and consist primarily of long-term debt. The Company has guaranteed certain obligations of its VIEs. The Company has no foreign operations or assets and its operating structure includes only one segment. 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 and disclosure of contingent assumptions and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investment in Real Estate Investment in real estate is stated 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 cost of ordinary repairs and maintenance are charged to expense when incurred. Depreciation expense is computed using the straight-line and accelerated methods based upon the following estimated useful lives: Building 39 years Improvements 7 - 15 years Furniture, fixtures and equipment 3 - 7 years Real Estate Purchase Price Allocation Upon the acquisition of hotel properties, the Company evaluates whether the acquisition is a business combination or an asset acquisition. For both business combinations and asset acquisitions the Company allocates the purchase price of properties to acquired tangible assets and any assumed debt based on their fair value. For asset acquisitions, the Company capitalizes transaction costs and allocates the purchase price using a relative fair value method allocating all accumulated costs. For business combinations, the Company expenses transaction costs associated as incurred and allocates the purchase price based on the estimated fair value of each separately identifiable asset and liability. The tangible assets acquired consist of land, buildings, improvements, furniture, fixtures and equipment. The Company utilizes independent appraisals, as well as hotel construction costs and other available market data, to assist in the determination of the fair values of the tangible assets of an acquired property. The Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using methods similar to those used by independent appraisers, including using a discounted cash flow analysis that uses appropriate discount or capitalization rates and available market information where applicable. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. 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 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. 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 are based on judgment and 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. Impairment of Long-Lived Assets The Company reviews long-lived assets and certain identifiable intangibles, including franchise agreements with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. Derivative Financial Instruments All derivative financial instruments are recorded at fair value in the Company’s consolidated balance sheet as an asset or liability. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. The Company’s objective in using derivatives is to add stability to interest expense and to manage the Company’s exposure to interest rate movements or other identified risks. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as an unrealized gain or loss in the consolidated statements of operations. Fair Value of Financial Instruments Under GAAP, the Company is required to disclose the fair value of certain financial instruments on a recurring basis. The accompanying consolidated balance sheets include the following financial instruments: cash, restricted cash, accounts receivable, accounts payable, mortgage notes payable and other debt. The Company considers the carrying value of cash, restricted cash, accounts receivable, accounts payable and other debt to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value is as follows: ● Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; ● Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value driers are observable in active markets; and ● Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. As of December 31, 2021, the estimated fair value of the mortgage notes payable was $64,722,195, compared to the carrying value of $64,369,587. These financial instruments are valued using Level 3 inputs through a discounted cash flow analysis of the contractual cash flows of the notes payable discounted at a market rate for similar borrowings. Revenue Recognition Revenue is generally recognized as services are performed. Revenue represents primarily rooms, food and beverage sales, and other fees. The Company collects sales tax from all nonexempt customers and remits the entire amount to the appropriate states upon collection from the customer. The Company's accounting policy is to exclude the tax collected and remitted to the state from revenue and expense. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand or held in banks and highly liquid investments with original maturities of three months or less. Restricted Cash The Company maintains reserves for property taxes and capital improvements as required by the debt agreements. At December 31, 2021 and 2020, reserves for property taxes were $347,273 and $409,373, respectively, and reserves for capital improvements were $2,587,963 and $2,420,168, respectively. The Company also included $53,140 and $36,140 of guest advance deposits as restricted cash at December 31, 2021 and 2020, respectively. Accounts Receivable The Company records its accounts receivable at cost. The Company provides an allowance for doubtful accounts, when deemed necessary, based on expected losses. The Company has determined that no allowance for doubtful accounts was necessary at December 31, 2021 and 2020. Prepaid Expenses and Other Assets Prepaid expenses include prepaid insurance and hotel operating expenses. Other assets include inventories at the hotel properties, consisting of food and beverage, are valued at the lower of cost and net realizable value, using the FIFO (first-in first-out) method of accounting. Other assets also include the Company’s deferred income tax asset. Deferred Franchise Fees Franchise fee represents the initial franchise fee paid by the Company. The initial franchise fees of the agreements are recorded at cost and amortized on a straight-line basis over the term of the franchise agreements. Deferred Financing Costs Deferred finance fees are bank fees and other costs incurred in obtaining financing that are amortized on a straight-line basis over the term of the related debt. Deferred finance fees are presented as a direct reduction of the carrying amount of the mortgage notes payable on the consolidated balance sheet. Amortization of deferred finances fees is included in interest expense. Organization and Offering Costs Organization and offering costs (“O&O Costs”) include selling commissions, dealer manager fees, stockholder servicing fees and any other elements of underwriting compensation, legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of the Company's transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals. The Company charged O&O Costs against additional paid in capital on the consolidated balance sheet as it raised proceeds in its Public Offering, which was terminated on August 13, 2021. Income Taxes The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and has operated as a REIT, commencing with the taxable year ended December 31, 2018. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to its stockholders (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). As a REIT, the Company generally will not be subject to U.S. federal income tax to the extent it distributes qualifying dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year following the year it initially elects to be taxed as a REIT, it will be subject to U.S. federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to its stockholders. Because the Company is prohibited from operating hotel properties pursuant to certain tax laws relating to its qualification as a REIT, the entities through which the Company owns hotel properties will lease the hotel properties to one or more taxable REIT subsidiaries (“TRSs”). A TRS is a corporate subsidiary of a REIT that jointly elects, with the REIT, to be treated as a TRS of the REIT, and that pays U.S. federal income tax at regular corporate rates on its taxable income. The Company accounts for income taxes of its TRSs 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 financial statements if it is more likely than not that the tax position will be sustained upon examination. At December 31, 2021, the Company had no material uncertain tax positions. 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 2018 through 2021 remaining subject to examination by federal and various state tax jurisdictions. Noncontrolling Interests Noncontrolling interest represents the portion of equity of Procaccianti Convertible Fund, LLC (“PCF”) held by owners other than the Company. Noncontrolling interest is reported in the consolidated balance sheets within equity, separately from stockholders’ equity. Revenue, expenses, and net income attributable to both the Company and the noncontrolling interest are reported in the consolidated statement of operations. Noncontrolling Interest of the Operating Partnership Noncontrolling interest of the Operating Partnership represents the value of the 128,124 Class K OP Units that were issued to affiliate sellers in connection with the acquisition of the Hilton Garden Inn Providence. Noncontrolling interest of the Operating Partnership is reported in the mezzanine section of the consolidated balance sheet, as the units are redeemable at the request of the holder for cash equal to the fair market value of a K Share as defined in the Amended and Restated Agreement of Limited Partnership of Procaccianti Hotel REIT, L.P. (the “Amended and Restated Operating Partnership Agreement”). The Company may elect to acquire any such unit presented for redemption for one K Share or cash. Revenue, expenses, and net income attributable to both the Company and the noncontrolling interest of the Operating Partnership are reported in the consolidated statement of operations. Per Share Data The Company calculates its basic and diluted earnings per common share (“EPS”) utilizing the two-class method. Under the two-class method both basic and diluted EPS are calculated for each class of common stock considering distributions declared and accumulated, and the rights of common shares and participating securities in any undistributed earnings. Undistributed earnings are allocated to all outstanding common shares based on the relative percentage of each class of shares to the total number of outstanding shares. Included in the calculation of basic EPS are 3,000 non-vested restricted K Shares held by the Company's independent directors as of December 31, 2021 because such shares have been issued and participate in distributions. The Company’s calculated earnings per share for the year ended December 31, 2021 and 2020, were as follows: Year Ended December 31, 2021 2020 Net income (loss) attributable to common stockholders $ 2,592,193 $ (3,826,605) Less: Class K Common Stock dividends declared and accumulated 2,670,747 2,221,403 Less: Class K-I Common Stock dividends declared and accumulated 756,291 421,761 Less: Class K-T Common Stock dividends declared and accumulated 38,663 32,247 Less: Class A Common Stock dividends declared and accumulated 405,468 362,825 Undistributed net loss $ (1,278,976) $ (6,864,841) Class K Common Stock: Undistributed loss $ (862,892) $ (4,882,213) Class K Common Stock dividends declared and accumulated 2,670,747 2,221,403 Net income (loss) $ 1,807,855 $ (2,660,810) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 3,815,288 3,281,469 Class K-I Common Stock: Undistributed net loss $ (244,344) $ (926,056) Class K-I Common Stock dividends declared and accumulated 756,291 421,761 Net income (loss) $ 511,947 $ (504,295) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 1,080,372 622,428 Class K-T Common Stock: Undistributed net loss $ (12,491) $ (71,030) Class K-T Common Stock dividends declared and accumulated 38,663 32,247 Net income (loss) $ 26,172 $ (38,783) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 55,231 47,741 Class A Common Stock: Undistributed net loss $ (130,978) $ (799,565) Class A Common Stock dividends declared and accumulated 405,468 362,825 Net income (loss) $ 274,490 $ (436,740) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 579,119 537,410 Class B Common Stock: Undistributed net loss $ (28,271) $ (185,977) Net loss per common share, basic and diluted $ (0.23) $ (1.49) Weighted average number of common shares outstanding, basic and diluted 125,000 125,000 . |
Investments in Hotels
Investments in Hotels | 12 Months Ended |
Dec. 31, 2021 | |
Investments in Hotels | |
Investments in Hotels | Note 3 – Investments in Hotels The following table sets forth summary information regarding the Company’s investments in hotel properties as of December 31, 2021: Contract Mortgage Date Ownership Purchase Debt Property Name Acquired Location Interest Price (1) (2) Rooms Outstanding Springhill Suites Wilmington 05/24/2017 (1) Wilmington, NC 51 % $ 18,000,000 120 $ 10,988,748 Staybridge Suites St. Petersburg 06/29/2017 (1) St. Petersburg, FL 51 % $ 20,500,000 119 $ 13,004,427 Hotel Indigo Traverse City 08/15/2018 Traverse City, MI 100 % $ 26,050,000 107 $ 15,092,000 Hilton Garden Inn Providence 02/27/2020 Providence, RI 100 % $ 28,500,000 137 $ 16,936,901 Cherry Tree Inn 07/30/2021 Traverse City, MI 100 % $ 15,000,000 76 $ 8,000,000 1) Represents the date and contract purchase price of PCF’s acquisition of the Springhill Suites Wilmington property (the “Springhill Suites Wilmington”) and the Staybridge Suites St. Petersburg property (the “Staybridge Suites St. Petersburg”). The Company exercised its option under an option agreement to purchase a 51% membership interest in PCF on March 29, 2018. 2) Contract purchase price excludes acquisition fees and costs. Investments in hotel properties consisted of the following as of December 31, 2021 and 2020: December 31, December 31, 2021 2020 Land $ 14,450,538 $ 11,588,686 Building and improvements 88,767,739 77,286,159 Furniture, fixtures, and equipment 8,896,732 7,244,831 Total cost 112,115,009 96,119,676 Accumulated depreciation (9,878,030) (6,530,972) Property and equipment, net $ 102,236,979 $ 89,588,704 Depreciation expense for the years ended December 31, 2021 and 2020 was $3,347,058 and $2,997,262, respectively. Acquisition of the Cherry Tree Inn On July 30, 2021 (the “Final Closing”), the Company, through a wholly-owned subsidiary of its Operating Partnership, acquired the fee simple interest in the Cherry Tree Inn and Suites, located at 2345 N. US 31 North, East Bay Township, Grand Traverse County, Michigan (the “Cherry Tree Inn”), for a total purchase price of $15,000,000, exclusive of closing costs and typical hotel closing date adjustments. The Company also incurred an acquisition fee of $264,789 due to PHA (See Note 9). The Company financed the transaction with a combination of net proceeds from the Public Offering and proceeds from an initial $4,000,000 bridge loan (the “Bridge Loan”) from an affiliate of the Sponsor, which was repaid in full on November 23, 2021 when the Company entered into a $10,000,000 mortgage note, $8,000,000 of which was outstanding as of December 31, 2021 and $2,000,000 of which is planned to be advanced in 2022 to fund property improvements. In connection with the Final Closing, the Ground Lease by and between a subsidiary of the Company and the seller, dated as of June 3, 2021, was terminated. Further, on July 30, 2021, the seller repaid in full the loan in the principal amount of $7,689,594 and the related loan agreement was terminated. The Company concluded its investment in the Cherry Tree Inn was an asset acquisition in accordance with ASC 805, Business Combinations (“Topic 805”). The Company allocated the purchase price of $15,000,000 to the acquired assets, consisting of land, building and improvements and furniture and fixtures, based on their respective fair values as determined by an independent third-party appraiser. Fair Value at July 30, 2021 Land $ 2,850,000 Building and improvements 10,920,000 Furniture, fixtures, and equipment 1,230,000 Total assets acquired $ 15,000,000 Acquisition costs of $81,449 were capitalized and allocated pro-rata to acquired assets on their relative fair values. 0 |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets | |
Other Assets | Note 4 – Other Assets Included in other assets at December 31, 2021 and 2020, are franchise fees of $242,274 and $257,750, respectively. The Company’s hotel properties each are operated pursuant to franchise agreements. The term of each current franchise agreement is for a 15 to 25 -year period and the agreements require the Company to, among other things, pay monthly fees that are calculated based on specified percentages of certain revenues. For the year ended December 31, 2021 and 2020, the Company amortized $15,476 and $14,642 of deferred franchise fees. These amounts are included in depreciation and amortization on the statement of operations. The future amortization of deferred franchise costs as of December 31, 2021 is as follows: Years Ending December 31, 2022 $ 15,475 2023 15,475 2024 15,475 2025 15,475 2026 15,475 Thereafter 164,899 Total $ 242,274 |
Mortgage Notes Payable
Mortgage Notes Payable | 12 Months Ended |
Dec. 31, 2021 | |
Mortgage Notes Payable | |
Mortgage Notes Payable | Note 5 – Mortgage Notes Payable Included in mortgage notes payable at December 31, 2021, is a $13,004,427 mortgage payable secured by the Staybridge Suites St. Petersburg (the “St. Petersburg Note”), a $10,988,748 mortgage payable secured by the Springhill Suites Wilmington (the “Wilmington Note”), $15,092,000 mortgage payable secured by the Hotel Indigo Traverse City (the “TCI Note”), a $16,936,901 mortgage payable secured by the Hilton Garden Inn Providence (the “HGI Note”) and a $8,000,000 mortgage payable secured by the Cherry Tree Inn Traverse City (the “CTI Note”). The mortgage notes payable each contain customary affirmative covenants, negative covenants and events of default. The St. Petersburg Note required monthly As a result of the negative impact of the COVID-19 pandemic, the Staybridge Suites St. Petersburg failed to maintain the required debt service coverage ratio as defined in the St. Petersburg Note loan documents starting with the period ended June 30, 2020. The lender approved a series of modifications of the debt service coverage tests for periods through December 31, 2021. Debt service coverage tests will resume as of March 31, 2022. The Wilmington Note required monthly interest payments at 4.49% through June 1, 2020, and subsequent to June 1, 2020, requires monthly As a result of the negative impact of the COVID-19 pandemic, the Springhill Suites Wilmington failed to maintain the required debt service coverage ratio as defined in the Wilmington Note loan documents for the period ended December 31, 2020. In March 2021, the Company received a written waiver of all debt service coverage testing for the test due for the periods ended December 31, 2020 through June 30, 2021, from its lender. As of December 31, 2021, the Springhill Suites Wilmington was in compliance with its applicable covenants and all required payments have been made as agreed. The TCI Note bears interest at LIBOR plus a LIBOR rate margin of 2.50% at December 31, 2021. The TCI Note provides for interest only monthly payments until maturity. The principal amount will be due on the maturity date, which is August 15, 2022. The maturity date may be extended by up to two additional one-year periods, provided no default exists and with prior written notice of at least 45 days before scheduled maturity. The TCI Note is collateralized by the Hotel Indigo Traverse City, including equipment, and has been guaranteed by TH Investment Holdings II, LLC, an affiliate of the Sponsor. On April 21, 2020, a subsidiary of the Operating Partnership, entered into a First Amendment to Loan Agreement and Other Loan Documents (the “Hotel Indigo Loan Modification Documents”) with its existing lender, Citizens Bank, N.A. (“Citizens Bank”), to amend the terms of the TCI Note. Pursuant to the Hotel Indigo Loan Modification Documents, the interest only payments that were scheduled to be paid on April 1, 2020, May 1, 2020 and June 1, 2020 were deferred (collectively, the “Deferred Payments”). The Deferred Payments did not accrue interest but were deemed principal payable in full on or before June 30, 2021. As of June 30, 2021, the Hotel Indigo Traverse City repaid the deferred interest in full. The Hotel Indigo Loan Modification Documents also waived the Operating Partnership’s requirement to achieve the stated debt service coverage ratio for the period from January 1, 2020 through June 30, 2021 and provides that all net worth, liquidity and financial covenant testing and any requirements of the guarantor, TH Investment Holdings II, LLC, an affiliate of the Sponsor, to comply with such covenants were waived from January 1, 2020 through June 30, 2021. As of December 31, 2021, the Hotel Indigo Traverse City was compliant with its loan obligations, including applicable covenants, and all required payments have been made as agreed. The HGI Note requires monthly interest payments at a fixed rate of 4.25% through February 15, 2023, and monthly principal and interest payments based on a 30-year amortization schedule thereafter to maturity on May 15, 2025. The HGI Note is collateralized by the Hilton Garden Inn Providence, including equipment, and has been guaranteed by the Company. On April 23, 2020, the Operating Partnership, through its subsidiary, and the Company entered into an Omnibus Amendment and Reaffirmation Agreement (the “Hilton Garden Inn Loan Modification Agreement”) with the lender, to amend the terms of the mortgage loan and loan documents on the HGI Note. Pursuant to the Hilton Garden Inn Loan Modification Agreement, interest only payments that were due on the six consecutive payment dates starting with the payment scheduled for April 2020 were deferred until the date that was twelve months after the date each payment was originally due. The HGI Note resumed interest payments in October 2020. In addition, the Hilton Garden Inn Loan Modification Agreement provides that all financial covenant testing and any other requirements of the Operating Partnership to comply with such covenants are waived until the year ending December 31, 2021, and that all net worth, liquidity and financial covenant testing and any requirements of the Company as guarantor to comply with such covenants are waived until the year ending December 31, 2021. As of December 31, 2021, the HGI Note was compliant with the above referenced loan arrangements. The CTI Note requires monthly interest payments at a fixed rate of 3.91% through November 23, 2023 and subsequent to November 23, 2023, monthly principal and interest payments of $52,601 through November 23, 2026, the maturity date. The CTI Note is collateralized by the Cherry Tree Inn & Suites, including equipment. All required payments have been made as of December 31, 2021. Compliance with the note’s covenants commences in 2022. In addition to the $8,000,000 financed, the CTI Note allows for an additional $2,000,000 in borrowings for construction advances. Although the Company has taken steps to enhance its ability to maintain sufficient liquidity, as noted here and elsewhere in this Annual Report on Form 10-K, a protracted negative economic impact resulting from the COVID-19 pandemic may cause increased pressure on the Company’s ability to satisfy its mortgage loan covenants. Scheduled principal payments of the mortgage notes payable as of December 31, 2021 are as follows: Years Ending December 31, 2022 $ 15,507,485 2023 673,704 2024 23,357,916 2025 16,482,971 Thereafter 8,000,000 Total $ 64,022,076 Interest expense on mortgage notes payable for the year ended December 31, 2021 and 2020 was $2,593,227 and $2,549,503, respectively. Also included in mortgage notes payable as of December 31, 2021, is $208,343 of net deferred financing costs and debt discounts and premiums. For the years ended December 31, 2021 and 2020, the Company amortized $6,276 and $9,009, respectively, of net deferred financing costs and debt discounts and premiums as a component of interest expense. |
Interest Rate Swap, Cap
Interest Rate Swap, Cap | 12 Months Ended |
Dec. 31, 2021 | |
Interest Rate Swap/Cap | |
Interest Rate Swap | Note 6 – Interest Rate Swap/Cap The Company is exposed to certain risks relating to its ongoing business operations, including the effect of changes in interest rates. The Company had an interest rate swap agreement to manage interest rate risk exposure on $15,092,000 of the TCI Note that expired on August 15, 2021 . As of December 31, 2021, the Company has an interest rate cap in place to manage its interest rate exposure on $15,092,000 of the TCI Note that expires on August 15, 2022 . |
Other Debt
Other Debt | 12 Months Ended |
Dec. 31, 2021 | |
Other Debt. | |
Other Debt | Note 7 – Other Debt On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was adopted by the Federal Government, which, among other things, provided emergency assistance to qualifying businesses and individuals as a result of the COVID-19 pandemic. The CARES Act also included the establishment of the Paycheck Protection Program ("PPP"), a U.S. Small Business Administration (the “SBA”) loan to businesses with fewer than 500 employees that may be partially forgivable. In 2020, the Company received $1,018,917 in PPP loans relating to the four hotel properties (the "PPP Loans"). On January 11, 2021, the PPP opened an additional round of funding, which allowed eligible borrowers that had previously received a PPP loan to apply for a second draw PPP loan with the same general terms as the first. Second draw PPP loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism, and certain supplier costs and expenses for operations. The Company applied for and received $1,426,672 in the second round of funding as of December 31, 2021. Pursuant to the CARES Act, the Company can apply for, and be granted, forgiveness for all or a portion of the PPP Loans. The loans’ principal and accrued interest are forgivable to the extent that the proceeds are used for eligible purposes, subject to limitations and ongoing rulemaking by the SBA, and that the Company maintains its payroll levels over a twenty-four week period following the loan date. The loan forgiveness amount may be reduced if the Company terminates employees or reduces salaries during the twenty-four week period. The Company used the proceeds from the PPP Loans to retain employees and maintain payroll and make mortgage and utility payments to support business continuity throughout the COVID-19 pandemic, which amounts are intended to be eligible for forgiveness, subject to the provisions of the CARES Act. The Company has applied for and received full forgiveness of all the $1,018,917 first round of PPP loans and $484,067 of the second round. In the year ended December 31, 2021, the Company recognized gain on loan extinguishment of $1,502,984 in the consolidated statement of operations. The currently unforgiven portion of these loans are presented as other debt on the condensed consolidated balance sheets under ASC 470, Debt. The Company is currently in the process of submitting applications for full forgiveness of the remaining two outstanding loans. |
Loans from Franchisors
Loans from Franchisors | 12 Months Ended |
Dec. 31, 2021 | |
Loans from Franchisors | |
Loans from Franchisors | Note 8 – Loans from Franchisors Included in accounts payable, accrued expenses and other liabilities on the balance sheet at December 31, 2021 and 2020, is $932,284 and $985,784, respectively, of net key money loans received from franchisors or assumed upon acquisition. In accordance with the loan agreement with the respective franchisor, funds were released to the applicable hotel properties upon completion of a change of ownership, property improvement plan, and inspection and subsequent approval of the completed work by the franchisor. The outstanding principal balances of the loans are reduced on a straight-line basis over the remaining life of the franchise agreement. As of December 31, 2021, the Company had received $750,000 in loans from franchisors relating to the Staybridge Suites St. Petersburg and assumed a liability of $364,430 in connection with the acquisition of the Hotel Indigo Traverse City. During each of the years ended December 31, 2021 and 2020, the Company amortized $53,500 of franchise fees, which are included in rooms and other property expenses on the statement of operations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | Note 9 – Related Party Transactions On August 2, 2018, the Company entered into the Amended and Restated Advisory Agreement with PHA and the Operating Partnership (as amended and renewed, the “Advisory Agreement”). The Advisory Agreement has a one-year term, subject to renewals upon mutual consent of PHA and the Company’s independent directors for an unlimited number of successive one-year periods. On November 22, 2019, the Company, the Operating Partnership and PHA entered into the Second Amendment to the Advisory Agreement (the “Advisory Agreement Amendment”) in order to revise certain terms regarding the accrual of interest on deferred acquisition, disposition and asset management fees, as well as the deferral of asset management fees paid to PHA. On July 29, 2021, the board of directors of the Company, including all independent directors of the Company, after review of PHA’s performance during the last year, authorized the Company to execute a mutual consent to renew the Advisory Agreement, by and among the Company, the Operating Partnership and PHA for a one-year term effective on August 2, 2021. Pursuant to the Advisory Agreement, PHA oversees the Company’s day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, and other administrative services. PHA also performs, or oversees the performance of, the Company’s corporate operations and required administrative services, which include maintaining required financial records and preparing reports to stockholders and filings with the SEC. In addition, PHA assists an independent valuation firm and the Company’s board of directors in calculating and determining the Company’s NAV, and assists the Company in overseeing the preparation and filing of tax returns, payment of expenses and for the performance of administrative and professional services rendered to the Company by others. The Company reimburses PHA for certain expenses and pays PHA certain fees pertaining to services provided. Operating Expenses The Company is also required to reimburse PHA for costs incurred in providing these administrative services. PHA is required to allocate the cost of such services to the Company based on objective factors such as total assets, revenues and/or time allocations. At least annually, the Company’s board of directors will review the amount of administrative services expense reimbursable to PHA to determine whether such amounts are reasonable in relation to the services provided. As of December 31, 2020, PHA had forfeited its right to collect reimbursement for providing these administrative services provided through such date. In the year ended December 31, 2021, the Company’s Sponsor requested reimbursement for $187,198 and the Company paid $168,649 of such administrative service expenses. This amount is included in other fees to affiliates on the consolidated statement of operations. Acquisition Fee The Company will pay PHA acquisition fees as described below: Acquisition Fee occurrence of a (i) liquidation event (i.e., any voluntary or involuntary liquidation or dissolution of the Company, including as a result of the sale of all or substantially all of the Company’s assets for cash or other consideration), (ii) the Company’s sale or merger in a transaction that provides stockholders with cash, securities or a combination of cash and securities, (iii) the listing of the Company’s shares of common stock on a national securities exchange, or (iv) the termination of the Advisory Agreement, other than for cause, or the non-renewal of the Advisory Agreement. The preceding clauses (ii) and (iii) are defined as an "Other Liquidity Event". Under the Advisory Agreement Amendment, deferred acquisition fees will accrue interest at a cumulative, non-compounded rate of 6.0% per annum until the day immediately following the Fifth Anniversary (as defined herein), at which time such interest will cease to further accrue. For the year ended December 31, 2021, the Company incurred $264,789 in acquisition fees related to the Cherry Tree Inn Traverse City. For the year ended December 31, 2020, the Company incurred $441,370 in acquisition fees related to the Hilton Garden Inn Providence. Acquisition fees are included in other fees to affiliates on the consolidated statements of operations. As of December 31, 2021 and 2020, there were $1,244,139 and $979,350, respectively, of deferred acquisition fees included in due to related parties on the consolidated balance sheets. Interest expense on outstanding acquisition fees was $65,508 and $54,564, respectively, for the years ended December 31, 2021 and 2020, and is included in interest expense on the consolidated statement of operations and in due to related parties on the consolidated balance sheets. Asset Management Fee The Company will pay PHA asset management fees as described below: Asset Management Fee For the years ended December 31, 2021 and 2020, the Company incurred $624,798 and $538,089, respectively, in asset management fees that are included in other fees to affiliates on the consolidated statements of operations. Interest expense on the outstanding asset management fees was $64,128 and $51,605 for the years ended December 31, 2021 and 2020, respectively, and is included in interest expense on the consolidated statements of operations. At December 31, 2021 and 2020, asset management fees and interest payable of $176,121 and $1,158,111, respectively, are included in due to related parties on the consolidated balance sheets. Disposition Fee The Company will pay PHA disposition fees as described below: Disposition Fee There were no disposition fees incurred for the years ended December 31, 2021 and 2020. Acquisition Expenses The Company will reimburse PHA for acquisition expenses actually incurred (excluding personnel costs) related to selecting, evaluating, and making investments on the Company’s behalf. All acquisition expenses as of December 31, 2021 and 2020 were paid directly by the Company and there have been no reimbursements to PHA. Organization and Offering Costs O&O Costs include selling commissions, dealer manager fees, stockholder servicing fees and any other elements of underwriting compensation, as well as legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of the Company’s transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals. For more information regarding selling commissions, dealer manager fees, stockholder servicing fees and any other elements of underwriting compensation, see Note 10 – “Stockholders’ Equity”. Certain O&O Costs have been incurred by PHA on behalf of the Company. As of December 31, 2021, the total amount of O&O Costs, exclusive of selling commissions, dealer manager fees and stockholder servicing fees, incurred by PHA and its affiliates related to the Private Offering and the Public Offering was $8,749,247, of which $1,026,564 has been reimbursed through the issuance of A Shares to an affiliate of PHA and payments to PHA of $3,340,946. The Company may reimburse PHA and its affiliates for O&O Costs incurred on the Company's behalf, but only to the extent the reimbursement would not cause the selling commissions, dealer manager fees, stockholder servicing fees and other O&O Costs to exceed 15% of the gross offering proceeds of the Public Offering as of the termination of the Public Offering (the “15% cap”). As of December 31, 2021, $3,153,071 is reimbursable to PHA and its affiliates by the Company in the future, subject to the 15% cap. The Company recorded O&O Costs as charges against additional paid in capital on the consolidated balance sheets as the Company raised proceeds in its continuous Public Offering for amounts incurred up to 15% of the gross offering proceeds of the Public Offering, the maximum amount allowed in accordance with the rules established by FINRA and the Company’s charter. The Company recognized O&O Costs of $1,394,296 and $1,598,938 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the Company had balances due from PHA for reimbursement of O&O Costs within the 15% cap of $28,113, which is included in due from related parties in the consolidated balance sheets. As of December 31, 2020, the Company had balances due to PHA for reimbursement of O&O Costs within the 15% cap of $121,786, which is included in due to related parties in the consolidated balance sheets. Property Management Fee and Reimbursement Wholly owned subsidiaries of PCF and the Operating Partnership entered into hotel management agreements with affiliates of the Company for the management of each of the Company’s hotels. Under the terms of the management agreements, the manager operates and manages each hotel, including making all human resource decisions. The employees of the hotels are employed by the managers, however, pursuant to the management agreements, all compensation of hotel personnel is recorded as a direct operating expense of the hotel. The manager of each hotel is paid a base management fee equal to 3% of the respective hotel’s gross revenues and is also reimbursed for certain expenses and centralized service costs. The terms of the in-place management agreements expire March 28, 2023, March 28, 2023, August 14, 2023, February 26, 2025 and June 3, 2031, respectively, for the Staybridge Suites St. Petersburg, the Springhill Suites Wilmington, the Hotel Indigo Traverse City, the Hilton Garden Inn Providence and the Cherry Tree Inn, respectively. Aggregate property management fees incurred for the years ended December 31, 2021 and 2020 were $747,948 and $393,134, respectively, and are included in property management fees to affiliates on the consolidated statements of operations. As of December 31, 2021 and 2020, $45,023 and $31,594, respectively, of accrued property management fees payable were included in due to related parties on the consolidated balance sheets. Aggregate net reimbursements for certain expenses for the years ended December 31, 2021 and 2020 were $281,929 and $118,708, respectively. As of December 31, 2021 and 2020, $9,995 and $16,172, respectively, of expense reimbursements were included in due to related parties on the consolidated balance sheets. During the years ended December 31, 2021 and 2020, the Company paid $512,884 and $324,055, respectively, to TPG Risk Services, LLC, an affiliate of the Company, for the reimbursement of prepaid insurance at the hotel properties. As of December 31, 2021, the Company had a balance of $3,749 due from TPG Risk Services, LLC and as of December 31, 2020, the Company had a balance due to TPG Risk Services LLC of $49,761 for prepaid insurance, such reimbursements are included in due from or due to related parties on the consolidated balance sheets, as appropriate. Construction Management Fee The Company pays its property managers or third parties selected by PHA, after requesting bids from such parties, a construction management fee (which may include expense reimbursements) based on market rates for such services in the markets in which the hotel properties are located and will take into account the nature of the services to be performed, which generally will constitute the supervision or coordination of any construction, improvements, refurbishments, renovations, or restorations of the Company’s hotel properties. If PHA selects the property manager or another affiliate of the Sponsor to perform such services, any resulting agreement must be approved by a majority of the Company’s board of directors, including a majority of its independent directors. During the years ended December 31, 2021 and 2020, the Company reimbursed TPG Construction, LLC, an affiliate of the Sponsor, $287,210 and $44,656, respectively, for capital expenditure costs incurred at the hotel properties. As of December 31, 2021 and 2020, $114,674 and $12,685, respectively, of construction reimbursements were included in the due to related parties balance. Included in the due from related parties balance at December 31, 2021 and 2020, was a $125,000 and $23,050 receivable from TPG Construction, LLC relating to working capital requests to provide funding for vendors and contractor deposits at the Hilton Garden Inn Providence and the Cherry Tree Inn. Additional Service Fees If the Company requests that PHA or its affiliates perform other services, including but not limited to, renovation evaluations, the compensation terms for those services must be approved by a majority of the Company’s board of directors, including a majority of the independent directors. No such fees for additional services were incurred for the years ended December 31, 2021 and 2020. Payment Upon Listing of Shares If the Company lists any of its shares of capital stock on a national securities exchange (which automatically results in a termination of the Advisory Agreement), the Company will be obligated to pay PHA the amount PHA would be entitled to receive on account of deferred asset management fees, acquisition fees, and disposition fees (and any accrued interest thereon) as if the Company liquidated and received liquidation proceeds equal to the market value of the Company, which is limited to the excess of market value over the liquidation preference on K Shares, K-I Shares and K-T Shares. Payment Upon a Merger or Acquisition Transaction If the Company terminates the Advisory Agreement in connection with or in contemplation of a transaction involving a merger or acquisition, the Company would be obligated to pay PHA the amount PHA would be entitled to receive as if the Company liquidated and received net liquidation proceeds equal to the consideration paid to the stockholders in such transaction. Payment Upon Other Advisory Agreement Termination The Company may elect not to renew the Advisory Agreement. The Company has the right to terminate the Advisory Agreement without cause, or other than in connection with a listing of the Company’s shares or a transaction involving a merger or acquisition or other than for cause (“Non-cause Advisory Agreement Termination”). If a Non-cause Advisory Agreement Termination were to occur, the Company would be obligated to make a cash payment to PHA in the amount of any deferred asset management fees, plus any interest accrued thereon, the full acquisition fees previously earned, plus interest accrued thereon, and the full disposition fees previously earned, plus any interest accrued thereon, regardless of the value of the Company’s assets or net assets. The Company would be obligated to repurchase its A Shares for an amount equal to the greater of: (1) any accrued common ordinary distributions on the A Shares plus the stated value of the outstanding A Shares ($10.00 per A Share) or (2) the amount the holders of A Shares would be entitled to receive if the Company liquidated and received net liquidation proceeds equal to the fair market value (determined by appraisals as of the termination date) of the Company’s investments less any loans secured by such investments, limited in the case of non-recourse loans to the value of investments securing such loans. Any shares of Class B common stock (“B Shares”) then outstanding would remain outstanding. The amounts payable on account of the repurchase of A Shares may be paid, in the discretion of a majority of the Company’s board of directors, including a majority of the Company’s independent directors, in the form of promissory notes bearing interest at the then-current rate, as determined in good faith by a majority of the Company’s independent directors. Payment Upon Advisory Agreement Termination for Cause If the Company terminates the Advisory Agreement for cause, the Company would not have a current obligation to make any payments to PHA or to S2K Servicing LLC (formerly known as Colony S2K Servicing LLC), an affiliate of S2K Financial LLC (the “Dealer Manager”). However, any A Shares and B Shares held by them or their affiliates would remain outstanding. In addition, any deferred asset management fees, plus any interest accrued thereon, the full acquisition fees previously earned, plus any interest accrued thereon, and the full disposition fees previously earned, plus any interest accrued thereon, would remain outstanding obligations, and the deferred fees would continue to accrue interest at a non-compounded annual rate of 6.0%. Such deferred fees and interest thereon would be payable upon a liquidation event. Amended and Restated Operating Partnership Agreement In connection with the Hilton Garden Inn Providence acquisition, effective February 27, 2020, the Company, as general partner of the Operating Partnership, Procaccianti Hotel REIT, LP, LLC and certain principals and affiliates of the Sponsor that were issued Class K OP Units entered into an Amended and Restated Operating Partnership Agreement. Loans from Affiliates The Company has combined subordinated promissory notes of $94,194 from PHA that bear interest at the current blended long term applicable federal rate (“AFR”). The blended long term AFR was 1.69% and 1.65% for the years ended December 31, 2021 and 2020, respectively. The maturity date of the notes is the date after all outstanding K Shares have received all accumulated, accrued and unpaid distributions due and owing under the terms of the Company’s organization documents and the liquidation preference on the K Shares pursuant to the Company’s organization documents has been paid in full, as well as upon any event of default. These amounts are included in due to related parties on the consolidated balance sheets at December 31, 2021 and 2020. Interest expense was $1,596 and $1,556 for the years ended December 31, 2021 and 2020, respectively, and is included in interest expense on the consolidated statements of operations and in due to related parties on the consolidated balance sheets. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | Note 10 - Stockholders’ Equity Under the Company’s charter, the total number of shares of common stock authorized for issuance is 248,125,000 , consisting of 55,500,000 K Shares, 55,500,000 K-I Shares, 116,000,000 K-T Shares, 21,000,000 A Shares, and 125,000 B Shares , with a par value of $0.01 per share. The Company’s K Shares, K-I Shares and K-T Shares entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote and to receive distributions as authorized by the Company’s board of directors. Holders of K Shares, K-I Shares and K-T Shares will be entitled to receive cumulative cash distributions on each share at the rate of 7.0% per annum of each share’s distribution base. Prior to March 31, 2020, distributions accrued at the rate of 6.0% per annum of each share’s distribution base. The distribution base will initially be $10.00 per K Share, $10.00 per K-I Share and $10.00 per K-T Share and will be reduced for distributions that the board of directors declares and pays out of net sales proceeds from the sale or disposition of assets to the extent such distributions are not used to pay accumulated, accrued, and unpaid dividends on such K Shares, K-I Shares, and K-T Shares. K Shares, K-I Shares and K-T Shares will rank, on a pro rata basis, senior to all other classes of stock with respect to distribution rights and rights upon the Company’s liquidation. In certain situations (other than upon liquidation), the Company may have excess cash available for distribution and the board of directors may authorize special distributions in which case the holders of K Shares, K-I Shares and K-T Shares would receive 50% of any such excess cash. Holders of K Shares, K-I Shares and K-T Shares would also generally be entitled to receive 50% of any remaining liquidation cash pro rata based on the number of K Shares, K-I Shares and K-T Shares outstanding. A Shares entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote and to receive distributions and other distributions of excess cash as authorized by the Company’s board of directors. Following the payment of all accumulated, accrued and unpaid distributions on K Shares, K-I Shares and K-T Shares and payment of any accrued asset management fees (and any interest thereon), each A Share will be entitled to receive distributions at a rate not to exceed 7.0% of the stated value of $10.00 per share from income and cash flow from ordinary operations on a cumulative basis. In certain situations (other than upon liquidation), the Company may have excess cash available for distribution and the board of directors may authorize special distributions in which case the holders of A Shares will receive 37.5% of any such excess cash on a pro rata basis. A Shares would also generally be entitled to receive 37.5% of any remaining liquidation cash pro rata based on the number of A Shares outstanding. B Shares will have no voting rights , other than the right to vote on and approve any further issuances of an increase of the authorized number of B Shares. In addition, if the Company were to list any shares of its common stock on a national securities exchange, the Company will repurchase its B Shares in accordance with its charter. Holders of B Shares are not entitled to distributions; however, in certain situations (other than upon liquidation) the Company may have excess cash available for distribution and the board of directors may authorize special distributions in which case the holders of B Shares would receive 12.5% of any such excess cash on a pro rata basis. Holders of B Shares would also generally be entitled to receive 12.5% of any remaining liquidation cash pro rata based on the number of B Shares outstanding. At the termination of the Private Offering, the Company had issued 1,253,618 K Shares and 23,000 A Shares to unaffiliated investors, resulting in receipt of gross proceeds of $12,398,660 from K Share issuances and $230,000 from A Share issuances. A Shares sold to unaffiliated investors were issued as part of a Unit. As of December 31, 2021, under the Public Offering, the Company had issued 2,787,944 K Shares, 1,287,644 K-I Shares, and 60,008 K-T Shares to unaffiliated investors, resulting in receipt of gross proceeds of $26,939,836 from K Share issuances, $11,274,927 from K-I Share issuances, and $585,400 from K-T Share issuances. As of December 31, 2021, the Company had issued 58,687 K Shares, 34,211 K-I Shares and 3,928 K-T Shares pursuant to the DRIP, resulting in gross proceeds pursuant to the DRIP of $538,633, $314,340 and $35,873 respectively, As of December 31, 2021, the Company had issued 1,250 restricted K Shares to each of the Company's three independent directors for a total of 3,750 restricted K Shares in connection with the Company's long-term incentive plan, as described below. As of December 31, 2021, the Company had issued 428,410 A Shares to THR, an affiliate of PHA, for aggregate proceeds of $4,284,095, or $10.00 per share. In addition, the Company issued 130,000 additional A Shares to THR in exchange for notes receivable, payable to the Company upon demand. The note receivable from THR was reduced for amounts reimbursed to PHA by the Company for certain costs incurred on the Company’s behalf with no remaining receivable balance as of December 31, 2019. As of December 31, 2021, the Company sold 10 K-I Shares for aggregate proceeds of $100, or $10.00 per K-I Share and sold 10 K-T Shares for aggregate proceeds of $100, or $10.00 per K-T Share to an affiliate of the Company. In addition, on September 29, 2016, the Company issued 125,000 B shares to S2K Servicing LLC. During the year ended December 31, 2021, pursuant to the primary portion of the Public Offering, the Company sold 398,959 K Shares for aggregate gross proceeds of $3,575,886, or $8.96 per K Share; 626,169 K-I Shares for aggregate gross proceeds of $5,169,421, or $8.26 per K-I Share; and 12,468 K-T Shares for aggregate gross proceeds of $110,000, or $8.82 per K-T Share. During the same period, pursuant to the DRIP, the Company had issued 43,451 K Shares at a price of $9.36 per K Share for aggregate gross proceeds of $406,697, 22,637 K-I Shares at a price of $9.36 per K-I Share for aggregate gross proceeds of $211,884, and 2,709 K-T Shares at a price of $9.36 per K-T Share for aggregate gross proceeds of $25,360. On February 27, 2020, as partial consideration for the Company’s acquisition of the Hilton Garden Inn Providence, the Operating Partnership issued 128,124 Class K OP Units valued at $10.00 per Class K OP Unit. Such issuance represents a total investment of $1,281,244 in Class K OP Units of the Operating Partnership. Individuals with direct or indirect interests in the sellers of the Hilton Garden Inn Providence who are direct or indirect owners of the Company’s Sponsor and PHA received only Class K OP Units and no cash as consideration. In response to adverse effects of the COVID-19 pandemic, the Company’s board of directors unanimously approved the temporary suspension of (i) the sale of K Shares, K-I Shares and K-T Shares in the Public Offering, effective as of April 7, 2020 and (ii) the operation of the DRIP, effective as of April 17, 2020. On June 10, 2020, the Company’s board of directors unanimously approved the resumption of the acceptance of subscriptions and the resumption of the operation of the DRIP. PHA was obligated to purchase sufficient A Shares to fund payment of O&O Costs associated with the Private Offering and the Public Offering and also to account for the difference between the applicable NAV per K-I Share and the applicable offering price per K-I Share and any amount equal to any discount to the applicable offering price of K Shares, K-I Shares and K-T Shares (excluding volume discounts). PHA’s obligation can be fulfilled by its affiliates, including the Sponsor or entities affiliated with the Sponsor. The Company paid the Dealer Manager, as dealer manager of the Private Offering, selling commissions of up to 7% of the gross offering proceeds from the sale of K Shares and Units in the Private Offering. The Dealer Manager re-allowed all selling commissions to participating broker-dealers. The Company also paid the Dealer Manager a dealer manager fee of up to 3% of the gross offering proceeds from the sale of K Shares and Units. The Dealer Manager could re-allow a portion of its dealer manager fees to participating broker-dealers. Selling commissions and dealer manager fees were paid with proceeds from the sale of A Shares to PHA or its affiliates. There were no selling commissions or dealer manager fees payable on account of shares of any class purchased by PHA, S2K Servicing LLC, or their affiliates. As of December 31, 2021, the Company recognized $1,058,501 of selling commissions and dealer manager fees in connection with the Private Offering. The Company paid the Dealer Manager selling commissions of up to 7% of the gross offering proceeds from the sale of K Shares and selling commissions of up to 3% of the gross offering proceeds from the sale of K-T Shares in the primary portion of the Public Offering. No selling commissions were payable in connection with the sale of K-I Shares. The Dealer Manager was able to re-allow all selling commissions to participating broker-dealers. The Company also paid the Dealer Manager a dealer manager fee of up to 3% of the gross offering proceeds from the sale of K Shares, K-I Shares and K-T Shares sold in the primary portion of the Public Offering. The Dealer Manager allowed a portion of its dealer manager fees to participating broker-dealers. Selling commission and dealer manager fees were generally paid with proceeds from the sale of A Shares to PHA or its affiliates. There were no selling commissions or dealer manager fees payable on account of shares of any class purchased by PHA, S2K Servicing LLC, or any K Shares, K-I Shares and K-T Shares sold pursuant to the DRIP. The selling commissions and dealer manager fees may have been reduced or waived in connection with certain categories of sales. As of December 31, 2021, the Company recognized $2,986,465 of selling commissions and dealer manager fees in connection with the Public Offering. The Company also pays the Dealer Manager with respect to each K-T Share sold in the primary portion of the Public Offering, a stockholder servicing fee equal to 1%, annualized, of the amount of the Company’s estimated NAV per K-T Share for each K-T Share purchased in the primary portion of the Public Offering, for providing services to a holder of K-T Shares. The stockholder servicing fee accrues daily and is payable monthly in arrears. The Dealer Manager will reallow all or a portion of the stockholder servicing fee to participating broker-dealers and servicing broker-dealers. The Company will cease paying the stockholder servicing fee with respect to K-T Shares sold in the primary portion of the Public Offering in accordance with the terms set forth in the prospectus portion of the Registration Statement. As of December 31, 2021, the Company recognized $10,775 of stockholder servicing fees with respect to K-T Shares sold in the primary portion of the Public Offering. If the Company’s board of directors determines, in any year, that the Company has excess cash, the Company’s board of directors will declare a special distribution entitling (a) the holders of K Shares, K-I Shares, K-T Shares to share, pro rata in accordance with the number of K Shares, K-I Shares K-T Shares PHA Upon a liquidation event, any remaining liquidation cash will be paid as a special distribution (a) to the holders of K Shares, K-I Shares and K-T Shares, pro rata in accordance with the number of K Shares, K-I Shares K-T Shares % of such excess cash (unless all such A Shares previously have been repurchased in connection with a Non-cause Advisory Agreement Termination, in which case the excess cash otherwise apportioned to the A Shares would be distributed to the holders of the K Shares, K-I Shares and K-T Shares as noted above). The Company established a long-term incentive plan pursuant to which the Company’s board of directors (including independent directors), officer and employees, PHA and its affiliates and their respective employees, employees of entities that provide services to the Company, managers of the Company’s advisor or directors or managers of entities that provide services to the Company and their respective employees, certain of the Company’s consultants and certain consultants to PHA and its affiliates or entities that provide services to the Company and their respective employees may be granted incentive awards in the form of restricted stock, options, and other equity-based awards. In accordance with the Company’s long-term incentive plan, each new independent director that joins the Company’s board of directors is awarded 250 restricted K Shares in connection to his or her initial election to the board of directors. In addition, in connection with an independent director’s re-election to the Company’s board of directors at each annual meeting of stockholders, he or she will receive an additional 250 restricted K Shares. Restricted K Shares issued to independent directors will vest in equal amounts annually over a four -year period on and following the first anniversary of the date of grant in increments of 25% per annum; provided, however, that the restricted K Shares 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. On February 11, 2019, the Company issued 500 restricted K Shares to each of the Company’s three independent directors for a total of 1,500 restricted K Shares. These awards were in relation to their initial election to the board of directors and their re-election. An additional 250 restricted K Shares were awarded to each independent director upon his or her re-election at the Company’s 2019 and 2020 annual meetings of stockholders on July 11, 2019, November 17, 2020 and November 10, 2021, respectively. Share Repurchase Program and Redeemable Common Stock The Company’s share repurchase program may provide eligible stockholders with limited, interim liquidity by enabling them to sell shares back to the Company, subject to restrictions and applicable law. The Company is not required to repurchase shares. The share repurchase program is only intended to provide interim liquidity to stockholders until a liquidity event occurs, such as the commencement of execution on a plan of liquidation, the listing of the K Shares, K-I Shares or K-T Shares (or successor security) on a national securities exchange, or the Company’s merger with a listed company. The Company cannot guarantee that a liquidity event will occur. On October 26, 2018, the Company’s board of directors approved and adopted the Amended and Restated Share Repurchase Program (the “A&R SRP”). The A&R SRP provides that the Company will not repurchase in excess of 5.0% of the weighted average number of K Shares, K-I Shares and K-T Shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which repurchases are being paid (provided, however, that while shares subject to a repurchase requested upon the death of a stockholder will be included in calculating the maximum number of shares that may be repurchased, shares subject to a repurchase requested upon the death of a stockholder will not be subject to the percentage cap). Additionally, in the event that any stockholder fails to maintain a minimum balance of $2,000 of K Shares, K-I Shares or K-T Shares , the Company may repurchase all of the shares held by that stockholder at the per share repurchase price in effect on the date the Company determines that the stockholder has failed to meet the minimum balance, less any applicable repurchase discount. Minimum account repurchases will apply even in the event that the failure to meet the minimum balance is caused solely by a decline in the Company's estimated NAV per share. In addition, the Company’s repurchase of any shares will be limited to the extent that the Company does not have, as determined in the Company’s board of directors’ discretion, sufficient funds available to fund any such repurchase. Most of the Company’s assets will consist of properties which cannot be readily liquidated without affecting the Company’s ability to realize full value upon their disposition. Therefore, the Company may not have sufficient liquid resources to satisfy all repurchase requests. In addition, the Company’s board of directors may In the event the Company cannot repurchase all shares presented for repurchase in any fiscal quarter, based upon insufficient cash available and/or the limit on the number of shares it may repurchase, the Company would give first priority to the repurchase of deceased stockholders’ shares. The Company would next give priority to (i) requests of stockholders with “qualifying disabilities” (as defined in the A&R SRP), and in the discretion of the Company’s board of directors, stockholders with another involuntary exigent circumstance, such as bankruptcy, and (ii) next, to requests for full repurchases of accounts with a balance of 100 or less shares at the time the Company receives the request, in order to reduce the expense of maintaining small accounts. Thereafter, the Company will honor the remaining quarterly repurchase requests on a pro-rata basis. Unfulfilled requests will be carried over automatically to subsequent repurchase periods unless a stockholder withdraws a request pursuant to the terms of the A&R SRP. Repurchases of K Shares, K-I Shares K-T Shares five No shares can be repurchased under the Company’s A&R SRP until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within two shares and will not be resold unless such sales are made pursuant to transactions that are registered or exempt from registration under applicable securities laws. The Company will not pay its Sponsor, board of directors, PHA or their affiliates any fees to complete transactions under the A&R SRP. The per share repurchase price will depend on the length of time the stockholder has held such shares as follows: Share Purchase Anniversary Repurchase Price on Repurchase Date Less than 1 year No Repurchase Allowed 1 year 92.5% of most recent estimated per share NAV 2 years 95.0% of most recent estimated per share NAV 3 years 97.5% of most recent estimated per share NAV 4 years 100.0% of most recent estimated per share NAV In the event of a stockholder’s death or disability 100.0% of most recent estimated per share NAV Notwithstanding the foregoing, pursuant to securities laws and regulations, at any time the Company is engaged in an offering, the repurchase amount shall never be more than the current offering price of such shares. Shares repurchased in connection with a stockholder’s bankruptcy or other exigent circumstance, in the sole discretion of the Company’s board of directors, within one year from the purchase date will be repurchased at a price per share equal to the price per share the Company would pay had the stockholder held the shares for one year from the purchase date. The purchase price for repurchased shares will be adjusted for any stock dividends, combinations, splits, recapitalizations, or similar corporate actions with respect to the Company’s common stock. If the Company has sold any properties and have made one or more special distributions to stockholders of all or a portion of the net proceeds from such sales, the per share repurchase price will be reduced by the net sale proceeds per share distributed to stockholders prior to the Repurchase Date to the extent such distributions are not used to pay accumulated, accrued and unpaid distributions on such K Shares, K-I Shares and K-T Shares. The Company’s board of directors will, in its sole discretion, determine which distributions, if any, constitute a special distribution. While the Company’s board of directors does not have specific criteria for determining a special distribution, the Company expects that a special distribution will occur only upon the sale of a property and the subsequent distribution of net sale proceeds. On March 20, 2020, the Company’s board of directors decided to temporarily suspend repurchases under the A&R SRP, effective with repurchase requests that would have been processed in April 2020 due to the negative impact of the COVID-19 pandemic on the Company’s portfolio at the time; provided, however, the Company continued to process repurchases due to death in accordance with the terms of its share repurchase program. On June 10, 2020, the Company’s board of directors determined to fully reopen the share repurchase program to all repurchase requests commencing with the next quarter Repurchase Date, beginning in July 2020. Shares will be repurchased subject to and upon the terms and conditions of the Company’s A&R SRP. During the year ended December 31, 2021, the Company fulfilled repurchase requests and repurchased K Shares, K-I Shares and K-T Shares pursuant to the share repurchase program as follows: Total Number of Shares Requested to Total Number of Average Price Paid For the Quarter Ended be Repurchased Shares Repurchased per Share March 31, 2021 34,700 1,000 $ 7.92 June 30, 2021 59,979 34,700 $ 8.34 September 30, 2021 7,900 59,979 $ 9.54 December 31, 2021 9,113 7,900 $ 9.68 111,692 103,579 During the year ended December 31, 2021, the Company repurchased approximately $945,878 of K Shares which represented all repurchase requests received in good order and eligible for repurchase through the December 31, 2021 Repurchase Date. The Company generally repurchases shares approximately 30 days following the end of the applicable quarter in which requests were received. As December 31, 2021, there were three outstanding and unfulfilled repurchase request for 7,500 K Shares and 1,613 K-I Shares, which were repurchased on January 11, 2022 for $84,708. Distributions During the year ended December 31, 2020, the Company’s board of directors authorized the payment of distributions as follows: Shares Amount Date Outstanding Date Record Per Share Distributions Paid Date Authorized Date Per Day K Share K-I Share K-T Share OP Units Total 1/31/2020 12/31/2019 1/23/2020 1/28/2020 $0.0016438356 $ 378,942 $ 65,432 $ 6,023 $ — $ 450,397 5/1/2020 3/31/2020 4/29/2020 4/30/2020 $0.0016393443 453,908 83,629 7,029 — $ 544,566 11/12/2020 6/30/2020 10/27/2020 10/30/2020 $0.0019125683 571,905 109,943 8,352 — $ 690,200 11/16/2020 9/30/2020 10/27/2020 10/30/2020 $0.0005737705 175,454 33,597 2,534 — $ 211,585 $ 1,580,209 $ 292,601 $ 23,938 $ — $ 1,896,748 During the year ended December 31, 2021, the Company’s board of directors authorized the payment of distributions as follows: Shares Amount Date Outstanding Date Record Per Share Distributions Paid Date Authorized Date Per Day K Share K-I Share K-T Share OP Units Total 9/24/2021 9/30/2020 9/24/2021 9/27/2021 $0.0013387978 $ 409,394 $ 78,393 $ 5,911 $ — $ 493,698 9/29/2021 12/31/2020 9/24/2021 9/24/2021 $0.0019125683 610,721 116,169 8,422 — $ 735,312 11/18/2021 3/31/2021 11/16/2021 11/17/2021 $0.0019178082 628,342 131,938 8,245 — $ 768,525 11/22/2021 6/30/2021 11/16/2021 11/17/2021 $0.0019178082 656,519 176,438 8,959 — $ 841,916 11/24/2021 9/30/2021 11/16/2021 11/17/2021 $0.0019178082 691,711 217,307 10,528 — $ 919,546 12/23/21 3/31/2020 4/29/2020 4/30/2020 $0.0016393443 6,932 $ 6,932 12/23/21 6/30/2020 10/27/2020 10/30/2020 $0.0019125683 22,299 $ 22,299 12/23/21 9/30/2020 9/24/2021 9/24/2021 $0.0019125683 22,544 $ 22,544 12/23/21 12/31/2020 9/24/2021 9/24/2021 $0.0019125683 22,544 $ 22,544 12/23/21 3/31/2021 11/16/2021 11/17/2021 $0.0019178082 22,115 $ 22,115 12/23/21 6/30/2021 11/16/2021 11/17/2021 $0.0019178082 22,360 $ 22,360 12/23/21 9/30/2021 11/16/2021 11/17/2021 $0.0019178082 22,606 $ 22,606 $ 2,996,687 $ 720,245 $ 42,065 $ 141,400 $ 3,900,397 On March 3, 2020, the Company’s stockholders approved to amend the Company’s charter (1) to increase the rate at which cash distributions on K Shares, K-I Shares and K-T Shares automatically accrue under the Company’s charter from 6% to 7% per annum of the K Share Distribution Base of such K Share, K-I Share K-T Share The Company paid quarterly distributions with respect to the quarter ended March 31, 2020, the quarter ended June 30, 2020, the quarter ended September 30, 2020, the quarter ended December 31, 2020, the quarter ended March 31, 2021, the quarter ended June 30, 2021, the quarter ended September 30, 2021 and the quarter ended December 31, 2021 with operating cash flow from its hotel properties, consistent with prior distributions. The Company’s board of directors will make determinations as to the payment of future distributions on a quarter by quarter basis; however, distributions will continue to accumulate pursuant to the Company’s charter. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | Note 11 - Income Taxes The Company recognized consolidated income tax expense of $25,745 and $609 for the years ended December 31, 2021 and 2020, respectively. These amounts relate to the operations of the Company’s TRSs, which had consolidated net income for the years ended December 31, 2021 and 2020. At December 31, 2021 and 2020, the Company had net deferred tax assets of $40,532 and $33,105, respectively, due to temporary differences between the timing of the GAAP recognition and tax recognition of certain expenses and net operating losses. The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and determined it is more likely than not that the Company will not recognize the benefits of the deferred tax assets, except for the net operating losses that can be carried back to offset income in prior years. As such, a valuation allowance has been established upon such deferred tax assets as of December 31, 2021. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 12 - Commitments and Contingencies Economic Dependency The Company depends on PHA for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase and disposition of properties and other investments, management of the daily operations of the Company’s real estate portfolio, and other general and administrative responsibilities. In the event that PHA is unable to provide these services to the Company, the Company will be required to obtain such services from other sources, and the Company’s failure to identify such other sources could have an adverse impact on the Company’s financial condition and results of operations. Legal Matters From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. Environmental All real properties and the operations conducted on real properties are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. In connection with ownership and operation of real estate, the Company may be potentially liable for costs and damages related to environmental matters. The Company intends to take commercially reasonable steps to protect ourselves from the impact of these laws, including obtaining environmental assessments of all properties that the Company acquires. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | Note 13 – Subsequent Events On February 11, 2022, the Company’s board of directors authorized the payment of distributions, with respect to each K Share, K-I Share and K-T Share outstanding as of December 31, 2021, to the holders of record of K Shares, K-I Shares and K-T Shares as of the close of business on February 14, 2022. With respect to the K Shares, K-I Shares and K-T Shares outstanding as of December 31, 2021, the cumulative amount of distributions that had accrued on a daily basis with respect to each K Share, K-I Share and K-T Share since September 30, 2021, was $694,063, or $0.0019178082 per K Share per day, $230,511, or $0.0019178082 per K-I Share per day, and $10,927, or $0.0019178082 per K-T Share per day, respectively. Such distributions were paid to stockholders in cash or in additional shares pursuant to the DRIP on February 16, 2022. Subsequent to December 31, 2021 and through March 25, 2022, pursuant to the DRIP Offering, the Company sold approximately 12,344 K Shares at a weighted average price of $9.36 per share for gross proceeds of $115,541, approximately 7,993 K-I Shares at a weighted average price of $9.36 per share for gross proceeds of $74,814 and approximately 753 K-T Shares at a weighted average price of $9.36 per share for gross proceeds of $7,051, for total gross proceeds of $197,406 in the DRIP Offering. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The Company consolidates variable interest entities (“VIEs”) as defined under the Consolidation Topic (“Topic 810”) of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) when it has the power to direct the activities that most significantly impact the VIE’s performance and the obligation to absorb losses or the right to receive benefits from the VIE that could be significant. At December 31, 2021, the assets of our VIEs were $65,357,202, and consist primarily of land, building, furniture, fixtures, and equipment and are available to satisfy our VIEs' obligations. The liabilities of our VIEs were $43,713,850 at December 31, 2021 and consist primarily of long-term debt. The Company has guaranteed certain obligations of its VIEs. The Company has no foreign operations or assets and its operating structure includes only one segment. |
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 and disclosure of contingent assumptions and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Investment in Real Estate | Investment in Real Estate Investment in real estate is stated 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 cost of ordinary repairs and maintenance are charged to expense when incurred. Depreciation expense is computed using the straight-line and accelerated methods based upon the following estimated useful lives: Building 39 years Improvements 7 - 15 years Furniture, fixtures and equipment 3 - 7 years |
Real Estate Purchase Price Allocation | Real Estate Purchase Price Allocation Upon the acquisition of hotel properties, the Company evaluates whether the acquisition is a business combination or an asset acquisition. For both business combinations and asset acquisitions the Company allocates the purchase price of properties to acquired tangible assets and any assumed debt based on their fair value. For asset acquisitions, the Company capitalizes transaction costs and allocates the purchase price using a relative fair value method allocating all accumulated costs. For business combinations, the Company expenses transaction costs associated as incurred and allocates the purchase price based on the estimated fair value of each separately identifiable asset and liability. The tangible assets acquired consist of land, buildings, improvements, furniture, fixtures and equipment. The Company utilizes independent appraisals, as well as hotel construction costs and other available market data, to assist in the determination of the fair values of the tangible assets of an acquired property. The Company determines the fair value of any assumed debt by calculating the net present value of the scheduled mortgage payments using methods similar to those used by independent appraisers, including using a discounted cash flow analysis that uses appropriate discount or capitalization rates and available market information where applicable. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. 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 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. 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 are based on judgment and 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets and certain identifiable intangibles, including franchise agreements with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. |
Derivative Financial Instruments | Derivative Financial Instruments All derivative financial instruments are recorded at fair value in the Company’s consolidated balance sheet as an asset or liability. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. The Company’s objective in using derivatives is to add stability to interest expense and to manage the Company’s exposure to interest rate movements or other identified risks. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as an unrealized gain or loss in the consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under GAAP, the Company is required to disclose the fair value of certain financial instruments on a recurring basis. The accompanying consolidated balance sheets include the following financial instruments: cash, restricted cash, accounts receivable, accounts payable, mortgage notes payable and other debt. The Company considers the carrying value of cash, restricted cash, accounts receivable, accounts payable and other debt to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value is as follows: ● Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; ● Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value driers are observable in active markets; and ● Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. As of December 31, 2021, the estimated fair value of the mortgage notes payable was $64,722,195, compared to the carrying value of $64,369,587. These financial instruments are valued using Level 3 inputs through a discounted cash flow analysis of the contractual cash flows of the notes payable discounted at a market rate for similar borrowings. |
Revenue Recognition | Revenue Recognition Revenue is generally recognized as services are performed. Revenue represents primarily rooms, food and beverage sales, and other fees. The Company collects sales tax from all nonexempt customers and remits the entire amount to the appropriate states upon collection from the customer. The Company's accounting policy is to exclude the tax collected and remitted to the state from revenue and expense. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash on hand or held in banks and highly liquid investments with original maturities of three months or less. |
Restricted Cash | Restricted Cash The Company maintains reserves for property taxes and capital improvements as required by the debt agreements. At December 31, 2021 and 2020, reserves for property taxes were $347,273 and $409,373, respectively, and reserves for capital improvements were $2,587,963 and $2,420,168, respectively. The Company also included $53,140 and $36,140 of guest advance deposits as restricted cash at December 31, 2021 and 2020, respectively. |
Accounts Receivable | Accounts Receivable The Company records its accounts receivable at cost. The Company provides an allowance for doubtful accounts, when deemed necessary, based on expected losses. The Company has determined that no allowance for doubtful accounts was necessary at December 31, 2021 and 2020. |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets Prepaid expenses include prepaid insurance and hotel operating expenses. Other assets include inventories at the hotel properties, consisting of food and beverage, are valued at the lower of cost and net realizable value, using the FIFO (first-in first-out) method of accounting. Other assets also include the Company’s deferred income tax asset. |
Deferred Franchise Fees | Deferred Franchise Fees Franchise fee represents the initial franchise fee paid by the Company. The initial franchise fees of the agreements are recorded at cost and amortized on a straight-line basis over the term of the franchise agreements. |
Deferred Financing Costs | Deferred Financing Costs Deferred finance fees are bank fees and other costs incurred in obtaining financing that are amortized on a straight-line basis over the term of the related debt. Deferred finance fees are presented as a direct reduction of the carrying amount of the mortgage notes payable on the consolidated balance sheet. Amortization of deferred finances fees is included in interest expense. |
Organization and Offering Costs | Organization and Offering Costs Organization and offering costs (“O&O Costs”) include selling commissions, dealer manager fees, stockholder servicing fees and any other elements of underwriting compensation, legal, accounting, printing, mailing and filing fees and expenses, due diligence expenses of participating broker-dealers supported by detailed and itemized invoices, costs in connection with preparing sales materials, design and website expenses, fees and expenses of the Company's transfer agent, fees to attend retail seminars sponsored by participating broker-dealers and reimbursements for customary travel, lodging, and meals. The Company charged O&O Costs against additional paid in capital on the consolidated balance sheet as it raised proceeds in its Public Offering, which was terminated on August 13, 2021. |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and has operated as a REIT, commencing with the taxable year ended December 31, 2018. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its annual REIT taxable income to its stockholders (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). As a REIT, the Company generally will not be subject to U.S. federal income tax to the extent it distributes qualifying dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year following the year it initially elects to be taxed as a REIT, it will be subject to U.S. federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for U.S. federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect the Company’s net income and net cash available for distribution to its stockholders. Because the Company is prohibited from operating hotel properties pursuant to certain tax laws relating to its qualification as a REIT, the entities through which the Company owns hotel properties will lease the hotel properties to one or more taxable REIT subsidiaries (“TRSs”). A TRS is a corporate subsidiary of a REIT that jointly elects, with the REIT, to be treated as a TRS of the REIT, and that pays U.S. federal income tax at regular corporate rates on its taxable income. The Company accounts for income taxes of its TRSs 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 financial statements if it is more likely than not that the tax position will be sustained upon examination. At December 31, 2021, the Company had no material uncertain tax positions. 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 2018 through 2021 remaining subject to examination by federal and various state tax jurisdictions. |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interest represents the portion of equity of Procaccianti Convertible Fund, LLC (“PCF”) held by owners other than the Company. Noncontrolling interest is reported in the consolidated balance sheets within equity, separately from stockholders’ equity. Revenue, expenses, and net income attributable to both the Company and the noncontrolling interest are reported in the consolidated statement of operations. |
Noncontrolling Interest of the Operating Partnership | Noncontrolling Interest of the Operating Partnership Noncontrolling interest of the Operating Partnership represents the value of the 128,124 Class K OP Units that were issued to affiliate sellers in connection with the acquisition of the Hilton Garden Inn Providence. Noncontrolling interest of the Operating Partnership is reported in the mezzanine section of the consolidated balance sheet, as the units are redeemable at the request of the holder for cash equal to the fair market value of a K Share as defined in the Amended and Restated Agreement of Limited Partnership of Procaccianti Hotel REIT, L.P. (the “Amended and Restated Operating Partnership Agreement”). The Company may elect to acquire any such unit presented for redemption for one K Share or cash. Revenue, expenses, and net income attributable to both the Company and the noncontrolling interest of the Operating Partnership are reported in the consolidated statement of operations. |
Per Share Data | Per Share Data The Company calculates its basic and diluted earnings per common share (“EPS”) utilizing the two-class method. Under the two-class method both basic and diluted EPS are calculated for each class of common stock considering distributions declared and accumulated, and the rights of common shares and participating securities in any undistributed earnings. Undistributed earnings are allocated to all outstanding common shares based on the relative percentage of each class of shares to the total number of outstanding shares. Included in the calculation of basic EPS are 3,000 non-vested restricted K Shares held by the Company's independent directors as of December 31, 2021 because such shares have been issued and participate in distributions. The Company’s calculated earnings per share for the year ended December 31, 2021 and 2020, were as follows: Year Ended December 31, 2021 2020 Net income (loss) attributable to common stockholders $ 2,592,193 $ (3,826,605) Less: Class K Common Stock dividends declared and accumulated 2,670,747 2,221,403 Less: Class K-I Common Stock dividends declared and accumulated 756,291 421,761 Less: Class K-T Common Stock dividends declared and accumulated 38,663 32,247 Less: Class A Common Stock dividends declared and accumulated 405,468 362,825 Undistributed net loss $ (1,278,976) $ (6,864,841) Class K Common Stock: Undistributed loss $ (862,892) $ (4,882,213) Class K Common Stock dividends declared and accumulated 2,670,747 2,221,403 Net income (loss) $ 1,807,855 $ (2,660,810) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 3,815,288 3,281,469 Class K-I Common Stock: Undistributed net loss $ (244,344) $ (926,056) Class K-I Common Stock dividends declared and accumulated 756,291 421,761 Net income (loss) $ 511,947 $ (504,295) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 1,080,372 622,428 Class K-T Common Stock: Undistributed net loss $ (12,491) $ (71,030) Class K-T Common Stock dividends declared and accumulated 38,663 32,247 Net income (loss) $ 26,172 $ (38,783) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 55,231 47,741 Class A Common Stock: Undistributed net loss $ (130,978) $ (799,565) Class A Common Stock dividends declared and accumulated 405,468 362,825 Net income (loss) $ 274,490 $ (436,740) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 579,119 537,410 Class B Common Stock: Undistributed net loss $ (28,271) $ (185,977) Net loss per common share, basic and diluted $ (0.23) $ (1.49) Weighted average number of common shares outstanding, basic and diluted 125,000 125,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of fixed assets | Building 39 years Improvements 7 - 15 years Furniture, fixtures and equipment 3 - 7 years |
Schedule of EPS | Year Ended December 31, 2021 2020 Net income (loss) attributable to common stockholders $ 2,592,193 $ (3,826,605) Less: Class K Common Stock dividends declared and accumulated 2,670,747 2,221,403 Less: Class K-I Common Stock dividends declared and accumulated 756,291 421,761 Less: Class K-T Common Stock dividends declared and accumulated 38,663 32,247 Less: Class A Common Stock dividends declared and accumulated 405,468 362,825 Undistributed net loss $ (1,278,976) $ (6,864,841) Class K Common Stock: Undistributed loss $ (862,892) $ (4,882,213) Class K Common Stock dividends declared and accumulated 2,670,747 2,221,403 Net income (loss) $ 1,807,855 $ (2,660,810) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 3,815,288 3,281,469 Class K-I Common Stock: Undistributed net loss $ (244,344) $ (926,056) Class K-I Common Stock dividends declared and accumulated 756,291 421,761 Net income (loss) $ 511,947 $ (504,295) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 1,080,372 622,428 Class K-T Common Stock: Undistributed net loss $ (12,491) $ (71,030) Class K-T Common Stock dividends declared and accumulated 38,663 32,247 Net income (loss) $ 26,172 $ (38,783) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 55,231 47,741 Class A Common Stock: Undistributed net loss $ (130,978) $ (799,565) Class A Common Stock dividends declared and accumulated 405,468 362,825 Net income (loss) $ 274,490 $ (436,740) Net income (loss) per common share, basic and diluted $ 0.47 $ (0.81) Weighted average number of common shares outstanding, basic and diluted 579,119 537,410 Class B Common Stock: Undistributed net loss $ (28,271) $ (185,977) Net loss per common share, basic and diluted $ (0.23) $ (1.49) Weighted average number of common shares outstanding, basic and diluted 125,000 125,000 |
Investments in Hotels (Tables)
Investments in Hotels (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments in Hotels | |
Schedule of investments in hotel properties | Contract Mortgage Date Ownership Purchase Debt Property Name Acquired Location Interest Price (1) (2) Rooms Outstanding Springhill Suites Wilmington 05/24/2017 (1) Wilmington, NC 51 % $ 18,000,000 120 $ 10,988,748 Staybridge Suites St. Petersburg 06/29/2017 (1) St. Petersburg, FL 51 % $ 20,500,000 119 $ 13,004,427 Hotel Indigo Traverse City 08/15/2018 Traverse City, MI 100 % $ 26,050,000 107 $ 15,092,000 Hilton Garden Inn Providence 02/27/2020 Providence, RI 100 % $ 28,500,000 137 $ 16,936,901 Cherry Tree Inn 07/30/2021 Traverse City, MI 100 % $ 15,000,000 76 $ 8,000,000 1) Represents the date and contract purchase price of PCF’s acquisition of the Springhill Suites Wilmington property (the “Springhill Suites Wilmington”) and the Staybridge Suites St. Petersburg property (the “Staybridge Suites St. Petersburg”). The Company exercised its option under an option agreement to purchase a 51% membership interest in PCF on March 29, 2018. 2) Contract purchase price excludes acquisition fees and costs. |
Schedule of investments in hotel properties, fixed assets | December 31, December 31, 2021 2020 Land $ 14,450,538 $ 11,588,686 Building and improvements 88,767,739 77,286,159 Furniture, fixtures, and equipment 8,896,732 7,244,831 Total cost 112,115,009 96,119,676 Accumulated depreciation (9,878,030) (6,530,972) Property and equipment, net $ 102,236,979 $ 89,588,704 |
Schedule of fair value of the assets acquired and liabilities assumed in the acquisition | Fair Value at July 30, 2021 Land $ 2,850,000 Building and improvements 10,920,000 Furniture, fixtures, and equipment 1,230,000 Total assets acquired $ 15,000,000 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Assets | |
Schedule of future amortization of deferred franchise costs | Years Ending December 31, 2022 $ 15,475 2023 15,475 2024 15,475 2025 15,475 2026 15,475 Thereafter 164,899 Total $ 242,274 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Mortgage Notes Payable | |
Scheduled of maturities of the mortgage notes payable | Years Ending December 31, 2022 $ 15,507,485 2023 673,704 2024 23,357,916 2025 16,482,971 Thereafter 8,000,000 Total $ 64,022,076 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity | |
Schedule of length of time use to calculate repurchase price | Share Purchase Anniversary Repurchase Price on Repurchase Date Less than 1 year No Repurchase Allowed 1 year 92.5% of most recent estimated per share NAV 2 years 95.0% of most recent estimated per share NAV 3 years 97.5% of most recent estimated per share NAV 4 years 100.0% of most recent estimated per share NAV In the event of a stockholder’s death or disability 100.0% of most recent estimated per share NAV |
Schedule of share repurchase program | Total Number of Shares Requested to Total Number of Average Price Paid For the Quarter Ended be Repurchased Shares Repurchased per Share March 31, 2021 34,700 1,000 $ 7.92 June 30, 2021 59,979 34,700 $ 8.34 September 30, 2021 7,900 59,979 $ 9.54 December 31, 2021 9,113 7,900 $ 9.68 111,692 103,579 |
Schedule of share distributions | During the year ended December 31, 2020, the Company’s board of directors authorized the payment of distributions as follows: Shares Amount Date Outstanding Date Record Per Share Distributions Paid Date Authorized Date Per Day K Share K-I Share K-T Share OP Units Total 1/31/2020 12/31/2019 1/23/2020 1/28/2020 $0.0016438356 $ 378,942 $ 65,432 $ 6,023 $ — $ 450,397 5/1/2020 3/31/2020 4/29/2020 4/30/2020 $0.0016393443 453,908 83,629 7,029 — $ 544,566 11/12/2020 6/30/2020 10/27/2020 10/30/2020 $0.0019125683 571,905 109,943 8,352 — $ 690,200 11/16/2020 9/30/2020 10/27/2020 10/30/2020 $0.0005737705 175,454 33,597 2,534 — $ 211,585 $ 1,580,209 $ 292,601 $ 23,938 $ — $ 1,896,748 During the year ended December 31, 2021, the Company’s board of directors authorized the payment of distributions as follows: Shares Amount Date Outstanding Date Record Per Share Distributions Paid Date Authorized Date Per Day K Share K-I Share K-T Share OP Units Total 9/24/2021 9/30/2020 9/24/2021 9/27/2021 $0.0013387978 $ 409,394 $ 78,393 $ 5,911 $ — $ 493,698 9/29/2021 12/31/2020 9/24/2021 9/24/2021 $0.0019125683 610,721 116,169 8,422 — $ 735,312 11/18/2021 3/31/2021 11/16/2021 11/17/2021 $0.0019178082 628,342 131,938 8,245 — $ 768,525 11/22/2021 6/30/2021 11/16/2021 11/17/2021 $0.0019178082 656,519 176,438 8,959 — $ 841,916 11/24/2021 9/30/2021 11/16/2021 11/17/2021 $0.0019178082 691,711 217,307 10,528 — $ 919,546 12/23/21 3/31/2020 4/29/2020 4/30/2020 $0.0016393443 6,932 $ 6,932 12/23/21 6/30/2020 10/27/2020 10/30/2020 $0.0019125683 22,299 $ 22,299 12/23/21 9/30/2020 9/24/2021 9/24/2021 $0.0019125683 22,544 $ 22,544 12/23/21 12/31/2020 9/24/2021 9/24/2021 $0.0019125683 22,544 $ 22,544 12/23/21 3/31/2021 11/16/2021 11/17/2021 $0.0019178082 22,115 $ 22,115 12/23/21 6/30/2021 11/16/2021 11/17/2021 $0.0019178082 22,360 $ 22,360 12/23/21 9/30/2021 11/16/2021 11/17/2021 $0.0019178082 22,606 $ 22,606 $ 2,996,687 $ 720,245 $ 42,065 $ 141,400 $ 3,900,397 |
Organization and Description _2
Organization and Description of Business (Details) | Jun. 24, 2021USD ($)shares | Dec. 31, 2020USD ($)$ / shares | Aug. 14, 2020USD ($)$ / shares | Feb. 27, 2020USD ($)$ / sharesshares | May 23, 2019USD ($)$ / shares | Aug. 14, 2018USD ($)$ / shares | Sep. 30, 2016USD ($)$ / sharesshares | Dec. 31, 2021USD ($)itemstateroom$ / shares | Jun. 09, 2021$ / shares | Jun. 10, 2020$ / shares | Nov. 16, 2018$ / shares |
Subsidiary, Sale of Stock | |||||||||||
Number of owned interests in select - service hotels | item | 5 | ||||||||||
Number of states select service hotels located | state | 4 | ||||||||||
Number of select service hotels rooms | room | 559 | ||||||||||
Total investment | $ 89,588,704 | $ 102,236,979 | |||||||||
Hilton Garden Inn Providence | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Number of Class K OP Units issued | shares | 128,124 | ||||||||||
Value of Class K OP Units issued (in dollars per share) | $ / shares | $ 10 | ||||||||||
Total investment | $ 1,281,244 | ||||||||||
Cash consideration received by individuals with direct or indirect interests in the sellers of the hotel | $ 0 | ||||||||||
Initial public offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Amount of shares sold for termination of private offering prior to commencement of public offering | $ 39,689,008 | ||||||||||
Amount of shares authorized under IPO | $ 550,000,000 | ||||||||||
Amount of shares offered | $ 500,000,000 | ||||||||||
Estimated net asset value | $ 50,000,000 | ||||||||||
Private offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Units issued, price per unit | $ / shares | $ 50 | ||||||||||
Class A Common Stock | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||
Net Asset Value Per Share | $ / shares | $ 0 | $ 0 | |||||||||
Class A Common Stock | Private offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Number of shares consist in one units | shares | 1 | ||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | ||||||||||
Amount of shares sold for termination of private offering prior to commencement of public offering | $ 2,954,095 | $ 2,630,000 | |||||||||
Selling commissions | 782,705 | ||||||||||
Dealer manager fees | 275,794 | ||||||||||
Other offering costs | 1,083,912 | ||||||||||
Class B Common Stock | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | 0.01 | $ 0.01 | |||||||||
Net Asset Value Per Share | $ / shares | 0 | 0 | |||||||||
Class K Shares and Class A shares | Private offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Amount of shares sold for termination of private offering prior to commencement of public offering | $ 15,582,755 | ||||||||||
Class K Common Stock | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | 0.01 | 0.01 | |||||||||
Net Asset Value Per Share | $ / shares | 9.85 | 8.56 | |||||||||
Class K Common Stock | Distribution reinvestment plan | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.50 | $ 9.36 | |||||||||
Amount of shares offered | $ 12,500,000 | ||||||||||
Proceeds from DRIP | $ 538,633 | ||||||||||
Class K Common Stock | Initial public offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.77 | $ 10 | |||||||||
Amount of shares offered | $ 125,000,000 | ||||||||||
Class K Common Stock | Private offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Number of shares consist in one units | shares | 4 | ||||||||||
Targeted maximum offering | $ 150,000,000 | ||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | ||||||||||
Shares issued price per share | $ / shares | $ 10 | ||||||||||
Class K Common Stock | DRIP Offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Number of shares issued | shares | 4,273,505 | ||||||||||
Amount of shares offered | $ 40,000,000 | ||||||||||
Class K-I Common Stock | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | 0.01 | $ 0.01 | |||||||||
Shares issued price per share | $ / shares | 10 | ||||||||||
Net Asset Value Per Share | $ / shares | 9.77 | 8.55 | |||||||||
Class K-I Common Stock | Distribution reinvestment plan | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.50 | $ 9.36 | |||||||||
Amount of shares offered | $ 12,500,000 | ||||||||||
Proceeds from DRIP | $ 314,340 | ||||||||||
Class K-I Common Stock | Initial public offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.85 | 9.50 | $ 9.30 | ||||||||
Amount of shares offered | $ 125,000,000 | ||||||||||
Class K-I Common Stock | Initial public offering | Distribution reinvestment plan | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.50 | ||||||||||
Class K-I Common Stock | DRIP Offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Number of shares issued | shares | 4,273,505 | ||||||||||
Amount of shares offered | $ 40,000,000 | ||||||||||
Class K-T Common Stock | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||
Shares issued price per share | $ / shares | 10 | ||||||||||
Net Asset Value Per Share | $ / shares | $ 9.85 | $ 8.56 | |||||||||
Class K-T Common Stock | Distribution reinvestment plan | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.50 | $ 9.36 | |||||||||
Amount of shares offered | $ 25,000,000 | ||||||||||
Proceeds from DRIP | $ 35,873 | ||||||||||
Class K-T Common Stock | Initial public offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Initial offering price per share | $ / shares | $ 9.85 | $ 10 | |||||||||
Amount of shares offered | $ 250,000,000 | ||||||||||
Class K-T Common Stock | DRIP Offering | |||||||||||
Subsidiary, Sale of Stock | |||||||||||
Number of shares issued | shares | 4,273,505 | ||||||||||
Amount of shares offered | $ 40,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | Feb. 27, 2020shares | Dec. 31, 2021USD ($)segmentshares | Dec. 31, 2020USD ($) |
Total of VIE and asset acquisition: | |||
Assets | $ 113,661,378 | $ 100,954,146 | |
Liabilities | $ 69,670,409 | 63,121,242 | |
Number of segment | segment | 1 | ||
Carrying value of mortgage notes payable | $ 64,141,964 | 56,747,853 | |
Uncertain tax positions | 0 | ||
Allowance for doubtful accounts | 0 | 0 | |
Hilton Garden Inn Providence | |||
Total of VIE and asset acquisition: | |||
Number Of Operating Partnership Units Issued | shares | 128,124 | ||
Procaccianti Convertible Fund, LLC (PCF) | |||
Total of VIE and asset acquisition: | |||
Fair value of mortgage notes payable | 64,722,195 | ||
Carrying value of mortgage notes payable | 64,369,587 | ||
Reserves for property taxes | 347,273 | 409,373 | |
Reserves for capital improvements | 2,587,963 | 2,420,168 | |
Advance deposits | $ 53,140 | $ 36,140 | |
Percentages of annual taxable income to stockholders | 90.00% | ||
Procaccianti Convertible Fund, LLC (PCF) | Restricted K shares | Director | |||
Total of VIE and asset acquisition: | |||
Number of shares issued and participate in dividends | shares | 3,000 | ||
Procaccianti Convertible Fund, LLC (PCF) | Variable Interest Entity, Primary Beneficiary | |||
Total of VIE and asset acquisition: | |||
Assets | $ 65,357,202 | ||
Liabilities | $ 43,713,850 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated useful lives (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Building [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful lives | 39 years |
Improvements [Member] | Minimum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful lives | 7 years |
Improvements [Member] | Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful lives | 15 years |
Furniture, fixtures and equipment [Member] | Minimum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful lives | 3 years |
Furniture, fixtures and equipment [Member] | Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimated useful lives | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - EPS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share | ||
Net income (loss) | $ 2,592,193 | $ (3,826,605) |
Undistributed net income (loss) | (1,278,976) | (6,864,841) |
Class K Common Stock | ||
Earnings Per Share | ||
Net income (loss) | 1,807,855 | (2,660,810) |
Common Stock dividends declared and accumulated | 2,670,747 | 2,221,403 |
Undistributed net income (loss) | $ (862,892) | $ (4,882,213) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 3,815,288 | 3,281,469 |
Weighted average number of common shares outstanding - diluted (in shares) | 3,815,288 | 3,281,469 |
Class K-I Common Stock | ||
Earnings Per Share | ||
Net income (loss) | $ 511,947 | $ (504,295) |
Common Stock dividends declared and accumulated | 756,291 | 421,761 |
Undistributed net income (loss) | $ (244,344) | $ (926,056) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 1,080,372 | 622,428 |
Weighted average number of common shares outstanding - diluted (in shares) | 1,080,372 | 622,428 |
Class K-T Common Stock | ||
Earnings Per Share | ||
Net income (loss) | $ 26,172 | $ (38,783) |
Common Stock dividends declared and accumulated | 38,663 | 32,247 |
Undistributed net income (loss) | $ (12,491) | $ (71,030) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 55,231 | 47,741 |
Weighted average number of common shares outstanding - diluted (in shares) | 55,231 | 47,741 |
Class A Common Stock | ||
Earnings Per Share | ||
Net income (loss) | $ 274,490 | $ (436,740) |
Common Stock dividends declared and accumulated | 405,468 | 362,825 |
Undistributed net income (loss) | $ (130,978) | $ (799,565) |
Net income (loss) per common share, basic (in dollars per share) | $ 0.47 | $ (0.81) |
Net income (loss) per common share, diluted (in dollars per share) | $ 0.47 | $ (0.81) |
Weighted average number of common shares outstanding - basic (in shares) | 579,119 | 537,410 |
Weighted average number of common shares outstanding - diluted (in shares) | 579,119 | 537,410 |
Class B Common Stock | ||
Earnings Per Share | ||
Net income (loss) | $ (28,271) | $ (185,977) |
Undistributed net income (loss) | $ (28,271) | $ (185,977) |
Net income (loss) per common share, basic (in dollars per share) | $ (0.23) | $ (1.49) |
Net income (loss) per common share, diluted (in dollars per share) | $ (0.23) | $ (1.49) |
Weighted average number of common shares outstanding - basic (in shares) | 125,000 | 125,000 |
Weighted average number of common shares outstanding - diluted (in shares) | 125,000 | 125,000 |
Investments in Hotels - Investm
Investments in Hotels - Investments in hotel properties (Details) | 12 Months Ended |
Dec. 31, 2021USD ($)room | |
Springhill Suites Wilmington Mayfaire | |
Schedule of Investments | |
Date Acquired | May 24, 2017 |
Location | Wilmington, NC |
Ownership interest | 51.00% |
Contract Purchase Price | $ 18,000,000 |
Rooms | room | 120 |
Mortgage debt Outstanding | $ 10,988,748 |
Staybridge Suites St. Petersburg | |
Schedule of Investments | |
Date Acquired | Jun. 29, 2017 |
Location | St. Petersburg, FL |
Ownership interest | 51.00% |
Contract Purchase Price | $ 20,500,000 |
Rooms | room | 119 |
Mortgage debt Outstanding | $ 13,004,427 |
Hotel Indigo Traverse City | |
Schedule of Investments | |
Date Acquired | Aug. 15, 2018 |
Location | Traverse City, MI |
Ownership interest | 100.00% |
Contract Purchase Price | $ 26,050,000 |
Rooms | room | 107 |
Mortgage debt Outstanding | $ 15,092,000 |
Hilton Garden Inn Providence | |
Schedule of Investments | |
Date Acquired | Feb. 27, 2020 |
Location | Providence, RI |
Ownership interest | 100.00% |
Contract Purchase Price | $ 28,500,000 |
Rooms | room | 137 |
Mortgage debt Outstanding | $ 16,936,901 |
Cherry Tree East Bay | |
Schedule of Investments | |
Date Acquired | Jul. 30, 2021 |
Location | Traverse City, MI |
Ownership interest | 100.00% |
Contract Purchase Price | $ 15,000,000 |
Rooms | room | 76 |
Mortgage debt Outstanding | $ 8,000,000 |
Investments in Hotels - Inves_2
Investments in Hotels - Investment in hotel properties consist of fixed assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Investments in Hotels | ||
Land | $ 14,450,538 | $ 11,588,686 |
Building and improvements | 88,767,739 | 77,286,159 |
Furniture, fixtures, and equipment | 8,896,732 | 7,244,831 |
Total cost | 112,115,009 | 96,119,676 |
Accumulated depreciation | (9,878,030) | (6,530,972) |
Property and equipment, net | $ 102,236,979 | $ 89,588,704 |
Investments in Hotels - Acquisi
Investments in Hotels - Acquisition of Cherry Tree Inn (Details) - Acquisition of Cherry Tree Inn | Jul. 30, 2021USD ($) |
Business Acquisition [Line Items] | |
Land | $ 2,850,000 |
Building | 10,920,000 |
Furniture and fixtures | 1,230,000 |
Total acquired assets | $ 15,000,000 |
Investments in Hotels - Additio
Investments in Hotels - Additional Information (Details) - USD ($) | Jul. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 29, 2018 |
Business Acquisition [Line Items] | ||||
Depreciation | $ 3,347,058 | $ 2,997,262 | ||
Repayment of loan | 7,689,594 | |||
Acquisition fee | 264,789 | |||
Mortgage notes payable, net | 64,141,964 | $ 56,747,853 | ||
Hilton Garden Inn Providence | ||||
Business Acquisition [Line Items] | ||||
Principal amount | 16,936,901 | |||
Procaccianti Convertible Fund, LLC (PCF) | ||||
Business Acquisition [Line Items] | ||||
Entity ownership percentage | 51.00% | |||
Mortgage notes payable, net | 64,369,587 | |||
Acquisition of Cherry Tree Inn | ||||
Business Acquisition [Line Items] | ||||
Repayment of loan | $ 7,689,594 | |||
Acquisition fee | 264,789 | |||
Mortgage notes payable, net | 8,000,000 | |||
Mortgage Loans, Additional Amount To Be Advanced | 2,000,000 | |||
Acquisition cost capitalized | 81,449 | |||
Acquisition of Cherry Tree Inn | Cherry Tree Inn | ||||
Business Acquisition [Line Items] | ||||
Purchase price | 15,000,000 | |||
Acquisition of Cherry Tree Inn | Bridge Loan | ||||
Business Acquisition [Line Items] | ||||
Proceeds from loan | $ 4,000,000 | |||
Secured Debt | Acquisition of Cherry Tree Inn | ||||
Business Acquisition [Line Items] | ||||
Mortgage loan | $ 10,000,000 |
Other Assets - Future Amortizat
Other Assets - Future Amortization of Deferred Franchise Costs (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Other Assets | |
2022 | $ 15,475 |
2023 | 15,475 |
2024 | 15,475 |
2025 | 15,475 |
2026 | 15,475 |
Thereafter | 164,899 |
Total | $ 242,274 |
Other Assets - Additional Infor
Other Assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Other Assets [Line Items] | ||
Franchise fees | $ 242,274 | $ 257,750 |
Amortization of deferred franchise fees | $ 15,476 | $ 14,642 |
Minimum [Member] | ||
Other Assets [Line Items] | ||
Term franchise agreement | 15 years | |
Maximum [Member] | ||
Other Assets [Line Items] | ||
Term franchise agreement | 25 years |
Mortgage Notes Payable (Details
Mortgage Notes Payable (Details) - USD ($) | Aug. 15, 2021 | Aug. 15, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 64,141,964 | $ 56,747,853 | ||
Interest expense on mortgage notes payable | 2,593,227 | 2,549,503 | ||
Deferred finance costs and debt discounts | $ 6,276 | $ 9,009 | ||
Amortization schedule | 30 years | |||
Interest rate swap | ||||
Debt Instrument [Line Items] | ||||
Mortgage note due date | Aug. 15, 2021 | |||
Mortgage payable secured by Staybridge Suites St Petersburg | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.34% | |||
Interest payments | $ 66,255 | |||
Interest payment starting date | Aug. 1, 2020 | |||
Interest payment ending date | Jul. 1, 2024 | |||
Description of variable rate | Monthly | |||
Mortgage payable | ||||
Debt Instrument [Line Items] | ||||
Deferred finance costs and debt discounts | $ 208,343 | |||
Mortgage payable secured by the St. Pete Hotel | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 13,004,427 | |||
Interest payment starting date | Jun. 1, 2020 | |||
Interest payment ending date | Jun. 1, 2024 | |||
Mortgage Payable Secured By Wilmington Hotel [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 10,988,748 | |||
Interest rate | 4.49% | |||
Interest payments | $ 57,026 | |||
Interest payment starting date | Jun. 1, 2020 | |||
Description of variable rate | Monthly | |||
Mortgage Payable Secured By Wilmington Hotel Tci [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 15,092,000 | |||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |||
Mortgage Payable Secured By Wilmington Hotel Tci [Member] | Interest rate swap | ||||
Debt Instrument [Line Items] | ||||
Mortgage note due date | Aug. 15, 2022 | |||
Mortgage Payable Secured By Hilton Garden Inn Providence | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 16,936,901 | |||
Interest rate | 4.25% | |||
Interest payment starting date | Feb. 15, 2023 | |||
Interest payment ending date | May 15, 2025 | |||
Description of variable rate | monthly | |||
Mortgage Payable Secured By Cherry Tree Inn | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, net | $ 8,000,000 | |||
Mortgage note, additional amount to be advanced | $ 2,000,000 | |||
Interest rate | 3.91% | |||
Interest payments | $ 52,601 |
Mortgage Notes Payable - Schedu
Mortgage Notes Payable - Scheduled of Maturities (Details) | Dec. 31, 2021USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2022 | $ 15,507,485 |
2023 | 673,704 |
2024 | 23,357,916 |
2025 | 16,482,971 |
Thereafter | 8,000,000 |
Total | $ 64,022,076 |
Interest Rate Swap, Cap - Summa
Interest Rate Swap, Cap - Summary of Outstanding Interest Rate Swap (Details) - USD ($) | Aug. 15, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | |||
Unrealized Gain (Loss) on Derivatives | $ 295,087 | $ 30,663 | |
Interest rate swap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 15,092,000 | ||
Maturity Date | Aug. 15, 2021 | ||
Interest rate cap | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | $ 15,092,000 | ||
Maturity Date | Aug. 15, 2022 |
Other Debt (Details)
Other Debt (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)item | Dec. 31, 2020USD ($) | Mar. 31, 2022USD ($) | |
Debt Instrument [Line Items] | |||
Gain on loan extinguishment | $ 1,502,984 | ||
PPP Loan | |||
Debt Instrument [Line Items] | |||
Proceeds from loan | $ 1,426,672 | $ 1,018,917 | |
Number of hotel properties | item | 4 | ||
Loan forgiveness approved amount | $ 1,018,917 | $ 484,067 |
Loans from Franchisors - (Detai
Loans from Franchisors - (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Other Liabilities [Line Items] | ||
Key money liability | $ 932,284 | $ 985,784 |
Deferred revenue amortized | 53,500 | |
PCF | ||
Other Liabilities [Line Items] | ||
PCF key money loan | 750,000 | |
TCI | ||
Other Liabilities [Line Items] | ||
TCI key money loan assumed | $ 364,430 |
Related Party Transactions - Ac
Related Party Transactions - Acquisition Fee, Asset Management Fee and Disposition Fee (Details) - USD ($) | Aug. 02, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transactions | |||
Reimbursements Expenses | $ 9,995 | $ 16,172 | |
Acquisition fee | 264,789 | ||
Procaccianti Hotel Advisors, LLC ("PHA") | |||
Related Party Transactions | |||
Reimbursements Expenses | 187,198 | ||
Administrative service expenses | 168,649 | ||
Acquisition fees in due to related parties | $ 1,244,139 | 979,350 | |
Advisory agreement with PHA and Operating Partnership | |||
Related Party Transactions | |||
Term of agreement | 1 year | ||
Advisory agreement with PHA and Operating Partnership | Procaccianti Hotel Advisors, LLC ("PHA") | |||
Related Party Transactions | |||
Percentage of total acquisition fee payable to PHA | 1.50% | ||
Non-compounded rate of interest on deferred acquisition fees | 6.00% | ||
Acquisition fee | $ 441,370 | ||
Accrued interest on outstanding acquisition fees | $ 65,508 | 54,564 | |
One fourth of percentage of quarterly asset management fee | 0.75% | ||
Accumulated, accrued, and unpaid distributions percentage | 6.00% | ||
Non-compounded rate of interest on deferred asset management fees | 6.00% | ||
Asset management fees | $ 624,798 | 538,089 | |
Accrued interest on outstanding asset management fees | 64,128 | 51,605 | |
Asset management fees and interest payable | $ 176,121 | $ 1,158,111 | |
Maximum percentage of sales price of real estate investment as disposition fee | 1.50% | ||
Non-compounded rate of interest on deferred disposition fees | 6.00% |
Related Party Transactions - Or
Related Party Transactions - Organization and Offering Costs, Advances to PHA and Property Management Fee and Reimbursement (Details) - USD ($) | Aug. 02, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transactions | |||
Offering costs paid to PHA through issuance of A Shares | $ 274,877 | ||
Due from related parties | $ 153,113 | 68,050 | |
Aggregate property management fees | 747,948 | 393,134 | |
Accrued property management fees payable | 45,023 | 31,594 | |
Aggregate net reimbursements | 281,929 | 118,708 | |
Reimbursement of prepaid insurance | 49,761 | ||
Due to related parties | 1,885,559 | 2,648,575 | |
Reimbursements expenses | 9,995 | 16,172 | |
Disposition fees | 0 | 0 | |
Additional service fees | 0 | 0 | |
Procaccianti Hotel Advisors, LLC ("PHA") | |||
Related Party Transactions | |||
Reimbursements expenses | 187,198 | ||
TPG Risk Services, LLC | |||
Related Party Transactions | |||
Due from related parties | 3,749 | ||
Reimbursement of prepaid insurance | 512,884 | 324,055 | |
Advisory agreement with PHA and Operating Partnership | |||
Related Party Transactions | |||
Term of agreement | 1 year | ||
Advisory agreement with PHA and Operating Partnership | Procaccianti Hotel Advisors, LLC ("PHA") | |||
Related Party Transactions | |||
Recognized organization and offering costs | $ 1,394,296 | $ 1,598,938 | |
Percentage of gross proceeds on public offering | 15.00% | ||
Percentage cap for reimbursement of organization and offering costs | 15.00% | ||
Organization and offering costs incurred by PHA and its affiliates | $ 8,749,247 | ||
Reimbursement of organization and offering costs through issuance of A shares | 1,026,564 | ||
Reimbursement of common shares issuance to affiliate | 3,340,946 | ||
Amount of organization and offering costs reimbursable | 3,153,071 | ||
Due from related parties | 28,113 | ||
Due to related parties | $ 121,786 | ||
Hotel management agreement with PHR St. Petersburg Hotel Manager, LLC | |||
Related Party Transactions | |||
Percentage of hotel's gross revenues as base management fee | 3.00% |
Related Party Transactions - Co
Related Party Transactions - Construction Management Fee, Payment Upon Advisory Agreement Termination for Cause and Loans from Affiliates (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions | ||
Due from related parties | $ 153,113 | $ 68,050 |
Due to related parties | 1,885,559 | 2,648,575 |
TPG Construction, LLC | ||
Related Party Transactions | ||
Reimbursement of capital expenditure costs | 287,210 | 44,656 |
Due from related parties | 125,000 | 23,050 |
Due to related parties | 114,674 | $ 12,685 |
Procaccianti Hotel Advisors, LLC ("PHA") | ||
Related Party Transactions | ||
Principal amount | $ 94,194 | |
Long Term Applicable Federal Rate | 1.69% | 1.65% |
Interest Expense | $ 1,596 | $ 1,556 |
Class B Common Stock | ||
Related Party Transactions | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Advisory agreement with PHA and Operating Partnership | ||
Related Party Transactions | ||
Stated value of A shares repurchased in Non-cause Advisory Agreement Termination | $ 10 | |
Non-compounded annual rate of accrued interest on deferred fees if agreement terminates for cause | 6.00% | |
Advisory agreement with PHA and Operating Partnership | Procaccianti Hotel Advisors, LLC ("PHA") | ||
Related Party Transactions | ||
Due from related parties | $ 28,113 | |
Due to related parties | $ 121,786 |
Stockholders' Equity - Per shar
Stockholders' Equity - Per share repurchase price (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Less than 1 year | |
Class of Stock [Line Items] | |
Repurchase Price on Repurchase Date | No Repurchase Allowed |
1 year | |
Class of Stock [Line Items] | |
Repurchase Price on Repurchase Date | 92.5% of most recent estimated per share NAV |
2 years | |
Class of Stock [Line Items] | |
Repurchase Price on Repurchase Date | 95.0% of most recent estimated per share NAV |
3 years | |
Class of Stock [Line Items] | |
Repurchase Price on Repurchase Date | 97.5% of most recent estimated per share NAV |
4 years | |
Class of Stock [Line Items] | |
Repurchase Price on Repurchase Date | 100.0% of most recent estimated per share NAV |
In the event of a stockholder's death or disability | |
Class of Stock [Line Items] | |
Repurchase Price on Repurchase Date | 100.0% of most recent estimated per share NAV |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - $ / shares | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 248,125,000 | ||
Class K Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 55,500,000 | 55,500,000 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, voting rights | one vote | ||
Rate of cumulative cash distributions | 6.00% | 7.00% | |
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 50.00% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 50.00% | ||
Class K-I Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 55,500,000 | 55,500,000 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, voting rights | one vote | ||
Rate of cumulative cash distributions | 6.00% | 7.00% | |
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 50.00% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 50.00% | ||
Class K-T Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 116,000,000 | 116,000,000 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, voting rights | one vote | ||
Rate of cumulative cash distributions | 6.00% | 7.00% | |
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 50.00% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 50.00% | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 21,000,000 | 21,000,000 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, voting rights | one vote | ||
Rate of cumulative cash distributions | 7.00% | ||
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 37.50% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 37.50% | ||
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 125,000 | 125,000 | |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, voting rights | no voting rights | ||
Percentage of excess cash available for distribution | 12.50% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 12.50% |
Stockholders' Equity - Long-ter
Stockholders' Equity - Long-term incentive plan - (Details) - Long-term incentive plan - Restricted K shares - shares | Feb. 11, 2019 | Dec. 31, 2021 |
Director | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 500 | 250 |
Additional number of shares awarded | 250 | |
Award vesting period | 4 years | |
Award vesting increments percentage | 25.00% | |
Award terms | (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. | |
Number of shares issuable in future | 250 | |
Independent director two. | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 500 | |
Number of shares issuable in future | 250 | |
Independent director three. | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 500 | |
Number of shares issuable in future | 250 | |
Three independent directors | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 1,500 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Program and Redeemable Common Stock - (Details) - USD ($) | Oct. 26, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Issuance of common stock | $ 9,295,309 | $ 10,476,003 | |
Value of share repurchase | $ 945,878 | $ 313,879 | |
Class K-I Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued price per share | $ 10 | ||
Class K-T Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued price per share | $ 10 | ||
A&R SRP | Class K Common Stock | |||
Class of Stock [Line Items] | |||
Percentage of weighted average number of shares outstanding | 5.00% | ||
Minimum balance required to be maintained by stockholders | $ 2,000 | ||
Maximum balance of shares requested to be repurchased | 100 | ||
Amount of share repurchased | $ 945,878 | ||
Prior period of share repurchase | 15 days | ||
Repurchase requests period | 30 days | ||
A&R SRP | Class K-I Common Stock | |||
Class of Stock [Line Items] | |||
Percentage of weighted average number of shares outstanding | 5.00% | ||
Minimum balance required to be maintained by stockholders | $ 2,000 | ||
Maximum balance of shares requested to be repurchased | 100 | ||
Prior period of share repurchase | 30 days | ||
Repurchase requests period | 30 days | ||
A&R SRP | Class K-T Common Stock | |||
Class of Stock [Line Items] | |||
Percentage of weighted average number of shares outstanding | 5.00% | ||
Minimum balance required to be maintained by stockholders | $ 2,000 | ||
Maximum balance of shares requested to be repurchased | 100 | ||
Prior period of share repurchase | 5 days | ||
Repurchase requests period | 2 years | ||
Three unfilled standard repurchase requests | |||
Class of Stock [Line Items] | |||
Value of share repurchase | $ 84,708 | ||
Three unfilled standard repurchase requests | Class K Common Stock | |||
Class of Stock [Line Items] | |||
Repurchase of common stock (in shares) | 7,500 | ||
Three unfilled standard repurchase requests | Class K-I Common Stock | |||
Class of Stock [Line Items] | |||
Repurchase of common stock (in shares) | 1,613 |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase requests and repurchased K Shares pursuant to the share repurchase program (Details) - Common Class K, K-I, K-T - $ / shares | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | |
Class of Stock | |||||
Total Number of Shares Requested to be Repurchased | 9,113 | 7,900 | 59,979 | 34,700 | 111,692 |
Number of share repurchase request | 7,900 | 59,979 | 34,700 | 1,000 | 103,579 |
Average Price Paid per Share | $ 9.68 | $ 9.54 | $ 8.34 | $ 7.92 |
Stockholders' Equity - Distribu
Stockholders' Equity - Distributions - (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 03, 2020 | |
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 7,428,718 | $ 3,528,321 | |
Distributions | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 3,900,397 | 1,896,748 | |
Distributions | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 141,400 | 0 | |
Distributions | Class A Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Amount Per Share Per Day | $ 10 | ||
Distributions | Class A Common Stock | Minimum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 6.00% | ||
Distributions | Class A Common Stock | Maximum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 7.00% | ||
Distributions | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 2,996,687 | 1,580,209 | |
Distributions | Class K Common Stock | Minimum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 6.00% | ||
Distributions | Class K Common Stock | Maximum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 7.00% | ||
Distributions | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 720,245 | 292,601 | |
Distributions | Class K-I Common Stock | Minimum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 6.00% | ||
Distributions | Class K-I Common Stock | Maximum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 7.00% | ||
Distributions | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 42,065 | $ 23,938 | |
Distributions | Class K-T Common Stock | Minimum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 6.00% | ||
Distributions | Class K-T Common Stock | Maximum [Member] | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Charter Distribution Percentage | 7.00% | ||
Distributions | 1/23/2020 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Jan. 31, 2020 | ||
Shares Outstanding Date | Dec. 31, 2019 | ||
Date Authorized | Jan. 23, 2020 | ||
Record Date | Jan. 28, 2020 | ||
Amount Per Share Per Day | $ 0.0016438356 | ||
Distributions | $ 450,397 | ||
Distributions | 1/23/2020 | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 0 | ||
Distributions | 1/23/2020 | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 378,942 | ||
Distributions | 1/23/2020 | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 65,432 | ||
Distributions | 1/23/2020 | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 6,023 | ||
Distributions | 4/29/2020 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | May 1, 2020 | ||
Shares Outstanding Date | Mar. 31, 2020 | ||
Date Authorized | Apr. 29, 2020 | ||
Record Date | Apr. 30, 2020 | ||
Amount Per Share Per Day | $ 0.0016393443 | ||
Distributions | $ 544,566 | ||
Distributions | 4/29/2020 | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 0 | ||
Distributions | 4/29/2020 | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 453,908 | ||
Distributions | 4/29/2020 | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 83,629 | ||
Distributions | 4/29/2020 | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 7,029 | ||
Distributions | 10/27/2020 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Nov. 12, 2020 | ||
Shares Outstanding Date | Jun. 30, 2020 | ||
Date Authorized | Oct. 27, 2020 | ||
Record Date | Oct. 30, 2020 | ||
Amount Per Share Per Day | $ 0.0019125683 | ||
Distributions | $ 690,200 | ||
Distributions | 10/27/2020 | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 0 | ||
Distributions | 10/27/2020 | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 571,905 | ||
Distributions | 10/27/2020 | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 109,943 | ||
Distributions | 10/27/2020 | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 8,352 | ||
Distributions | 10/27/2020. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Nov. 16, 2020 | ||
Shares Outstanding Date | Sep. 30, 2020 | ||
Date Authorized | Oct. 27, 2020 | ||
Record Date | Oct. 30, 2020 | ||
Amount Per Share Per Day | $ 0.0005737705 | ||
Distributions | $ 211,585 | ||
Distributions | 10/27/2020. | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 0 | ||
Distributions | 10/27/2020. | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 175,454 | ||
Distributions | 10/27/2020. | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 33,597 | ||
Distributions | 10/27/2020. | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 2,534 | ||
Distributions | 9/24/2021 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Sep. 24, 2021 | ||
Shares Outstanding Date | Sep. 30, 2020 | ||
Date Authorized | Sep. 24, 2021 | ||
Record Date | Sep. 27, 2021 | ||
Amount Per Share Per Day | $ 0.0013387978 | ||
Distributions | $ 493,698 | ||
Distributions | 9/24/2021 | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 409,394 | ||
Distributions | 9/24/2021 | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 78,393 | ||
Distributions | 9/24/2021 | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 5,911 | ||
Distributions | 9/24/2021. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Sep. 29, 2021 | ||
Shares Outstanding Date | Dec. 31, 2020 | ||
Date Authorized | Sep. 24, 2021 | ||
Record Date | Sep. 24, 2021 | ||
Amount Per Share Per Day | $ 0.0019125683 | ||
Distributions | $ 735,312 | ||
Distributions | 9/24/2021. | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 610,721 | ||
Distributions | 9/24/2021. | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 116,169 | ||
Distributions | 9/24/2021. | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 8,422 | ||
Distributions | 11/16/2021. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Nov. 18, 2021 | ||
Shares Outstanding Date | Mar. 31, 2021 | ||
Date Authorized | Nov. 16, 2021 | ||
Record Date | Nov. 17, 2021 | ||
Amount Per Share Per Day | $ 0.0019178082 | ||
Distributions | $ 768,525 | ||
Distributions | 11/16/2021. | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 628,342 | ||
Distributions | 11/16/2021. | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 131,938 | ||
Distributions | 11/16/2021. | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 8,245 | ||
Distributions | 11/16/2021 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Nov. 22, 2021 | ||
Shares Outstanding Date | Jun. 30, 2021 | ||
Date Authorized | Nov. 16, 2021 | ||
Record Date | Nov. 17, 2021 | ||
Amount Per Share Per Day | $ 0.0019178082 | ||
Distributions | $ 841,916 | ||
Distributions | 11/16/2021 | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 656,519 | ||
Distributions | 11/16/2021 | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 176,438 | ||
Distributions | 11/16/2021 | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 8,959 | ||
Distributions | 11/16/2021.. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Nov. 24, 2021 | ||
Shares Outstanding Date | Sep. 30, 2021 | ||
Date Authorized | Nov. 16, 2021 | ||
Record Date | Nov. 17, 2021 | ||
Amount Per Share Per Day | $ 0.0019178082 | ||
Distributions | $ 919,546 | ||
Distributions | 11/16/2021.. | Class K Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 691,711 | ||
Distributions | 11/16/2021.. | Class K-I Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | 217,307 | ||
Distributions | 11/16/2021.. | Class K-T Common Stock | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 10,528 | ||
Distributions | .4/29/2020. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Mar. 31, 2020 | ||
Date Authorized | Apr. 29, 2020 | ||
Record Date | Apr. 30, 2020 | ||
Amount Per Share Per Day | $ 0.0016393443 | ||
Distributions | $ 6,932 | ||
Distributions | .4/29/2020. | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 6,932 | ||
Distributions | 10/27/2020.. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Jun. 30, 2020 | ||
Date Authorized | Oct. 27, 2020 | ||
Record Date | Oct. 30, 2020 | ||
Amount Per Share Per Day | $ 0.0019125683 | ||
Distributions | $ 22,299 | ||
Distributions | 10/27/2020.. | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 22,299 | ||
Distributions | 9/24/2021.. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Sep. 30, 2020 | ||
Date Authorized | Sep. 24, 2021 | ||
Record Date | Sep. 24, 2021 | ||
Amount Per Share Per Day | $ 0.0019125683 | ||
Distributions | $ 22,544 | ||
Distributions | 9/24/2021.. | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 22,544 | ||
Distributions | .9/24/2021 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Dec. 31, 2020 | ||
Date Authorized | Sep. 24, 2021 | ||
Record Date | Sep. 24, 2021 | ||
Amount Per Share Per Day | $ 0.0019125683 | ||
Distributions | $ 22,544 | ||
Distributions | .9/24/2021 | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 22,544 | ||
Distributions | .11/16/2021.. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Mar. 31, 2021 | ||
Date Authorized | Nov. 16, 2021 | ||
Record Date | Nov. 17, 2021 | ||
Amount Per Share Per Day | $ 0.0019178082 | ||
Distributions | $ 22,115 | ||
Distributions | .11/16/2021.. | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 22,115 | ||
Distributions | .11/16/2021. | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Jun. 30, 2021 | ||
Date Authorized | Nov. 16, 2021 | ||
Record Date | Nov. 17, 2021 | ||
Amount Per Share Per Day | $ 0.0019178082 | ||
Distributions | $ 22,360 | ||
Distributions | .11/16/2021. | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 22,360 | ||
Distributions | .11/16/2021 | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Date Paid | Dec. 23, 2021 | ||
Shares Outstanding Date | Sep. 30, 2021 | ||
Date Authorized | Nov. 16, 2021 | ||
Record Date | Nov. 17, 2021 | ||
Amount Per Share Per Day | $ 0.0019178082 | ||
Distributions | $ 22,606 | ||
Distributions | .11/16/2021 | OP Units | |||
Distribution Made to Limited Liability Company (LLC) Member | |||
Distributions | $ 22,606 |
Stockholders' Equity - Additi_2
Stockholders' Equity - Additional Information 1 (Details) | Feb. 27, 2020USD ($)$ / sharesshares | Sep. 29, 2016shares | Dec. 31, 2021USD ($)director$ / sharesshares | Dec. 31, 2020USD ($)shares | Feb. 11, 2019director | Sep. 30, 2016$ / shares |
Class of Stock | ||||||
Proceeds from issuance of common stock | $ | $ 9,295,309 | $ 10,476,003 | ||||
Value of issuance of common stock | $ | 9,295,309 | 10,476,003 | ||||
Total investment | $ | 102,236,979 | $ 89,588,704 | ||||
Director | ||||||
Class of Stock | ||||||
Number of independent directors | director | 3 | |||||
Hilton Garden Inn Providence | ||||||
Class of Stock | ||||||
Number of Class K OP Units issued | 128,124 | |||||
Value of Class K OP Units issued (in dollars per share) | $ / shares | $ 10 | |||||
Total investment | $ | $ 1,281,244 | |||||
Cash consideration received by individuals with direct or indirect interests in the sellers of the hotel | $ | $ 0 | |||||
Private offering | ||||||
Class of Stock | ||||||
Selling commissions and dealer manager fees | $ | 1,058,501 | |||||
Dealer Manager | Initial public offering | ||||||
Class of Stock | ||||||
Selling commissions and dealer manager fees | $ | 2,986,465 | |||||
Value of stockholder servicing fee | $ | 10,775 | |||||
Procaccianti Hotel Advisors, LLC ("PHA") | Initial public offering | ||||||
Class of Stock | ||||||
Selling commissions and dealer manager fees | $ | $ 0 | |||||
Class K Common Stock | ||||||
Class of Stock | ||||||
Common stock, shares issued | 3,947,642 | 3,608,062 | ||||
Percentage of excess cash as special distribution declared on pro rata basis | 50.00% | |||||
Percentage of excess liquidation cash as special distribution declared on pro rata basis | 50.00% | |||||
Class K Common Stock | Initial public offering | Distribution reinvestment plan | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 58,687 | |||||
Value of issuance of common stock | $ | $ 538,633 | |||||
Class K Common Stock | Private offering | ||||||
Class of Stock | ||||||
Shares issued price per share | $ / shares | $ 10 | |||||
Class K Common Stock | Unaffiliated investors | Initial public offering | ||||||
Class of Stock | ||||||
Common stock, shares issued | 2,787,944 | |||||
Proceeds from issuance of common stock | $ | $ 26,939,836 | |||||
Class K Common Stock | Unaffiliated investors | Private offering | ||||||
Class of Stock | ||||||
Common stock, shares issued | 1,253,618 | |||||
Proceeds from issuance of common stock | $ | $ 12,398,660 | |||||
Selling commissions and dealer manager fees | $ | $ 3 | |||||
Class K Common Stock | Dealer Manager | Initial public offering | ||||||
Class of Stock | ||||||
Dealer manager selling commissions percentage | 7.00% | |||||
Dealer manager fee, percentage | 3.00% | |||||
Class K Common Stock | Dealer Manager | Private offering | ||||||
Class of Stock | ||||||
Dealer manager selling commissions percentage | 7.00% | |||||
Class K Common Stock | Investors | Distribution reinvestment plan | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 43,451 | |||||
Shares issued price per share | $ / shares | $ 9.36 | |||||
Value of issuance of common stock | $ | $ 406,697 | |||||
Class K Common Stock | Investors | Initial public offering | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 398,959 | |||||
Shares issued price per share | $ / shares | $ 8.96 | |||||
Value of issuance of common stock | $ | $ 3,575,886 | |||||
Class K Common Stock | Three Independent director | ||||||
Class of Stock | ||||||
Number of restricted shares issued | 3,750 | |||||
Number of independent directors | director | 3 | |||||
Class K Common Stock | Independent director one | ||||||
Class of Stock | ||||||
Number of restricted shares issued | 1,250 | |||||
Class K Common Stock | Independent director two | ||||||
Class of Stock | ||||||
Number of restricted shares issued | 1,250 | |||||
Class K Common Stock | Independent director three | ||||||
Class of Stock | ||||||
Number of restricted shares issued | 1,250 | |||||
Class A Common Stock | ||||||
Class of Stock | ||||||
Common stock, shares issued | 581,410 | 537,410 | ||||
Percentage of excess liquidation cash if A shares repurchased in Non-cause Advisory Agreement Termination | 87.50% | |||||
Class A Common Stock | Unaffiliated investors | Private offering | ||||||
Class of Stock | ||||||
Common stock, shares issued | 23,000 | |||||
Proceeds from issuance of common stock | $ | $ 230,000 | |||||
Class A Common Stock | TPG Hotel REIT Investor, LLC (THR) | ||||||
Class of Stock | ||||||
Common stock, shares issued | 428,410 | |||||
Proceeds from issuance of common stock | $ | $ 4,284,095 | |||||
Number of shares issued in exchange of notes receivable | 130,000 | |||||
Shares issued price per share | $ / shares | $ 10 | |||||
Class A Common Stock | Procaccianti Hotel Advisors, LLC ("PHA") | ||||||
Class of Stock | ||||||
Percentage of excess cash if A shares repurchased in Non-cause Advisory Agreement Termination | 37.50% | |||||
Percentage of excess liquidation cash if A shares repurchased in Non-cause Advisory Agreement Termination | 37.50% | |||||
Class B Common Stock | ||||||
Class of Stock | ||||||
Common stock, shares issued | 125,000 | 125,000 | ||||
Percentage of excess liquidation cash if A shares repurchased in Non-cause Advisory Agreement Termination | 12.50% | |||||
Class B Common Stock | Dealer Manager | ||||||
Class of Stock | ||||||
Number of shares issued in exchange of notes receivable | 125,000 | |||||
Class K-I Common Stock | ||||||
Class of Stock | ||||||
Common stock, shares issued | 1,315,534 | 666,728 | ||||
Shares issued price per share | $ / shares | $ 10 | |||||
Number of shares sold (in shares) | 10 | |||||
Value of shares sold | $ | $ 100 | |||||
Percentage of excess cash as special distribution declared on pro rata basis | 50.00% | |||||
Class K-I Common Stock | Initial public offering | Distribution reinvestment plan | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 34,211 | |||||
Value of issuance of common stock | $ | $ 314,340 | |||||
Class K-I Common Stock | Unaffiliated investors | Initial public offering | ||||||
Class of Stock | ||||||
Common stock, shares issued | 1,287,644 | |||||
Proceeds from issuance of common stock | $ | $ 11,274,927 | |||||
Class K-I Common Stock | Dealer Manager | Initial public offering | ||||||
Class of Stock | ||||||
Dealer manager fee, percentage | 3.00% | |||||
Selling commissions and dealer manager fees | $ | $ 0 | |||||
Class K-I Common Stock | Investors | Distribution reinvestment plan | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 22,637 | |||||
Shares issued price per share | $ / shares | $ 9.36 | |||||
Value of issuance of common stock | $ | $ 211,884 | |||||
Class K-I Common Stock | Investors | Initial public offering | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 626,169 | |||||
Shares issued price per share | $ / shares | $ 8.26 | |||||
Value of issuance of common stock | $ | $ 5,169,421 | |||||
Class K-T Common Stock | ||||||
Class of Stock | ||||||
Common stock, shares issued | 62,946 | 47,769 | ||||
Shares issued price per share | $ / shares | $ 10 | |||||
Number of shares sold (in shares) | 10 | |||||
Value of shares sold | $ | $ 100 | |||||
Percentage of excess cash as special distribution declared on pro rata basis | 50.00% | |||||
Percentage of excess liquidation cash as special distribution declared on pro rata basis | 50.00% | |||||
Class K-T Common Stock | Initial public offering | Distribution reinvestment plan | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 3,928 | |||||
Value of issuance of common stock | $ | $ 35,873 | |||||
Class K-T Common Stock | Unaffiliated investors | Initial public offering | ||||||
Class of Stock | ||||||
Common stock, shares issued | 60,008 | |||||
Proceeds from issuance of common stock | $ | $ 585,400 | |||||
Class K-T Common Stock | Dealer Manager | Initial public offering | ||||||
Class of Stock | ||||||
Selling commissions, percentage | 3.00% | |||||
Dealer manager fee, percentage | 3.00% | |||||
Stockholder servicing fee, percentage | 1.00% | |||||
Class K-T Common Stock | Investors | Distribution reinvestment plan | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 2,709 | |||||
Shares issued price per share | $ / shares | $ 9.36 | |||||
Value of issuance of common stock | $ | $ 25,360 | |||||
Class K-T Common Stock | Investors | Initial public offering | ||||||
Class of Stock | ||||||
Issuance of common stock (in shares) | 12,468 | |||||
Shares issued price per share | $ / shares | $ 8.82 | |||||
Value of issuance of common stock | $ | $ 110,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Income tax (expense) benefit | $ 25,745 | $ 609 |
Net deferred tax asset | $ 40,532 | $ 33,105 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 03, 2020 |
Subsequent Event [Line Items] | |||
Distributions | $ 7,428,718 | $ 3,528,321 | |
Distributions | |||
Subsequent Event [Line Items] | |||
Distributions | 3,900,397 | 1,896,748 | |
Distributions | Class A Common Stock | |||
Subsequent Event [Line Items] | |||
Amount Per Share Per Day | $ 10 | ||
Distributions | Class K Common Stock | |||
Subsequent Event [Line Items] | |||
Distributions | 2,996,687 | 1,580,209 | |
Distributions | Class K-I Common Stock | |||
Subsequent Event [Line Items] | |||
Distributions | 720,245 | 292,601 | |
Distributions | Class K-T Common Stock | |||
Subsequent Event [Line Items] | |||
Distributions | $ 42,065 | $ 23,938 |