Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 13, 2023 | |
Document Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Central Index Key | 0001692345 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Class K Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 3,912,601 | |
Class K-I Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 1,367,487 | |
Class K-T Common Stock | ||
Document Information | ||
Entity Common Stock, Shares Outstanding | 14,116 | |
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 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Property and equipment, net | $ 98,705,928 | $ 100,985,680 |
Cash | 8,528,761 | 8,011,506 |
Restricted cash | 3,712,392 | 3,176,682 |
Accounts receivable, net | 472,319 | 413,800 |
Prepaid expenses and other assets, net | 1,367,501 | 996,804 |
Total Assets | 112,812,993 | 113,846,620 |
Liabilities | ||
Mortgage notes payable, net | 64,554,369 | 64,969,299 |
Accounts payable, accrued expenses and other, net | 3,109,594 | 2,587,008 |
Total Liabilities | 69,680,951 | 69,566,380 |
Commitments and Contingencies | ||
Noncontrolling interest of the Operating Partnership | 1,402,962 | 1,319,912 |
Stockholders' Equity | ||
Additional paid-in capital | 47,357,124 | 47,700,045 |
Cumulative income | 3,130,552 | 892,306 |
Cumulative distributions | (14,078,262) | (11,238,663) |
Total Stockholders' Equity | 36,469,240 | 37,413,825 |
Noncontrolling interest | 5,259,840 | 5,546,503 |
Total Equity | 41,729,080 | 42,960,328 |
Total Liabilities and Stockholders' Equity | 112,812,993 | 113,846,620 |
Related Party, Affiliated Entity [Member] | ||
ASSETS | ||
Due from related parties | 26,092 | 262,148 |
Liabilities | ||
Due to related parties | 2,016,988 | 2,010,073 |
Class K Common Stock | ||
Stockholders' Equity | ||
Common stock, value | 39,020 | 39,325 |
Class K-I Common Stock | ||
Stockholders' Equity | ||
Common stock, value | 13,602 | 13,455 |
Class K-T Common Stock | ||
Stockholders' Equity | ||
Common stock, value | 140 | 293 |
Class A Common Stock | ||
Stockholders' Equity | ||
Common stock, value | 5,814 | 5,814 |
Class B Common Stock | ||
Stockholders' Equity | ||
Common stock, value | $ 1,250 | $ 1,250 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
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 | 3,902,017 | 3,932,526 |
Common Stock, shares outstanding | 3,902,017 | 3,932,526 |
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 | 1,360,226 | 1,345,518 |
Common Stock, shares outstanding | 1,360,226 | 1,345,518 |
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 | 13,946 | 29,306 |
Common Stock, shares outstanding | 13,946 | 29,306 |
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 | 581,410 |
Common Stock, shares outstanding | 581,410 | 581,410 |
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 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Total revenues | $ 10,986,213 | $ 10,959,839 | $ 24,418,689 | $ 24,396,500 |
Expenses | ||||
Other property expenses | 3,040,061 | 2,906,890 | 8,019,694 | 7,641,134 |
Property management fees to affiliates | 329,697 | 328,867 | 732,936 | 706,587 |
Corporate general and administrative | 320,940 | 348,781 | 1,026,274 | 1,052,282 |
Other fees to affiliates | 209,558 | 262,628 | 644,041 | 702,442 |
Depreciation and amortization | 1,031,180 | 990,626 | 3,060,341 | 2,852,336 |
Total expenses | 7,191,959 | 7,111,912 | 19,184,803 | 17,395,967 |
Operating income | 3,794,254 | 3,847,927 | 5,233,886 | 7,000,533 |
Gain on loan extinguishment | 0 | 942,605 | ||
Loss on disposal of fixed assets | (10,535) | (10,535) | ||
Interest expense, net | (744,035) | (716,108) | (2,159,796) | (2,026,484) |
Gain (loss) on interest rate cap | (42,035) | 62,109 | (146,890) | 147,218 |
Net income before income taxes | 3,008,184 | 3,183,393 | 2,927,200 | 6,053,337 |
Income tax expense | (193,881) | (200,498) | (8,117) | (243,473) |
Net income | 2,814,303 | 2,982,895 | 2,919,083 | 5,809,864 |
Net income attributable to noncontrolling interest | 184,066 | 214,792 | 646,469 | 1,033,968 |
Net income attributable to common stockholders | 2,630,237 | 2,768,103 | 2,272,614 | 4,775,896 |
Net income attributable to common stockholders - diluted | 2,630,237 | 2,768,103 | 2,272,614 | 4,775,896 |
Class K Common Stock | ||||
Expenses | ||||
Net income attributable to common stockholders | 1,731,429 | 1,815,882 | 1,528,347 | 3,157,834 |
Net income attributable to common stockholders - diluted | $ 1,731,429 | $ 1,815,882 | $ 1,528,347 | $ 3,157,834 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 3,906,944 | 3,915,774 | 3,917,945 | 3,930,059 |
Weighted average number of common shares outstanding - diluted (in shares) | 3,906,944 | 3,915,774 | 3,917,945 | 3,930,059 |
Class K-I Common Stock | ||||
Expenses | ||||
Net income attributable to common stockholders | $ 601,656 | $ 618,844 | $ 528,069 | $ 1,065,864 |
Net income attributable to common stockholders - diluted | $ 601,656 | $ 618,844 | $ 528,069 | $ 1,065,864 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 1,357,628 | 1,334,480 | 1,353,707 | 1,326,513 |
Weighted average number of common shares outstanding - diluted (in shares) | 1,357,628 | 1,334,480 | 1,353,707 | 1,326,513 |
Class K-T Common Stock | ||||
Expenses | ||||
Net income attributable to common stockholders | $ 6,149 | $ 27,845 | $ 6,079 | $ 50,037 |
Net income attributable to common stockholders - diluted | $ 6,149 | $ 27,845 | $ 6,079 | $ 50,037 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 13,876 | 60,046 | 15,566 | 62,274 |
Weighted average number of common shares outstanding - diluted (in shares) | 13,876 | 60,046 | 15,566 | 62,274 |
Class A Common Stock | ||||
Expenses | ||||
Net income attributable to common stockholders | $ 257,662 | $ 269,620 | $ 226,803 | $ 467,168 |
Net income attributable to common stockholders - diluted | $ 257,662 | $ 269,620 | $ 226,803 | $ 467,168 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 581,410 | 581,410 | 581,410 | 581,410 |
Weighted average number of common shares outstanding - diluted (in shares) | 581,410 | 581,410 | 581,410 | 581,410 |
Class B Common Stock | ||||
Expenses | ||||
Net income attributable to common stockholders | $ 33,341 | $ 35,912 | $ (16,684) | $ 34,993 |
Net income attributable to common stockholders - diluted | $ 33,341 | $ 35,912 | $ (16,684) | $ 34,993 |
Net income per common share, basic (in dollars per share) | $ 0.27 | $ 0.29 | $ (0.13) | $ 0.28 |
Net income per common share, diluted (in dollars per share) | $ 0.27 | $ 0.29 | $ (0.13) | $ 0.28 |
Weighted average number of common shares outstanding - basic (in shares) | 125,000 | 125,000 | 125,000 | 125,000 |
Weighted average number of common shares outstanding - diluted (in shares) | 125,000 | 125,000 | 125,000 | 125,000 |
Rooms | ||||
Revenues | ||||
Total revenues | $ 9,577,029 | $ 9,652,212 | $ 21,492,976 | $ 20,916,938 |
Expenses | ||||
Costs | 1,710,208 | 1,684,324 | 4,453,127 | 3,190,483 |
Food and beverage | ||||
Revenues | ||||
Total revenues | 1,061,479 | 1,038,870 | 2,095,574 | 2,036,163 |
Expenses | ||||
Costs | 550,315 | 589,796 | 1,248,390 | 1,250,703 |
Other operating | ||||
Revenues | ||||
Total revenues | $ 347,705 | $ 268,757 | $ 830,139 | $ 1,443,399 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND NONCONTROLLING INTEREST - USD ($) | Class K Common Stock Common Stock | Class K Common Stock | Class K-I Common Stock Common Stock | Class K-I Common Stock | Class K-T Common Stock Common Stock | Class K-T Common Stock | Class A Common Stock Common Stock | Class A Common Stock | Class B Common Stock Common Stock | 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, 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 | 1,315,534 | 62,946 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Conversion of common stock | $ 5 | $ (5) | ||||||||||||||
Conversion of common stock (in shares) | 500 | (500) | ||||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | $ 123 | $ 80 | $ 8 | 197,195 | 197,406 | 197,406 | ||||||||||
Issuance of common stock pursuant to distribution reinvestment plan (in shares) | 12,344 | 7,993 | 753 | |||||||||||||
Stockholder servicing fees | 1,429 | 1,429 | 1,429 | |||||||||||||
Repurchase of common stock | $ (75) | $ (16) | (84,617) | (84,708) | (84,708) | |||||||||||
Repurchase of common stock (in shares) | (7,500) | (1,613) | ||||||||||||||
Net income (loss) | (316,458) | (316,458) | 314,391 | (2,067) | ||||||||||||
Distributions paid | (958,121) | (958,121) | (122,500) | (1,080,621) | ||||||||||||
BALANCE at Mar. 31, 2022 | $ 39,530 | $ 13,219 | $ 632 | $ 5,814 | $ 1,250 | 48,041,361 | (3,816,686) | (8,386,839) | 35,898,281 | 5,894,852 | 41,793,133 | |||||
BALANCE (in shares) at Mar. 31, 2022 | 3,952,986 | 1,321,914 | 63,199 | 581,410 | 125,000 | |||||||||||
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 | 1,315,534 | 62,946 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | 596,103 | |||||||||||||||
BALANCE at Sep. 30, 2022 | $ 39,091 | $ 13,372 | $ 569 | $ 5,814 | $ 1,250 | 47,671,267 | 1,275,668 | (10,279,117) | 38,727,914 | 5,802,337 | 44,530,251 | |||||
BALANCE (in shares) at Sep. 30, 2022 | 3,909,144 | 1,337,250 | 56,919 | 581,410 | 125,000 | |||||||||||
BALANCE at Mar. 31, 2022 | $ 39,530 | $ 13,219 | $ 632 | $ 5,814 | $ 1,250 | 48,041,361 | (3,816,686) | (8,386,839) | 35,898,281 | 5,894,852 | 41,793,133 | |||||
BALANCE (in shares) at Mar. 31, 2022 | 3,952,986 | 1,321,914 | 63,199 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | $ 122 | $ 81 | $ 8 | 197,069 | 197,280 | 197,280 | ||||||||||
Issuance of common stock (in shares) | 12,261 | 8,053 | 762 | |||||||||||||
Stockholder servicing fees | (1,440) | (1,440) | (1,440) | |||||||||||||
Repurchase of common stock | $ (375) | (369,000) | (369,375) | (369,375) | ||||||||||||
Repurchase of common stock (in shares) | (37,500) | |||||||||||||||
Net income (loss) | 2,324,251 | 2,324,251 | 462,063 | 2,786,314 | ||||||||||||
Distributions paid | (941,800) | (941,800) | (355,250) | (1,297,050) | ||||||||||||
BALANCE at Jun. 30, 2022 | $ 39,277 | $ 13,300 | $ 640 | $ 5,814 | $ 1,250 | 47,867,990 | (1,492,435) | (9,328,639) | 37,107,197 | 6,001,665 | 43,108,862 | |||||
BALANCE (in shares) at Jun. 30, 2022 | 3,927,747 | 1,329,967 | 63,961 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Conversion of common stock | $ 68 | $ (68) | ||||||||||||||
Conversion of common stock (in shares) | 6,775 | (6,775) | ||||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | $ 119 | $ 79 | $ 7 | 201,212 | 201,417 | 201,417 | ||||||||||
Issuance of common stock pursuant to distribution reinvestment plan (in shares) | 11,924 | 7,940 | 733 | |||||||||||||
Stockholder servicing fees | (1,409) | (1,409) | (1,409) | |||||||||||||
Repurchase of common stock | $ (373) | $ (7) | $ (10) | (396,526) | (396,916) | (396,916) | ||||||||||
Repurchase of common stock (in shares) | (37,302) | (657) | (1,000) | |||||||||||||
Net income (loss) | 2,768,103 | 2,768,103 | 155,922 | 2,924,025 | ||||||||||||
Distributions paid | (950,478) | (950,478) | (355,250) | (1,305,728) | ||||||||||||
BALANCE at Sep. 30, 2022 | $ 39,091 | $ 13,372 | $ 569 | $ 5,814 | $ 1,250 | 47,671,267 | 1,275,668 | (10,279,117) | 38,727,914 | 5,802,337 | 44,530,251 | |||||
BALANCE (in shares) at Sep. 30, 2022 | 3,909,144 | 1,337,250 | 56,919 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Repurchase of common stock (in shares) | (20,900) | |||||||||||||||
BALANCE at Dec. 31, 2022 | $ 39,325 | $ 13,455 | $ 293 | $ 5,814 | $ 1,250 | 47,700,045 | 892,306 | (11,238,663) | 37,413,825 | 5,546,503 | 42,960,328 | |||||
BALANCE (in shares) at Dec. 31, 2022 | 3,932,526 | 3,932,526 | 1,345,518 | 1,345,518 | 29,306 | 29,306 | 581,410 | 581,410 | 125,000 | 125,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Conversion of common stock | $ 159 | $ (159) | ||||||||||||||
Conversion of common stock (in shares) | 15,899 | (15,899) | ||||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | $ 119 | $ 84 | $ 2 | 200,319 | 200,524 | 200,524 | ||||||||||
Issuance of common stock pursuant to distribution reinvestment plan (in shares) | 11,896 | 8,419 | 187 | |||||||||||||
Stockholder servicing fees | 447 | 447 | 447 | |||||||||||||
Repurchase of common stock | $ (209) | (211,308) | (211,517) | (211,517) | ||||||||||||
Repurchase of common stock (in shares) | (20,900) | (43,151) | (8,602) | |||||||||||||
Net income (loss) | (1,031,938) | (1,031,938) | 248,515 | (783,423) | ||||||||||||
Distributions paid | (958,261) | (958,261) | (232,750) | (1,191,011) | ||||||||||||
BALANCE at Mar. 31, 2023 | $ 39,394 | $ 13,539 | $ 136 | $ 5,814 | $ 1,250 | 47,688,609 | (139,632) | (12,196,924) | 35,412,186 | 5,562,268 | 40,974,454 | |||||
BALANCE (in shares) at Mar. 31, 2023 | 3,939,421 | 1,353,937 | 13,594 | 581,410 | 125,000 | |||||||||||
BALANCE at Dec. 31, 2022 | $ 39,325 | $ 13,455 | $ 293 | $ 5,814 | $ 1,250 | 47,700,045 | 892,306 | (11,238,663) | 37,413,825 | 5,546,503 | 42,960,328 | |||||
BALANCE (in shares) at Dec. 31, 2022 | 3,932,526 | 3,932,526 | 1,345,518 | 1,345,518 | 29,306 | 29,306 | 581,410 | 581,410 | 125,000 | 125,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock pursuant to distribution reinvestment plan | 595,102 | |||||||||||||||
BALANCE at Sep. 30, 2023 | $ 39,020 | $ 13,602 | $ 140 | $ 5,814 | $ 1,250 | 47,357,124 | 3,130,552 | (14,078,262) | 36,469,240 | 5,259,840 | 41,729,080 | |||||
BALANCE (in shares) at Sep. 30, 2023 | 3,902,017 | 3,902,017 | 1,360,226 | 1,360,226 | 13,946 | 13,946 | 581,410 | 581,410 | 125,000 | 125,000 | ||||||
BALANCE at Mar. 31, 2023 | $ 39,394 | $ 13,539 | $ 136 | $ 5,814 | $ 1,250 | 47,688,609 | (139,632) | (12,196,924) | 35,412,186 | 5,562,268 | 40,974,454 | |||||
BALANCE (in shares) at Mar. 31, 2023 | 3,939,421 | 1,353,937 | 13,594 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | $ 116 | $ 84 | $ 2 | 196,845 | 197,047 | 197,047 | ||||||||||
Issuance of common stock (in shares) | 11,594 | 8,367 | 187 | |||||||||||||
Stockholder servicing fees | (322) | (322) | (322) | |||||||||||||
Repurchase of common stock | $ (431) | $ (86) | (528,108) | (528,625) | (528,625) | |||||||||||
Repurchase of common stock (in shares) | (43,151) | (16,090) | (8,602) | (1,101) | ||||||||||||
Noncontrolling interest valuation adjustment | (90,635) | (90,635) | (90,635) | |||||||||||||
Net income (loss) | 674,315 | 674,315 | 221,473 | 895,788 | ||||||||||||
Distributions paid | (937,017) | (937,017) | (343,000) | (1,280,017) | ||||||||||||
BALANCE at Jun. 30, 2023 | $ 39,079 | $ 13,537 | $ 138 | $ 5,814 | $ 1,250 | 47,357,024 | 444,048 | (13,133,941) | 34,726,949 | 5,440,741 | 40,167,690 | |||||
BALANCE (in shares) at Jun. 30, 2023 | 3,907,864 | 1,353,702 | 13,781 | 581,410 | 125,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||
Issuance of common stock | $ 102 | $ 76 | $ 2 | 197,351 | 197,531 | 197,531 | ||||||||||
Issuance of common stock (in shares) | 10,242 | 7,625 | 165 | |||||||||||||
Stockholder servicing fees | (376) | (376) | (376) | |||||||||||||
Repurchase of common stock | $ (161) | $ (11) | (196,875) | (197,047) | (197,047) | |||||||||||
Repurchase of common stock (in shares) | (16,089) | (1,101) | ||||||||||||||
Noncontrolling interest valuation adjustment | 56,267 | 56,267 | 56,267 | |||||||||||||
Net income (loss) | 2,630,237 | 2,630,237 | 127,799 | 2,758,036 | ||||||||||||
Distributions paid | (944,321) | (944,321) | (308,700) | (1,253,021) | ||||||||||||
BALANCE at Sep. 30, 2023 | $ 39,020 | $ 13,602 | $ 140 | $ 5,814 | $ 1,250 | $ 47,357,124 | $ 3,130,552 | $ (14,078,262) | $ 36,469,240 | $ 5,259,840 | $ 41,729,080 | |||||
BALANCE (in shares) at Sep. 30, 2023 | 3,902,017 | 3,902,017 | 1,360,226 | 1,360,226 | 13,946 | 13,946 | 581,410 | 581,410 | 125,000 | 125,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows from Operating Activities: | ||
Net income | $ 2,919,083 | $ 5,809,864 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,060,341 | 2,852,336 |
Amortization of deferred financing costs and debt discount as interest | (545) | (20,875) |
Amortization of key money loans | (39,125) | (40,125) |
Gain on loan extinguishment | 0 | (942,605) |
Loss (Gain) on interest rate swap/cap | 146,890 | (147,218) |
Loss on disposal of fixed assets | 10,535 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (58,519) | 49,023 |
Due from related parties | 236,056 | (165,026) |
Prepaid expenses and other assets | (382,303) | (382,270) |
Accounts payable, accrued expenses and other | 414,822 | 844,129 |
Due to related parties | 6,915 | 200,730 |
Net cash provided by operating activities | 6,303,615 | 8,068,498 |
Cash Flow from Investing Activities: | ||
Capital improvements | (768,983) | (2,300,075) |
Cash used in investing activities | (768,983) | (2,300,075) |
Cash Flows from Financing Activities: | ||
Payment of stockholder servicing fees | (1,145) | (4,278) |
Proceeds from mortgage note | 135,495 | 1,270,226 |
Payments of mortgage notes principal | (511,347) | (275,915) |
Payment of deferred financing costs | (38,534) | (41,234) |
Distributions to stockholders | (2,244,497) | (2,254,296) |
Distributions to noncontrolling interest | (884,450) | (833,000) |
Repurchase of common stock | (937,189) | (850,999) |
Net cash used in financing activities | (4,481,667) | (2,989,496) |
Increase in cash and cash equivalents and restricted cash | 1,052,965 | 2,778,927 |
Cash and cash equivalents and restricted cash, beginning of period | 11,188,188 | 9,838,402 |
Cash and cash equivalents and restricted cash, end of period | $ 12,241,153 | $ 12,617,329 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 9 Months Ended | |
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Supplemental Disclosure of Cash Flow Information | ||
Cash | $ 8,528,761 | $ 9,212,533 |
Restricted cash | 3,712,392 | 3,404,796 |
Total cash and restricted cash shown on the condensed consolidated statements of cash flows | 12,241,153 | 12,617,329 |
Cash paid for interest | 2,252,157 | 1,888,748 |
Cash paid for income taxes | 84,537 | 49,760 |
Supplemental Disclosure of Noncash Transactions | ||
Common stock issued pursuant to distribution reinvestment plan | $ 595,102 | $ 596,103 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2023 | |
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 its Public Offering (defined below), which terminated on August 13, 2021, to acquire a diverse portfolio of hospitality properties consisting primarily of select-service, extended-stay, and compact full-service hotel properties throughout the United States (the “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. The Company is externally managed by Procaccianti Hotel Advisors, LLC (“PHA”) pursuant to an Advisory Agreement by and among the Company, its Operating Partnership and PHA. PHA is an affiliate of Procaccianti Companies, Inc., the Company’s sponsor (the “Sponsor”). As of September 30, 2023, 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.” The Company raised the equity capital for its real estate investments through a private offering (the “Private Offering”) and a public offering (the “Public Offering”, together with the Private Offering, the “Offerings”) from September 2016 through August 2021, and has offered shares through its distribution reinvestment plan (“DRIP”) pursuant to a Registration Statement on Form S-3 (the “DRIP Offering”) since August 2021. The Company terminated the 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 shares of Class K common stock (“K Shares”) and Class A common stock (“A Shares”), including Units (which were comprised of one K Share and one A Share), in the Private Offering. Of the $15,582,755 in gross proceeds received, $2,954,095 was from the sale of A Shares to TPG Hotel REIT Investor, LLC (“THR”), an affiliate of PHA, to fund organization and offering expenses associated with the K Shares and Units. Since the commencement of the Public Offering and through September 30, 2023, the Company received approximately $41,077,420 in gross proceeds from the sale of K Shares, shares of Class K-I common stock (“K-I Shares”) and shares of Class K-T common shares (“K-T Shares”) in the Public Offering, inclusive of proceeds from the sale of $1,336,956 of K Shares, $870,709 of K-I Shares and $69,593 of K-T Shares pursuant to the DRIP. Additionally, on October 26, 2018, June 10, 2019 and January 19, 2021, the Company received $1,500,000, $690,000 and $440,000, respectively, from the sale of A Shares to THR in private placements, the proceeds of which were used to pay the selling commissions, dealer manager fees, stockholder servicing fees, and other organizational and offering expenses related to the K Shares, K-I Shares and K-T Shares sold in the primary offering portion of the Public Offering. In addition, the Company allocated proceeds from the sale of A Shares in amounts that represent the difference between (i) the applicable estimated net asset value (“NAV”) per K-I Share and the applicable offering price of K-I Shares sold in the primary offering and (ii) any discount to the applicable offering price of K Shares, K-I Shares and K-T Shares arising from reduced or waived selling commissions (other than reduced selling commissions for volume discounts) or dealer manager fees. On February 27, 2020, through a separate private placement and 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”) at $10.00 per Class K OP Unit. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The accompanying condensed consolidated financial statements of the Company are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair and consistent presentation, have been included in these condensed consolidated financial statements. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. 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 September 30, 2023, the assets of the Company’s VIEs were $63,934,314, and consisted primarily of land, building, furniture, fixtures, and equipment and were available to satisfy our VIEs’ obligations. At September 30, 2023, the liabilities of the Company’s VIEs were $42,618,155, and consisted 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 condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 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 condensed consolidated balance sheets include the following financial instruments: cash, restricted cash, accounts receivable, accounts payable and mortgage notes payable. The Company considers the carrying value of cash, restricted cash, accounts receivable and accounts payable 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 drivers 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 September 30, 2023, the estimated fair value of the mortgage notes payable was $60,544,439 compared to the carrying value of $64,701,272. 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. Revenue Recognition Revenue is generally recognized as services are performed. Revenue primarily represents room rental fees, 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 expenses. Included in other operating revenues for the three and nine months ended September 30, 2022, is $0 and $846,828, respectively, of business recovery grants awarded to the Springhill Suites Wilmington, Hotel Indigo Traverse City and the Hilton Garden Inn Providence hotels. 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, capital improvements and insurance as required by its debt agreements. At September 30, 2023 and 2022, reserves for property taxes were $497,542 and $477,530, respectively, reserves for capital improvements were $3,070,065 and $2,741,033, respectively, and reserves for insurance were $63,285 and $42,249, respectively. The Company also included $81,500 and $143,984 of guest advance deposits as restricted cash at September 30, 2023 and 2022, respectively. 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 September 30, 2023, 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 2019 through 2022 remaining subject to examination by federal and various state tax jurisdictions. Noncontrolling Interest 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 condensed 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 condensed 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 a group of 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 condensed 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 K Shares or cash. The carrying amount of the noncontrolling interest of the Operating Partnership is equal to the greater of the initial carrying amount, increased, or decreased for the Class K OP Units’ share of net income or loss and the redemption value. As of September 30, 2023, the carrying amount of the noncontrolling interest of the Operating Partnership includes a $34,368 adjustment to reflect its redemption value. Revenue, expenses, and net income attributable to both the Company and the noncontrolling interest of the Operating Partnership are reported in the condensed 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. As of September 30, 2023, 4,500 restricted K Shares held by the Company’s independent directors are included in the calculation of basic EPS because such shares have been issued and participate in distributions. The Company’s calculated earnings per share for the three and nine months ended September 30, 2023 and 2022, were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income attributable to common stockholders $ 2,630,237 $ 2,768,103 $ 2,272,614 $ 4,775,896 Less: Class K Common Stock dividends declared and accumulated 689,335 690,893 2,051,277 2,057,627 Less: Class K-I Common Stock dividends declared and accumulated 239,538 235,453 708,749 694,511 Less: Class K-T Common Stock dividends declared and accumulated 2,448 10,594 8,157 32,604 Less: Class A Common Stock dividends declared and accumulated 102,583 102,583 304,404 304,404 Undistributed net income (loss) $ 1,596,333 $ 1,728,580 $ (799,973) $ 1,686,750 Class K Common Stock: Undistributed net income (loss) $ 1,042,094 $ 1,124,989 $ (522,930) $ 1,100,207 Class K Common Stock dividends declared and accumulated 689,335 690,893 2,051,277 2,057,627 Net income $ 1,731,429 $ 1,815,882 $ 1,528,347 $ 3,157,834 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 3,906,944 3,915,774 3,917,945 3,930,059 Class K-I Common Stock: Undistributed net income (loss) $ 362,118 $ 383,391 $ (180,680) $ 371,353 Class K-I Common Stock dividends declared and accumulated 239,538 235,453 708,749 694,511 Net income $ 601,656 $ 618,844 $ 528,069 $ 1,065,864 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 1,357,628 1,334,480 1,353,707 1,326,513 Class K-T Common Stock: Undistributed net income (loss) $ 3,701 $ 17,251 $ (2,078) $ 17,433 Class K-T Common Stock dividends declared and accumulated 2,448 10,594 8,157 32,604 Net income $ 6,149 $ 27,845 $ 6,079 $ 50,037 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 13,876 60,046 15,566 62,274 Class A Common Stock: Undistributed net income (loss) $ 155,079 $ 167,037 $ (77,601) $ 162,764 Class A Common Stock dividends declared and accumulated 102,583 102,583 304,404 304,404 Net income $ 257,662 $ 269,620 $ 226,803 $ 467,168 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 581,410 581,410 581,410 581,410 Class B Common Stock: Undistributed net income (loss) $ 33,341 $ 35,912 $ (16,684) $ 34,993 Net income (loss) per common share, basic and diluted $ 0.27 $ 0.29 $ (0.13) $ 0.28 Weighted average number of common shares outstanding, basic and diluted 125,000 125,000 125,000 125,000 |
Investments in Hotels
Investments in Hotels | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023: Contract Mortgage Ownership Purchase Debt Property Name Date Acquired Location Interest Price (1)(2) Rooms Outstanding Springhill Suites Wilmington 05/24/2017 (1) Wilmington, NC 51% $ 18,000,000 120 $ 10,670,083 Staybridge Suites St. Petersburg 06/29/2017 (1) St. Petersburg, FL 51% $ 20,500,000 119 $ 12,619,168 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 $ 16,749,123 Cherry Tree Inn 07/30/2021 Traverse City, MI 100% $ 15,000,000 76 $ 9,404,235 1) Represents the date and contract purchase price of PCF’s acquisition of the Springhill Suites Wilmington (the “Springhill Suites Wilmington”) and the Staybridge Suites St. Petersburg (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 September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 Land $ 14,450,538 $ 14,450,538 Building and improvements 89,188,548 89,048,018 Furniture, fixtures, and equipment 11,758,384 11,179,909 Total cost 115,397,470 114,678,465 Accumulated depreciation (16,691,542) (13,692,785) Property and equipment, net $ 98,705,928 $ 100,985,680 Depreciation expense for the three months ended September 30, 2023 and 2022 was $1,027,311 and $986,607, respectively. Depreciation expense for the nine months ended September 30, 2023 and 2022 was $3,048,735 and $2,840,579, respectively. |
Mortgage Notes Payable
Mortgage Notes Payable | 9 Months Ended |
Sep. 30, 2023 | |
Mortgage Notes Payable | |
Mortgage Notes Payable | Note 4 – Mortgage Notes Payable Included in mortgage notes payable at September 30, 2023, is a $12,619,168 mortgage payable secured by the Staybridge Suites St. Petersburg (the “St. Petersburg Note”), a $10,670,083 mortgage payable secured by the Springhill Suites Wilmington (the “Wilmington Note”), a $15,092,000 mortgage payable secured by the Hotel Indigo Traverse City (the “TCI Note”), a $16,749,123 mortgage payable secured by the Hilton Garden Inn Providence (the “HGI Note”) and a $9,404,235 mortgage payable (the “CTI Note”) secured by the Cherry Tree Inn (the “Cherry Tree Inn”). The mortgage notes payable each contain customary affirmative covenants, negative covenants and events of default. The St. Petersburg Note required monthly August 1, 2020 The Wilmington Note required monthly interest payments at 4.49% through June 1, 2020, and subsequent to June 1, 2020 Partnership and its subsidiary for the Springhill Suites Wilmington was in compliance with its loan obligations, including applicable covenants, and all required payments were made as agreed. The TCI Note bears interest at the Secured Overnight Financing Rate (“SOFR”) plus a SOFR rate margin of 2.50% at September 30, 2023. The TCI Note provides for interest only monthly payments until maturity. The principal amount will be due on the maturity date, August 15, 2024. 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. As of September 30, 2023, we believe the Operating Partnership and its subsidiary for the Hotel Indigo Traverse City were in compliance with their loan obligations, including applicable covenants, and all required payments were made as agreed. The HGI Note required monthly interest payments at a fixed rate of 4.25% through February 15, 2023, and monthly principal and interest payments based on a 30 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, including equipment. As of September 30, 2023, we believe the Operating Partnership and its subsidiary for the Cherry Tree Inn were in compliance with their loan obligations, including applicable covenants and all required payments have been made as agreed. No further borrowings on the CTI Note are anticipated. The Company’s operations have been and are expected to continue to be impacted by economic and market conditions. Persistent market and economic challenges, such as increases in interest rates, labor shortages, supply chain disruptions and inflation, could, among other things, affect (i) the value and performance of the Company’s investments, (ii) the Company’s ability to pay future distributions, (iii) the availability or terms of financings, (iv) the Company’s ability to make scheduled principal and interest payments, and (v) the Company’s ability to refinance any outstanding debt when contractually due. Interest expense on mortgage notes payable for the three months ended September 30, 2023 and 2022 was $795,325 and $729,776, respectively. Interest expense on mortgage notes payable for the nine months ended September 30, 2023 and 2022 was $2,257,582 and $2,013,631, respectively. Also included in mortgage notes payable as of September 30, 2023 is $209,052 of net deferred financing costs and debt discounts and premiums. For the three months ended September 30, 2023 and 2022, the Company amortized $2,663 and $2,438, respectively, of net deferred financing costs and debt discounts and premiums as interest expense. For the nine months ended September 30, 2023 and 2022, the Company amortized $545 and $20,875, respectively, of net deferred financing costs and debt discounts and premiums as interest expense. |
Interest Rate Swap
Interest Rate Swap | 9 Months Ended |
Sep. 30, 2023 | |
Interest Rate Swap/Cap | |
Interest Rate Swap/Cap | Note 5 – Interest Rate Swap The Company is exposed to certain risks relating to its ongoing business operations, including the effect of changes in interest rates. The Company has an interest rate swap agreement to manage interest rate risk exposure on $15,092,000 of the TCI Note. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. The following table summarizes the terms of the Company's outstanding interest rate swap agreement: Notional Fair Value of Amount as of Liability as of September 30, Interest Effective Maturity September 30, Balance Sheet Location 2023 Rate (1) Date Date 2023 (2) Interest rate swap Accounts payable, accrued expenses and other, net $ 15,092,000 5.13 % 8/15/2023 8/15/2024 $ 29,243 1) The interest rate consists of the underlying index swapped to a fixed rate rather than floating rate SOFR, plus a premium. 2) Changes in fair value are recorded as unrealized gain (loss) in the condensed consolidated statements of operations as the Company did not designate this interest rate swap as a hedge. The Company valued the interest rate swap using Level 2 inputs . |
Other Debt
Other Debt | 9 Months Ended |
Sep. 30, 2023 | |
Other Debt. | |
Other Debt | Note 6 – 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 fully or partially forgivable. 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. During 2020 and 2021, the Company received PPP loans in the aggregate amount of $2,445,589, of which, $1,502,984 and $942,605 was forgiven during the years ended December 31, 2021 and 2022, respectively. During the three and nine months ended September 30, 2022, the Company received forgiveness for $0 and $942,605, respectively of its PPP loans and recognized a gain on extinguishment in the condensed consolidated statement of operations for the same amount. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 7 – 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 June 27, 2023, 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 an additional one-year term effective on August 2, 2023. 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. Administrative Expenses PHA is required to allocate the cost of administrative 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. During the three months ended September 30, 2023 and 2022, the Sponsor requested reimbursement for $29,734 and $35,120, respectively, of such administrative service expenses. During the nine months ended September 30, 2023 and 2022, the Sponsor requested reimbursement for $106,201 and $122,813, respectively, of such administrative service expenses. These amounts are included in other fees to affiliates on the condensed consolidated statement of operations. Acquisition Fee The Company will pay PHA acquisition fees as described below: Acquisition Fee : Fee for providing services including selecting, evaluating and acquiring potential investments (the “acquisition fee”). The total acquisition fee payable to PHA shall equal No acquisition fees were incurred during the three and nine months ended September 30, 2023 and 2022. As of September 30, 2023 and 2022, there was $1,244,139 of deferred acquisition fees included in due to related parties on the condensed consolidated balance sheets. Interest expense on outstanding acquisition fees was $18,816 and $18,816, respectively, for the three months ended September 30, 2023 and 2022 and $55,483 and $55,833, respectively, for the nine months ended September 30, 2023 and 2022. These are included in interest expense on the condensed consolidated statement of operations and in due to related parties on the condensed consolidated balance sheets. Asset Management Fee The Company will pay PHA asset management fees as described below: Asset Management Fee For the three months ended September 30, 2023 and 2022, the Company incurred $179,824 and $177,812, respectively, in asset management fees. For the nine months ended September 30, 2023 and 2022, the Company incurred $537,840 and $529,933, respectively, in asset management fees. Asset management fees are included in other fees to affiliates on the condensed consolidated statements of operations. Interest expense on the outstanding asset management fees was $2,719 and $2,689 for the three months ended September 30, 2023 and 2022, respectively, $16,028 and $15,710 for the nine months ended September 30, 2023 and 2022, respectively, and are included in interest expense on the condensed consolidated statements of operations. At September 30, 2023 and 2022, asset management fees and interest payable of $182,544 and $180,501, respectively, are included in due to related parties on the condensed 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 three and nine months ended September 30, 2023 and 2022. 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 September 30, 2023 and 2022 were paid directly by the Company and there have been no reimbursements to PHA. 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, 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 8 – “Stockholders’ Equity”. Certain O&O Costs have been incurred by PHA on behalf of the Company. At the termination of the Public Offering on August 13, 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 $8,752,997, of which $1,026,564 has been reimbursed through the issuance of A Shares to an affiliate of PHA and through cash payments to PHA of $3,312,833. The Company recorded O&O Costs as charges against additional paid in capital on the condensed 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 and regulations established by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Company’s charter. The Company recognized no O&O Costs for the three months ended September 30, 2023 and 2022, respectively. As of September 30, 2023 and 2022, the Company had no balances due to or from PHA for the reimbursement of O&O Costs. 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 for the Staybridge Suites St. Petersburg and the Springhill Suites Wilmington expire March 28, 2024, with three additional automatic one-year extensions. The term of the in-place management agreement for the Hotel Indigo Traverse City expires August 14, 2024, with three additional automatic one-year extensions. The terms of the in-place management agreements expire February 26, 2025 and June 3, 2031, respectively, for the Hilton Garden Inn Providence and the Cherry Tree Inn. Aggregate property management fees incurred were $329,697 and $328,867 for the three months ended September 30, 2023 and 2022, respectively, $732,936 and $706,587 for the nine months ended September 30, 2023 and 2022, respectively, and are included in property management fees to affiliates on the condensed consolidated statements of operations. As of September 30, 2023, $97,932 of accrued property management fees payable were included in due to related parties on the condensed consolidated balance sheet. Aggregate net reimbursements for certain expenses were $211,683 and $161,372 for the three months ended September 30, 2023 and 2022, respectively, and $553,710 and $414,134 for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, $66,918 of expense reimbursements were included in due to related parties on the condensed consolidated balance sheet. During the three months ended September 30, 2023 and 2022, the Company paid $0 and $334,404, respectively, to TPG Risk Services, LLC, an affiliate of the Sponsor (“TPG”), for the reimbursement of prepaid insurance at the hotel properties. During the nine months ended September 30, 2023 and 2022, the Company paid $594,143 and $335,358, respectively, to TPG for the reimbursement of prepaid insurance at the hotel properties. As of September 30, 2023, the Company had a balance of $5,015 due to TPG, which is included in due to related parties on the condensed consolidated balance sheets. The CARES Act provided an employee retention tax credit, which was a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers and equal to 50% of qualified wages paid per quarter through December 31, 2020 and up to $10,000 per employee and equal to 70% of qualified wages paid per quarter through September 30, 2021. An affiliate of the Company’s hotel property managers qualified for the employee retention tax credit. During the three and nine months ended September 30, 2022, the Company received from its affiliate $817,773 of the $859,899 related to payroll expenses reimbursed by the Company pursuant to its property management agreements and had a $42,126 receivable balance included in Due from related parties in the Company’s condensed consolidated balance sheet as of September 30, 2022. The affiliate partially offset these amounts by $49,696 for expenses incurred by the affiliate related to the reimbursements. 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. The Company reimbursed TPG Construction, LLC, an affiliate of the Sponsor (“TPG Construction”), $59,304 and $431,635 during the three months ended September 30, 2023 and 2022, respectively, and $61,256 and $1,685,754 during the nine months ended September 30, 2023 and 2022, respectively, for capital expenditure costs incurred at the hotel properties. As of September 30, 2023 and 2022, $0 and $59,227, respectively, of construction reimbursements were included in the due to related parties balance. Included in the due from related parties balance at September 30, 2023 and 2022, was $26,092 and $250,000, respectively, in receivables from TPG Construction relating to working capital requests to provide funding for vendors and contractor deposits at the Cherry Tree Inn and the Hilton Garden Inn Providence. 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 during the three and nine months ended September 30, 2023 and 2022. 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, with a par value of $0.01 per share (“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, 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 were issued Class K OP Units and 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 3.87% and 2.50% for the three months ended September 30, 2023 and 2022, respectively, and 3.88% and 2.34% for the nine months ended September 30, 2023 and 2022, 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 condensed consolidated balance sheets at September 30, 2023 and December 31, 2022. Interest expense was $919 and $594 for the three months ended September 30, 2023 and 2022, respectively, $2,731 and $1,651 for the nine months ended September 30, 2023 and 2022, respectively, and is included in interest expense on the condensed consolidated statements of operations and in due to related parties on the condensed consolidated balance sheets. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | Note 8 - Stockholders’ Equity Under the Company’s charter, the total number of shares of capital 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. The Company’s K Shares, K-I K-T K-I K-T annum each 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 K-T K-I K-T 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 K-T B Shares will have no voting rights, other than the right to vote on and approve any further issuances of or an increase in 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. On September 29, 2016, the Company issued 125,000 B Shares to S2K Servicing LLC. At the termination of the Private Offering on August 13, 2021, 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 in the Private Offering. As of the termination of 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 September 30, 2023, the Company had issued 140,147 K Shares, 90,877 K-I Shares and 7,415 K-T Shares pursuant to the DRIP, resulting in gross proceeds pursuant to the DRIP of $1,336,956, $870,709 and $69,593, respectively. As of September 30, 2023, the Company had issued 1,500 restricted K Shares each 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 Sponsor and PHA received only Class K OP Units and no cash as consideration. As of September 30, 2023, 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 balance as of September 30, 2023. As of September 30, 2023, 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. During the nine months ended September 30, 2023, pursuant to Section 5.2.7 of the Company’s charter, 15,899 K-T shares converted to 15,899 K Shares. As of September 30, 2023, pursuant to Section 5.2.7 of the Company’s charter, 51,486 K-T Shares converted to 51,486 K Shares. PHA was obligated to purchase sufficient A Shares to fund payment of O&O Costs associated with the Private Offering and was obligated to purchase sufficient A Shares to fund payment of O&O Costs related to 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, through the termination of the Public Offering, 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. 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. The Company recognized $1,058,501 of selling commissions and dealer manager fees in connection with the Private Offering. There have been no additional selling commissions and dealer managers fees in connection with the Public Offering since 2021. 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 K-I 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 September 30, 2023, the Company recognized $17,230 of stockholder servicing fees in connection with 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 K-T 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 K-T The Company established a long-term incentive plan pursuant to which the Company’s board of directors (including independent directors), officers 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 each three Shares independent 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 K-T K-I K-T 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 30 days 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 Repurchases of K Shares, K-I K-T following 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 years after the death or disability of a stockholder. Additionally, any shares purchased pursuant to the Company’s DRIP will be excluded from the one-year holding requirement. For stockholders that have made more than one purchase of K Shares, K-I Shares or K-T Shares in the Public Offering and/or Private Offering, the one-year holding period will be calculated separately with respect to each such purchase. Repurchases of K Shares, K-I Shares and K-T Shares, when requested, are at the Company’s sole discretion and generally will be made quarterly. Shares repurchased under the A&R SRP program will become unissued 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. The Company generally repurchases shares approximately 30 days following the end of the applicable quarter in which requests were received. The following table reflects repurchase activity for the nine months ended September 30, 2023. Share Class Requests Received During 3 Months Ended Date Repurchased Number of Share Repurchases Requested Shares Repurchased $ Amount of Shares Repurchased Amount per share Requests Withdrawn Repurchase Requests Outstanding K 12/31/2022 1/12/2023 20,900 20,900 $ 211,517 $ 10.12 - - K 3/31/2023 4/27/2023 43,151 43,151 $ 440,108 $ 10.20 - - K 6/30/2023 8/23/2023 59,587 16,090 (1) $ 184,422 $ 11.46 - 43,497 K 9/30/2023 TBD 10,274 - - - - 10,274 Total K Share repurchase requests outstanding at September 30, 2023 53,771 K-I 3/31/2023 4/27/2023 8,602 8,602 $ 88,516 $ 10.29 - - K-I 6/30/2023 8/23/2023 5,591 1,101 (1) $ 12,625 $ 11.46 1,036 3,454 Total K-I Share repurchase requests outstanding at September 30, 2023 3,454 (1) On August 18, 2023, the Company’s board of directors determined that the funding limitation under the A&R SRP was reached with respect to share repurchase requests for the quarter ended June 30, 2023, as there were insufficient net proceeds from the DRIP to fund all share repurchase requests. Distributions During the nine months ended September 30, 2023, 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 Unit Total 2/9/2023 12/31/2022 2/6/2023 2/8/2023 $0.001917808 $ 694,914 $ 236,910 $ 3,831 $ 22,606 $ 958,261 5/4/2023 3/31/2023 4/26/2023 5/3/2023 $0.001917808 678,982 233,064 2,856 22,115 $ 937,017 8/9/2023 6/30/2023 8/4/2023 8/8/2023 $0.001917808 683,412 236,148 2,401 22,360 $ 944,321 $ 2,057,309 $ 706,122 $ 9,087 $ 67,081 $ 2,839,599 During the nine months ended September 30, 2022, 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 Unit Total 2/16/2022 12/31/2021 2/11/2022 2/14/22 $0.001917808 $ 694,066 $ 230,522 $ 10,927 $ 22,606 $ 958,121 5/6/2022 3/31/2022 4/29/2022 5/2/2022 $0.001917808 681,294 227,492 10,899 — $ 919,685 5/11/2022 3/31/2022 4/29/2022 5/2/2022 $0.001917808 - — — 22,115 $ 22,115 8/5/2022 6/30/2022 8/1/2022 8/3/2022 $0.001917808 - 685,440 231,566 11,112 22,360 $ 950,478 $ 2,060,800 $ 689,580 $ 32,938 $ 67,081 $ 2,850,399 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. On October 30, 2023, the Company’s board of directors authorized the payment of distributions, with respect to the K Shares, K-I Shares and K-T Shares outstanding as of September 30, 2023, to the holders of record of K Shares, K-I Shares and K-T shares as of the close of business on November 1, 2023. With respect to the K Shares, K-I Shares and K-T Shares outstanding as of September 30, 2023, the cumulative amount of distributions that had accumulated on a daily basis with respect to the K Shares, K-I Shares and K-T Shares since June 30, 2023 was $689,334, or $0.001917808 per K Share per day, $239,538, or $0.001917808 per K-I Share per day, and $2,448, or $0.001917808 per K-T Share per day, respectively. Such distributions were paid to stockholders in cash or in additional shares pursuant to the DRIP on November 2, 2023. On October 30, 2023, the Company’s board of directors authorized the payment of distributions with respect to the Class K OP Units outstanding as of September 30, 2023, to the holders of record of Class K OP Units as of the close of business on November 1, 2023. With respect to the Class K OP Units outstanding as of September 30, 2023, the cumulative amount of distributions that had accumulated on a daily basis with respect to the Class K OP Units since June 30, 2023 was $22,606, or $0.001917808 per Class K OP Unit. Such distributions were paid to stockholders in cash or in additional shares pursuant to the DRIP on November 9, 2023. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Taxes | |
Income Taxes | Note 9 - Income Taxes The Company recognized a consolidated income tax expense of $193,881 and $200,498 for the three months ended September 30, 2023 and 2022, respectively. The Company recognized a consolidated income tax expense of $8,117 and $243,473 for the nine months ended September 30, 2023 and 2022, respectively. These amounts relate to the operations of the Company’s TRSs. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The accompanying condensed consolidated financial statements of the Company are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, all adjustments, which include only normal recurring adjustments considered necessary for a fair and consistent presentation, have been included in these condensed consolidated financial statements. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. 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 September 30, 2023, the assets of the Company’s VIEs were $63,934,314, and consisted primarily of land, building, furniture, fixtures, and equipment and were available to satisfy our VIEs’ obligations. At September 30, 2023, the liabilities of the Company’s VIEs were $42,618,155, and consisted 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 condensed consolidated financial statements in conformity with 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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 condensed consolidated balance sheets include the following financial instruments: cash, restricted cash, accounts receivable, accounts payable and mortgage notes payable. The Company considers the carrying value of cash, restricted cash, accounts receivable and accounts payable 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 drivers 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 September 30, 2023, the estimated fair value of the mortgage notes payable was $60,544,439 compared to the carrying value of $64,701,272. 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. |
Revenue Recognition | Revenue Recognition Revenue is generally recognized as services are performed. Revenue primarily represents room rental fees, 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 expenses. Included in other operating revenues for the three and nine months ended September 30, 2022, is $0 and $846,828, respectively, of business recovery grants awarded to the Springhill Suites Wilmington, Hotel Indigo Traverse City and the Hilton Garden Inn Providence hotels. |
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, capital improvements and insurance as required by its debt agreements. At September 30, 2023 and 2022, reserves for property taxes were $497,542 and $477,530, respectively, reserves for capital improvements were $3,070,065 and $2,741,033, respectively, and reserves for insurance were $63,285 and $42,249, respectively. The Company also included $81,500 and $143,984 of guest advance deposits as restricted cash at September 30, 2023 and 2022, respectively. |
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 September 30, 2023, 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 2019 through 2022 remaining subject to examination by federal and various state tax jurisdictions. |
Noncontrolling Interests | Noncontrolling Interest 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 condensed 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 condensed 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 a group of 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 condensed 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 K Shares or cash. The carrying amount of the noncontrolling interest of the Operating Partnership is equal to the greater of the initial carrying amount, increased, or decreased for the Class K OP Units’ share of net income or loss and the redemption value. As of September 30, 2023, the carrying amount of the noncontrolling interest of the Operating Partnership includes a $34,368 adjustment to reflect its redemption value. Revenue, expenses, and net income attributable to both the Company and the noncontrolling interest of the Operating Partnership are reported in the condensed 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. As of September 30, 2023, 4,500 restricted K Shares held by the Company’s independent directors are included in the calculation of basic EPS because such shares have been issued and participate in distributions. The Company’s calculated earnings per share for the three and nine months ended September 30, 2023 and 2022, were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income attributable to common stockholders $ 2,630,237 $ 2,768,103 $ 2,272,614 $ 4,775,896 Less: Class K Common Stock dividends declared and accumulated 689,335 690,893 2,051,277 2,057,627 Less: Class K-I Common Stock dividends declared and accumulated 239,538 235,453 708,749 694,511 Less: Class K-T Common Stock dividends declared and accumulated 2,448 10,594 8,157 32,604 Less: Class A Common Stock dividends declared and accumulated 102,583 102,583 304,404 304,404 Undistributed net income (loss) $ 1,596,333 $ 1,728,580 $ (799,973) $ 1,686,750 Class K Common Stock: Undistributed net income (loss) $ 1,042,094 $ 1,124,989 $ (522,930) $ 1,100,207 Class K Common Stock dividends declared and accumulated 689,335 690,893 2,051,277 2,057,627 Net income $ 1,731,429 $ 1,815,882 $ 1,528,347 $ 3,157,834 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 3,906,944 3,915,774 3,917,945 3,930,059 Class K-I Common Stock: Undistributed net income (loss) $ 362,118 $ 383,391 $ (180,680) $ 371,353 Class K-I Common Stock dividends declared and accumulated 239,538 235,453 708,749 694,511 Net income $ 601,656 $ 618,844 $ 528,069 $ 1,065,864 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 1,357,628 1,334,480 1,353,707 1,326,513 Class K-T Common Stock: Undistributed net income (loss) $ 3,701 $ 17,251 $ (2,078) $ 17,433 Class K-T Common Stock dividends declared and accumulated 2,448 10,594 8,157 32,604 Net income $ 6,149 $ 27,845 $ 6,079 $ 50,037 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 13,876 60,046 15,566 62,274 Class A Common Stock: Undistributed net income (loss) $ 155,079 $ 167,037 $ (77,601) $ 162,764 Class A Common Stock dividends declared and accumulated 102,583 102,583 304,404 304,404 Net income $ 257,662 $ 269,620 $ 226,803 $ 467,168 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 581,410 581,410 581,410 581,410 Class B Common Stock: Undistributed net income (loss) $ 33,341 $ 35,912 $ (16,684) $ 34,993 Net income (loss) per common share, basic and diluted $ 0.27 $ 0.29 $ (0.13) $ 0.28 Weighted average number of common shares outstanding, basic and diluted 125,000 125,000 125,000 125,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of EPS | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income attributable to common stockholders $ 2,630,237 $ 2,768,103 $ 2,272,614 $ 4,775,896 Less: Class K Common Stock dividends declared and accumulated 689,335 690,893 2,051,277 2,057,627 Less: Class K-I Common Stock dividends declared and accumulated 239,538 235,453 708,749 694,511 Less: Class K-T Common Stock dividends declared and accumulated 2,448 10,594 8,157 32,604 Less: Class A Common Stock dividends declared and accumulated 102,583 102,583 304,404 304,404 Undistributed net income (loss) $ 1,596,333 $ 1,728,580 $ (799,973) $ 1,686,750 Class K Common Stock: Undistributed net income (loss) $ 1,042,094 $ 1,124,989 $ (522,930) $ 1,100,207 Class K Common Stock dividends declared and accumulated 689,335 690,893 2,051,277 2,057,627 Net income $ 1,731,429 $ 1,815,882 $ 1,528,347 $ 3,157,834 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 3,906,944 3,915,774 3,917,945 3,930,059 Class K-I Common Stock: Undistributed net income (loss) $ 362,118 $ 383,391 $ (180,680) $ 371,353 Class K-I Common Stock dividends declared and accumulated 239,538 235,453 708,749 694,511 Net income $ 601,656 $ 618,844 $ 528,069 $ 1,065,864 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 1,357,628 1,334,480 1,353,707 1,326,513 Class K-T Common Stock: Undistributed net income (loss) $ 3,701 $ 17,251 $ (2,078) $ 17,433 Class K-T Common Stock dividends declared and accumulated 2,448 10,594 8,157 32,604 Net income $ 6,149 $ 27,845 $ 6,079 $ 50,037 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 13,876 60,046 15,566 62,274 Class A Common Stock: Undistributed net income (loss) $ 155,079 $ 167,037 $ (77,601) $ 162,764 Class A Common Stock dividends declared and accumulated 102,583 102,583 304,404 304,404 Net income $ 257,662 $ 269,620 $ 226,803 $ 467,168 Net income per common share, basic and diluted $ 0.44 $ 0.46 $ 0.39 $ 0.80 Weighted average number of common shares outstanding, basic and diluted 581,410 581,410 581,410 581,410 Class B Common Stock: Undistributed net income (loss) $ 33,341 $ 35,912 $ (16,684) $ 34,993 Net income (loss) per common share, basic and diluted $ 0.27 $ 0.29 $ (0.13) $ 0.28 Weighted average number of common shares outstanding, basic and diluted 125,000 125,000 125,000 125,000 |
Investments in Hotels (Tables)
Investments in Hotels (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments in Hotels | |
Schedule of investments in hotel properties | Contract Mortgage Ownership Purchase Debt Property Name Date Acquired Location Interest Price (1)(2) Rooms Outstanding Springhill Suites Wilmington 05/24/2017 (1) Wilmington, NC 51% $ 18,000,000 120 $ 10,670,083 Staybridge Suites St. Petersburg 06/29/2017 (1) St. Petersburg, FL 51% $ 20,500,000 119 $ 12,619,168 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 $ 16,749,123 Cherry Tree Inn 07/30/2021 Traverse City, MI 100% $ 15,000,000 76 $ 9,404,235 1) Represents the date and contract purchase price of PCF’s acquisition of the Springhill Suites Wilmington (the “Springhill Suites Wilmington”) and the Staybridge Suites St. Petersburg (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 | September 30, December 31, 2023 2022 Land $ 14,450,538 $ 14,450,538 Building and improvements 89,188,548 89,048,018 Furniture, fixtures, and equipment 11,758,384 11,179,909 Total cost 115,397,470 114,678,465 Accumulated depreciation (16,691,542) (13,692,785) Property and equipment, net $ 98,705,928 $ 100,985,680 |
Interest Rate Swap (Tables)
Interest Rate Swap (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Interest Rate Swap/Cap | |
Schedule of outstanding interest rate swap agreement | Notional Fair Value of Amount as of Liability as of September 30, Interest Effective Maturity September 30, Balance Sheet Location 2023 Rate (1) Date Date 2023 (2) Interest rate swap Accounts payable, accrued expenses and other, net $ 15,092,000 5.13 % 8/15/2023 8/15/2024 $ 29,243 1) The interest rate consists of the underlying index swapped to a fixed rate rather than floating rate SOFR, plus a premium. 2) Changes in fair value are recorded as unrealized gain (loss) in the condensed consolidated statements of operations as the Company did not designate this interest rate swap as a hedge. The Company valued the interest rate swap using Level 2 inputs . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 | Share Class Requests Received During 3 Months Ended Date Repurchased Number of Share Repurchases Requested Shares Repurchased $ Amount of Shares Repurchased Amount per share Requests Withdrawn Repurchase Requests Outstanding K 12/31/2022 1/12/2023 20,900 20,900 $ 211,517 $ 10.12 - - K 3/31/2023 4/27/2023 43,151 43,151 $ 440,108 $ 10.20 - - K 6/30/2023 8/23/2023 59,587 16,090 (1) $ 184,422 $ 11.46 - 43,497 K 9/30/2023 TBD 10,274 - - - - 10,274 Total K Share repurchase requests outstanding at September 30, 2023 53,771 K-I 3/31/2023 4/27/2023 8,602 8,602 $ 88,516 $ 10.29 - - K-I 6/30/2023 8/23/2023 5,591 1,101 (1) $ 12,625 $ 11.46 1,036 3,454 Total K-I Share repurchase requests outstanding at September 30, 2023 3,454 (1) On August 18, 2023, the Company’s board of directors determined that the funding limitation under the A&R SRP was reached with respect to share repurchase requests for the quarter ended June 30, 2023, as there were insufficient net proceeds from the DRIP to fund all share repurchase requests. |
Schedule of share distributions | During the nine months ended September 30, 2023, 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 Unit Total 2/9/2023 12/31/2022 2/6/2023 2/8/2023 $0.001917808 $ 694,914 $ 236,910 $ 3,831 $ 22,606 $ 958,261 5/4/2023 3/31/2023 4/26/2023 5/3/2023 $0.001917808 678,982 233,064 2,856 22,115 $ 937,017 8/9/2023 6/30/2023 8/4/2023 8/8/2023 $0.001917808 683,412 236,148 2,401 22,360 $ 944,321 $ 2,057,309 $ 706,122 $ 9,087 $ 67,081 $ 2,839,599 During the nine months ended September 30, 2022, 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 Unit Total 2/16/2022 12/31/2021 2/11/2022 2/14/22 $0.001917808 $ 694,066 $ 230,522 $ 10,927 $ 22,606 $ 958,121 5/6/2022 3/31/2022 4/29/2022 5/2/2022 $0.001917808 681,294 227,492 10,899 — $ 919,685 5/11/2022 3/31/2022 4/29/2022 5/2/2022 $0.001917808 - — — 22,115 $ 22,115 8/5/2022 6/30/2022 8/1/2022 8/3/2022 $0.001917808 - 685,440 231,566 11,112 22,360 $ 950,478 $ 2,060,800 $ 689,580 $ 32,938 $ 67,081 $ 2,850,399 |
Organization and Description _2
Organization and Description of Business (Details) | 9 Months Ended | 85 Months Ended | ||||
Jan. 19, 2021 USD ($) | Feb. 27, 2020 $ / shares shares | Jun. 10, 2019 USD ($) | Oct. 26, 2018 USD ($) | Sep. 30, 2023 USD ($) item room state shares | Sep. 30, 2023 USD ($) room state | |
Subsidiary, Sale of Stock | ||||||
Number of owned interests in select - service hotels | item | 5 | |||||
Number of states select service hotels located | state | 4 | 4 | ||||
Number of select service hotels rooms | room | 559 | 559 | ||||
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 | |||||
Initial public offering | ||||||
Subsidiary, Sale of Stock | ||||||
Amount of shares sold for termination of private offering prior to commencement of public offering | $ 41,077,420 | |||||
Class A Common Stock | Private offering | ||||||
Subsidiary, Sale of Stock | ||||||
Number of shares consist in one units | shares | 1 | |||||
Amount of shares sold for termination of private offering prior to commencement of public offering | $ 440,000 | $ 690,000 | $ 1,500,000 | $ 2,954,095 | ||
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 | Distribution reinvestment plan | ||||||
Subsidiary, Sale of Stock | ||||||
Proceeds from DRIP | 1,336,956 | |||||
Class K Common Stock | Private offering | ||||||
Subsidiary, Sale of Stock | ||||||
Number of shares consist in one units | shares | 1 | |||||
Class K-I Common Stock | Distribution reinvestment plan | ||||||
Subsidiary, Sale of Stock | ||||||
Proceeds from DRIP | 870,709 | |||||
Class K-T Common Stock | Distribution reinvestment plan | ||||||
Subsidiary, Sale of Stock | ||||||
Proceeds from DRIP | $ 69,593 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||
Feb. 27, 2020 shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Total of VIE and asset acquisition: | ||||||
Assets | $ 112,812,993 | $ 112,812,993 | $ 113,846,620 | |||
Liabilities | 69,680,951 | $ 69,680,951 | 69,566,380 | |||
Number of segment | segment | 1 | |||||
Carrying value of mortgage notes payable | 64,554,369 | $ 64,554,369 | $ 64,969,299 | |||
Uncertain tax positions | 0 | 0 | ||||
Adjustment In Carrying Amount Of Noncontrolling Interest | 34,368 | 34,368 | ||||
Revenue | 10,986,213 | $ 10,959,839 | 24,418,689 | $ 24,396,500 | ||
Reserves for insurance | 63,285 | 42,249 | 63,285 | 42,249 | ||
Other operating | ||||||
Total of VIE and asset acquisition: | ||||||
Revenue | 347,705 | 268,757 | $ 830,139 | 1,443,399 | ||
Hilton Garden Inn Providence | ||||||
Total of VIE and asset acquisition: | ||||||
Number of operating partnership units issued | shares | 128,124 | |||||
Springhill Suites Wilmington, Hotel Indigo Traverse City, and Hilton Garden Inn Providence Hotels | Other operating | ||||||
Total of VIE and asset acquisition: | ||||||
Revenue | 0 | 846,828 | ||||
Class K Common Stock | ||||||
Total of VIE and asset acquisition: | ||||||
Shares held by the Company's independent directors | shares | 4,500 | |||||
Procaccianti Convertible Fund, LLC (PCF) | ||||||
Total of VIE and asset acquisition: | ||||||
Fair value of mortgage notes payable | 60,544,439 | $ 60,544,439 | ||||
Carrying value of mortgage notes payable | 64,701,272 | 64,701,272 | ||||
Reserves for property taxes | 497,542 | 477,530 | 497,542 | 477,530 | ||
Reserves for capital improvements | 3,070,065 | 2,741,033 | 3,070,065 | 2,741,033 | ||
Advance deposits | 81,500 | $ 143,984 | $ 81,500 | $ 143,984 | ||
Percentages of annual taxable income to stockholders | 90% | |||||
Procaccianti Convertible Fund, LLC (PCF) | Variable Interest Entity, Primary Beneficiary | ||||||
Total of VIE and asset acquisition: | ||||||
Assets | 63,934,314 | $ 63,934,314 | ||||
Liabilities | $ 42,618,155 | $ 42,618,155 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - EPS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share | ||||
Net income | $ 2,630,237 | $ 2,768,103 | $ 2,272,614 | $ 4,775,896 |
Undistributed net income (loss) | 1,596,333 | 1,728,580 | (799,973) | 1,686,750 |
Class K Common Stock | ||||
Earnings Per Share | ||||
Net income | 1,731,429 | 1,815,882 | 1,528,347 | 3,157,834 |
Common Stock dividends declared and accumulated | 689,335 | 690,893 | 2,051,277 | 2,057,627 |
Undistributed net income (loss) | $ 1,042,094 | $ 1,124,989 | $ (522,930) | $ 1,100,207 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 3,906,944 | 3,915,774 | 3,917,945 | 3,930,059 |
Weighted average number of common shares outstanding - diluted (in shares) | 3,906,944 | 3,915,774 | 3,917,945 | 3,930,059 |
Class K-I Common Stock | ||||
Earnings Per Share | ||||
Net income | $ 601,656 | $ 618,844 | $ 528,069 | $ 1,065,864 |
Common Stock dividends declared and accumulated | 239,538 | 235,453 | 708,749 | 694,511 |
Undistributed net income (loss) | $ 362,118 | $ 383,391 | $ (180,680) | $ 371,353 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 1,357,628 | 1,334,480 | 1,353,707 | 1,326,513 |
Weighted average number of common shares outstanding - diluted (in shares) | 1,357,628 | 1,334,480 | 1,353,707 | 1,326,513 |
Class K-T Common Stock | ||||
Earnings Per Share | ||||
Net income | $ 6,149 | $ 27,845 | $ 6,079 | $ 50,037 |
Common Stock dividends declared and accumulated | 2,448 | 10,594 | 8,157 | 32,604 |
Undistributed net income (loss) | $ 3,701 | $ 17,251 | $ (2,078) | $ 17,433 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 13,876 | 60,046 | 15,566 | 62,274 |
Weighted average number of common shares outstanding - diluted (in shares) | 13,876 | 60,046 | 15,566 | 62,274 |
Class A Common Stock | ||||
Earnings Per Share | ||||
Net income | $ 257,662 | $ 269,620 | $ 226,803 | $ 467,168 |
Common Stock dividends declared and accumulated | 102,583 | 102,583 | 304,404 | 304,404 |
Undistributed net income (loss) | $ 155,079 | $ 167,037 | $ (77,601) | $ 162,764 |
Net income per common share, basic (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Net income per common share, diluted (in dollars per share) | $ 0.44 | $ 0.46 | $ 0.39 | $ 0.80 |
Weighted average number of common shares outstanding - basic (in shares) | 581,410 | 581,410 | 581,410 | 581,410 |
Weighted average number of common shares outstanding - diluted (in shares) | 581,410 | 581,410 | 581,410 | 581,410 |
Class B Common Stock | ||||
Earnings Per Share | ||||
Net income | $ 33,341 | $ 35,912 | $ (16,684) | $ 34,993 |
Undistributed net income (loss) | $ 33,341 | $ 35,912 | $ (16,684) | $ 34,993 |
Net income per common share, basic (in dollars per share) | $ 0.27 | $ 0.29 | $ (0.13) | $ 0.28 |
Net income per common share, diluted (in dollars per share) | $ 0.27 | $ 0.29 | $ (0.13) | $ 0.28 |
Weighted average number of common shares outstanding - basic (in shares) | 125,000 | 125,000 | 125,000 | 125,000 |
Weighted average number of common shares outstanding - diluted (in shares) | 125,000 | 125,000 | 125,000 | 125,000 |
Investments in Hotels - Investm
Investments in Hotels - Investments in hotel properties (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) room | |
Springhill Suites Wilmington | |
Schedule of Investments | |
Date Acquired | May 24, 2017 |
Location | Wilmington, NC |
Ownership interest | 51% |
Contract Purchase Price | $ 18,000,000 |
Rooms | room | 120 |
Mortgage debt Outstanding | $ 10,670,083 |
Staybridge Suites St. Petersburg | |
Schedule of Investments | |
Date Acquired | Jun. 29, 2017 |
Location | St. Petersburg, FL |
Ownership interest | 51% |
Contract Purchase Price | $ 20,500,000 |
Rooms | room | 119 |
Mortgage debt Outstanding | $ 12,619,168 |
Hotel Indigo Traverse City | |
Schedule of Investments | |
Date Acquired | Aug. 15, 2018 |
Location | Traverse City, MI |
Ownership interest | 100% |
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% |
Contract Purchase Price | $ 28,500,000 |
Rooms | room | 137 |
Mortgage debt Outstanding | $ 16,749,123 |
Cherry Tree East Bay | |
Schedule of Investments | |
Date Acquired | Jul. 30, 2021 |
Location | Traverse City, MI |
Ownership interest | 100% |
Contract Purchase Price | $ 15,000,000 |
Rooms | room | 76 |
Mortgage debt Outstanding | $ 9,404,235 |
Investments in Hotels - Inves_2
Investments in Hotels - Investment in hotel properties consist of fixed assets (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Investments in Hotels | ||
Land | $ 14,450,538 | $ 14,450,538 |
Building and improvements | 89,188,548 | 89,048,018 |
Furniture, fixtures, and equipment | 11,758,384 | 11,179,909 |
Total cost | 115,397,470 | 114,678,465 |
Accumulated depreciation | (16,691,542) | (13,692,785) |
Property and equipment, net | $ 98,705,928 | $ 100,985,680 |
Investments in Hotels - Additio
Investments in Hotels - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 29, 2018 | |
Business Acquisition [Line Items] | |||||
Depreciation | $ 1,027,311 | $ 986,607 | $ 3,048,735 | $ 2,840,579 | |
Procaccianti Convertible Fund, LLC (PCF) | |||||
Business Acquisition [Line Items] | |||||
Entity ownership percentage | 51% |
Mortgage Notes Payable (Details
Mortgage Notes Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Mortgage notes payable, net | $ 64,554,369 | $ 64,554,369 | $ 64,969,299 | ||
Interest expense on mortgage notes payable | 795,325 | $ 729,776 | 2,257,582 | $ 2,013,631 | |
Deferred finance costs and debt discounts | (2,663) | $ (2,438) | 545 | $ 20,875 | |
Mortgage payable secured by Staybridge Suites St Petersburg | |||||
Debt Instrument [Line Items] | |||||
Mortgage notes payable, net | $ 12,619,168 | $ 12,619,168 | |||
Interest rate | 4.34% | 4.34% | |||
Interest payment starting date | Aug. 01, 2020 | ||||
Interest payment ending date | Jul. 01, 2024 | ||||
Description of variable rate | Monthly | ||||
Mortgage payable | |||||
Debt Instrument [Line Items] | |||||
Deferred finance costs and debt discounts | $ (209,052) | ||||
Mortgage payable secured by the St. Pete Hotel (the "St. Petersburg Note") | |||||
Debt Instrument [Line Items] | |||||
Interest payments | $ 66,255 | ||||
Description of variable rate | Monthly | ||||
Mortgage payable secured by the Springhill Suites Wilmington (the "Wilmington Note") | |||||
Debt Instrument [Line Items] | |||||
Mortgage notes payable, net | $ 10,670,083 | $ 10,670,083 | |||
Interest rate | 4.49% | 4.49% | |||
Interest payments | $ 57,026 | ||||
Interest payment starting date | Jun. 01, 2020 | ||||
Interest payment ending date | Jun. 01, 2024 | ||||
Description of variable rate | Monthly | ||||
Mortgage payable secured by the Hotel Indigo Traverse City (the "TCI Note") | |||||
Debt Instrument [Line Items] | |||||
Mortgage notes payable, net | $ 15,092,000 | $ 15,092,000 | |||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | ||||
Mortgage payable secured by the Hilton Garden Inn Providence (the "HGI Note") | |||||
Debt Instrument [Line Items] | |||||
Mortgage notes payable, net | $ 16,749,123 | $ 16,749,123 | |||
Interest rate | 4.25% | 4.25% | |||
Interest payment starting date | Feb. 15, 2023 | ||||
Interest payment ending date | May 15, 2025 | ||||
Description of variable rate | monthly | ||||
Amortization schedule | 30 years | ||||
Mortgage payable secured by the Cherry Tree Inn (the "CTI Note") | |||||
Debt Instrument [Line Items] | |||||
Mortgage notes payable, net | $ 9,404,235 | $ 9,404,235 | |||
Interest rate | 3.91% | 3.91% | |||
Interest payments | $ 52,601 |
Interest Rate Swap - Summary of
Interest Rate Swap - Summary of Outstanding Interest Rate Swap (Details) - Interest rate swap | Sep. 30, 2023 USD ($) |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 15,092,000 |
Accounts payable, accrued expenses and other, net | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 15,092,000 |
Interest Rate | 5.13% |
Fair Value of Liability | $ 29,243 |
Interest Rate Swap - Additional
Interest Rate Swap - Additional Information (Details) | Sep. 30, 2023 USD ($) |
Interest rate swap | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 15,092,000 |
Other Debt (Details)
Other Debt (Details) - PPP Loan - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Proceeds from loan | $ 2,445,589 | $ 2,445,589 | |||
Loans forgiven amount | $ 0 | $ 942,605 | $ 942,605 | $ 1,502,984 |
Related Party Transactions - Ac
Related Party Transactions - Acquisition Fee, Asset Management Fee and Disposition Fee (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Aug. 02, 2018 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transactions | |||||
Reimbursements Expenses | $ 859,899 | $ 66,918 | $ 859,899 | ||
Acquisition fee | $ 0 | 0 | 0 | 0 | |
Procaccianti Hotel Advisors, LLC ("PHA") | |||||
Related Party Transactions | |||||
Reimbursements Expenses | 29,734 | 35,120 | $ 106,201 | 122,813 | |
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% | ||||
Acquisition fees in due to related parties | 1,244,139 | 1,244,139 | $ 1,244,139 | 1,244,139 | |
Accrued interest on outstanding acquisition fees | 18,816 | 18,816 | $ 55,483 | 55,833 | |
One fourth of percentage of quarterly asset management fee | 0.75% | ||||
Accumulated, accrued, and unpaid distributions percentage | 7% | ||||
Non-compounded rate of interest on deferred asset management fees | 6% | ||||
Asset management fees | 179,824 | 177,812 | $ 537,840 | 529,933 | |
Deferred asset management fees | 182,544 | 180,501 | 182,544 | 180,501 | |
Accrued interest on outstanding asset management fees | $ 2,719 | $ 2,689 | $ 16,028 | $ 15,710 | |
Maximum percentage of sales price of real estate investment as disposition fee | 1.50% | ||||
Non-compounded rate of interest on deferred disposition fees | 6% |
Related Party Transactions - Or
Related Party Transactions - Organization and Offering Costs, Advances to PHA and Property Management Fee and Reimbursement (Details) | 3 Months Ended | 9 Months Ended | |||||
Aug. 02, 2018 | Sep. 30, 2023 USD ($) item | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) item | Sep. 30, 2022 USD ($) | |
Related Party Transactions | |||||||
Aggregate property management fees | $ 329,697 | $ 328,867 | $ 732,936 | $ 706,587 | |||
Accrued property management fees payable | 97,932 | 97,932 | |||||
Aggregate net reimbursements | 211,683 | 161,372 | 553,710 | 414,134 | |||
Reimbursements expenses | 859,899 | 66,918 | 859,899 | ||||
Disposition fees | 0 | 0 | 0 | 0 | |||
Additional service fees | 0 | 0 | 0 | 0 | |||
Reimbursement of wages | 42,126 | 42,126 | |||||
Proceeds for Reimbursement of Wages | 817,773 | 817,773 | |||||
Other Fees Related To Reimbursement of Wages | 49,696 | ||||||
Procaccianti Hotel Advisors, LLC ("PHA") | |||||||
Related Party Transactions | |||||||
Reimbursements expenses | 29,734 | 35,120 | 106,201 | 122,813 | |||
TPG Risk Services, LLC | |||||||
Related Party Transactions | |||||||
Due from related parties | 5,015 | 5,015 | |||||
Reimbursement of prepaid insurance | 0 | 334,404 | $ 594,143 | 335,358 | |||
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 | $ 0 | $ 0 | |||||
Percentage of gross proceeds on public offering | 15% | ||||||
Organization and offering costs incurred by PHA and its affiliates | 8,752,997 | $ 8,752,997 | |||||
Reimbursement of organization and offering costs through issuance of A shares | 1,026,564 | 1,026,564 | |||||
Reimbursement of common shares issuance to affiliate | 3,312,833 | 3,312,833 | |||||
Due from related parties | $ 0 | $ 0 | $ 0 | $ 0 | |||
Hotel management agreement with PHR St. Petersburg Hotel Manager, LLC | |||||||
Related Party Transactions | |||||||
Percentage of hotel's gross revenues as base management fee | 3% | ||||||
Hotel management agreement with Staybridge Suites St. Petersburg and the Springhill Suites Wilmington [Member] | |||||||
Related Party Transactions | |||||||
Number Of Automatic Term Extensions | item | 3 | 3 | |||||
Term of agreement, extension | 1 year | ||||||
Hotel Management Agreement With Hotel Indigo Traverse City | |||||||
Related Party Transactions | |||||||
Number Of Automatic Term Extensions | item | 3 | 3 | |||||
Term of agreement, extension | 1 year |
Related Party Transactions - Co
Related Party Transactions - Construction Management Fee, Payment Upon Advisory Agreement Termination for Cause and Loans from Affiliates (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
TPG Construction, LLC | |||||
Related Party Transactions | |||||
Reimbursement of capital expenditure costs | $ 59,304 | $ 431,635 | $ 61,256 | $ 1,685,754 | |
Due to related parties | 0 | $ 59,227 | 0 | $ 59,227 | |
Procaccianti Hotel Advisors, LLC ("PHA") | |||||
Related Party Transactions | |||||
Principal amount | $ 94,194 | $ 94,194 | |||
Long Term Applicable Federal Rate | 3.87% | 2.50% | 3.88% | 2.34% | |
Interest Expense | $ 919 | $ 594 | $ 2,731 | $ 1,651 | |
Hilton Garden Inn Providence | |||||
Related Party Transactions | |||||
Due from related parties | 26,092 | 26,092 | |||
Cherry Tree Inn | |||||
Related Party Transactions | |||||
Due from related parties | 250,000 | 250,000 | |||
Related Party, Affiliated Entity [Member] | |||||
Related Party Transactions | |||||
Due from related parties | 26,092 | 26,092 | $ 262,148 | ||
Due to related parties | $ 2,016,988 | $ 2,016,988 | $ 2,010,073 | ||
Class B Common Stock | |||||
Related Party Transactions | |||||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 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 | $ 10 | |||
Non-compounded annual rate of accrued interest on deferred fees if agreement terminates for cause | 6% | 6% | |||
Advisory agreement with PHA and Operating Partnership | Procaccianti Hotel Advisors, LLC ("PHA") | |||||
Related Party Transactions | |||||
Due from related parties | $ 0 | $ 0 | $ 0 | $ 0 | |
Advisory agreement with PHA and Operating Partnership | Class B Common Stock | |||||
Related Party Transactions | |||||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Stockholders' Equity - Per shar
Stockholders' Equity - Per share repurchase price (Details) | 9 Months Ended |
Sep. 30, 2023 | |
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 | 9 Months Ended | ||
Mar. 31, 2020 | Sep. 30, 2023 | Dec. 31, 2022 | |
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% | 7% | |
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 50% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 50% | ||
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% | 7% | |
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 50% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 50% | ||
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% | 7% | |
Base distribution per share | $ 10 | ||
Percentage of excess cash available for distribution | 50% | ||
Percentage of remaining liquidation cash distribution on pro rata basis | 50% | ||
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% | ||
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) - shares | 9 Months Ended | |
Feb. 11, 2019 | Sep. 30, 2023 | |
Director | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 1,500 | |
Long-term incentive plan | Director | Restricted K shares | ||
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% | |
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 | |
Long-term incentive plan | Independent director two. | Restricted K shares | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 500 | |
Number of shares issuable in future | 250 | |
Long-term incentive plan | Independent director three. | Restricted K shares | ||
Class of Stock [Line Items] | ||
Number of shares awarded | 500 | |
Number of shares issuable in future | 250 | |
Long-term incentive plan | Three independent directors | Restricted K shares | ||
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 ($) | 3 Months Ended | 9 Months Ended | |||||||
Oct. 26, 2018 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | |
Class of Stock [Line Items] | |||||||||
Value of share repurchase | $ 197,047 | $ 528,625 | $ 211,517 | $ 396,916 | $ 369,375 | $ 84,708 | |||
Class K Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Repurchase of common stock (in shares) | 16,090 | 43,151 | 20,900 | ||||||
Amount per share | $ 11.46 | $ 10.20 | $ 10.12 | ||||||
Class K-I Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Shares issued price per share | $ 10 | $ 10 | |||||||
Repurchase of common stock (in shares) | 1,101 | 8,602 | |||||||
Amount per share | $ 11.46 | $ 10.29 | |||||||
Class K-T Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Shares issued price per share | $ 10 | $ 10 | |||||||
A&R SRP | Class K Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Percentage of weighted average number of shares outstanding | 5% | ||||||||
Minimum balance required to be maintained by stockholders | $ 2,000 | ||||||||
Maximum balance of shares requested to be repurchased | 100 | ||||||||
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% | ||||||||
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% | ||||||||
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 |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase activity (Details) - USD ($) | 3 Months Ended | |||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Class K Common Stock | ||||
Class of Stock | ||||
Number of Share Repurchases Requested | 10,274 | 59,587 | 43,151 | 20,900 |
Shares Repurchased | 16,090 | 43,151 | 20,900 | |
Amount of Shares Repurchased | $ 184,422 | $ 440,108 | $ 211,517 | |
Amount per share | $ 11.46 | $ 10.20 | $ 10.12 | |
Repurchase Requests Outstanding | 10,274 | 43,497 | ||
Class K-I Common Stock | ||||
Class of Stock | ||||
Number of Share Repurchases Requested | 5,591 | 8,602 | ||
Shares Repurchased | 1,101 | 8,602 | ||
Amount of Shares Repurchased | $ 12,625 | $ 88,516 | ||
Amount per share | $ 11.46 | $ 10.29 | ||
Requests Withdrawn | 1,036 | |||
Repurchase Requests Outstanding | 3,454 |
Stockholders' Equity - Distribu
Stockholders' Equity - Distributions - (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 1,253,021 | $ 1,280,017 | $ 1,191,011 | $ 1,305,728 | $ 1,297,050 | $ 1,080,621 | |||
Distributions | $ 14,078,262 | $ 14,078,262 | $ 11,238,663 | ||||||
Distributions | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 2,839,599 | $ 2,850,399 | |||||||
Distributions | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 67,081 | 67,081 | |||||||
Distributions to be paid | $ 22,606 | $ 22,606 | |||||||
Distributions | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 2,057,309 | 2,060,800 | |||||||
Distributions to be paid | $ 689,334 | $ 689,334 | |||||||
Distributions | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 706,122 | 689,580 | |||||||
Distributions to be paid | $ 239,538 | $ 239,538 | |||||||
Distributions | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 9,087 | $ 32,938 | |||||||
Distributions to be paid | $ 2,448 | $ 2,448 | |||||||
Distributions | 2/09/2023 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Date Paid | Feb. 09, 2023 | ||||||||
Shares Outstanding Date | Dec. 31, 2022 | ||||||||
Date Authorized | Feb. 06, 2023 | ||||||||
Record Date | Feb. 08, 2023 | ||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 958,261 | ||||||||
Distributions | 2/09/2023 | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 22,606 | ||||||||
Distributions | 2/09/2023 | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 694,914 | ||||||||
Distributions | 2/09/2023 | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 236,910 | ||||||||
Distributions | 2/09/2023 | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 3,831 | ||||||||
Distributions | 5/4/2023 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Date Paid | May 04, 2023 | Feb. 16, 2022 | |||||||
Shares Outstanding Date | Mar. 31, 2023 | ||||||||
Date Authorized | Apr. 26, 2023 | ||||||||
Record Date | May 03, 2023 | ||||||||
Amount Per Share Per Day | 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 937,017 | ||||||||
Distributions | 5/4/2023 | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 22,115 | ||||||||
Distributions | 5/4/2023 | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 678,982 | ||||||||
Distributions | 5/4/2023 | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 233,064 | ||||||||
Distributions | 5/4/2023 | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 2,856 | ||||||||
Distributions | 8/9/2023 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Date Paid | Aug. 09, 2023 | ||||||||
Shares Outstanding Date | Jun. 30, 2023 | ||||||||
Date Authorized | Aug. 04, 2023 | ||||||||
Record Date | Aug. 08, 2023 | ||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 944,321 | ||||||||
Distributions | 8/9/2023 | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 22,360 | ||||||||
Distributions | 8/9/2023 | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 683,412 | ||||||||
Distributions | 8/9/2023 | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 236,148 | ||||||||
Distributions | 8/9/2023 | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 2,401 | ||||||||
Distributions | 2/16/2022 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Shares Outstanding Date | Dec. 31, 2021 | ||||||||
Date Authorized | Feb. 11, 2022 | ||||||||
Record Date | Feb. 14, 2022 | ||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 958,121 | ||||||||
Distributions | 2/16/2022 | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 22,606 | ||||||||
Distributions | 2/16/2022 | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 694,066 | ||||||||
Distributions | 2/16/2022 | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 230,522 | ||||||||
Distributions | 2/16/2022 | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 10,927 | ||||||||
Distributions | 5/6/2022 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Date Paid | May 06, 2022 | ||||||||
Shares Outstanding Date | Mar. 31, 2022 | ||||||||
Date Authorized | Apr. 29, 2022 | ||||||||
Record Date | May 02, 2022 | ||||||||
Amount Per Share Per Day | 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 919,685 | ||||||||
Distributions | 5/6/2022 | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 681,294 | ||||||||
Distributions | 5/6/2022 | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 227,492 | ||||||||
Distributions | 5/6/2022 | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 10,899 | ||||||||
Distributions | 5/11/2022 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Date Paid | May 11, 2022 | ||||||||
Shares Outstanding Date | Mar. 31, 2022 | ||||||||
Date Authorized | Apr. 29, 2022 | ||||||||
Record Date | May 02, 2022 | ||||||||
Amount Per Share Per Day | 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 22,115 | ||||||||
Distributions | 5/11/2022 | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 22,115 | ||||||||
Distributions | 8/5/2022 | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Date Paid | Aug. 05, 2022 | ||||||||
Shares Outstanding Date | Jun. 30, 2022 | ||||||||
Date Authorized | Aug. 01, 2022 | ||||||||
Record Date | Aug. 03, 2022 | ||||||||
Amount Per Share Per Day | $ 0.001917808 | $ 0.001917808 | |||||||
Distributions paid | $ 950,478 | ||||||||
Distributions | 8/5/2022 | OP Units | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 22,360 | ||||||||
Distributions | 8/5/2022 | Class K Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 685,440 | ||||||||
Distributions | 8/5/2022 | Class K-I Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | 231,566 | ||||||||
Distributions | 8/5/2022 | Class K-T Common Stock | |||||||||
Distribution Made to Limited Liability Company (LLC) Member | |||||||||
Distributions paid | $ 11,112 |
Stockholders' Equity - Additi_2
Stockholders' Equity - Additional Information 1 (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Feb. 27, 2020 USD ($) $ / shares shares | Feb. 11, 2019 shares | Sep. 29, 2016 shares | Sep. 30, 2023 USD ($) director $ / shares shares | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) director $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) shares | |
Class of Stock | |||||||||
Value of issuance of common stock | $ | $ 197,531 | $ 197,047 | $ 197,280 | ||||||
Total investment | $ | 98,705,928 | $ 98,705,928 | $ 100,985,680 | ||||||
Director | |||||||||
Class of Stock | |||||||||
Issuance of common stock (in shares) | 1,500 | ||||||||
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 | ||||||||
Initial public offering | |||||||||
Class of Stock | |||||||||
Additional selling commissions and dealer manager fees | $ | $ 0 | ||||||||
Dealer Manager | Initial public offering | |||||||||
Class of Stock | |||||||||
Selling commissions and dealer manager fees | $ | 2,986,465 | 2,986,465 | |||||||
Value of stockholder servicing fee | $ | 17,230 | ||||||||
Dealer Manager | Initial public offering | Distribution reinvestment plan | |||||||||
Class of Stock | |||||||||
Selling commissions and dealer manager fees | $ | 0 | 0 | |||||||
Dealer Manager | Private offering | |||||||||
Class of Stock | |||||||||
Selling commissions and dealer manager fees | $ | 1,058,501 | 1,058,501 | |||||||
Procaccianti Hotel Advisors, LLC ("PHA") | Initial public offering | |||||||||
Class of Stock | |||||||||
Selling commissions and dealer manager fees | $ | $ 0 | $ 0 | |||||||
Class K Common Stock | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 3,902,017 | 3,902,017 | 3,932,526 | ||||||
Percentage of excess cash as special distribution declared on pro rata basis | 50% | ||||||||
Conversion of common stock (in shares) | 15,899 | ||||||||
Accumulated Common Stock Converted | 51,486 | 51,486 | |||||||
Class K Common Stock | Initial public offering | Distribution reinvestment plan | |||||||||
Class of Stock | |||||||||
Issuance of common stock (in shares) | 140,147 | ||||||||
Value of issuance of common stock | $ | $ 1,336,956 | ||||||||
Class K Common Stock | Unaffiliated investors | Initial public offering | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 2,787,944 | 2,787,944 | |||||||
Proceeds From Issuance Of Shares In Private Placement | $ | $ 26,939,836 | ||||||||
Class K Common Stock | Unaffiliated investors | Private offering | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 1,253,618 | 1,253,618 | |||||||
Proceeds From Issuance Of Shares In Private Placement | $ | $ 12,398,660 | ||||||||
Class K Common Stock | Dealer Manager | Initial public offering | |||||||||
Class of Stock | |||||||||
Dealer manager selling commissions percentage | 7% | ||||||||
Dealer manager fee, percentage | 3% | ||||||||
Class K Common Stock | Dealer Manager | Private offering | |||||||||
Class of Stock | |||||||||
Dealer manager selling commissions percentage | 7% | ||||||||
Selling commissions, percentage | 3% | ||||||||
Class K Common Stock | Three Independent director | |||||||||
Class of Stock | |||||||||
Number of restricted shares issued | 4,500 | ||||||||
Number of independent directors | director | 3 | 3 | |||||||
Class K Common Stock | Independent director one | |||||||||
Class of Stock | |||||||||
Number of restricted shares issued | 1,500 | ||||||||
Class K Common Stock | Independent director two | |||||||||
Class of Stock | |||||||||
Number of restricted shares issued | 1,500 | ||||||||
Class K Common Stock | Independent director three | |||||||||
Class of Stock | |||||||||
Number of restricted shares issued | 1,500 | ||||||||
Class A Common Stock | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 581,410 | 581,410 | 581,410 | ||||||
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 | 23,000 | |||||||
Proceeds from issuance of common stock | $ | $ 230,000 | ||||||||
Class A Common Stock | TPG Hotel REIT Investor, LLC (THR) [Member] | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 428,410 | 428,410 | |||||||
Number of shares issued in exchange of notes receivable | 130,000 | ||||||||
Shares issued price per share | $ / shares | $ 10 | $ 10 | |||||||
Proceeds From Issuance Of Shares In Private Placement | $ | $ 4,284,095 | ||||||||
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 | 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 | 1,360,226 | 1,360,226 | 1,345,518 | ||||||
Shares issued price per share | $ / shares | $ 10 | $ 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% | ||||||||
Percentage of excess liquidation cash as special distribution declared on pro rata basis | 50% | ||||||||
Class K-I Common Stock | Initial public offering | Distribution reinvestment plan | |||||||||
Class of Stock | |||||||||
Issuance of common stock (in shares) | 90,877 | ||||||||
Value of issuance of common stock | $ | $ 870,709 | ||||||||
Class K-I Common Stock | Unaffiliated investors | Initial public offering | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 1,287,644 | 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% | ||||||||
Selling commissions and dealer manager fees | $ | $ 0 | $ 0 | |||||||
Class K-T Common Stock | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 13,946 | 13,946 | 29,306 | ||||||
Shares issued price per share | $ / shares | $ 10 | $ 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% | ||||||||
Percentage of excess liquidation cash as special distribution declared on pro rata basis | 50% | ||||||||
Conversion of common stock (in shares) | 15,899 | ||||||||
Accumulated Common Stock Converted | 51,486 | 51,486 | |||||||
Class K-T Common Stock | Initial public offering | Distribution reinvestment plan | |||||||||
Class of Stock | |||||||||
Issuance of common stock (in shares) | 7,415 | ||||||||
Value of issuance of common stock | $ | $ 69,593 | ||||||||
Class K-T Common Stock | Unaffiliated investors | Initial public offering | |||||||||
Class of Stock | |||||||||
Common stock, shares issued | 60,008 | 60,008 | |||||||
Proceeds from issuance of common stock | $ | $ 585,400 | ||||||||
Class K-T Common Stock | Dealer Manager | Initial public offering | |||||||||
Class of Stock | |||||||||
Dealer manager selling commissions percentage | 3% | ||||||||
Dealer manager fee, percentage | 3% | ||||||||
Stockholder servicing fee, percentage | 1% |
Disclosure - Income Taxes (Deta
Disclosure - Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Taxes | ||||
Income Tax Expense | $ 193,881 | $ 200,498 | $ 8,117 | $ 243,473 |