Subsequent Events

3 Months Ended

Mar. 31, 2020

COVID-19

The global spread of COVID-19 has created significant uncertainty and economic disruption, both in the near-term and potentially longer-term. The extent to which this pandemic could affect our financial condition, liquidity, and results of operations is difficult to predict and depends on evolving factors, including: duration, scope, government actions, and other social responses.

We are closely monitoring the impact of COVID-19 on all aspects of our business, including the safety and health of our employees, our portfolio, and tenant credit health (including our tenants’ ability to pay rent), as well as our liquidity, capital allocation, and balance sheet management. We continue to actively engage in discussions with our tenants regarding the impact of COVID-19 on their business operations, liquidity, prospects, and financial position.

The extent to which the COVID-19 pandemic impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

CWI 1 and CWI 2 Merger

On October 22, 2019, CWI 1 and CWI 2 announced that they had entered into a definitive merger agreement under which the two companies intended to merge in an all-stock transaction, with CWI 2 as the surviving entity. The CWI 1 and CWI 2 Merger was approved by the stockholders of CWI 1 and CWI 2 on April 8, 2020 and closed on April 13, 2020. Subsequently, CWI 2 was renamed Watermark Lodging Trust, Inc. (“WLT”).

In connection with the CWI 1 and CWI 2 Merger, we entered into an internalization agreement and a transition services agreement, which were filed by us as exhibits to a Form 8-K filed with the SEC on October 22, 2019. Immediately following the closing of the CWI 1 and CWI 2 Merger:


(i)	the advisory agreements with each of CWI 1 and CWI 2 and each of their respective operating partnerships terminated;

(ii)

pursuant to the internalization agreement, the operating partnerships of each of CWI 1 and CWI 2 redeemed the special general partnership interests that we previously held, for which we received 1,300,000 shares of CWI 2 preferred stock with a liquidation preference of $50.00 per share and 2,840,549 shares in CWI 2 common stock (as of the date of this Report, we have not completed the determination of the fair value of consideration received in connection with the CWI 1 and CWI 2 Merger);


(iii)	pursuant to the internalization agreement, two of our representatives were appointed to the board of directors of WLT, however both representatives resigned from the board of directors of WLT on April 29, 2020; and

(iv)

we provide certain transition services at cost to Watermark Lodging Trust, Inc. for, what is currently expected to be, a period of approximately 12 months from closing, pursuant to the transition services agreement.