ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☒ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Item No. | Form 10-K Page | |||||||
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS | ||||||||
PART I | ||||||||
ITEM 1. | ||||||||
ITEM 1A. | ||||||||
ITEM 1B. | ||||||||
ITEM 2. | ||||||||
ITEM 3. | ||||||||
ITEM 4. | ||||||||
PART II | ||||||||
ITEM 5. | ||||||||
ITEM 6. | ||||||||
ITEM 7. | ||||||||
ITEM 7A. | ||||||||
ITEM 8. | ||||||||
ITEM 9. | ||||||||
ITEM 9A. | ||||||||
ITEM 9B. | ||||||||
ITEM 9C. | ||||||||
PART III | ||||||||
ITEM 10. | ||||||||
ITEM 11. | ||||||||
ITEM 12. | ||||||||
ITEM 13. | ||||||||
ITEM 14. | ||||||||
PART IV | ||||||||
ITEM 15. | ||||||||
ITEM 16. |
Franchisor | Franchises | |||||||
Marriott International | Ritz-Carlton, Marriott, Westin, Courtyard by Marriott, TownePlace Suites, Autograph Collection | |||||||
Hilton Hotels Corporation | Hilton Garden Inn, Hampton Inn | |||||||
Hyatt Hotels Corporation | Hyatt, Hyatt House | |||||||
IHG | Holiday Inn Express, Holiday Inn Express & Suites | |||||||
Pan Pacific Hotel Group | Pan Pacific |
Wholly Owned | Joint Ventures | Total | ||||||||||||||||||||||||||||||||||||
Manager | Hotels | Rooms | Hotels | Rooms | Hotels | Rooms | ||||||||||||||||||||||||||||||||
Hersha Hospitality Management, L.P. | 31 | 5,133 | — | — | 31 | 5,133 | ||||||||||||||||||||||||||||||||
South Bay Boston Management, Inc. | — | — | 3 | 468 | 3 | 468 | ||||||||||||||||||||||||||||||||
Marriott Management | 1 | 86 | 1 | 115 | 2 | 201 | ||||||||||||||||||||||||||||||||
Total | 32 | 5,219 | 4 | 583 | 36 | 5,802 |
• | Economic conditions have reduced, and may continue to reduce, demand for hotel properties, which has, and may continue to, adversely affect the Company’s profitability. | ||||
• | A sustained recession could result in declines in our average daily room rates, occupancy and RevPAR. | ||||
• | Disruptions in the financial markets could adversely affect our ability to obtain sufficient third-party financing. | ||||
• | Changes in interest expense as a result of the phase out of LIBOR. |
• | Our hotels are subject to general hotel industry operating risks. | ||||
• | The value of our hotels depends on conditions beyond our control. | ||||
• | Our investments are concentrated in a single segment of the hotel industry. | ||||
• | Operating costs and capital expenditures for hotel renovation may be greater than anticipated. | ||||
• | The franchise licenses under which we operate our hotels may be terminated or not renewed. | ||||
• | The seasonal and cyclical nature of the hotel industry may cause fluctuations in our operating performance. | ||||
• | The increasing use of Internet travel intermediaries by consumers. | ||||
• | The need for business-related travel may decline. | ||||
• | Future terrorist attacks or changes in terror alert levels could adversely affect travel and hotel demand. | ||||
• | The COVID-19 pandemic has had, and will continue to have, adverse effects on our business. |
• | We face risks associated with the use of debt, including covenant compliance and refinancing risk. | ||||
• | We may fail to maintain an effective system of internal controls. | ||||
• | We do not operate our hotels or have complete control over implementation of our strategic decisions. | ||||
• | Most of our hotels are located in the area from Washington, DC to Boston, MA, including New York City, which may increase the effect of any regional or local events or conditions. | ||||
• | We own a limited number of hotels. | ||||
• | We focus on acquiring hotels operating under a limited number of franchise brands. | ||||
• | We depend on key personnel. | ||||
• | Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial conditions and disputes between us and our co-venturers. | ||||
• | We engage in hedging transactions to limit our exposure to fluctuations in interest rates. | ||||
• | Hedging transactions may reduce our shareholders’ equity. | ||||
• | We and our hotel managers rely on information technology, which may fail or be inadequate, in our operations. | ||||
• | We face possible risks associated with the physical effects of severe weather and climate change. | ||||
• | We may be contractually prohibited from paying dividends. | ||||
• | Labor shortages and increased employee-related costs may impact operating results. | ||||
• | We could be required to refinance our debt before it matures and may not be able to do so on acceptable terms. |
• | Real estate investments can be illiquid. | ||||
• | We may suffer losses not covered by insurance or that are in excess of our insurance coverage limits. | ||||
• | Real estate is subject to property taxes. | ||||
• | Environmental matters could adversely affect our results. | ||||
• | Our hotel properties may contain or develop harmful mold, which could lead to liability and remediation costs. | ||||
• | Costs associated with complying with the ADA may adversely affect our financial condition and operating results. |
• | Many of our existing agreements may not have been negotiated on an arm’s-length basis. | ||||
• | Conflicts of interest with HHMLP may result in decisions that do not reflect our best interests. | ||||
• | Sales or refinancing of certain hotels acquired from related parties may lead to decisions not in our best interest. |
• | There are no assurances of our ability to make distributions in the future. | ||||
• | Holders of our outstanding preferred shares have certain senior rights to the holders of our common shares. | ||||
• | Our Board of Trustees may authorize the issuance of additional shares. | ||||
• | Our Declaration of Trust contains a provision that creates staggered terms for our Board of Trustees. | ||||
• | Certain provisions of Maryland law may discourage a third party from acquiring us. | ||||
• | Our Board of Trustees and management make decisions on our behalf and shareholders have limited policymaking and management rights. |
• | If we fail to qualify as a REIT, our dividends will not be deductible, and our income will be subject to taxation. | ||||
• | To qualify as a REIT, we must distribute annually a certain percentage of our REIT taxable income. | ||||
• | If the leases of our hotels to our TRSs are not respected as true leases, we would fail to qualify as a REIT. | ||||
• | Our ownership of our TRSs is limited and our transactions with our TRSs will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm's-length terms. | ||||
• | If our hotel managers do not qualify as “eligible independent contractors,” we would fail to qualify as a REIT. | ||||
• | Complying with REIT requirements may force us to sell otherwise attractive investments. | ||||
• | The prohibited transactions tax may limit our ability to engage in certain transactions, including dispositions. | ||||
• | We may pay taxable dividends partly in shares and partly in cash. | ||||
• | Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends. | ||||
• | Our share ownership limitation may prevent certain transfers of our shares. | ||||
• | We may be subject to adverse legislative or regulatory tax changes. | ||||
• | The federal income tax laws governing REITs are complex. |
• | An increase in market interest rates may have an adverse effect on the market price of our securities. | ||||
• | Future offerings of equity securities may adversely affect the market price of our common shares. | ||||
• | The market price of our securities has been, and may continue to be, volatile and has declined, and may continue to decline. | ||||
• | Future sales of our securities could depress the market price of our common shares. |
• | a complete suspension or significant reduction of operations at many of our properties, including our largest concentration of properties in New York City, which has been disproportionately adversely affected by COVID-19; | ||||
• | a variety of factors related to the coronavirus have caused, and may continue to cause, a sharp decline in group, business and leisure travel, including but not limited to (i) restrictions on travel mandated by governmental entities or voluntarily imposed by employers, (ii) the postponement or cancellation of conventions and conferences, music and arts festivals, sporting events and other large public gatherings, (iii) the closure of amusement parks, museums and other tourist attractions, (iv) the closure of colleges and universities, and (v) negative public perceptions of travel and public gatherings in light of the perceived risks associated with COVID-19; | ||||
• | travelers have been, and may continue to be, wary to travel where, or because, they may view the risk of contagion as increased and contagion or virus-related deaths linked or alleged to be linked to travel to our properties, whether accurate or not, may injure our reputation; | ||||
• | travelers may be dissuaded from traveling due to possible enhanced COVID-19-related screening measures and vaccine mandates or lack of mandates which are being implemented across multiple markets we serve; | ||||
• | travelers may be dissuaded from traveling due to the concern that additional travel restrictions implemented between their departure and return may affect their ability to return to their homes; | ||||
• | commercial airline service has been reduced or previously suspended to many of the areas in which our hotels are located, if scheduled airline service does not increase or return to normal levels it could negatively affect our revenues; | ||||
• | there remain uncertainties as to the amount of vaccine available for distribution, particularly internationally, the public's willingness and ability to get vaccinated, and the overall efficacy of the vaccines, especially as new variant strains of COVID-19 have emerged which have a higher level of resistance to administered vaccines; |
• | the reduced economic activity could also result in an economic recession, and increased unemployment, which could negatively impact future ability or desire to travel lodging demand and, therefore, our revenues, even when temporary restrictions are not in place; | ||||
• | a decrease in the ancillary revenue from amenities at our properties; | ||||
• | the financial impact of the COVID-19 pandemic has (i) negatively impacted our compliance with covenants in certain debt obligations, triggering cash management provisions provided for in one mortgage and (ii) could negatively impact our future compliance with the financial covenants of our Credit Facility after these covenants again become applicable in 2022, which could result in an event of default and an acceleration of indebtedness under the Credit Facility, which would adversely affect our financial condition and liquidity; | ||||
• | a potential decline in asset values at one or more of our properties encumbered by mortgage debt, which could inhibit our ability to successfully refinance one or more such properties, result in a default under the applicable mortgage debt agreement and potentially cause the acceleration of such indebtedness; | ||||
• | difficulty in accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital; | ||||
• | the general decline in business activity and demand for real estate transactions adversely affecting our ability to acquire additional properties; | ||||
• | the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could result in a deterioration in our ability to ensure business continuity during and after this disruption; | ||||
• | we may be subject to increased risks related to employee matters, including increased employment litigation and claims for severance or other benefits tied to termination or furloughs as a result of hotel closures or reduced operations prompted by the effects of the pandemic; | ||||
• | employee or guest assertions that our properties were not adequately cleaned or that adequate safeguards were not in place to prevent contact with employees or guests may result in liabilities; and | ||||
• | the reduction in our cash flows, prohibitions contained in our Credit Agreements (as defined below) and, with respect to our common dividends, the terms of our declaration of trust designating our preferred shares, have caused the indefinite suspension of dividends and could impact our ability to pay dividends to our stockholders at expected levels in the future. |
• | downturns in lodging fundamentals are more severe or prolonged in New York City compared to the United States as a whole; |
• | negative economic conditions are more severe or prolonged in New York City compared to other areas, due to concentration of the financial industry in New York or otherwise; |
• | as new hotel supply enters the New York City market, this could impact our ability to grow ADR and RevPar as a result of the new supply; or |
• | New York City is impacted by other unforeseen events beyond our control, including, among others, terrorist attacks and travel related health concerns including pandemics and epidemics. |
• | Available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought; |
• | The duration of the hedge may not match the duration of the related liability; |
• | The party at risk in the hedging transaction may default on its obligation to pay; |
• | The credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction; and |
• | The value of derivatives used for hedging may be adjusted from time to time in accordance with accounting rules to reflect changes in fair value. |
• | amend the Declaration of Trust to increase or decrease the aggregate number of shares of beneficial interest or the number of shares of beneficial interest of any class or series that we have the authority to issue; | ||||
• | cause us to issue additional authorized but unissued common shares or preferred shares; or | ||||
• | classify or reclassify any unissued common or preferred shares and to set the preferences, rights and other terms of such classified or reclassified shares, including the issuance of additional common shares or preferred shares that have preference rights over the common shares with respect to dividends, liquidation, voting and other matters. |
• | 85% of our REIT ordinary income for that year; |
• | 95% of our REIT capital gain net income for that year; and |
• | 100% of our undistributed taxable income required to be distributed from prior years. |
• | our operating performance and the performance of other similar companies; | ||||
• | actual or anticipated differences in our operating results; | ||||
• | changes in our revenues or earnings estimates or recommendations by securities analysts; publication of research reports about us or our industry by securities analysts; | ||||
• | additions and departures of key personnel; | ||||
• | strategic decisions by us or our competitors, such as mergers and acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy; | ||||
• | the passage of legislation or other regulatory developments or executive policies that adversely affect us or our industry; | ||||
• | speculation in the press or investment community; actions by institutional shareholders; | ||||
• | changes in accounting principles; | ||||
• | terrorist acts; | ||||
• | general market conditions, including factors unrelated to our performance; and | ||||
• | pandemics and epidemics, such as the COVID-19 pandemic, and the related governmental and economic responses thereto. |
Market | Name | Location | Year Opened | Number of Rooms | ||||||||||||||||||||||
Boston Urban and Metro | The Envoy, Boston Seaport | Boston, MA | 2015 | 136 | ||||||||||||||||||||||
The Boxer, Boston | Boston, MA | 2004 | 80 | |||||||||||||||||||||||
Courtyard by Marriott Brookline | Brookline/Boston, MA (1) | 2003 | 188 | |||||||||||||||||||||||
Mystic Marriott Hotel & Spa | Groton, CT | 2001 | 285 | |||||||||||||||||||||||
California - Washington | The Ambrose Hotel, Santa Monica | Santa Monica, CA | 2015 | 77 | ||||||||||||||||||||||
The Sanctuary Beach Resort | Monterey Bay, CA | 2014 | 60 | |||||||||||||||||||||||
The Hotel Milo, Santa Barbara | Santa Barbara, CA (1) | 2001 | 121 | |||||||||||||||||||||||
Courtyard by Marriott Los Angeles Westside | Los Angeles, CA | 2008 | 260 | |||||||||||||||||||||||
Courtyard by Marriott Sunnyvale | Sunnyvale, CA | 2014 | 145 | |||||||||||||||||||||||
TownePlace Suites Sunnyvale | Sunnyvale, CA (1) | 2003 | 94 | |||||||||||||||||||||||
The Pan Pacific Hotel Seattle | Seattle, WA | 2006 | 153 | |||||||||||||||||||||||
NYC Urban | Hyatt Union Square | Union Square, New York, NY | 2013 | 178 | ||||||||||||||||||||||
Hilton Garden Inn Manhattan Midtown East | Midtown East, New York, NY | 2014 | 206 | |||||||||||||||||||||||
Hilton Garden Inn TriBeCa | TriBeCa, New York, NY | 2009 | 151 | |||||||||||||||||||||||
Hampton Inn Seaport | Seaport, New York, NY | 2006 | 65 | |||||||||||||||||||||||
Holiday Inn Express Chelsea | Madison Square Garden, New York, NY | 2006 | 228 | |||||||||||||||||||||||
Hilton Garden Inn JFK | JFK Airport, New York, NY (1) | 2005 | 192 | |||||||||||||||||||||||
Gate Hotel JFK Airport | JFK Airport, New York, NY (1) | 2008 | 150 | |||||||||||||||||||||||
Nu Hotel, Brooklyn | Brooklyn, New York, NY | 2008 | 93 | |||||||||||||||||||||||
NY-NJ Metro | Hyatt House White Plains | White Plains, NY | 2000 | 187 | ||||||||||||||||||||||
Philadelphia | The Rittenhouse Hotel | Philadelphia, PA | 2004 | 118 | ||||||||||||||||||||||
Philadelphia Westin | Philadelphia, PA | 1990 | 294 | |||||||||||||||||||||||
Hampton Inn Center City/ Convention Center | Philadelphia, PA | 2001 | 250 | |||||||||||||||||||||||
South Florida | Cadillac Hotel & Beach Club | Miami, FL | 2004 | 357 | ||||||||||||||||||||||
The Ritz-Carlton, Coconut Grove | Coconut Grove, FL | 2002 | 115 | |||||||||||||||||||||||
The Blue Moon Hotel, Miami Beach | Miami, FL | 2013 | 75 | |||||||||||||||||||||||
The Winter Haven Hotel, Miami Beach | Miami, FL | 2013 | 70 | |||||||||||||||||||||||
Parrot Key Hotel & Villas | Key West, FL | 2013 | 148 | |||||||||||||||||||||||
Washington D.C. | The Ritz-Carlton, Georgetown | Georgetown, DC | 2014 | 86 | ||||||||||||||||||||||
The St. Gregory Hotel, Dupont Circle | Washington, DC | 2014 | 156 | |||||||||||||||||||||||
Hilton Garden Inn M Street | Washington, DC | 2014 | 238 | |||||||||||||||||||||||
Hampton Inn Washington, D.C. | Washington, DC | 2005 | 228 | |||||||||||||||||||||||
Annapolis Waterfront Hotel | Annapolis, MD (1) | 1968 | 150 | |||||||||||||||||||||||
TOTAL ROOMS | 5,334 |
Market | Name | Location | Year Opened | Number of Rooms | HHLP Ownership in Asset | |||||||||||||||||||||||||||
Boston | Courtyard | South Boston, MA (1) | 2005 | 164 | 50 | % | ||||||||||||||||||||||||||
Holiday Inn Express | South Boston, MA (1) | 1998 | 174 | 50 | % | |||||||||||||||||||||||||||
Home2 Suites | South Boston, MA (1) | 2020 | 130 | 50 | % | |||||||||||||||||||||||||||
TOTAL ROOMS | 468 |
COMPARABLE CONSOLIDATED HOTELS: | |||||||||||||||||
(Includes 33 hotels in both years) | |||||||||||||||||
Year Ended December 31, 2021 | Year Ended December 31, 2020 | 2021 vs. 2020 % Variance | |||||||||||||||
(dollars in thousands except ADR and RevPAR) | |||||||||||||||||
Occupancy | 56.3 | % | 36.5 | % | 1,983 bps | ||||||||||||
Average Daily Rate (ADR) | $ | 215.22 | $ | 181.36 | 18.7% | ||||||||||||
Revenue Per Available Room (RevPAR) | $ | 121.24 | $ | 66.20 | 83.1% | ||||||||||||
Room Revenues | $ | 236,047 | $ | 128,757 | 83.3% | ||||||||||||
Hotel Operating Revenues | $ | 291,931 | $ | 159,460 | 83.1% |
Year Ended | |||||||||||||||||
December 31, 2021 | December 31, 2020 | December 31, 2019 | |||||||||||||||
Net loss applicable to common shareholders | $ | (64,347) | $ | (190,521) | $ | (27,843) | |||||||||||
Loss allocated to noncontrolling interests | (4,672) | (22,915) | (2,178) | ||||||||||||||
Loss (income) from unconsolidated joint ventures | 2,292 | 2,938 | (691) | ||||||||||||||
Gain on disposition of hotel properties | (48,352) | (1,158) | — | ||||||||||||||
Loss from impairment of depreciable assets | 222 | 1,069 | — | ||||||||||||||
Depreciation and amortization | 83,309 | 96,958 | 96,529 | ||||||||||||||
Funds from consolidated hotel operations applicable to common shareholders and Partnership units | (31,548) | (113,629) | 65,817 | ||||||||||||||
(Loss) income from Unconsolidated Joint Ventures | (2,292) | (2,938) | 691 | ||||||||||||||
Unrecognized pro rata interest in loss (1) | (1,053) | (1,417) | (4,247) | ||||||||||||||
Depreciation and amortization of difference between purchase price and historical cost (2) | 94 | 83 | 96 | ||||||||||||||
Interest in depreciation and amortization of unconsolidated joint ventures (3) | 2,508 | 1,828 | 5,234 | ||||||||||||||
Funds from unconsolidated joint ventures operations applicable to common shareholders and Partnership units | (743) | (2,444) | 1,774 | ||||||||||||||
Funds from Operations applicable to common shareholders and Partnership units | $ | (32,291) | $ | (116,073) | $ | 67,591 | |||||||||||
Weighted Average Common Shares and Units Outstanding | |||||||||||||||||
Basic | 39,089,987 | 38,613,563 | 38,907,894 | ||||||||||||||
Diluted | 44,172,521 | 44,066,289 | 43,390,093 |
Less Than 1 Year | 1 - 3 Years | 4 - 5 Years | After 5 Years | Total | |||||||||||||||||||||||||
Fixed Rate Debt | $ | 240,136 | $ | 420,040 | $ | 188,014 | $ | — | $ | 848,190 | |||||||||||||||||||
Weighted Average Interest Rate | 5.25 | % | 6.21 | % | 9.50 | % | N/A | 5.24 | % | ||||||||||||||||||||
Floating Rate Debt | $ | 26,846 | $ | 84,762 | $ | — | $ | 51,548 | $ | 163,156 | |||||||||||||||||||
Weighted Average Interest Rate | 3.46 | % | 3.24 | % | N/A | 3.10 | % | 3.23 | % | ||||||||||||||||||||
$ | 266,982 | $ | 504,802 | $ | 188,014 | $ | 51,548 | $ | 1,011,346 | ||||||||||||||||||||
Line of Credit | $ | 118,684 | $ | — | $ | — | $ | — | $ | 118,684 | |||||||||||||||||||
Weighted Average Interest Rate | 2.50 | % | N/A | N/A | N/A | 2.50 | % | ||||||||||||||||||||||
$ | 385,666 | $ | 504,802 | $ | 188,014 | $ | 51,548 | $ | 1,130,030 |
Hersha Hospitality Trust | Page | ||||
Report of Independent Registered Public Accounting Firm ( | |||||
December 31, 2021 | December 31, 2020 | ||||||||||
Assets: | |||||||||||
Investment in Hotel Properties, Net of Accumulated Depreciation | $ | $ | |||||||||
Investment in Unconsolidated Joint Ventures | |||||||||||
Cash and Cash Equivalents | |||||||||||
Escrow Deposits | |||||||||||
Hotel Accounts Receivable | |||||||||||
Due from Related Parties | |||||||||||
Intangible Assets, Net of Accumulated Amortization of $ | |||||||||||
Right of Use Assets | |||||||||||
Other Assets | |||||||||||
Hotel Assets Held for Sale | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Equity: | |||||||||||
Line of Credit | $ | $ | |||||||||
Secured Term Loans, Net of Unamortized Deferred Financing Costs (Note 5) | |||||||||||
Unsecured Notes Payable, Net of Unamortized Deferred Financing Costs (Note 5) | |||||||||||
Mortgages Payable, Net of Unamortized Premium and Unamortized Deferred Financing Costs | |||||||||||
Lease Liabilities | |||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities | |||||||||||
Dividends and Distributions Payable | |||||||||||
Due to Related Parties | |||||||||||
Total Liabilities | $ | $ | |||||||||
Redeemable Noncontrolling Interests - Consolidated Joint Venture (Note 12) | |||||||||||
Equity: | |||||||||||
Shareholders' Equity: | |||||||||||
Preferred Shares: $ | $ | $ | |||||||||
Common Shares: Class A, $ | |||||||||||
Common Shares: Class B, $ | |||||||||||
Accumulated Other Comprehensive Loss | ( | ( | |||||||||
Additional Paid-in Capital | |||||||||||
Distributions in Excess of Net Income | ( | ( | |||||||||
Total Shareholders' Equity | |||||||||||
Noncontrolling Interests (Note 1): | |||||||||||
Total Equity | |||||||||||
Total Liabilities, Redeemable Noncontrolling Interests, and Equity | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Revenue: | |||||||||||||||||
Hotel Operating Revenues: | |||||||||||||||||
Room | $ | $ | $ | ||||||||||||||
Food & Beverage | |||||||||||||||||
Other Operating Revenues | |||||||||||||||||
Other Revenues | |||||||||||||||||
Total Revenues | |||||||||||||||||
Operating Expenses: | |||||||||||||||||
Hotel Operating Expenses: | |||||||||||||||||
Room | |||||||||||||||||
Food & Beverage | |||||||||||||||||
Other Operating Expenses | |||||||||||||||||
Hotel Ground Rent | |||||||||||||||||
Real Estate and Personal Property Taxes and Property Insurance | |||||||||||||||||
General and Administrative (including Share Based Payments of $ | |||||||||||||||||
Acquisition and Terminated Transaction Costs | |||||||||||||||||
Loss on Impairment of Assets | |||||||||||||||||
Depreciation and Amortization | |||||||||||||||||
Insurance Recoveries in Excess of Property Loss | ( | ( | |||||||||||||||
Total Operating Expenses | |||||||||||||||||
Operating (Loss) Income | ( | ( | |||||||||||||||
Interest Income | |||||||||||||||||
Interest Expense | ( | ( | ( | ||||||||||||||
Other Income (Expense) | ( | ( | |||||||||||||||
Gain on Disposition of Hotel Properties | |||||||||||||||||
Loss on Debt Extinguishment | ( | ( | |||||||||||||||
Loss Before Results from Unconsolidated Joint Venture Investments and Income Taxes | ( | ( | ( | ||||||||||||||
(Loss) Income from Unconsolidated Joint Venture Investments | ( | ( | |||||||||||||||
Loss Before Income Taxes | ( | ( | ( | ||||||||||||||
Income Tax Expense | ( | ( | ( | ||||||||||||||
Net Loss | ( | ( | ( | ||||||||||||||
Loss Allocated to Noncontrolling Interests - Common Units | |||||||||||||||||
(Income) Loss Allocated to Noncontrolling Interests - Consolidated Joint Venture | ( | ( | |||||||||||||||
Preferred Distributions | ( | ( | ( | ||||||||||||||
Net Loss Applicable to Common Shareholders | $ | ( | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Earnings Per Share: | |||||||||||||||||
BASIC | |||||||||||||||||
Loss from Continuing Operations Applicable to Common Shareholders | $ | ( | $ | ( | $ | ( | |||||||||||
DILUTED | |||||||||||||||||
Loss from Continuing Operations Applicable to Common Shareholders | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||
Basic | |||||||||||||||||
Diluted* |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Common Units and Vested LTIP Units | |||||||||||||||||
Unvested Stock Awards and LTIP Units Outstanding | |||||||||||||||||
Contingently Issuable Share Awards | |||||||||||||||||
Total Potentially Dilutive Securities Excluded from the Denominator |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | |||||||||||
Change in Fair Value of Derivative Instruments | ( | ( | |||||||||||||||
Less: Reclassification Adjustment for Change in Fair Value of Derivative Instruments Included in Net Income | |||||||||||||||||
Total Other Comprehensive Income (Loss) | $ | $ | ( | $ | ( | ||||||||||||
Comprehensive Loss | ( | ( | ( | ||||||||||||||
Less: Comprehensive Loss Applicable to Noncontrolling Interests - Common Units | |||||||||||||||||
Less: Comprehensive (Income) Loss Applicable to Noncontrolling Interests - Consolidated Joint Venture | ( | ( | |||||||||||||||
Less: Preferred Distributions | ( | ( | ( | ||||||||||||||
Comprehensive Loss Applicable to Common Shareholders | $ | ( | $ | ( | $ | ( |
Redeemable Noncontrolling Interests | Shareholders' Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||
Consolidated Joint Venture ($) | Common Shares | Class A Common Shares ($) | Class B Common Shares ($) | Preferred Shares | Preferred Shares ($) | Additional Paid-In Capital ($) | Accumulated Other Comprehensive Loss ($) | Distributions in Excess of Net Income ($) | Total Shareholders' Equity ($) | Common Units and LTIP Units | Common Units and LTIP Units ($) | Total Equity ($) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Unit Conversion | — | — | — | — | — | — | ( | ( | — | |||||||||||||||||||||||||||||||||||
Dividends and Distributions declared: | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | — | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||
Share Based Compensation: | ||||||||||||||||||||||||||||||||||||||||||||
Grants | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Amortization | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Change in Fair Value of Derivative Instruments | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Equity Contribution to Consolidated Joint Venture | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | — | — | — | — | — | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Net Loss | ( | — | — | — | — | — | — | — | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | ( |
Redeemable Noncontrolling Interests | Shareholders' Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||
Consolidated Joint Venture ($) | Common Shares | Class A Common Shares ($) | Class B Common Shares ($) | Preferred Shares | Preferred Shares ($) | Additional Paid-In Capital ($) | Accumulated Other Comprehensive Income ($) | Distributions in Excess of Net Income ($) | Total Shareholders' Equity ($) | Common Units and LTIP Units | Common Units and LTIP Units ($) | Total Equity ($) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | ( | |||||||||||||||||||||||||||||||||||||||||||
Issuance Costs | — | — | — | — | — | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||
Dividends and Distributions declared: | ||||||||||||||||||||||||||||||||||||||||||||
Preferred Shares | — | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||
Dividend Reinvestment Plan | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Share Based Compensation: | ||||||||||||||||||||||||||||||||||||||||||||
Grants | — | — | — | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Amortization | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Equity Contribution to Consolidated Joint Venture | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Change in Fair Value of Derivative Instruments | — | — | — | — | — | — | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | ( | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net Loss | ( | — | — | — | — | — | — | — | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||
Balance at December 31, 2020 | ( | ( |
Redeemable Noncontrolling Interests | Shareholders' Equity | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||
Consolidated Joint Venture ($) | Common Shares | Class A Common Shares ($) | Class B Common Shares ($) | Preferred Shares | Preferred Shares ($) | Additional Paid-In Capital ($) | Accumulated Other Comprehensive Income ($) | Distributions in Excess of Net Income ($) | Total Shareholders' Equity ($) | Common Units and LTIP Units | Common Units and LTIP Units ($) | Total Equity ($) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | ( | |||||||||||||||||||||||||||||||||||||||||||
Repurchase of Common Shares | — | ( | ( | — | — | — | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||
Dividends and Distributions declared: | ||||||||||||||||||||||||||||||||||||||||||||
Common Shares ($ | — | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||
Preferred Shares | — | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||
Common Units ($ | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||
LTIP Units ($ | — | — | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||
Dividend Reinvestment Plan | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Share Based Compensation: | ||||||||||||||||||||||||||||||||||||||||||||
Grants | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Amortization | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Equity Contribution to Consolidated Joint Venture | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Change in Fair Value of Derivative Instruments | — | — | — | — | — | — | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||
Adjustment to Record Noncontrolling Interest at Redemption Value | — | — | — | — | — | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Net Income (Loss) | ( | — | — | — | — | — | — | — | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||
Balance at December 31, 2019 | ( |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Operating Activities: | |||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | |||||||||||
Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities: | |||||||||||||||||
Gain on Disposition of Hotel Properties | ( | ( | |||||||||||||||
Loss on Impairment of Assets | |||||||||||||||||
Insurance Recoveries in Excess of Property Loss | ( | ( | |||||||||||||||
Junior Note PIK Interest Added to Principal | |||||||||||||||||
Deferred Taxes | ( | ||||||||||||||||
Depreciation | |||||||||||||||||
Amortization | |||||||||||||||||
Loss on Debt Extinguishment | |||||||||||||||||
Equity in Loss (Income) of Unconsolidated Joint Ventures | ( | ||||||||||||||||
Loss Recognized on Change in Fair Value of Derivative Instrument | |||||||||||||||||
Share Based Compensation Expense | |||||||||||||||||
Distributions from Unconsolidated Joint Ventures | |||||||||||||||||
Proceeds Received for Business Interruption Insurance Claims, net | |||||||||||||||||
Change in Assets and Liabilities: | |||||||||||||||||
(Increase) Decrease in: | |||||||||||||||||
Hotel Accounts Receivable | ( | ||||||||||||||||
Other Assets | ( | ( | |||||||||||||||
Due from Related Parties | ( | ||||||||||||||||
(Decrease) Increase in: | |||||||||||||||||
Due to Related Parties | |||||||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities | ( | ||||||||||||||||
Net Cash Provided by (Used in) Operating Activities | $ | $ | ( | $ | |||||||||||||
Investing Activities: | |||||||||||||||||
Capital Expenditures | ( | ( | ( | ||||||||||||||
Cash Paid for Hotel Development Projects | ( | ||||||||||||||||
Proceeds from Disposition of Hotel Properties | |||||||||||||||||
Contributions to Unconsolidated Joint Ventures | ( | ( | ( | ||||||||||||||
Proceeds from Insurance Claims | |||||||||||||||||
Distributions from Unconsolidated Joint Ventures | |||||||||||||||||
Net Cash Provided by (Used in) Investing Activities | $ | $ | ( | $ | ( |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Financing Activities: | |||||||||||||||||
Borrowings on Line of Credit | $ | $ | $ | ||||||||||||||
Repayment of Borrowings Under Line of Credit | ( | ( | |||||||||||||||
Payments on Term Loans | ( | ( | |||||||||||||||
Principal Repayment of Mortgages | ( | ( | ( | ||||||||||||||
Proceeds from Mortgages and Notes Payable | |||||||||||||||||
Deferred Financing Costs | ( | ( | ( | ||||||||||||||
Cash Paid for Debt Extinguishment | ( | ||||||||||||||||
Repurchase of Common Shares | ( | ||||||||||||||||
Dividends Paid on Common Shares | ( | ( | |||||||||||||||
Dividends Paid on Preferred Shares | ( | ( | ( | ||||||||||||||
Distributions Paid on Common Units and LTIP Units | ( | ( | |||||||||||||||
Other Financing Activities | ( | ( | |||||||||||||||
Net Cash (Used in) Provided by Financing Activities | $ | ( | $ | $ | ( | ||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | $ | $ | ( | $ | ( | ||||||||||||
Cash, Cash Equivalents, and Restricted Cash - Beginning of Period | |||||||||||||||||
Cash, Cash Equivalents, and Restricted Cash - End of Period | $ | $ | $ |
Joint Venture | Ownership Interest | Property | Location | Lessee/Sublessee | ||||||||||||||||||||||
Consolidated Joint Ventures | ||||||||||||||||||||||||||
Hersha Holding RC Owner, LLC | Ritz-Carlton | Coconut Grove, FL | Hersha Holding RC Lessee, LLC | |||||||||||||||||||||||
Unconsolidated Joint Ventures | ||||||||||||||||||||||||||
SB Partners, LLC | Holiday Inn Express | South Boston, MA | South Bay Sandeep, LLC | |||||||||||||||||||||||
Hiren Boston, LLC | Courtyard | South Boston, MA | South Bay Boston, LLC | |||||||||||||||||||||||
SB Partners Three, LLC | Home2 Suites | South Boston, MA | SB Partners Three Lessee, LLC |
Building and Improvements | ||||||||
Furniture, Fixtures and Equipment |
December 31, 2021 | December 31, 2020 | ||||||||||
Land | $ | $ | |||||||||
Buildings and Improvements | |||||||||||
Furniture, Fixtures and Equipment | |||||||||||
Construction in Progress | |||||||||||
Less Accumulated Depreciation | ( | ( | |||||||||
Total Investment in Hotel Properties* | $ | $ |
Hotel | Acquisition Date | Disposition Date | Consideration | Gain on Disposition | ||||||||||||||||||||||
Courtyard San Diego, CA | 5/30/2013 | 2/19/2021 | $ | $ | ||||||||||||||||||||||
The Capitol Hill Hotel Washington, DC | 4/15/2011 | 3/9/2021 | ||||||||||||||||||||||||
Holiday Inn Express Cambridge, MA | 5/3/2006 | 3/9/2021 | ||||||||||||||||||||||||
Residence Inn Miami Coconut Grove, FL | 6/12/2013 | 3/10/2021 | ||||||||||||||||||||||||
Duane Street Hotel (1) | 1/4/2008 | 5/13/2021 | ||||||||||||||||||||||||
2021 Total | $ | |||||||||||||||||||||||||
Sheraton Wilmington South, DE | 12/21/2010 | 12/1/2020 | $ | $ | ||||||||||||||||||||||
2020 Total | $ |
December 31, 2020 | ||||||||||||||
Land | $ | |||||||||||||
Buildings and Improvements | ||||||||||||||
Furniture, Fixtures and Equipment | ||||||||||||||
Less Accumulated Depreciation | ( | |||||||||||||
Assets Held for Sale | $ |
Joint Venture | Hotel Properties | Percent Owned | December 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Cindat Hersha Owner JV, LLC | Hilton and IHG branded hotels in NYC | % | * | $ | $ | |||||||||||||||||||||
Hiren Boston, LLC | Courtyard by Marriott, South Boston, MA | % | ||||||||||||||||||||||||
SB Partners, LLC | Holiday Inn Express, South Boston, MA | % | ||||||||||||||||||||||||
SB Partners Three, LLC | Home2 Suites, South Boston, MA | % | ||||||||||||||||||||||||
$ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Cindat Hersha Owner JV, LLC | $ | ( | $ | $ | |||||||||||||
Hiren Boston, LLC | ( | ( | |||||||||||||||
SB Partners, LLC | ( | ( | |||||||||||||||
SB Partners Three, LLC | ( | ( | ( | ||||||||||||||
(Loss) Income from Unconsolidated Joint Venture Investments | $ | ( | $ | ( | $ |
Balance Sheets | |||||||||||
December 31, 2021 | December 31, 2020 | ||||||||||
Assets | |||||||||||
Investment in Hotel Properties, Net | $ | $ | |||||||||
Other Assets | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Equity | |||||||||||
Mortgages and Notes Payable | $ | $ | |||||||||
Other Liabilities | |||||||||||
Equity: | |||||||||||
Hersha Hospitality Trust | |||||||||||
Joint Venture Partners | ( | ||||||||||
Accumulated Other Comprehensive Loss | ( | ||||||||||
Total Equity | ( | ||||||||||
Total Liabilities and Equity | $ | $ |
Statements of Operations | |||||||||||||||||
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Room Revenue | $ | $ | $ | ||||||||||||||
Other Revenue | |||||||||||||||||
Operating Expenses | ( | ( | ( | ||||||||||||||
Lease Expense | ( | ( | ( | ||||||||||||||
Property Taxes and Insurance | ( | ( | ( | ||||||||||||||
General and Administrative | ( | ( | ( | ||||||||||||||
Depreciation and Amortization | ( | ( | ( | ||||||||||||||
Interest Expense | ( | ( | ( | ||||||||||||||
Loss on Dissolution of Joint Venture | ( | ||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( |
December 31, 2021 | December 31, 2020 | ||||||||||
Our share of equity recorded on the joint ventures' financial statements | $ | $ | |||||||||
Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures(1) | |||||||||||
Investment in Unconsolidated Joint Ventures | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Derivative Asset | $ | $ | |||||||||
Deferred Financing Costs | |||||||||||
Prepaid Expenses | |||||||||||
Investment in Statutory Trusts | |||||||||||
Investment in Non-Hotel Property and Inventories | |||||||||||
Deposits with Unaffiliated Third Parties | |||||||||||
Deferred Tax Asset, Net of Valuation Allowance of $ | |||||||||||
Other | |||||||||||
$ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Mortgage Indebtedness | $ | $ | |||||||||
Net Unamortized Premium | |||||||||||
Net Unamortized Deferred Financing Costs | ( | ( | |||||||||
Mortgages Payable | $ | $ | |||||||||
- Courtyard by Marriott Brookline, Brookline, MA | - Hampton Inn, Washington, DC | ||||
- The Envoy Boston Seaport, Boston, MA | - Ritz-Carlton Georgetown, Washington, DC | ||||
- The Boxer, Boston, MA | - Hilton Garden Inn, M Street, Washington, DC | ||||
- Hampton Inn Seaport, Seaport, New York, NY | - The Winter Haven Hotel Miami Beach, Miami, FL | ||||
- Holiday Inn Express Chelsea, 29th Street, New York, NY | - The Blue Moon Hotel Miami Beach, Miami, FL | ||||
- Gate Hotel JFK Airport, New York, NY | - Cadillac Hotel & Beach Club, Miami, FL | ||||
- Hilton Garden Inn JFK Airport, New York, NY | - The Parrot Key Hotel & Villas, Key West, FL | ||||
- NU Hotel, Brooklyn, New York, NY | - TownePlace Suites, Sunnyvale, CA | ||||
- Hyatt House White Plains, White Plains, NY | - The Ambrose Hotel, Santa Monica, CA | ||||
- Hampton Inn Center City/ Convention Center, Philadelphia, PA | - The Pan Pacific Hotel Seattle, Seattle, WA | ||||
- The Rittenhouse, Philadelphia, PA | - Mystic Marriott Hotel & Spa, Groton, CT | ||||
- Philadelphia Westin, Philadelphia, PA |
Outstanding Balance | ||||||||||||||||||||
Borrowing | Spread | December 31, 2021 | December 31, 2020 | |||||||||||||||||
Line of Credit | $ | $ | ||||||||||||||||||
Secured Term Loan: | ||||||||||||||||||||
First Term Loan | ||||||||||||||||||||
Second Term Loan | ||||||||||||||||||||
Third Term Loan | ||||||||||||||||||||
Deferred Financing Costs | ( | ( | ||||||||||||||||||
Total Secured Term Loan | $ | $ |
December 31, 2021 | December 31, 2020 | |||||||||||||
Statutory Trust I and Statutory Trust II Notes Payable Indebtedness | $ | $ | ||||||||||||
Net Unamortized Deferred Financing Costs | ( | ( | ||||||||||||
Statutory Trust I and Statutory Trust II Notes Payable | ||||||||||||||
Junior Notes Payable Indebtedness | $ | $ | ||||||||||||
Net Unamortized Deferred Financing Costs | ( | |||||||||||||
Net Unamortized Discount | ( | |||||||||||||
Junior Notes Payable | ||||||||||||||
Total Notes Payable | $ | $ | ||||||||||||
Year Ending December 31, | Amount | |||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
$ |
Years Ended December 31, | |||||||||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||||||||
Mortgage Loans Payable | |||||||||||||||||||||||
Interest Rate Swap Contracts on Mortgages* | ( | ||||||||||||||||||||||
Unsecured Notes Payable | |||||||||||||||||||||||
Credit Facility and Term Loans | |||||||||||||||||||||||
Interest Rate Swap Contracts on Credit Facility and Term Loans* | ( | ||||||||||||||||||||||
Deferred Financing Costs Amortization | |||||||||||||||||||||||
Capitalized Interest* | ( | ||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total Interest Expense | $ | $ | $ |
For the Year Ended December 31, 2021 | ||||||||||||||||||||
Ground Lease | Office Lease | Total | ||||||||||||||||||
Operating lease costs | $ | $ | $ | |||||||||||||||||
Variable lease costs | ||||||||||||||||||||
Total lease costs | $ | $ | $ |
For the Year Ended December 31, 2020 | ||||||||||||||||||||
Ground Lease | Office Lease | Total | ||||||||||||||||||
Operating lease costs | $ | $ | $ | |||||||||||||||||
Variable lease costs | ||||||||||||||||||||
Total lease costs | $ | $ | $ | |||||||||||||||||
For the Year Ended December 31, 2019 | ||||||||||||||||||||
Ground Lease | Office Lease | Total | ||||||||||||||||||
Operating lease costs | $ | $ | $ | |||||||||||||||||
Variable lease costs | ||||||||||||||||||||
Total lease costs | $ | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Cash paid from operating cash flows for operating leases | $ | $ | |||||||||
Weighted average remaining lease term in years | |||||||||||
Weighted average discount rate | % | % |
Amount | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total undiscounted lease payments | |||||
Less imputed interest | ( | ||||
Total lease liability | $ |
Estimated Fair Value | ||||||||||||||||||||||||||
Asset / (Liability) Balance | ||||||||||||||||||||||||||
Hedged Debt | Type | Strike Rate | Index | Effective Date | Derivative Contract Maturity Date | Notional Amount | December 31, 2021 | December 31, 2020 | ||||||||||||||||||
Term Loan Instruments: | ||||||||||||||||||||||||||
Credit Facility | Swap | % | 1-Month LIBOR + | October 3, 2019 | August 2, 2021 | $ | $ | ( | ||||||||||||||||||
Credit Facility (1) | Swap | % | 1-Month LIBOR + | September 3, 2019 | August 2, 2021 | ( | ||||||||||||||||||||
Credit Facility | Swap | % | 1-Month LIBOR + | September 3, 2019 | August 10, 2022 | ( | ( | |||||||||||||||||||
Credit Facility | Swap | % | 1-Month LIBOR + | September 3, 2019 | August 10, 2022 | ( | ( | |||||||||||||||||||
Credit Facility | Swap | % | 1-Month LIBOR + | September 10, 2019 | September 10, 2024 | ( | ( | |||||||||||||||||||
Mortgages: | ||||||||||||||||||||||||||
Hyatt, Union Square, New York, NY | Swap | % | 1-Month LIBOR + | June 7, 2019 | June 7, 2023 | ( | ( | |||||||||||||||||||
Hilton Garden Inn Tribeca, New York, NY | Swap | % | 1-Month LIBOR + | July 25, 2019 | July 25, 2024 | ( | ( | |||||||||||||||||||
Hilton Garden Inn Tribeca, New York, NY | Swap | % | 1-Month LIBOR + | July 25, 2019 | July 25, 2024 | ( | ( | |||||||||||||||||||
Hilton Garden Inn 52nd Street, New York, NY | Swap | % | 1-Month LIBOR + | December 4, 2019 | December 4, 2022 | ( | ( | |||||||||||||||||||
Courtyard, LA Westside, Culver City, CA | Swap | % | 1-Month LIBOR + | June 1, 2020 | August 1, 2021 | ( | ||||||||||||||||||||
Courtyard, LA Westside, Culver City, CA | Cap | % | 1-Month LIBOR | August 1, 2021 | August 1, 2024 | |||||||||||||||||||||
$ | ( | $ | ( |
LTIP Unit Awards | Restricted Share Awards | Share Awards | ||||||||||||||||||||||||||||||||||||
Number of Units | Weighted Average Grant Date Fair Value | Number of Restricted Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||||||||||||||||
Unvested Balance as of January 1, 2019 | $ | $ | ||||||||||||||||||||||||||||||||||||
Granted | $ | |||||||||||||||||||||||||||||||||||||
Vested | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Forfeited | N/A | ( | N/A | |||||||||||||||||||||||||||||||||||
Unvested Balance as of December 31, 2019 | ||||||||||||||||||||||||||||||||||||||
Granted | N/A | |||||||||||||||||||||||||||||||||||||
Vested | ( | ( | N/A | |||||||||||||||||||||||||||||||||||
Forfeited | N/A | ( | N/A | |||||||||||||||||||||||||||||||||||
Unvested Balance as of December 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||||||||||||||
Vested | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Forfeited | N/A | ( | N/A | |||||||||||||||||||||||||||||||||||
Unvested Balance as of December 31, 2021 |
Share Based Compensation Expense | Unearned Compensation | |||||||||||||||||||||||||||||||
For the Year Ended December 31, | As of December 31, | |||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2021 | 2020 | ||||||||||||||||||||||||||||
Issued Awards | ||||||||||||||||||||||||||||||||
LTIP Unit Awards | ||||||||||||||||||||||||||||||||
Restricted Share Awards | ||||||||||||||||||||||||||||||||
Share Awards | ||||||||||||||||||||||||||||||||
Unissued Awards | ||||||||||||||||||||||||||||||||
Market Based | ||||||||||||||||||||||||||||||||
Performance Based | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
2022 | 2023 | 2024 | ||||||||||||||||||
LTIP Unit Awards | ||||||||||||||||||||
Restricted Share Awards | ||||||||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
NUMERATOR: | |||||||||||||||||
Basic and Diluted* | |||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | |||||||||||
Loss allocated to Noncontrolling Interests | |||||||||||||||||
Distributions to Preferred Shareholders | ( | ( | ( | ||||||||||||||
Dividends Paid on Unvested Restricted Shares and LTIP Units | ( | ||||||||||||||||
Net Loss from Continuing Operations attributable to Common Shareholders | $ | ( | $ | ( | $ | ( | |||||||||||
DENOMINATOR: | |||||||||||||||||
Weighted average number of common shares - basic | |||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Restricted Stock Awards and LTIP Units (unvested) | |||||||||||||||||
Contingently Issued Shares and Units | |||||||||||||||||
Weighted average number of common shares - diluted |
2021 | 2020 | 2019 | |||||||||||||||
Common Shares issued as part of the Dividend Reinvestment Plan | $ | $ | $ | ||||||||||||||
Conversion of Common Units to Common Shares | |||||||||||||||||
Issuance of share based payments | |||||||||||||||||
Accrued payables for fixed assets placed into service | |||||||||||||||||
Increase in accrued liabilities related to insurance premium financing agreements | |||||||||||||||||
Adjustment to Record Non-Controlling Interest at Redemption Value | ( | ||||||||||||||||
Right of Use Assets obtained in exchange for Lease Liabilities | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||
Escrowed cash | |||||||||||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ | $ | $ |
Dividend Per Share (1) | ||||||||||||||||||||||||||||||||||||||
Shares Outstanding | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||
Series | December 31, 2021 | December 31, 2020 | Aggregate Liquidation Preference | Distribution Rate | 2021 | 2020 | ||||||||||||||||||||||||||||||||
Series C | $ | % | $ | $ | ||||||||||||||||||||||||||||||||||
Series D | % | |||||||||||||||||||||||||||||||||||||
Series E | % | |||||||||||||||||||||||||||||||||||||
Total |
For the year ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Statutory federal income tax provision | $ | ( | $ | ( | $ | ( | |||||||||||
Adjustment for nontaxable income for Hersha Hospitality Trust | |||||||||||||||||
State income taxes, net of federal income tax effect | ( | ( | |||||||||||||||
Non-deductible expenses, tax credits, and other, net | ( | ( | |||||||||||||||
Changes in valuation allowance | ( | ||||||||||||||||
Total income tax expense | $ | $ | $ |
For the year ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Income tax expense (benefit): | |||||||||||||||||
Current: | |||||||||||||||||
Federal | $ | $ | ( | $ | ( | ||||||||||||
State | ( | ||||||||||||||||
Deferred: | |||||||||||||||||
Federal | ( | ||||||||||||||||
State | ( | ||||||||||||||||
Total | $ | $ | $ |
As of December 31, | |||||||||||
2021 | 2020 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss carryforwards | $ | $ | |||||||||
Accrued expenses and other | |||||||||||
Tax credit carryforwards | |||||||||||
Depreciation and amortization | |||||||||||
Total gross deferred tax assets | |||||||||||
Valuation allowance | ( | ( | |||||||||
Total Net deferred tax assets | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Preferred Shares - 6.875% Series C | |||||||||||||||||
Ordinary income | % | % | % | ||||||||||||||
Return of Capital | % | % | % | ||||||||||||||
Capital Gain Distribution | % | % | % | ||||||||||||||
Preferred Shares - 6.5% Series D | |||||||||||||||||
Ordinary income | % | % | % | ||||||||||||||
Return of Capital | % | % | % | ||||||||||||||
Capital Gain Distribution | % | % | % | ||||||||||||||
Preferred Shares - 6.5% Series E | |||||||||||||||||
Ordinary income | % | % | % | ||||||||||||||
Return of Capital | % | % | % | ||||||||||||||
Capital Gain Distribution | % | % | % | ||||||||||||||
Common Shares - Class A | |||||||||||||||||
Ordinary income | N/A | % | % | ||||||||||||||
Return of Capital | N/A | % | % | ||||||||||||||
Capital Gain Distribution | N/A | % | % |
Year Ended December 31, 2021 | |||||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||
Hotel Operating Revenues: | |||||||||||||||||||||||
Room | $ | $ | $ | $ | |||||||||||||||||||
Food & Beverage | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Other Revenues | |||||||||||||||||||||||
Hotel Operating Expenses: | |||||||||||||||||||||||
Room | |||||||||||||||||||||||
Food & Beverage | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Other Expenses | |||||||||||||||||||||||
Loss from Unconsolidated Joint Ventures | ( | ( | ( | ( | |||||||||||||||||||
Income (Loss) Before Income Taxes | ( | ( | ( | ||||||||||||||||||||
Income Tax Benefit (Expense) | ( | ( | ( | ||||||||||||||||||||
Net Income (Loss) | ( | ( | ( | ||||||||||||||||||||
Income (loss) Allocated to Noncontrolling Interests | ( | ( | ( | ||||||||||||||||||||
(Loss) Income Allocated to Noncontrolling Interests - Consolidated Joint Venture | ( | ||||||||||||||||||||||
Preferred Distributions | |||||||||||||||||||||||
Net Income (Loss) applicable to Common Shareholders | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic Net Income (Loss) applicable to Common Shareholders | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Diluted Net Income (Loss) applicable to Common Shareholders | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Weighted Average Common Shares Outstanding - Basic | |||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | |||||||||||||||||||||||
Year Ended December 31, 2020 | |||||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||
Hotel Operating Revenues: | |||||||||||||||||||||||
Room | $ | $ | $ | $ | |||||||||||||||||||
Food & Beverage | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Other Revenues | |||||||||||||||||||||||
Hotel Operating Expenses: | |||||||||||||||||||||||
Room | |||||||||||||||||||||||
Food & Beverage | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Other Expenses | |||||||||||||||||||||||
Loss from Unconsolidated Joint Ventures | ( | ( | ( | ( | |||||||||||||||||||
Loss Before Income Taxes | ( | ( | ( | ( | |||||||||||||||||||
Income Tax Benefit (Expense) | ( | ||||||||||||||||||||||
Net Loss | ( | ( | ( | ( | |||||||||||||||||||
Loss Allocated to Noncontrolling Interests | ( | ( | ( | ( | |||||||||||||||||||
Loss Allocated to Noncontrolling Interests - Consolidated Joint Ventures | ( | ( | |||||||||||||||||||||
Preferred Distributions | |||||||||||||||||||||||
Net Loss applicable to Common Shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic Net Loss applicable to Common Shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted Net Loss applicable to Common Shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted Average Common Shares Outstanding - Basic | |||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted |
Initial Costs | Costs Capitalized Subsequent to Acquisition (1) | Gross Amounts at Close of Period | Accumulated Depreciation | Net Book Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Encumbrances | Land | Buildings & Improvements | Land | Buildings & Improvements | Land | Buildings & Improvements | Total | Buildings & Improvements* | Land, Buildings & Improvements | Date of Acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Courtyard by Marriott Brookline, Brookline, MA | $ | — | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ | 6/16/2005 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Annapolis Waterfront Hotel, Annapolis, MD | ( | ( | 3/28/2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hilton Garden Inn JFK, JFK Airport, NY | — | ( | 2/16/2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hyatt House White Plains, White Plains, NY | — | ( | 12/28/2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hampton Inn Seaport, Seaport, NY | — | ( | 2/1/2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gate Hotel JFK Airport, JFK Airport, NY | — | ( | 6/13/2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hampton Inn Center City/ Convention Center, Philadelphia, PA | — | ( | 2/15/2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NU Hotel Brooklyn, Brooklyn, NY | — | ( | 1/14/2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hilton Garden Inn Tribeca, Tribeca, NY | ( | ( | 5/1/2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hampton Inn Washington, D.C., Washington, DC | — | ( | 9/1/2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Courtyard by Marriott Los Angeles Westside, LA Westside, CA | ( | ( | 5/19/2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cadillac Hotel & Beach Club, Miami, FL | — | ( | 11/16/2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Rittenhouse Hotel, Philadelphia, PA | — | ( | 3/1/2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Boxer Boston, Boston, MA | — | ( | 5/7/2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Holiday Inn Express Chelsea, Manhattan, NY | — | ( | 6/18/2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hyatt Union Square, Union Square, NY | ( | ( | 4/9/2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Hotel Milo, Santa Barbara, CA | ( | ( | 2/28/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hilton Garden Inn Manhattan Midtown East, Midtown East, NY | ( | ( | 5/27/2014 |
Initial Costs | Costs Capitalized Subsequent to Acquisition (1) | Gross Amounts at Close of Period | Accumulated Depreciation | Net Book Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description | Encumbrances | Land | Buildings & Improvements | Land | Buildings & Improvements | Land | Buildings & Improvements | Total | Buildings & Improvements* | Land, Buildings & Improvements | Date of Acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Parrot Key Hotel & Villas, Key West, FL | — | ( | 5/7/2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Winter Haven Hotel Miami Beach, Miami Beach, FL | — | ( | 12/20/2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Blue Moon Hotel Miami Beach, Miami Beach, FL | — | ( | 12/20/2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The St. Gregory Hotel, Dupont Circle, Washington D.C. | ( | ( | 6/16/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TownePlace Suites Sunnyvale, Sunnyvale, CA | — | ( | 8/25/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Ritz-Carlton Georgetown, Washington D.C. | — | ( | 12/29/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Sanctuary Beach Resort, Marina, CA | ( | ( | 1/28/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hilton Garden Inn M Street, Washington D.C. | — | ( | 3/9/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Envoy Boston Seaport, Boston, MA | — | ( | 7/21/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Courtyard by Marriott Sunnyvale, Sunnyvale, CA | ( | ( | 10/20/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mystic Marriott Hotel & Spa, Groton, CT | — | ( | 1/3/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Ritz-Carlton Coconut Grove, Coconut Grove, FL | — | ( | 2/1/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Pan Pacific Hotel Seattle, Seattle, WA | — | ( | 2/21/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Philadelphia Westin, Philadelphia, PA | — | ( | 6/29/2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Ambrose Hotel, Santa Monica, CA | — | ( | 12/1/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Investment in Real Estate | $ | ( | $ | $ | $ | $ | $ | $ | $ | $ | ( | $ |
2021 | 2020 | 2019 | |||||||||||||||
Reconciliation of Real Estate | |||||||||||||||||
Balance at beginning of year | $ | $ | $ | ||||||||||||||
Additions during the year | |||||||||||||||||
Dispositions | ( | ( | |||||||||||||||
Total Real Estate | $ | $ | $ | ||||||||||||||
Reconciliation of Accumulated Depreciation | |||||||||||||||||
Balance at beginning of year | $ | $ | $ | ||||||||||||||
Depreciation for year | |||||||||||||||||
Accumulated depreciation on assets sold | ( | ( | |||||||||||||||
Balance at the end of year | $ | $ | $ |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans(1) | |||||||||||||||||
Equity compensation plans approved by security holders | - | - | 1,683,036 | |||||||||||||||||
Equity compensation plans not approved by security holders | - | - | - | |||||||||||||||||
Total | - | - | 1,683,036 |
Exhibit No. | ||||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5 | ||||||||
4.6 | ||||||||
4.7 | ||||||||
4.8 | ||||||||
4.9 | ||||||||
4.10 | ||||||||
4.11 | ||||||||
4.12 | ||||||||
4.13 | ||||||||
4.14 | ||||||||
4.15 | ||||||||
10.1 |
Exhibit No. | ||||||||
10.2 | ||||||||
10.3 | ||||||||
10.4 | ||||||||
10.5 | ||||||||
10.6 | ||||||||
10.7 | ||||||||
10.8 | ||||||||
10.9 | ||||||||
10.10 | ||||||||
10.11 | ||||||||
10.12 | ||||||||
10.13 | ||||||||
10.14 | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | ||||||||
10.18 |
Exhibit No. | ||||||||
10.19 | ||||||||
10.20 | ||||||||
10.21 | ||||||||
10.22 | ||||||||
10.23 | ||||||||
10.24 | ||||||||
10.25 | ||||||||
10.26 | ||||||||
10.27 | ||||||||
10.28 | ||||||||
10.29 | ||||||||
10.30 | ||||||||
10.31 | ||||||||
10.32 | ||||||||
10.33 |
Exhibit No. | ||||||||
10.34 | ||||||||
21.1 | ||||||||
23.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 |
Exhibit No. | ||||||||
101.INS | Instance Document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document* | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* | |||||||
104 | Cover Page Interactive Data File. | |||||||
* | Filed herewith. |
HERSHA HOSPITALITY TRUST | |||||
February 23, 2022 | /s/ Jay H. Shah | ||||
Jay H. Shah | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) |
Signature | Title | Date | ||||||||||||
/s/ Hasu P. Shah | Chairman and Trustee | February 23, 2022 | ||||||||||||
Hasu P. Shah | ||||||||||||||
/s/ Jay H. Shah | Chief Executive Officer and Trustee (Principal Executive Officer) | February 23, 2022 | ||||||||||||
Jay H. Shah | ||||||||||||||
/s/ Neil H. Shah | President and Chief Operating Officer (Chief Operating Officer) | February 23, 2022 | ||||||||||||
Neil H. Shah | ||||||||||||||
/s/ Ashish R. Parikh | Chief Financial Officer (Principal Financial Officer) | February 23, 2022 | ||||||||||||
Ashish R. Parikh | ||||||||||||||
/s/ Michael R. Gillespie | Chief Accounting Officer (Principal Accounting Officer) | February 23, 2022 | ||||||||||||
Michael R. Gillespie | ||||||||||||||
/s/ Donald J. Landry | Trustee | February 23, 2022 | ||||||||||||
Donald J. Landry | ||||||||||||||
/s/ Jackson Hsieh | Trustee | February 23, 2022 | ||||||||||||
Jackson Hsieh | ||||||||||||||
/s/ Thomas J. Hutchison III | Trustee | February 23, 2022 | ||||||||||||
Thomas J. Hutchison III | ||||||||||||||
/s/ Michael A. Leven | Trustee | February 23, 2022 | ||||||||||||
Michael A. Leven | ||||||||||||||
/s/ Dianna F. Morgan | Trustee | February 23, 2022 | ||||||||||||
Dianna F. Morgan | ||||||||||||||
/s/ John M. Sabin | Trustee | February 23, 2022 | ||||||||||||
John M. Sabin |
Name of Entity | Ownership | Jurisdiction of Incorporation or Organization | ||||||
2144 Associates - Hershey (LP) | 1% by Hersha Hospitality Limited Liability Company - Hershey 99% by HHLP | PA | ||||||
2144 Associates - New Columbia | 1% by Hersha Hospitality Limited Liability Company - New Columbia 99% by HHLP | PA | ||||||
2144 Associates - Selinsgrove (LP) | 1% by Hersha Hospitality Limited Liability Company - Selinsgrove 99% by HHLP | PA | ||||||
2801 Roosevelt Development Master Property Owners' Association, Inc. | 100% by HHLP Key West One Associates, LLC | FL | ||||||
2844 Associates, LP | 1% by HH LLC 99% by HHLP | PA | ||||||
3044 Associates, LP | 1% by HH LLC 99% by HHLP | PA | ||||||
3144 Associates, LP | 1% by HH LLC 99% by HHLP | PA | ||||||
320 Pearl Street, Inc. | 100% by HHLP | NY | ||||||
44 Aarti Associates, LP | 1% by HH LLC 99% by HHLP | PA | ||||||
44 Brookline Hotel, LLC | 1% by 44 Brookline Manager, LLC 99% by HHLP | DE | ||||||
44 Brookline Management, LLC | 100% by 44 New England Management Company | DE | ||||||
44 Brookline Manager, LLC | 100% by HHLP | DE | ||||||
44 Delaware One, LLC | 100% by 44 New England Management Company | DE | ||||||
44 Delaware Three, LLC | 100% by 44 New England Management Company | DE | ||||||
44 Duane Street Lessee, LLC | 100% by 44 New England Management Company | NY | ||||||
44 Duane Street, LLC | 100% by HHLP | DE | ||||||
44 Frederick Associates, LP | 1% by HH LLC 99% by HHLP | PA | ||||||
44 LA Westside Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
44 Metro, LLC | 100% by 44 New England Management Company | DE | ||||||
44 New England Management Company | 100% by HHLP | VA | ||||||
44 Smith Street Lessee, LLC | 100% by 44 New England Management Company | NY | ||||||
44 White Plains, LLC | 100% by 44 New England Management Company | DE | ||||||
5444 Associates (LP) | 99% by HHLP 1% by 44 Duane Street, LLC | PA | ||||||
63 RB Holding Company LLC | 100% by Hiren Boston, LLC | MA | ||||||
Affordable Hospitality Associates, LP | 99% by HHLP 1% by Race Street, LLC | PA | ||||||
Brisam Management (DE) LLC | 99% by HHLP 1% by HHLP Brisam 29 Manager, LLC | DE | ||||||
Chimes of Freedom, LLC | 89% by HHLP Liberty Associates, LLC 11% by Of Freedom I, LLC | DE | ||||||
Exit 88 Hotel Manager, LLC | 100% by HHLP | DE | ||||||
Exit 88 Hotel, LLC | 99% by HHLP 1% by Exit 88 Hotel Manager, LLC | CT | ||||||
HCIN NYC Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HCIN NYC Owner, LLC | 100% by Hersha Hospitality Limited Partnership | DE | ||||||
Hersha Conduit Associates, LLC | 100% by HHLP | NY | ||||||
Hersha Holding RC Lessee, LLC | 85% by 44 New England Management Company 15% by GenCom | DE | ||||||
Hersha Holding RC Owner, LLC | 85% by HHLP 15% by GenCom | DE | ||||||
Hersha Hospitality Limited Partnership (“HHLP”) (the “Operating Partnership”) | 86.9% by Hersha Hospitality Trust (General Partnership Interest) 13.1% by Hersha Affiliates (Limited Partnership Interest) | VA |
Name of Entity | Ownership | Jurisdiction of Incorporation or Organization | ||||||
Hersha Hospitality Trust | N/A | MD | ||||||
Hersha Hospitality, LLC (“HH LLC”) | 100% by HHLP | VA | ||||||
HHLP 52nd Associates, LLC | 99% by HHLP 1% by HHLP 52nd Manager, LLC | DE | ||||||
HHLP 52nd Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP 52nd Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Ambrose Associates, LLC | 99% by HHLP 1% by HHLP Ambrose Manager, LLC | DE | ||||||
HHLP Ambrose Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Ambrose Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Annapolis Associates, LLC | 99% by HHLP 1% by HHLP Annapolis Manager, LLC | DE | ||||||
HHLP Annapolis Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Annapolis Liquor Holder, LLC | 98% by 44 New England Management Company 1% by Elizabeth Werner, 1% by Ashish Parikh | DE | ||||||
HHLP Annapolis Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Blue Moon Associates, LLC | 99% by HHLP, 1% by HHLP Blue Moon Manager, LLC | DE | ||||||
HHLP Blue Moon Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Blue Moon Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Boston One, LLC | 100% by HHLP | MA | ||||||
HHLP Boston Seaport Associates, LLC | 99% by HHLP 1% by HHLP Boston Seaport Manager, LLC | DE | ||||||
HHLP Boston Seaport Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Boston Seaport Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Boston Two, LLC | 100% by HHLP | MA | ||||||
HHLP Brisam 29 Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Bulfinch Associates, LLC | 99% by HHLP 1% by HHLP Bulfinch Manager, LLC | DE | ||||||
HHLP Bulfinch Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Bulfinch Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Coconut Grove RC Associates, LLC | 99% by Hersha Holding RC Owner, LLC 1% by HHLP Coconut Grove RC Manager, LLC | DE | ||||||
HHLP Coconut Grove RC Lessee, LLC | 100% by Hersha Holding RC Lessee, LLC | DE | ||||||
HHLP Coconut Grove RC Manager, LLC | 100% by Hersha Holding RC Owner, LLC | DE | ||||||
HHLP Conduit Lessee, LLC | 100% by 44 New England Management Company | NY | ||||||
HHLP DC Convention Center Associates, LLC | 1% by HHLP DC Convention Center Manager, LLC 99% by HHLP | DE | ||||||
HHLP DC Convention Center Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP DC Convention Center Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Georgetown Associates, LLC | 99% by HHLP 1% by HHLP Georgetown Manager, LLC | DE | ||||||
HHLP Georgetown II Associates, LLC | 99% by HHLP 1% by HHLP Georgetown II Manager, LLC | DE | ||||||
HHLP Georgetown II Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Georgetown II Manager, LLC | 100% HHLP | DE | ||||||
HHLP Georgetown Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Georgetown Manager, LLC | 100% HHLP | DE | ||||||
HHLP Harrisburg Friendship GP, LLC | 100% by HHLP | PA | ||||||
HHLP Harrisburg Friendship, LP | 99% by HHLP 1% by HHLP Harrisburg Friendship GP, LLC | PA |
Name of Entity | Ownership | Jurisdiction of Incorporation or Organization | ||||||
HHLP Holdings, LLC | 99.5% by HHLP .5% by Hersha Hospitality Trust | DE | ||||||
HHLP Key West One Associates, LLC | 99% by HHLP 1% by HHLP Key West One Manager, LLC | DE | ||||||
HHLP Key West One Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Key West One Manager, LLC | 100% by HHLP | DE | ||||||
HHLP King of Prussia Associates, LP | 1% by HHLP King of Prussia, Inc. 99% by HHLP | PA | ||||||
HHLP LA Westside Associates, LLC | 1% by HHLP LA Westside Manager LLC 99% by HHLP | DE | ||||||
HHLP LA Westside Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Langhorne One Associates, LP | 1% by HHLP Langhorne One, LLC 99% by HHLP | PA | ||||||
HHLP Langhorne Two Associates, LP | 1% by HHLP Langhorne Two, LLC 99% by HHLP | PA | ||||||
HHLP Liberty Associates, LLC | 100% by HHLP | DE | ||||||
HHLP Liberty Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Malvern Associates 2,LP | 99% by HHLP 1% by HHLP Malvern 2, LLC | PA | ||||||
HHLP Miami Beach Associates, LLC | 1% by HHLP Miami Beach Manager, LLC 99% by HHLP | DE | ||||||
HHLP Miami Beach Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Miami Beach Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Oxford Valley Associates, LP | 1% by HHLP Oxford Valley, Inc. 99% by HHLP | PA | ||||||
HHLP Rittenhouse Associates, LLC | 99% by HHLP 1% by HHLP Rittenhouse Manager, LLC | DE | ||||||
HHLP Rittenhouse Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Rittenhouse Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Saint Gregory Associates, LLC | 99% by HHLP 1% by HHLP Saint Gregory Manager, LLC | DE | ||||||
HHLP Saint Gregory Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Saint Gregory Manager, LLC | 100% by HHLP | DE | ||||||
HHLP San Diego Associates, LLC | 99% by HHLP 1% by HHLPSan Diego Manager, LLC | DE | ||||||
HHLP San Diego Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP San Diego Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Sanctuary Associates, LLC | 99% by HHLP 1% by HHLP Sanctuary Manager, LLC | DE | ||||||
HHLP Sanctuary Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Sanctuary Manager, LLC | 100% HHLP | DE | ||||||
HHLP Santa Barbara I Associates, LLC | 99% by HHLP, 1% by HHLP Santa Barbara I Manager, LLC | DE | ||||||
HHLP Santa Barbara I Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Santa Barbara I Manager, LLC | 100% by HHLP | DE | ||||||
HHLP SB Three Associates LLC | 100% by HHLP | DE | ||||||
HHLP Seattle Associates, LLC | 99% by HHLP 1% by HHLP Seattle Manager, LLC | DE | ||||||
HHLP Seattle Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Seattle Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Smith Street Associates, LLC | 100% by HHLP Smith Street Holding, LLC | NY | ||||||
HHLP Smith Street Holding, LLC | 99% by HHLP 1% by HHLP Smith Street Managing Member, LLC | NY | ||||||
HHLP Smith Street Managing Member, LLC | 100% by HHLP | NY |
Name of Entity | Ownership | Jurisdiction of Incorporation or Organization | ||||||
HHLP Sunny Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Sunny Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Sunnyvale TPS Associates, LLC | 99% by HHLP 1% by HHLP Sunnyvale TPS Manager, LLC | DE | ||||||
HHLP Sunnyvale TPS Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Sunnyvale TPS Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Union Square Associates, LLC | 100% by HHLP | DE | ||||||
HHLP Union Square Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Union Square Manager, LLC | 100% by HHLP | DE | ||||||
HHLP Valley Forge Associates (LP) | 1% by HH LLC 99% by HHLP | PA | ||||||
HHLP White Plains Associates, LLC | 100% by HHLP | DE | ||||||
HHLP Winter Haven Associates, LLC | 99% by HHLP, 1% by HHLP Winterhaven Manager, LLC | DE | ||||||
HHLP Winter Haven Lessee, LLC | 100% by 44 New England Management Company | DE | ||||||
HHLP Winter Haven Manager, LLC | 100% by HHLP | DE | ||||||
HHLP York Street, LLC | 100% by HHLP | DE | ||||||
Hiren Boston, LLC | 49.9% by HHLP Boston One, LLC 50.1% by third parties | MA | ||||||
HT-Exit 88 Hotel TRS, LLC | 100% by 44 New England Management Company | DE | ||||||
Market 8 Hotel Associates GP, LLC | 100% by 44 New England Management Company | DE | ||||||
Metro 29th Sublessee, LLC | 100% by 44 New England Management Company | NY | ||||||
Metro JFK Associates, LLC | 1% by Metro JFK Managing Member, LLC 99%by HHLP | NY | ||||||
Metro JFK Managing Member, LLC | 100% by HHLP | NY | ||||||
Of Freedom I, LLC | 100% by HHLP Liberty Associates, LLC | DE | ||||||
Philly One TRS, LLC | 100% by 44 New England Management Company | PA | ||||||
Race Street, LLC | 100% by HHLP | PA | ||||||
Risingsam Hospitality, LLC | 99% by HHLP 1% by Hersha Conduit Associates, LLC | NY | ||||||
SB Partners Three Lessee, LLC | 50% by 44 New England Management Company 50% by JHM SB Three Member LLC | DE | ||||||
SB Partners Three, LLC | 50% by HHLP SB Three Associates, LLC 50% by JHM SB Three Member LLC | DE | ||||||
SB Partners, LLC | 49.9% by HHLP Boston Two, LLC 50.1% by third parties | MA | ||||||
Seaport Hospitality, LLC | 99% by HHLP 1% 320 Pearl Street, Inc. | NY | ||||||
Seaport TRS, LLC | 100% by 44 New England Management Company | DE | ||||||
South Bay Boston, LLC | 49.9% by 44 New England Management Company 50.1% by third parties | MA | ||||||
South Bay Sandeep, LLC | 100% by SB Partners, LLC | MA | ||||||
The Tower and Executive Residences | 100% HHLP Coconut Grove RC Associates, LLC | FL | ||||||
The Village on Roosevelt Property Owners' Association, Inc. | 100% by HHLP Key West One Associates, LLC | FL | ||||||
York Street Lessee DE, LLC | 100% by 44 New England Management Company | DE | ||||||
York Street LLC | 100% by HHLP York Street, LLC | DE |
Date: February 23, 2022 | |||||
/s/ Jay H. Shah | |||||
Jay H. Shah | |||||
Chief Executive Officer |
Date: February 23, 2022 | |||||
/s/ Ashish R. Parikh | |||||
Ashish R. Parikh | |||||
Chief Financial Officer |
February 23, 2022 | /s/ Jay H. Shah | ||||
Jay H. Shah | |||||
Chief Executive Officer |
February 23, 2022 | /s/ Ashish R. Parikh | ||||
Ashish R. Parikh | |||||
Chief Financial Officer |
Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Firm ID | 185 |
Auditor Location | Philadelphia, Pennsylvania |
Consolidated Statements Of Operations - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
||||||
Operating Expenses: | |||||||||
Other Revenues | $ 123 | $ 217 | $ 292 | ||||||
Total Revenues | 295,989 | 176,660 | 529,960 | ||||||
Hotel Ground Rent | 4,400 | 4,301 | 4,581 | ||||||
Real Estate and Personal Property Taxes and Property Insurance | 36,787 | 40,928 | 38,601 | ||||||
General and Administrative (including Share Based Payments of $12,033, $9,488, and $10,803 for the years ended December 31, 2021, 2020, and 2019, respectively) | 23,027 | 20,078 | 26,431 | ||||||
Acquisition and Terminated Transaction Costs | 391 | 4,419 | 0 | ||||||
Loss on Impairment of Assets | 222 | 1,069 | 0 | ||||||
Depreciation and Amortization | 83,309 | 96,958 | 96,529 | ||||||
Insurance Recoveries in Excess of Property Loss | (711) | (8,960) | 12 | ||||||
Total Operating Expenses | 325,581 | 299,049 | 483,590 | ||||||
Operating (Loss) Income | (29,592) | (122,389) | 46,370 | ||||||
Interest Income | 15 | 39 | 253 | ||||||
Interest Expense | (57,549) | (53,279) | (52,205) | ||||||
Other Income (Expense) | 128 | (522) | (584) | ||||||
Gain on Disposition of Hotel Properties | 48,352 | 1,158 | 0 | ||||||
Loss on Debt Extinguishment | (3,069) | 0 | (280) | ||||||
Loss Before Results from Unconsolidated Joint Venture Investments and Income Taxes | (41,715) | (174,993) | (6,446) | ||||||
(Loss) Income from Unconsolidated Joint Venture Investments | $ (434) | (2,292) | (2,938) | 691 | |||||
Loss Before Income Taxes | (13,481) | (44,007) | (177,931) | (5,755) | |||||
Income Tax Expense | (999) | (838) | (11,329) | (92) | |||||
Net Loss | (14,480) | (44,845) | (189,260) | (5,847) | |||||
Preferred Distributions | (6,043) | (24,174) | (24,176) | (24,174) | |||||
Net Loss Applicable to Common Shareholders | $ (18,841) | $ (64,347) | $ (190,521) | $ (27,843) | |||||
BASIC | |||||||||
(Loss) Income from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (0.48) | $ (1.65) | $ (4.93) | $ (0.74) | |||||
DILUTED | |||||||||
(Loss) Income from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (0.48) | $ (1.65) | $ (4.93) | $ (0.74) | |||||
Weighted Average Common Shares Outstanding: | |||||||||
Basic (in shares) | 39,149,120 | 39,089,987 | 38,613,563 | 38,907,894 | |||||
Diluted (in shares) | 39,149,120 | 39,089,987 | [1] | 38,613,563 | [1] | 38,907,894 | [1] | ||
Noncontrolling Interest | |||||||||
Operating Expenses: | |||||||||
Net Loss | $ (19,698) | ||||||||
Noncontrolling Interest | Consolidated joint venture | |||||||||
Operating Expenses: | |||||||||
(Income) Loss Allocated to Noncontrolling Interests | $ (2,152) | 3,217 | $ (188) | ||||||
Common Shares | Noncontrolling Interest | |||||||||
Operating Expenses: | |||||||||
(Income) Loss Allocated to Noncontrolling Interests | 6,824 | 19,698 | 2,366 | ||||||
Net Loss | $ (6,824) | (2,366) | |||||||
Room | |||||||||
Revenue: | |||||||||
Hotel Operating Revenues: | 73,797 | 237,988 | 142,260 | 424,698 | |||||
Operating Expenses: | |||||||||
Hotel Operating Expenses: | 15,631 | 51,885 | 38,787 | 93,488 | |||||
Food & Beverage | |||||||||
Revenue: | |||||||||
Hotel Operating Revenues: | 11,858 | 31,778 | 15,418 | 65,379 | |||||
Operating Expenses: | |||||||||
Hotel Operating Expenses: | 9,351 | 24,756 | 16,199 | 52,820 | |||||
Other | |||||||||
Revenue: | |||||||||
Hotel Operating Revenues: | 7,768 | 26,100 | 18,765 | 39,591 | |||||
Operating Expenses: | |||||||||
Hotel Operating Expenses: | $ 29,695 | $ 101,515 | $ 85,270 | $ 171,128 | |||||
|
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||
Net Loss | $ (44,845) | $ (189,260) | $ (5,847) |
Other Comprehensive Income (Loss) | |||
Change in Fair Value of Derivative Instruments | 17,980 | (26,431) | (4,502) |
Less: Reclassification Adjustment for Change in Fair Value of Derivative Instruments Included in Net Income | 366 | 4,083 | 1,007 |
Total Other Comprehensive Income (Loss) | 18,346 | (22,348) | (3,495) |
Comprehensive Loss | (26,499) | (211,608) | (9,342) |
Less: Comprehensive Loss Applicable to Noncontrolling Interests - Common Units | 5,006 | 21,761 | 2,644 |
Less: Comprehensive (Income) Loss Applicable to Noncontrolling Interests - Consolidated Joint Venture | (2,152) | 3,217 | (188) |
Less: Preferred Distributions | (24,174) | (24,176) | (24,174) |
Comprehensive Loss Applicable to Common Shareholders | $ (47,819) | $ (210,806) | $ (31,060) |
Consolidated Statements Of Equity (Parenthetical) |
12 Months Ended |
---|---|
Dec. 31, 2019
$ / shares
| |
Dividends [Abstract] | |
Common shares, dividends declared (in dollars per share) | $ 1.12 |
Common units, distributions declared (in dollars per share) | 1.12 |
LTIP units, distribution per unit (in dollars per share) | $ 1.12 |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Hersha Hospitality Trust (“we” or the “Company”) was formed in May 1998 as a self-administered, Maryland real estate investment trust. We have elected to be taxed and expect to continue to elect to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. The Company owns a controlling general partnership interest in Hersha Hospitality Limited Partnership (“HHLP” or the “Partnership”), which owns a 99% limited partnership interest in various subsidiary partnerships. Hersha Hospitality, LLC (“HHLLC”), a Virginia limited liability company, owns a 1% general partnership interest in the subsidiary partnerships and the Partnership is the sole member of HHLLC. The Partnership owns a taxable REIT subsidiary (“TRS”), 44 New England Management Company (“44 New England” or “TRS Lessee”), which leases certain of the Company’s hotels. Hersha’s common shares of beneficial interest trade on the New York Stock Exchange (“the NYSE”) under the ticker symbol "HT," its 6.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest trade on the NYSE under the ticker symbol “HT PRC,” its 6.500% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest trade on the NYSE under the ticker symbol “HT PRD,” and it’s 6.500% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest trade on the NYSE under the ticker symbol “HT PRE.” As of December 31, 2021, the Company, through the Partnership and subsidiary partnerships, wholly owned 32 limited and full service hotels. All of the wholly owned hotel facilities are leased to the Company’s TRS, 44 New England. In addition to the wholly owned hotel properties, as of December 31, 2021, the Company owned a consolidated joint venture interest in one property and an unconsolidated joint venture interest in three properties. The properties owned by the joint ventures are leased to a TRS owned by the joint venture or to an entity owned by the joint venture partners and 44 New England. The following table lists the properties owned by these joint ventures:
Our properties are managed by eligible independent management companies, including Hersha Hospitality Management, LP (“HHMLP”). HHMLP is owned in part by certain of our trustees and executive officers and other unaffiliated third party investors as defined by the Internal Revenue Code. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and include all of our accounts as well as accounts of the Partnership, subsidiary partnerships and our wholly owned TRS Lessee. All significant inter-company amounts have been eliminated. Consolidated properties are either wholly owned or owned less than 100% by the Partnership and are controlled by the Company as general partner of the Partnership. Properties owned in joint ventures are also evaluated for consolidation. Entities are consolidated if the determination is made that we are the primary beneficiary in a variable interest entity ("VIE") or we maintain control of the asset through our voting interest or other rights in the operation of the entity. To determine if we are the primary beneficiary of a VIE, we evaluate whether we have a controlling financial interest in that VIE. An enterprise is deemed to have a controlling financial interest if it has i) the power to direct the activities of a variable interest entity that most significantly impacts the entity’s economic performance, and ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the rights to receive benefits from the VIE that could be significant to the VIE. Control can also be demonstrated by the ability of a member to manage day-to-day operations, refinance debt and sell the assets of the partnerships without the consent of the other member and the inability of the members to replace the managing member. Based on our examination, the following entities were determined to be VIE’s: HHLP; South Bay Boston, LLC; SB Partners Three Lessee, LLC; Hersha Holding RC Owner, LLC; Hersha Statutory Trust I; and Hersha Statutory Trust II. The Company’s most significant asset is its investment in HHLP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of HHLP. South Bay Boston, LLC and SB Partners Three Lessee, LLC, are consolidated by the respective lessors, the primary beneficiaries. Hersha Holding RC Owner, LLC is the owner entity of the Ritz Carlton Coconut Grove and is a VIE. HHLP is considered the primary beneficiary of the VIE and consolidates the joint venture with the minority owner interest presented as part of redeemable noncontrolling interest within the Consolidated Balance Sheets. Hersha Statutory Trust I and Hersha Statutory Trust II are VIEs but HHLP is not the primary beneficiary in these entities. Accordingly, the accounts of Hersha Statutory Trust I and Hersha Statutory Trust II are not consolidated. Segment Reporting We allocate resources and assess operating performance based on individual hotels and consider each one of our hotels to be an operating segment. No operating segment, individually, meets the threshold for a reportable segment as defined within ASC Topic 280 – Segment Reporting, nor do they fully satisfy the requisite aggregation criteria therein. As a result, the Company does not present separate operating segment information within the Notes to the Consolidated Financial Statements. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Although we believe the assumptions and estimates we made are reasonable and appropriate, as discussed in the applicable sections throughout these Consolidated Financial Statements, different assumptions and estimates could materially impact our reported results. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investment in Hotel Properties Investment purchases of hotel properties and identifiable intangible assets that are not businesses are accounted for as asset acquisitions and recorded at relative fair value based upon total accumulated cost of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. Property and equipment purchased after the hotel acquisition date is recorded at cost. The Company’s investments in hotel properties are carried at cost and are depreciated using the straight-line method over the following estimated useful lives:
Based on the occurrence of certain events or changes in circumstances, we review the recoverability of each hotel property's carrying value. Such events or changes in circumstances include the following: •a significant decrease in the market price of a long-lived asset; •a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; •a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; •an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; •a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and •a current expectation that, it is more likely than not that, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We review our portfolio on an ongoing basis to evaluate the existence of any of the aforementioned events or changes in circumstances that would require us to test for recoverability. In general, our review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value expected, as well as the effects of hotel demand, competition and other factors. Other assumptions used in the review of recoverability include the holding period and expected terminal capitalization rate. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are required to make subjective assessments as to whether there are impairments in the values of our investments in hotel properties. We consider a hotel to be held for sale when management and our independent trustees commit to a plan to sell the property, the property is available for sale, management engages in an active program to locate a buyer for the property and it is probable the sale will be completed within a year of the initiation of the plan to sell. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investment in Unconsolidated Joint Ventures If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a VIE or our voting interest in a voting interest entity, and we have the ability to exercise significant influence over the operating and financial policies of the joint venture, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliates as they occur, limited to the extent of our investment in, advances to and commitments for the investee. Pursuant to our joint venture agreements, allocations of profits and losses of some of our investments in unconsolidated joint ventures may be allocated disproportionately as compared to nominal ownership percentages due to specified preferred return rate thresholds. See Note 3 – Investment in Unconsolidated Joint Ventures for a more detailed explanation of the methodology used in determining the allocation of profits and losses within our joint ventures. The Company periodically reviews the carrying value of its investment in unconsolidated joint ventures to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. When an impairment indicator is present, we will estimate the fair value of the investment. Our estimate of fair value takes into consideration factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. This determination requires significant estimates by management, including the expected cash flows to be generated by the assets owned and operated by the joint venture. To the extent impairment has occurred and the impairment is considered other than temporary, the loss will be measured as the excess of the carrying amount over the fair value of our investment in the unconsolidated joint venture. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand and in banks plus short-term investments with an initial maturity of three months or less when purchased. Escrow Deposits Escrow deposits include reserves for debt service, working capital, real estate taxes, and insurance and reserves for furniture, fixtures, and equipment replacements, as required by certain mortgage debt agreement restrictions and provisions. Hotel Accounts Receivable Hotel accounts receivable consists primarily of meeting and banquet room rental and hotel guest receivables. The Company generally does not require collateral. Ongoing credit evaluations are performed and potential losses from uncollectible accounts are written off against revenue when they are estimated to be uncollectible. Deferred Financing Costs Deferred financing costs are recorded at cost and amortized over the terms of the related indebtedness using the effective interest method. Deferred financing costs associated with our line of credit are recorded within the Other Assets line item in our Consolidated Balance Sheets. Deferred financing costs associated with our term loans, mortgage debt, and unsecured notes are recorded as contra-liabilities within each respective line item on our Consolidated Balance Sheets. All amortization of deferred financing costs is presented within the Interest Expense line on our Consolidated Statements of Operations. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Due from/to Related Parties Due from/to Related Parties represents current receivables and payables resulting from transactions related to hotel management and project management with affiliated entities. Amounts due from related parties result primarily from advances of shared costs incurred. Amounts due to related parties result primarily from hotel management and project management fees incurred. Both due to and due from related parties are generally settled within a period not to exceed one year. Intangible Assets and Liabilities Intangible assets primarily consist of leasehold intangibles for in-place leases at the time of hotel acquisition and deferred franchise fees. The leasehold intangibles are amortized over the remaining lease term. Deferred franchise fees are amortized using the straight-line method over the life of the franchise agreement. Intangible liabilities consist of leasehold intangibles for in-place leases at the time of hotel acquisition. The leasehold intangibles are amortized over the remaining lease term. Intangible liabilities are included in the accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets. Development Project Capitalization We have opportunistically engaged in the development and re-development of hotel assets. We capitalize expenditures related to hotel development projects and renovations, including indirect costs such as interest expense, real estate taxes and utilities related to hotel development projects and renovations. Preferred Shares The Declaration of Trust authorizes our Board of Trustees to classify any unissued preferred shares and to reclassify any previously classified but unissued preferred shares of any series from time to time in one or more series, as authorized by the Board of Trustees. Prior to issuance of shares of each series, the Board of Trustees is required by Maryland REIT Law and our Declaration of Trust to set for each such series, subject to the provisions of our Declaration of Trust regarding the restriction on transfer of shares of beneficial interest, the terms, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each such series. Thus, our Board of Trustees could authorize the issuance of additional preferred shares with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control in us that might involve a premium price for holders of common shares or otherwise be in their best interest. Noncontrolling Interest We define a noncontrolling interest as the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interests are reported on the consolidated balance sheets within equity, but separately from the shareholders’ equity. Revenues, expenses and net income or loss attributable to both the Company and noncontrolling interests are reported on the consolidated statements of operations. Noncontrolling interest in the Partnership represents the limited partner’s proportionate share of the equity of the Partnership. Income (loss) is allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the Partnership during the period. At the end of each reporting period the appropriate adjustments to the income (loss) are made based upon the weighted average percentage ownership of the Partnership during the period. Our ownership interest in the Partnership as of December 31, 2021, 2020 and 2019 was 85.0%, 87.8%, and 90.0%, respectively. Securities that are redeemable for cash or other assets at the option of the holder, or not solely within the control of the issuer, are classified outside of permanent equity in the consolidated balance sheet and have been adjusted to their approximate redemption values, after the attribution of net income or loss. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to noncontrolling interests for which the Company has a choice to settle the contract by delivery of its own shares, the Company considers the guidance in US GAAP to evaluate whether the Company controls the actions or events necessary to issue the maximum number of common shares that could be required to be delivered at the time of settlement of the contract. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) We classify the noncontrolling interests of our common units of limited partnership interest in HHLP ("Common Units"), and Long Term Incentive Plan Units ("LTIP Units") as equity. LTIP Units are a separate class of limited partnership interest in the Operating Partnership that are convertible into Common Units under certain circumstances. In accordance with the partnership agreement of the Partnership, holders of these units may redeem them for cash unless we, in our sole and absolute discretion, elect to issue common shares on a one-for-one basis in lieu of paying cash. Net income or loss attributed to Common Units and LTIP Units, as well as the net income or loss related to the noncontrolling interests of our consolidated variable interest entity, is included in net income or loss in the consolidated statements of operations. Net income or loss attributed to the Common Units, LTIP Units, and the noncontrolling interests of our consolidated joint ventures is excluded from net income or loss applicable to common shareholders in the consolidated statements of operations. Stock Based Compensation We measure the cost of employee service received in exchange for an award of equity instruments based on the grant-date fair value of the award. The compensation cost is amortized on a straight line basis over the period during which an employee is required to provide service in exchange for the award. The compensation cost related to performance awards that are contingent upon market-based criteria being met is recorded at the fair value of the award on the date of the grant and amortized over the performance period. Derivatives and Hedging The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps designated as cash flow hedges limit the Company’s exposure to increased cash payments due to increases in variable interest rates. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Liquidity and Management's Plan Due to the COVID-19 pandemic and the effects of travel restrictions both globally and in the United States, the hospitality industry has experienced drastic drops in demand as a result of government mandates, health official recommendations, corporate policy changes and individual responses. We believe the ongoing effects of the COVID-19 pandemic on our operations have had, and will continue to have a material negative impact on our financial results and liquidity, and such negative impact may continue beyond the containment of the pandemic. In February of 2021, we entered into an unsecured notes facility that provided net proceeds of $144,750. The proceeds, along with a portion of the proceeds from asset sales, were used to repay amounts outstanding under our senior secured credit facility and our secured term loans and allowed us to negotiate amendments to this senior facility. The amendments to the senior secured credit facility and secured term loans eliminated term loan maturities until August of 2022, waived all financial covenants through March 31, 2022, established accommodative covenant testing methodology through December 31, 2022, enabled the Company to pay down the accrual of the Company's preferred dividends, allow the ongoing preferred dividend accrual to be kept current, and provided additional liquidity to be used at the Company's discretion. Two of our secured term loans totaling $218,635, as well as our Line of Credit, which has $118,684 drawn as of December 31, 2021, will mature in August of 2022. In addition, it is possible that we could breach certain of our Credit Agreement covenants in 2022, which could lead to potential acceleration of amounts due under our Credit Agreements. Management intends to explore options including, but not limited to, additional asset sales, the refinancing of debt and the offering of equity or equity-linked securities prior to the maturity of these term loans in August of 2022, or an event of default. Currently the markets for financing and refinancing similar loans are open and absent an event that would impact the markets broadly, the Company believes that we will be able to refinance this debt or obtain a waiver prior to a default. However, given the unpredictable nature of the recovery from the impact of COVID-19, there can be no assurance that we will be able to obtain a waiver or amendment in a timely manner, or on acceptable terms, if at all. The failure to obtain a waiver or amendment, or otherwise repay the debt, could lead to an event of default, which would have a material adverse effect on our financial condition, which gives rise to substantial doubt about our ability to continue as a going concern. We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because the lodging industry has not previously experienced such an abrupt and drastic reduction in hotel demand, and as a consequence, our ability to be predictive is uncertain. In addition, the magnitude, duration, and speed of the pandemic is uncertain and we cannot estimate when travel demand will recover. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenue Recognition We recognize revenue for all consolidated hotels as hotel operating revenue when earned. Revenues are recorded net of any sales or occupancy tax collected from our guests. We participate in frequent guest programs sponsored by the brand owners of our hotels and we expense the charges associated with those programs, as incurred. Hotel operating revenues are disaggregated on the face of the consolidated statement of operations into the categories of rooms revenue, food and beverage revenue, and other to demonstrate how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows. Room revenue is generated through contracts with customers whereby the customers agree to pay a daily rate for right to use a hotel room. The customer is provided the room and revenue is recognized daily at the contract rate. Payment from the customer is generally secured at the end of the contract upon check-out by the customer from our hotel. The Company records advanced deposits when a customer or group of customers provides a deposit for a future stay at our hotels. Advanced deposits for room revenue are included in the balance of Accounts Payable, Accrued Expenses and Other Liabilities on the Consolidated Balance Sheet. Advanced deposits are recognized as revenue at the time of the guest's stay. The Company notes no significant judgments regarding the recognition of room revenue. Food and beverage revenue is generated through contracts with customers whereby the customer agrees to pay a contract rate for restaurant dining services or banquet services. The Company's contract performance obligations are fulfilled at the time that the meal is provided to the customer or when the banquet facilities and related dining amenities are provided to the customer. The Company recognizes food and beverage revenue upon the fulfillment of the contract with the customer. The Company records contract liabilities in the form of advanced deposits when a customer or group of customers provides a deposit for a future banquet event at our hotels. Advanced deposits for food and beverage revenue are included in the balance of Accounts Payable, Accrued Expenses and Other Liabilities on the Consolidated Balance Sheet. Advanced deposits for banquet services are recognized as revenue following the completion of the banquet services. The Company notes no significant judgments regarding the recognition of food and beverage revenue. Other revenues consist primarily of fees earned for asset management services provided to hotels we own through unconsolidated joint ventures. Fees are earned as a percentage of hotel revenue and are recorded in the period earned to the extent of the noncontrolling interest ownership. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes The Company has elected to be taxed as a REIT under applicable provisions of the Internal Revenue Code of 1986, as amended, or the Code, and intends to continue to qualify as a REIT. In general, under such provisions, a trust which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, will not be subject to federal income tax to the extent of the income which it distributes. Earnings and profits, which determine the taxability of dividends to shareholders, differ from net income reported for financial reporting purposes due primarily to differences in depreciation of hotel properties for federal income tax purposes. Deferred income taxes relate primarily to the TRS Lessee and are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS Lessee and their respective tax bases and for their operating loss and tax credit carry forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors. The Company may recognize a tax benefit from an uncertain tax position when it is more-likely-than-not (defined as a likelihood of more than 50%) that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. If a tax position does not meet the more-likely-than-not recognition threshold, despite the Company’s belief that its filing position is supportable, the benefit of that tax position is not recognized in the statements of operations. The Company recognizes interest and penalties, as applicable, related to unrecognized tax benefits as a component of income tax expense. The Company recognizes unrecognized tax benefits in the period that the uncertainty is eliminated by either affirmative agreement of the uncertain tax position by the applicable taxing authority, or by expiration of the applicable statute of limitation. For the years ended December 31, 2021, 2020 and 2019, the Company did not record any uncertain tax positions. As of December 31, 2021, with few exceptions, the Company is subject to tax examinations by federal, state, and local income tax authorities for years 2003 through 2021. New Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued 2021-01, Reference Rate Reform (Topic 848), Scope, which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. As a result of identified structural risks of interbank offered rates, in particular, the London Interbank Offered Rate (LIBOR), reference rate reform is underway to identify alternative reference rates that are more observable or transaction based. The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The provisions of these updates that will most likely affect our financial reporting process related to modifications of contracts with lenders and the related hedging contracts associated with each respective modified borrowing contract. In general, the provisions of these updates would impact the Company by allowing, among other things, the following: •Allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 470 to be accounted for as a non-substantial modification and not be considered a debt extinguishment. •Allowing a change to contractual terms of a hedging instrument in conjunction with reference rate reform to not require a dedesignation of the hedging relationship. •Allowing a change to the interest rate used for margining, discounting, or contract price alignment for a derivative that is a cash flow hedge to not be considered a change to the critical terms of the hedge and will not require a dedesignation of the hedging relationship. We have not entered into any contract modifications yet, as it directly relates to reference rate reform but we anticipate having to undertake such modifications in the future as a majority of our contracts with lenders and hedging counterparties are indexed to LIBOR. Some debt contract modifications will occur in the normal course of business and will include other changes in the terms, for which we do not anticipate that this accounting relief will be applicable. However, we anticipate that other debt contract modifications will occur prior to the phase of LIBOR on June 30, 2023 specifically to address the LIBOR transition, for which we will be able to apply the accounting relief.
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INVESTMENT IN HOTEL PROPERTIES |
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INVESTMENT IN HOTEL PROPERTIES | INVESTMENT IN HOTEL PROPERTIES Investment in hotel properties consists of the following at December 31, 2021 and December 31, 2020:
*The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $39,577 and $42,487 at December 31, 2021 and December 31, 2020, respectively. Depreciation expense on hotel properties was $82,668, $96,216 and $95,673 for the years ended December 31, 2021, 2020 and 2019, respectively. During the years ended December 31, 2021 and December 31, 2020, we acquired no hotel properties. Property Damage from Natural Disaster During September 2017, all six of our hotels located in South Florida incurred property damage and an interruption of business operations as a result of Hurricane Irma. During the year ended December 31, 2020, we closed our remaining open claim and recorded a net gain in excess of estimated insurance recoveries of $8,147. During the year ended December 31, 2021, we received net proceeds of $961 for a business interruption claim as a result of COVID-19. NOTE 2 – INVESTMENT IN HOTEL PROPERTIES (CONTINUED) Hotel Dispositions During the years ended December 31, 2020 and December 31, 2021, we had the following hotel dispositions:
(1) During 2020, the Company determined that the carrying value of the Duane Street hotel exceeded the anticipated net proceeds from sale, resulting in a $1,069 impairment charge recorded during the year ended December 31, 2020. We recorded an additional impairment charge of $147 prior to the disposition of the hotel property during the year ended December 31, 2021. Assets Held For Sale We classified the assets of the Duane Street Hotel, the Residence Inn Coconut Grove and the Courtyard San Diego as held for sale as of December 31, 2020. The sales of these hotels closed during the year ended December 31, 2021. The table below shows the balances for the properties that were classified as assets held for sale as of December 31, 2020:
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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES |
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Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES | INVESTMENT IN UNCONSOLIDATED JOINT VENTURES As of December 31, 2021 and December 31, 2020 our investment in unconsolidated joint ventures consisted of the following:
*On February 7, 2021, all of the assets of the properties owned by this joint venture were transferred to the mezzanine lender of Cindat Hersha Owner JV, LLC. As a result, upon dissolution of the venture, we no longer maintain an interest in this venture. Effective August 1, 2021, HHLP entered into Asset Management Agreements with the joint venture investments at the Courtyard by Marriott, South Boston, Holiday Inn Express, South Boston, and Home2 Suites, South Boston properties whereby it provides asset management services. Fees for these services are calculated as 1.0% of operating revenues, which we recognize as income in other revenues on the consolidated statement of operations. Income/Loss Allocation Prior to February 7, 2021, based on the income allocation methodology within Cindat Hersha Owner JV, LLC, the Company had absorbed cumulative losses equal to our accounting basis in the joint venture resulting in a $0 investment balance in the table above as of December 31, 2021 and December 31, 2020. For SB Partners, LLC, Hiren Boston, LLC, and SB Partners Three, LLC, income or loss is allocated to us and our joint venture partners consistent with the allocation of cash distributions in accordance with the joint venture agreements. This results in an income allocation consistent with our percentage of ownership interests. When we absorb cumulative losses equal to our accounting basis in the joint venture, our investment balance is $0 as presented in the table above. Any difference between the carrying amount of any of our investments noted above and the underlying equity in net assets is amortized over the expected useful lives of the properties and other intangible assets. NOTE 3 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (CONTINUED) Loss (income) recognized during the years ended December 31, 2021, 2020 and 2019, for our investments in unconsolidated joint ventures is as follows:
The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of December 31, 2021 and December 31, 2020 and for the years ended December 31, 2021, 2020 and 2019.
NOTE 3 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (CONTINUED) The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of December 31, 2021 and December 31, 2020.
(1) Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following: •the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements; •accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Income (Loss) from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and •cumulative impairment of our investment in joint ventures not reflected on the joint ventures' financial statements, if any.
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OTHER ASSETS | OTHER ASSETS Other Assets Other Assets consisted of the following at December 31, 2021 and December 31, 2020:
Derivative Asset - This category represents the Company’s gross asset fair value of interest rate swaps and interest rate caps. Any swaps and caps resulting in a liability to the Company are accounted for separately within Other Liabilities on the Balance Sheet. Deferred Financing Costs - This category represents financing costs paid by the Company to establish our Line of Credit. These costs have been capitalized and will amortize to interest expense over the life of the Line of Credit. Prepaid Expenses - Prepaid expenses include amounts paid for property tax, insurance and other expenditures that will be expensed in the next twelve months. Investment in Statutory Trusts - We have an investment in the common stock of Hersha Statutory Trust I and Hersha Statutory Trust II. Our investment is accounted for under the equity method. Investment in Non-Hotel Property and Inventories - This category represents the costs paid and capitalized by the Company for items such as office leasehold improvements, furniture and equipment, and property inventories. Deposits with Unaffiliated Third Parties - These deposits represent deposits made by the Company with unaffiliated third parties for items such as lease security deposits, utility deposits, and deposits with unaffiliated third party management companies. Deferred Tax Asset - We have $0 of net deferred tax assets as of December 31, 2021. We have considered various factors, including future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies in determining a valuation allowance for our deferred tax assets, and we believe that it is more likely than not that we will not be able to realize the net deferred tax assets in the future, and a valuation allowance for the entire deferred tax asset has been recorded.
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DEBT | DEBT Mortgages Mortgages payable at December 31, 2021 and December 31, 2020 consisted of the following:
Net Unamortized Deferred Financing Costs associated with entering into mortgage indebtedness are deferred and amortized over the life of the mortgages. Net Unamortized Premiums are also amortized over the remaining life of the loans. Mortgage indebtedness balances are subject to fixed and variable interest rates, which ranged from 2.75% to 5.05% as of December 31, 2021. Our mortgage indebtedness contains various financial and non-financial covenants customarily found in secured, non-recourse financing arrangements. Our mortgage loans payable typically require that specified debt service coverage ratios be maintained with respect to the financed properties before we can exercise certain rights under the loan agreements relating to such properties. If the specified criteria are not satisfied, the lender may be able to escrow cash flow generated by the property securing the applicable mortgage loan. We have determined that all debt covenants contained in the loan agreements securing our consolidated hotel properties with the exception of one mortgage was met as of December 31, 2021. The lender of this mortgage has elected its right to escrow property level cash flow for the purpose of meeting future payment obligations. As of December 31, 2021, the maturity dates for the outstanding mortgage loans ranged from December 2022 to September 2025. During the year ended December 31, 2021, we refinanced the outstanding mortgages secured by the Hilton Garden Inn 52nd Street, the Courtyard Los Angeles Westside, the Hilton Garden Inn Tribeca, the Hyatt Union Square, and the St. Gregory Hotel, which resulted in $90 of debt modification expense. NOTE 5 – DEBT (CONTINUED) Credit Facilities We maintain three secured credit agreements which aggregate to $747,481 with Citigroup Global Markets Inc., Wells Fargo Bank, Inc. and various other lenders. One credit agreement ("Credit Agreement") provides for a senior secured credit facility of $442,404 (“Credit Facility”). The Credit Facility consists of a $250,000 senior secured revolving line of credit (“Line of Credit”), and a $192,404 senior secured term loan (“First Term Loan”). The Credit Facility expires on August 10, 2022. We maintain another credit agreement which provides for a $278,846 senior secured loan agreement (“Second Term Loan”) and expires on September 10, 2024. A separate credit agreement provides for a $26,231 senior secured term loan agreement (“Third Term Loan” and collectively with the Credit Agreement and the Second Term Loan, the "Credit Agreements") and expires on August 10, 2022. Management intends to explore options including, but not limited to, additional asset sales, the refinancing of debt and the offering of equity or equity-linked securities prior to the maturity of the First Term Loan and the Third Term Loan on August 10, 2022. On February 17, 2021, the Company signed amendments to the Credit Agreements which resulted in debt extinguishment expense $2,977. Debt extinguishment expense consists of $635 of debt extinguishment losses and $2,342 of debt modification losses. The signed amendments to the Credit Agreements, among other things, provide for: •an extension of the maturity date of the Third Term Loan to August 10, 2022; •a limited waiver of financial covenants through March 31, 2022; and •the ability to borrow up to $174,729, inclusive of amounts already outstanding, under the Line of Credit, the proceeds of which may only be used to fund certain costs and expenses. Certain conditions, such as minimum liquid assets in an aggregate amount of at least $30,000, and certain negative covenants and restrictions that are considered normal and customary, must be met on a recurring basis as outlined within the amendments. The amendments to the Credit Agreements make certain other amendments to financial covenants in place beginning in the second quarter of 2022: •a fixed charge coverage ratio of not less than 1.20 to 1.00 (was 1.50 to 1.00); •a maximum leverage ratio of not more than 65% (was 60%); and •a new financial covenant that requires the borrowing base leverage ratio to not exceed 60% at any time. NOTE 5 – DEBT (CONTINUED) The amount that we can borrow at any given time under our Line of Credit, and the First, Second and Third Term Loan (each a “Term Loan” and together the “Term Loans”) is governed by certain operating metrics of designated unencumbered hotel properties known as borrowing base assets. As of December 31, 2021, the following hotel properties were borrowing base assets:
The interest rate for borrowings under the Line of Credit and Term Loans are based on a pricing grid with a range of one month U.S. LIBOR plus a spread. The following table summarizes the balances outstanding and interest rate spread for each borrowing:
Prior to the amendments noted above, the Credit Facility and the Term Loans included certain financial covenants and required that we maintain: (1) a minimum tangible net worth (calculated as total assets, plus accumulated depreciation, less total liabilities, intangibles and other defined adjustments) of $1,119,500, plus an amount equal to 75% of the net cash proceeds of all issuances and primary sales of equity interests of the parent guarantor or any of its subsidiaries consummated following the closing date; (2) annual distributions not to exceed 95% of adjusted funds from operations; and (3) certain financial ratios, including the following: •a fixed charge coverage ratio of not less than 1.50 to 1.00; •a maximum leverage ratio of not more than 60%; and •a maximum secured debt leverage ratio of 45%. The weighted average interest rate on our credit facilities was 3.69%, 4.07% and 4.11% for the years ended December 31, 2021, 2020 and 2019, respectively. NOTE 5 – DEBT (CONTINUED) Notes Payable Notes payable at December 31, 2021 and December 31, 2020 consisted of the following:
Statutory Trust I and Statutory Trust II Notes Payable We have two junior subordinated notes payable in the aggregate amount of $51,548 to the Hersha Statutory Trusts pursuant to indenture agreements which will mature on July 30, 2035, but may be redeemed at our option, in whole or in part, prior to maturity in accordance with the provisions of the indenture agreements. The $25,774 notes issued to Hersha Statutory Trust I and Hersha Statutory Trust II, bear interest at a variable rate of LIBOR plus 3% per annum. This rate resets business days prior to each quarterly payment. The weighted average interest rate on our two junior subordinated notes payable during the years ended December 31, 2021, 2020 and 2019 was 3.21%, 3.95% and 5.50%, respectively. Junior Notes Payable On February 17, 2021, the Company entered into a note purchase agreement (the “Purchase Agreement”) with several purchasers (the “Purchasers”). The Company issued and sold to the Purchasers $150,000 aggregate principal amount of the Company’s 9.50% Unsecured PIK Toggle Notes due 2026 (the “Notes”) on February 23, 2021. The Notes will mature on February 23, 2026. The Notes bear interest at a rate of 9.50% per year, payable in arrears on June 30, September 30, December 31 and March 31 of each year, beginning on June 30, 2021. For any interest period ending on or prior to March 31, 2022, the Company, in our sole discretion, may elect to pay interest (a) in cash at a rate per annum equal to 4.75% per annum, and (b) in kind at a rate per annum equal to 4.75% per annum (“PIK Interest”). Any PIK Interest will be paid by increasing the principal amount of the Notes at the end of the applicable interest period by the amount of such PIK Interest. We elected the PIK Interest option for the interest periods ended June 30, 2021, September 30, 2021, and December 31, 2021 increasing the principal balance by $6,239 to $156,239 as of December 31, 2021. We have elected the PIK Interest option for the interest period ended March 31, 2022, which is the last period that the option is available to us. The Notes may not be redeemed prior to February 23, 2022. The notes may be redeemed during the 12 month period beginning February 23, 2022 and the 12 month period beginning February 23, 2023, at a redemption price equal to 104% and 102% of the principal amount of the Notes being redeemed, respectively. After February 23, 2024, the notes may be redeemed at the principal amount. The Notes are subject to representations, warranties, covenants, terms and conditions customary for transactions of this type, including limitations on liens, incurrence of debt, investments, mergers and asset dispositions, covenants to preserve corporate existence and comply with laws and default provisions. The Company may only use the net proceeds from the issuance of the Notes in accordance with the mandatory prepayment waterfalls, which includes the repayment of outstanding borrowings under the Credit Agreement and use for certain other general corporate purposes. NOTE 5 – DEBT (CONTINUED) Debt Maturities Aggregate annual principal payments for the Company’s credit facility and secured term loans, as amended, mortgages, Statutory Trust I and Statutory Trust II notes, and Junior notes payable for the five years following December 31, 2021 and thereafter are as follows:
Interest Expense The table below shows the interest expense incurred by the Company during the twelve months ended December 31, 2021, 2020, and 2019:
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LEASES |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES We own five hotels within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms, with extension options that range from May 2062 to October 2103. Based on the nature of these leases, the Company assumed that all extension options would be fully executed in the measurement of the right of use assets and lease liabilities. Some of our land leases include variable payments, which are tied to an index such as the consumer price index or include rental payments based partially on the hotel revenues. Lease costs for our land leases are presented as Hotel Ground Rent in the Consolidated Statements of Operations. Two additional office space leases are also factored into the lease liability and are classified as operating leases with terms ranging from March 2023 to December 2027. Our office space leases include variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. Lease costs for our office spaces are included in General and Administrative Expense in the Consolidated Statements of Operations. The components of lease costs for the years ended December 31, 2021, 2020, and 2019 were as follows:
NOTE 6 – LEASES (CONTINUED) Other information related to leases as of and for the years ended December 31, 2021 and 2020 is as follows:
Maturities of lease liabilities as of December 31, 2021 are as follows:
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LEASES | LEASES We own five hotels within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms, with extension options that range from May 2062 to October 2103. Based on the nature of these leases, the Company assumed that all extension options would be fully executed in the measurement of the right of use assets and lease liabilities. Some of our land leases include variable payments, which are tied to an index such as the consumer price index or include rental payments based partially on the hotel revenues. Lease costs for our land leases are presented as Hotel Ground Rent in the Consolidated Statements of Operations. Two additional office space leases are also factored into the lease liability and are classified as operating leases with terms ranging from March 2023 to December 2027. Our office space leases include variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. Lease costs for our office spaces are included in General and Administrative Expense in the Consolidated Statements of Operations. The components of lease costs for the years ended December 31, 2021, 2020, and 2019 were as follows:
NOTE 6 – LEASES (CONTINUED) Other information related to leases as of and for the years ended December 31, 2021 and 2020 is as follows:
Maturities of lease liabilities as of December 31, 2021 are as follows:
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COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS |
12 Months Ended |
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Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS | COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS Management Agreements Our wholly-owned TRS, 44 New England Management Company, and certain of our joint venture entities engage eligible independent contractors in accordance with the requirements for qualification as a REIT under the Internal Revenue Code of 1986, as amended, including Hersha Hospitality Management Limited Partnership (“HHMLP”), as the property managers for hotels it leases from us pursuant to management agreements. Certain executives and trustees of the Company own a minority interest in HHMLP. Our management agreements with HHMLP provide for five-year terms and are subject to early termination upon the occurrence of defaults and certain other events described therein. As required under the REIT qualification rules, HHMLP must qualify as an “eligible independent contractor” during the term of the management agreements. Under the management agreements, HHMLP generally pays the operating expenses of our hotels. All operating expenses or other expenses incurred by HHMLP in performing its authorized duties are reimbursed or borne by our TRS to the extent the operating expenses or other expenses are incurred within the limits of the applicable approved hotel operating budget. HHMLP is not obligated to advance any of its own funds for operating expenses of a hotel or to incur any liability in connection with operating a hotel. Management agreements with other unaffiliated hotel management companies have similar terms. For its services, HHMLP receives a base management fee and, if a hotel exceeds certain thresholds, an incentive management fee. The base management fee for a hotel is due monthly and is equal to 3% of gross revenues associated with each hotel managed for the related month. The incentive management fee, if any, for a hotel is due annually in arrears on the ninetieth day following the end of each fiscal year and is based upon the financial performance of the hotels. For the years ended December 31, 2021, 2020 and 2019, base management fees incurred totaled $7,423, $4,795 and $14,123 respectively, and are recorded as Other Hotel Operating Expenses. For the years ended December 31, 2021, 2020 and 2019, incentive management fees incurred totaled $347, $0 and $161 respectively. Franchise Agreements Our branded hotel properties are operated under franchise agreements assumed by the hotel property lessee. The franchise agreements have 10 to 20 year terms, but may be terminated by either the franchisee or franchisor on certain anniversary dates specified in the agreements. The franchise agreements require annual payments for franchise royalties, reservation, and advertising services, and such payments are based upon percentages of gross room revenue. These payments are paid by the hotels and charged to expense as incurred. Franchise fee expenses for the years ended December 31, 2021, 2020 and 2019 were $11,262, $7,237 and $23,389 respectively, and are recorded in Other Hotel Operating Expenses. The initial fees incurred to enter into the franchise agreements are amortized over the life of the franchise agreements. Accounting, Revenue Management and Information Technology Fees Each of the wholly-owned hotels and consolidated joint venture hotel properties managed by HHMLP incurs a monthly accounting and information technology fee. Monthly fees for accounting services are between $2 and $3 per property and monthly information technology fees range from $1 to $2 per property. For the years ended December 31, 2021, 2020 and 2019, the Company incurred accounting fees of $1,144, $1,298 and $1,261 respectively. For the years ended December 31, 2021, 2020 and 2019, the Company incurred information technology fees of $370, $419 and $402 respectively. For the years ended December 31, 2021, 2020 and 2019, the Company incurred revenue management service fees of $1,635, $1,940 and $3,127. Accounting fees, revenue management fees, and information technology fees are included in Other Hotel Operating Expenses. Capital Expenditure Fees HHMLP charges a 5% fee on certain capital expenditures and pending renovation projects at the properties as compensation for procurement services related to capital expenditures and for project management of renovation projects. For the years ended December 31, 2021, 2020 and 2019, we incurred fees of $509, $1,148 and $2,525 respectively, which were capitalized with the cost of the related capital expenditures. NOTE 7 – COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS (CONTINUED) Acquisitions from Affiliates We have entered into an option agreement with certain of our officers and trustees such that we obtain a right of first refusal to purchase any hotel owned or developed in the future by these individuals or entities controlled by them at fair market value. This right of first refusal would apply to each party until one year after such party ceases to be an officer or trustee of the Company. Our Acquisition Committee of the Board of Trustees is comprised solely of independent trustees, and the purchase prices and all material terms of the purchase of hotels from related parties are approved by the Acquisition Committee. Hotel Supplies For the years ended December 31, 2021, 2020 and 2019, we incurred charges for hotel supplies of $3, $82 and $307 respectively. For the years ended December 31, 2021, 2020 and 2019, we incurred charges for capital expenditure purchases of $1,034, $1,212 and $12,721 respectively. These purchases were made from Hersha Purchasing and Design, a hotel supply company owned, in part, by certain executives and trustees of the Company. Hotel supplies are expensed and included in Hotel Operating Expenses on our consolidated statements of operations, and capital expenditure purchases are included in investment in hotel properties on our consolidated balance sheets. Insurance Services Prior to January 1, 2021, the Company utilized the services of the Hersha Group, a risk management business owned, in part, by certain executives and trustees of the Company. The Hersha Group provided consulting and procurement services to the Company related to the placement of property and casualty insurance, placement of general liability insurance, and for claims handling for our hotel properties. Beginning January 1, 2021, these services were provided by a third-party service provider. The total costs of property insurance that we paid through the Hersha Group were $6,968, and $5,934 for the years ended December 31, 2020 and 2019, respectively. These amounts paid to the Hersha Group include insurance premiums and brokerage fees as compensation for brokerage services. Restaurant Lease Agreements with Independent Restaurant Group The Company has entered into management agreements with Independent Restaurant Group (“IRG”), subject to the supervision of HHMLP, as property manager, for restaurants at three of its hotel properties. Jay H. Shah and Neil H. Shah, executive officers and/or trustees of the Company, collectively own a 70.0% interest in IRG. Management fees incurred to IRG were $163 and $33 for the years ended December 31, 2021 and 2020, respectively. Prior to April 1, 2020, the restaurants at these three hotel properties were leased to IRG under lease agreements which generally provided for the payment of base rents and percentage rents, which were based on IRG’s revenue in excess of defined thresholds. At the time of the conversion of the lease agreements to management agreements, there was rent due of $103, which was forgiven due to the impact of the COVID-19 pandemic on the operations of our hotels and IRG's restaurants. Due From Related Parties The due from related parties balance as of December 31, 2021 and December 31, 2020 was $2,495 and $2,641, respectively. The balances primarily consisted of working capital deposits made to HHMLP and other entities owned, in part, by certain executives and trustees of the Company. Due to Related Parties The balance due to related parties as of December 31, 2021 and December 31, 2020 was $1,723 and $0, respectively. The balance at December 31, 2021 primarily consists of amounts due to HHMLP for monthly management fees discussed above. NOTE 7 – COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS (CONTINUED) Litigation We are not presently subject to any material litigation nor, to our knowledge, is any other litigation threatened against us, other than routine actions for negligence or other claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance and all of which collectively are not expected to have a material adverse effect on our liquidity, results of operations or business or financial condition.
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FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS Fair Value Measurements Our determination of fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, we utilize a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liabilities, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. As of December 31, 2021, the Company’s derivative instruments represented the only financial instruments measured at fair value. Currently, the Company uses derivative instruments, such as interest rate swaps and caps, to manage its interest rate risk. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and the counterparties. However, as of December 31, 2021 we have assessed the significance of the effect of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Derivative Instruments The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps designated as cash flow hedges limit the Company’s exposure to increased cash payments due to increases in variable interest rates. The table on the following page presents our derivative instruments as of December 31, 2021 and 2020. NOTE 8 – FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (CONTINUED)
(1) During the year ended December 31, 2021, we dedesignated this swap as a cash flow hedge and recorded expense of $372 accordingly. The fair value of the interest rate swaps and caps with an asset balance are included in Other Assets and the fair value of the interest rate swaps and caps with a liability balance are included in Accounts Payable, Accrued Expenses and Other Liabilities on our Consolidated Balance Sheets at December 31, 2021 and December 31, 2020. The net change related to derivative instruments designated as cash flow hedges recognized as unrealized gains and losses reflected on our consolidated balance sheet in accumulated other comprehensive income was a gain of $18,346, a loss of $22,348, and a loss of $3,495 for the years ended December 31, 2021, 2020 and 2019, respectively. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate derivatives. The change in net unrealized gains/losses on cash flow hedges reflects a reclassification of $366, $4,083 and $1,007 of net unrealized gains/losses from accumulated other comprehensive income as an increase/decrease to interest expense during 2021, 2020 and 2019, respectively. During 2022, the Company estimates that an additional $6,799 will be reclassified as an increase to interest expense. NOTE 8 – FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (CONTINUED) Fair Value of Debt The Company estimates the fair value of its fixed rate debt and the credit spreads over variable market rates on its variable rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of the debt obligation with similar credit policies. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. As of December 31, 2021, the carrying value and estimated fair value of the Company’s debt were $1,117,873 and $1,146,699, respectively. As of December 31, 2020, the carrying value and estimated fair value of the Company’s debt were $1,196,434 and $1,176,625, respectively.
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SHARE BASED PAYMENTS |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE BASED PAYMENTS | SHARE BASED PAYMENTS We measure the cost of employee service received in exchange for an award of equity instruments based on the grant-date fair value of the award. The compensation cost is amortized on a straight-line basis over the period during which an employee is required to provide service in exchange for the award. The compensation cost related to performance awards that are contingent upon market-based criteria being met is recorded at the fair value of the award on the date of the grant and amortized over the performance period. As discussed in Note 1, forfeitures of share-based awards are expensed as they occur. Our shareholders approved the Hersha Hospitality Trust 2012 Equity Incentive Plan, as amended, (the “2012 Plan”) for the purpose of attracting and retaining executive officers, employees, trustees and other persons and entities that provide services to the Company. Summary of Share Based Compensation Programs Executives The Compensation Committee of our Board of Trustees implements executive compensation strategies that align the interests of the Company’s executives with those of shareholders. It does so through a mix of base salary, the Short Term Incentive Program ("STIP"), and the Long-Term Incentive Program ("LTIP"). The STIP and LTIP are incentive compensation programs that align executive compensation with the performance of the Company. •Short Term Incentive Program - On March 3, 2021, the Compensation Committee approved the 2021 STIP, pursuant to which the executive officers are eligible to earn cash and equity awards based on achieving a threshold, target or maximum level of defined performance objectives at the end of the performance period, December 31, 2021. Any amounts earned are satisfied 50% in cash and 50% in equity awards. The Compensation Committee provided the option to the executive officers to elect equity awards in lieu of cash payment for amounts earned under the 2021 STIP. On December 31, 2021, 960,384 Units were issued to the executive officers in settlement of the 2021 STIP. These Units vest on December 31, 2023, the two year anniversary following the end of the performance period and were determined by dividing the dollar amount of award earned by $9.04, the per share volume weighted average trading price of the Company's common shares on the NYSE for the 20 trading days prior to December 31, 2021. The Company accounts for grants earned under the STIP as performance awards for which the Company assesses the probability of achievement of the performance conditions at the end of each period. Estimates of amounts earned under the STIP are recorded in general and administrative expense on the consolidated statement of operations and a liability is recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. In the case of the 2021 STIP issued on December 31, 2021, please see information on the next page for the presentation for awards upon issuance. •Long Term Incentive Program - On March 3, 2021, the Compensation Committee approved the 2021 LTIP in which 50% of the awards provide for time based vesting and the remaining 50% are issuable based on the Company's achievement of a certain level of (1) absolute total shareholder return (37.5% of the award), (2) relative total shareholder return as compared to the Company’s peer group (37.5% of the award), and (3) relative growth in revenue per available room ("RevPar") compared to the Company’s peer group (25.0% of the award). On March 17, 2021, the Compensation Committee awarded 247,689 LTIP Units related to the time based portion of the plan. These Units will vest over a three year period from January 1, 2021 to December 31, 2023 and were determined by dividing the dollar amount of award earned by $8.43, the per share volume weighted average trading price of the Company's common shares on the NYSE for the 20 trading days prior to December 31, 2020. The 50% market-based portion of the 2021 LTIP has a three-year performance period which commenced on January 1, 2021 and ends December 31, 2023. NOTE 9 – SHARE BASED PAYMENTS (CONTINUED) The Company accounts for the total shareholder return components of these grants as market based awards where the Company estimates unearned compensation at the grant date fair value which is then amortized into compensation cost over the vesting period of each individual plan. The Company accounts for the RevPAR component of the grants as performance-based awards for which the Company assesses the probable achievement of the performance conditions at the end of the reporting period. As of December 31, 2021, no shares or LTIP Units have been issued to the executive officers in settlement of the 2021 market-based LTIP awards. Remaining unearned compensation for LTIP Units issued to executives in settlement of awards under the STIP, LTIP or the Company’s legacy incentive compensation programs is recorded in noncontrolling interests on the Company’s consolidated balance sheets and is amortized in general and administrative expense on the consolidated statement of operations over the remaining vesting period. Trustees To align the interests of the Company’s trustees with those of shareholders, our trustees receive equity as a component of the compensation for their service on our board of trustees. •Share Awards - Trustees receive biennial share awards that vest immediately upon issuance. •Trustee Long Term Incentive Program - Trustees receive grants of restricted shares which vest over a three-year period subject to continued service to the Company’s board of trustees. •Board Fee Compensation Elected in Equity - Trustees can make a voluntary election to receive any portion of their board fee compensation in the form of common equity valued at a 25% premium to the cash that would have been received. Shares issued for board retainer elected in equity vest over the year of service covered by the retainer and shares issued for service as lead director, committee chair and committee membership vest immediately upon issuance. For shares issued that are subject to vesting, unearned compensation is recorded in additional paid in capital on the consolidated balance sheet and is amortized in general and administrative expense on the consolidated statement of operations over the vesting period. Share based compensation for shares issued that immediately vest is recorded in general and administrative expense on the consolidated statement of operations. Employees and Non-Employees Grants of restricted shares are issued to attract, retain and reward employees and non-employees that are critical to the Company’s success. These restricted shares typically vest over a period of between and four years, subject to continued service to the Company. NOTE 9 – SHARE BASED PAYMENTS (CONTINUED) Share Based Compensation Activity A summary of our share based compensation activity from January 1, 2019 to December 31, 2021 is as follows:
NOTE 9 – SHARE BASED PAYMENTS (CONTINUED) The following table summarizes share based compensation expense and unearned compensation for the years ended December 31, 2021, 2020 and 2019 and as of December 31, 2021 and 2020:
The weighted-average period of which the unrecognized compensation expense will be recorded is approximately 1.9 years for LTIP Unit Awards and 1.3 years for Restricted Share Awards. The remaining unvested target units are expected to vest as follows:
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EARNINGS PER SHARE |
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EARNINGS PER SHARE | EARNINGS PER SHARE The following table is a reconciliation of the income or loss (numerator) and the weighted average shares (denominator) used in the calculation of basic and diluted earnings per common share. The computation of basic and diluted earnings per share is presented below.
* Income (loss) allocated to noncontrolling interest in HHLP has been excluded from the numerator and Common Units and Vested LTIP Units have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders.
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CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES |
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CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES | CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES Interest paid during 2021, 2020 and 2019 totaled $34,661, $38,170 and $54,158 respectively. Net Cash paid on Interest Rate Derivative contracts during 2021, 2020 and 2019 totaled $11,822, $7,635 and $(4,336), respectively. Cash paid for income taxes during 2021, 2020 and 2019 was $113, $79 and $53, respectively. The following non-cash investing and financing activities occurred during 2021, 2020 and 2019:
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019:
Amounts included in restricted cash represent those required to be set aside in escrow by contractual agreements with various lenders for the payment of specific items such as property insurance, property tax, and capital expenditures.
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SHAREHOLDERS’ EQUITY, NONCONTROLLING INTERESTS IN PARTNERSHIP, AND REDEEMABLE NON-CONTROLLING INTERESTS |
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SHAREHOLDERS’ EQUITY, NONCONTROLLING INTERESTS IN PARTNERSHIP, AND REDEEMABLE NON-CONTROLLING INTERESTS | SHAREHOLDERS’ EQUITY, NONCONTROLLING INTERESTS IN PARTNERSHIP, AND REDEEMABLE NON-CONTROLLING INTERESTS Common Shares The Company’s outstanding common shares have been duly authorized, and are fully paid and non-assessable. Common shareholders are entitled to receive dividends if and when authorized and declared by the Board of Trustees of the Company out of assets legally available and to share ratably in the assets of the Company legally available for distribution to its shareholders in the event of its liquidation, dissolution or winding up after payment of, or adequate provision for, all known debts and liabilities of the Company. Preferred Shares As of December 31, 2021, we have 14,703,214 Cumulative Redeemable Preferred Shares outstanding consisting of three separate Series issuances. Terms of the Series C, Series D and Series E Preferred Shares outstanding at December 31, 2021 and 2020 are summarized as follows:
(1) We suspended the payment of our preferred dividends in 2020. The total arrearage as of December 31, 2020 of approximately $24,176 was paid on March 26, 2021. During the year ended December 31, 2021, the Company paid cash dividends on the Company's Series C, Series D and Series E cumulative redeemable preferred stock reflecting accrued and unpaid dividends for the dividend periods ended April 15, 2020, July 15, 2020, October 15, 2020 and January 15, 2021. In addition, the Company paid a cash dividend on all Series of cumulative redeemable preferred stock for the dividend periods ending April 15, 2021, July 15, 2021, October 15, 2021, and declared a similar cash dividend for the fourth dividend period ending January 15, 2021, which was paid on January 18, 2022 to holders of record as of December 31, 2021. Our Board of Trustees authorized a share repurchase program for up to $50,000 of common shares which expired on December 31, 2019. For the year ended December 31, 2019, we repurchased 933,436 common shares for an aggregate purchase price of $14,194. Upon repurchase by the Company, these common shares ceased to be outstanding and became authorized but unissued common shares. There was no share repurchase program for the years ended December 31, 2020 and December 31, 2021. Common Units and LTIP Units The noncontrolling interest of Common Units and LTIP Units totaled $50,922 as of December 31, 2021 and $49,246 as of December 31, 2020. As of December 31, 2021, there were 6,926,253 Common Units and LTIP Units collectively outstanding with a fair market value of $63,514, based on the price per share of our common shares on the NYSE on such date. Common Units are issued in connection with the acquisition of wholly owned hotels and joint venture interests in hotel properties. The total number of Common Units outstanding as of December 31, 2021, 2020 and 2019 was 1,835,820, 2,066,615 and 2,066,615, respectively. These units can be redeemed for cash or converted to common shares, at the Company’s option, on a one-for-one basis. The number of common shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of stock splits, mergers, consolidation or similar pro rata share transactions, that otherwise would have the effect of diluting the ownership interest of the limited partners or our shareholders. During December 31, 2021, 241,545 Common Units were converted to common shares, and there were no conversions of Common Units during the years ended December 31, 2020 and December 31, 2019. In addition, as noted in “Note 9 – Share Based Payments,” during 2021, the Company issued 1,774,990 LTIP Units. Redeemable Non-controlling Interest Our joint venture partner has a noncontrolling equity interest of 15% in the Ritz-Carlton Coconut Grove, FL. Hersha Holding RC Owner, LLC, the owner entity of the Ritz-Carlton Coconut Grove joint venture ("Ritz Coconut Grove"), distributes income based on cash available for distribution as follows: (1) to us until we receive a cumulative return on our contributed senior common equity interest, currently at 8%, and (2) then to the owner of the noncontrolling interest until they receive a cumulative return on their contributed junior common equity interest, currently at 8%, and (3) then 75% to us and 25% to the owner of the noncontrolling interest until we both receive a cumulative return on our contributed senior common equity interest, currently at 12%, and (4) finally, any remaining operating profit shall be distributed 70% to us and 30% to the owner of the noncontrolling interest. Additionally, our joint venture partner in the Ritz Coconut Grove has the right to put their ownership interest to us for cash consideration at any time during the life of the venture. The balance sheet and financial results of the Ritz Coconut Grove are included in our consolidated financial statements and the noncontrolling interest in the Ritz Coconut Grove is classified as temporary equity within our Consolidated Balance Sheet. The noncontrolling interest in the Ritz Coconut Grove is measured at the put option redemption value, which is defined in the joint venture agreement. For the years ended December 31, 2021, 2020 and 2019, based on the income allocation methodology described above, the noncontrolling interest in this joint venture was allocated losses of $158, $21 and $300, respectively, and is recorded as part of the (Income) Loss Allocated to Noncontrolling Interests line item within the Consolidated Statements of Operations. We reclassified $2,310 and $(3,196) from Additional Paid in Capital to Noncontrolling Joint Venture Interest to recognize the minority interest at the put option redemption value of $2,310 and $0, at December 31, 2021 and December 31, 2020, respectively.
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INCOME TAXES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The Company elected to be taxed as a REIT under Sections 856 through 860 of the Code commencing with its taxable year ended December 31, 1999. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it currently distribute at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gain, to its shareholders. It is the Company’s current intention to adhere to these requirements and maintain the Company’s qualification for taxation as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax on that portion of its net income that is currently distributed to shareholders. If the Company fails to qualify for taxation as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax for taxable years prior to 2018) and may not be able to qualify as a REIT for four subsequent taxable years. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. Taxable income from non-REIT activities managed through TRSs is subject to federal, state and local income taxes. As a TRS, 44 New England is subject to income taxes at the applicable federal, state and local tax rates. The provision for income taxes differs from the amount of income tax determined by applying the applicable statutory federal income tax rate (21%) to pretax income from continuing operations as a result of the following differences:
NOTE 13 – INCOME TAXES (CONTINUED) The components of the Company’s income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 were as follows:
The components of consolidated TRS’s net deferred tax asset as of December 31, 2021 and 2020 were as follows:
In assessing the realizability of deferred tax assets, Management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on the level of historical taxable income and projections for future taxable income over which the deferred tax assets are deductible and limitations related to the utilization of certain tax attribute carryforwards, Management believes it is more likely than not that the remaining deferred tax assets will not be realized. As of December 31, 2021, we have gross federal net operating loss carryforwards of $56,248 of which $14,429 expire over various periods from 2023 through 2036 and $41,819 carries forward indefinitely. As of December 31, 2021, we have gross state net operating loss carryforwards of $114,770 which expire over various periods from 2023 to 2040. The Company has tax credits of $355 available which begin to expire in 2032. NOTE 13 – INCOME TAXES (CONTINUED) Earnings and profits, which will determine the taxability of distributions to shareholders, will differ from net income reported for financial reporting purposes due to the differences for federal tax purposes in the estimated useful lives and methods used to compute depreciation. The following table sets forth certain per share information regarding the Company’s common and preferred share distributions for the years ended December 31, 2021, 2020 and 2019.
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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
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SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION | SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION AS OF DECEMBER 31, 2021 [IN THOUSANDS]
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION AS OF DECEMBER 31, 2021 (CONTINUED) [IN THOUSANDS]
(1)Costs capitalized subsequent to acquisition include reductions of asset value due to impairment. * Assets are depreciated over a 7 to 40 year life, upon which the latest income statement is computed. The aggregate cost of land, buildings and improvements for Federal income tax purposes for the years ended December 31, 2021, 2020 and 2019 is approximately $1,450,092, $1,633,467 and $1,675,650, respectively. Depreciation is computed for buildings and improvements using a useful life for these assets of 7 to 40 years. See Accompanying Report of Independent Registered Public Accounting Firm HERSHA HOSPITALITY TRUST AND SUBSIDIARIES SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION AS OF DECEMBER 31, 2021 (CONTINUED) [IN THOUSANDS]
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaborative Arrangement, Accounting Policy | Hersha Hospitality Trust (“we” or the “Company”) was formed in May 1998 as a self-administered, Maryland real estate investment trust. We have elected to be taxed and expect to continue to elect to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. The Company owns a controlling general partnership interest in Hersha Hospitality Limited Partnership (“HHLP” or the “Partnership”), which owns a 99% limited partnership interest in various subsidiary partnerships. Hersha Hospitality, LLC (“HHLLC”), a Virginia limited liability company, owns a 1% general partnership interest in the subsidiary partnerships and the Partnership is the sole member of HHLLC. The Partnership owns a taxable REIT subsidiary (“TRS”), 44 New England Management Company (“44 New England” or “TRS Lessee”), which leases certain of the Company’s hotels. Hersha’s common shares of beneficial interest trade on the New York Stock Exchange (“the NYSE”) under the ticker symbol "HT," its 6.875% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest trade on the NYSE under the ticker symbol “HT PRC,” its 6.500% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest trade on the NYSE under the ticker symbol “HT PRD,” and it’s 6.500% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest trade on the NYSE under the ticker symbol “HT PRE.” As of December 31, 2021, the Company, through the Partnership and subsidiary partnerships, wholly owned 32 limited and full service hotels. All of the wholly owned hotel facilities are leased to the Company’s TRS, 44 New England. In addition to the wholly owned hotel properties, as of December 31, 2021, the Company owned a consolidated joint venture interest in one property and an unconsolidated joint venture interest in three properties. The properties owned by the joint ventures are leased to a TRS owned by the joint venture or to an entity owned by the joint venture partners and 44 New England. The following table lists the properties owned by these joint ventures:
Our properties are managed by eligible independent management companies, including Hersha Hospitality Management, LP (“HHMLP”). HHMLP is owned in part by certain of our trustees and executive officers and other unaffiliated third party investors as defined by the Internal Revenue Code. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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Principles Of Consolidation And Presentation | Principles of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and include all of our accounts as well as accounts of the Partnership, subsidiary partnerships and our wholly owned TRS Lessee. All significant inter-company amounts have been eliminated. Consolidated properties are either wholly owned or owned less than 100% by the Partnership and are controlled by the Company as general partner of the Partnership. Properties owned in joint ventures are also evaluated for consolidation. Entities are consolidated if the determination is made that we are the primary beneficiary in a variable interest entity ("VIE") or we maintain control of the asset through our voting interest or other rights in the operation of the entity. To determine if we are the primary beneficiary of a VIE, we evaluate whether we have a controlling financial interest in that VIE. An enterprise is deemed to have a controlling financial interest if it has i) the power to direct the activities of a variable interest entity that most significantly impacts the entity’s economic performance, and ii) the obligation to absorb losses of the VIE that could be significant to the VIE or the rights to receive benefits from the VIE that could be significant to the VIE. Control can also be demonstrated by the ability of a member to manage day-to-day operations, refinance debt and sell the assets of the partnerships without the consent of the other member and the inability of the members to replace the managing member. Based on our examination, the following entities were determined to be VIE’s: HHLP; South Bay Boston, LLC; SB Partners Three Lessee, LLC; Hersha Holding RC Owner, LLC; Hersha Statutory Trust I; and Hersha Statutory Trust II. The Company’s most significant asset is its investment in HHLP, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of HHLP. South Bay Boston, LLC and SB Partners Three Lessee, LLC, are consolidated by the respective lessors, the primary beneficiaries. Hersha Holding RC Owner, LLC is the owner entity of the Ritz Carlton Coconut Grove and is a VIE. HHLP is considered the primary beneficiary of the VIE and consolidates the joint venture with the minority owner interest presented as part of redeemable noncontrolling interest within the Consolidated Balance Sheets. Hersha Statutory Trust I and Hersha Statutory Trust II are VIEs but HHLP is not the primary beneficiary in these entities. Accordingly, the accounts of Hersha Statutory Trust I and Hersha Statutory Trust II are not consolidated.
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Segment Reporting | Segment Reporting We allocate resources and assess operating performance based on individual hotels and consider each one of our hotels to be an operating segment. No operating segment, individually, meets the threshold for a reportable segment as defined within ASC Topic 280 – Segment Reporting, nor do they fully satisfy the requisite aggregation criteria therein. As a result, the Company does not present separate operating segment information within the Notes to the Consolidated Financial Statements.
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Use Of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Although we believe the assumptions and estimates we made are reasonable and appropriate, as discussed in the applicable sections throughout these Consolidated Financial Statements, different assumptions and estimates could materially impact our reported results.
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Investment In Hotel Properties | Investment in Hotel Properties Investment purchases of hotel properties and identifiable intangible assets that are not businesses are accounted for as asset acquisitions and recorded at relative fair value based upon total accumulated cost of the acquisition. Direct acquisition-related costs are capitalized as a component of the acquired assets. Property and equipment purchased after the hotel acquisition date is recorded at cost. The Company’s investments in hotel properties are carried at cost and are depreciated using the straight-line method over the following estimated useful lives:
Based on the occurrence of certain events or changes in circumstances, we review the recoverability of each hotel property's carrying value. Such events or changes in circumstances include the following: •a significant decrease in the market price of a long-lived asset; •a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; •a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; •an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; •a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset; and •a current expectation that, it is more likely than not that, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. We review our portfolio on an ongoing basis to evaluate the existence of any of the aforementioned events or changes in circumstances that would require us to test for recoverability. In general, our review of recoverability is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value expected, as well as the effects of hotel demand, competition and other factors. Other assumptions used in the review of recoverability include the holding period and expected terminal capitalization rate. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property. We are required to make subjective assessments as to whether there are impairments in the values of our investments in hotel properties. We consider a hotel to be held for sale when management and our independent trustees commit to a plan to sell the property, the property is available for sale, management engages in an active program to locate a buyer for the property and it is probable the sale will be completed within a year of the initiation of the plan to sell.
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Investment In Unconsolidated Joint Ventures | Investment in Unconsolidated Joint Ventures If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a VIE or our voting interest in a voting interest entity, and we have the ability to exercise significant influence over the operating and financial policies of the joint venture, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the affiliates as they occur, limited to the extent of our investment in, advances to and commitments for the investee. Pursuant to our joint venture agreements, allocations of profits and losses of some of our investments in unconsolidated joint ventures may be allocated disproportionately as compared to nominal ownership percentages due to specified preferred return rate thresholds. See Note 3 – Investment in Unconsolidated Joint Ventures for a more detailed explanation of the methodology used in determining the allocation of profits and losses within our joint ventures. The Company periodically reviews the carrying value of its investment in unconsolidated joint ventures to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. When an impairment indicator is present, we will estimate the fair value of the investment. Our estimate of fair value takes into consideration factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. This determination requires significant estimates by management, including the expected cash flows to be generated by the assets owned and operated by the joint venture. To the extent impairment has occurred and the impairment is considered other than temporary, the loss will be measured as the excess of the carrying amount over the fair value of our investment in the unconsolidated joint venture.
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Cash And Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents represent cash on hand and in banks plus short-term investments with an initial maturity of three months or less when purchased. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Escrow Deposits | Escrow Deposits Escrow deposits include reserves for debt service, working capital, real estate taxes, and insurance and reserves for furniture, fixtures, and equipment replacements, as required by certain mortgage debt agreement restrictions and provisions.
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Hotel Accounts Receivable | Hotel Accounts ReceivableHotel accounts receivable consists primarily of meeting and banquet room rental and hotel guest receivables. The Company generally does not require collateral. Ongoing credit evaluations are performed and potential losses from uncollectible accounts are written off against revenue when they are estimated to be uncollectible. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are recorded at cost and amortized over the terms of the related indebtedness using the effective interest method. Deferred financing costs associated with our line of credit are recorded within the Other Assets line item in our Consolidated Balance Sheets. Deferred financing costs associated with our term loans, mortgage debt, and unsecured notes are recorded as contra-liabilities within each respective line item on our Consolidated Balance Sheets. All amortization of deferred financing costs is presented within the Interest Expense line on our Consolidated Statements of Operations.
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Due From/To Related Parties | Due from/to Related Parties Due from/to Related Parties represents current receivables and payables resulting from transactions related to hotel management and project management with affiliated entities. Amounts due from related parties result primarily from advances of shared costs incurred. Amounts due to related parties result primarily from hotel management and project management fees incurred. Both due to and due from related parties are generally settled within a period not to exceed one year.
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Intangible Assets and Liabilities | Intangible Assets and Liabilities Intangible assets primarily consist of leasehold intangibles for in-place leases at the time of hotel acquisition and deferred franchise fees. The leasehold intangibles are amortized over the remaining lease term. Deferred franchise fees are amortized using the straight-line method over the life of the franchise agreement. Intangible liabilities consist of leasehold intangibles for in-place leases at the time of hotel acquisition. The leasehold intangibles are amortized over the remaining lease term. Intangible liabilities are included in the accounts payable, accrued expenses and other liabilities on the Company’s consolidated balance sheets.
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Development Project Capitalization | Development Project Capitalization We have opportunistically engaged in the development and re-development of hotel assets. We capitalize expenditures related to hotel development projects and renovations, including indirect costs such as interest expense, real estate taxes and utilities related to hotel development projects and renovations.
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Preferred Shares | Preferred Shares The Declaration of Trust authorizes our Board of Trustees to classify any unissued preferred shares and to reclassify any previously classified but unissued preferred shares of any series from time to time in one or more series, as authorized by the Board of Trustees. Prior to issuance of shares of each series, the Board of Trustees is required by Maryland REIT Law and our Declaration of Trust to set for each such series, subject to the provisions of our Declaration of Trust regarding the restriction on transfer of shares of beneficial interest, the terms, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each such series. Thus, our Board of Trustees could authorize the issuance of additional preferred shares with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or a change in control in us that might involve a premium price for holders of common shares or otherwise be in their best interest.
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Noncontrolling Interest | Noncontrolling Interest We define a noncontrolling interest as the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interests are reported on the consolidated balance sheets within equity, but separately from the shareholders’ equity. Revenues, expenses and net income or loss attributable to both the Company and noncontrolling interests are reported on the consolidated statements of operations. Noncontrolling interest in the Partnership represents the limited partner’s proportionate share of the equity of the Partnership. Income (loss) is allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the Partnership during the period. At the end of each reporting period the appropriate adjustments to the income (loss) are made based upon the weighted average percentage ownership of the Partnership during the period. Our ownership interest in the Partnership as of December 31, 2021, 2020 and 2019 was 85.0%, 87.8%, and 90.0%, respectively. Securities that are redeemable for cash or other assets at the option of the holder, or not solely within the control of the issuer, are classified outside of permanent equity in the consolidated balance sheet and have been adjusted to their approximate redemption values, after the attribution of net income or loss. The Company makes this determination based on terms in applicable agreements, specifically in relation to redemption provisions. Additionally, with respect to noncontrolling interests for which the Company has a choice to settle the contract by delivery of its own shares, the Company considers the guidance in US GAAP to evaluate whether the Company controls the actions or events necessary to issue the maximum number of common shares that could be required to be delivered at the time of settlement of the contract. NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) We classify the noncontrolling interests of our common units of limited partnership interest in HHLP ("Common Units"), and Long Term Incentive Plan Units ("LTIP Units") as equity. LTIP Units are a separate class of limited partnership interest in the Operating Partnership that are convertible into Common Units under certain circumstances. In accordance with the partnership agreement of the Partnership, holders of these units may redeem them for cash unless we, in our sole and absolute discretion, elect to issue common shares on a one-for-one basis in lieu of paying cash. Net income or loss attributed to Common Units and LTIP Units, as well as the net income or loss related to the noncontrolling interests of our consolidated variable interest entity, is included in net income or loss in the consolidated statements of operations. Net income or loss attributed to the Common Units, LTIP Units, and the noncontrolling interests of our consolidated joint ventures is excluded from net income or loss applicable to common shareholders in the consolidated statements of operations.
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Stock Based Compensation | Stock Based Compensation We measure the cost of employee service received in exchange for an award of equity instruments based on the grant-date fair value of the award. The compensation cost is amortized on a straight line basis over the period during which an employee is required to provide service in exchange for the award. The compensation cost related to performance awards that are contingent upon market-based criteria being met is recorded at the fair value of the award on the date of the grant and amortized over the performance period.
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Derivatives And Hedging | Derivatives and Hedging The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and interest rate caps as part of its cash flow hedging strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps designated as cash flow hedges limit the Company’s exposure to increased cash payments due to increases in variable interest rates.
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Revenue Recognition | Revenue Recognition We recognize revenue for all consolidated hotels as hotel operating revenue when earned. Revenues are recorded net of any sales or occupancy tax collected from our guests. We participate in frequent guest programs sponsored by the brand owners of our hotels and we expense the charges associated with those programs, as incurred. Hotel operating revenues are disaggregated on the face of the consolidated statement of operations into the categories of rooms revenue, food and beverage revenue, and other to demonstrate how economic factors affect the nature, amount, timing, and uncertainty of revenue and cash flows. Room revenue is generated through contracts with customers whereby the customers agree to pay a daily rate for right to use a hotel room. The customer is provided the room and revenue is recognized daily at the contract rate. Payment from the customer is generally secured at the end of the contract upon check-out by the customer from our hotel. The Company records advanced deposits when a customer or group of customers provides a deposit for a future stay at our hotels. Advanced deposits for room revenue are included in the balance of Accounts Payable, Accrued Expenses and Other Liabilities on the Consolidated Balance Sheet. Advanced deposits are recognized as revenue at the time of the guest's stay. The Company notes no significant judgments regarding the recognition of room revenue. Food and beverage revenue is generated through contracts with customers whereby the customer agrees to pay a contract rate for restaurant dining services or banquet services. The Company's contract performance obligations are fulfilled at the time that the meal is provided to the customer or when the banquet facilities and related dining amenities are provided to the customer. The Company recognizes food and beverage revenue upon the fulfillment of the contract with the customer. The Company records contract liabilities in the form of advanced deposits when a customer or group of customers provides a deposit for a future banquet event at our hotels. Advanced deposits for food and beverage revenue are included in the balance of Accounts Payable, Accrued Expenses and Other Liabilities on the Consolidated Balance Sheet. Advanced deposits for banquet services are recognized as revenue following the completion of the banquet services. The Company notes no significant judgments regarding the recognition of food and beverage revenue. Other revenues consist primarily of fees earned for asset management services provided to hotels we own through unconsolidated joint ventures. Fees are earned as a percentage of hotel revenue and are recorded in the period earned to the extent of the noncontrolling interest ownership.
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Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under applicable provisions of the Internal Revenue Code of 1986, as amended, or the Code, and intends to continue to qualify as a REIT. In general, under such provisions, a trust which has made the required election and, in the taxable year, meets certain requirements and distributes to its shareholders at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, will not be subject to federal income tax to the extent of the income which it distributes. Earnings and profits, which determine the taxability of dividends to shareholders, differ from net income reported for financial reporting purposes due primarily to differences in depreciation of hotel properties for federal income tax purposes. Deferred income taxes relate primarily to the TRS Lessee and are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting bases of assets and liabilities of the TRS Lessee and their respective tax bases and for their operating loss and tax credit carry forwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors. The Company may recognize a tax benefit from an uncertain tax position when it is more-likely-than-not (defined as a likelihood of more than 50%) that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. If a tax position does not meet the more-likely-than-not recognition threshold, despite the Company’s belief that its filing position is supportable, the benefit of that tax position is not recognized in the statements of operations. The Company recognizes interest and penalties, as applicable, related to unrecognized tax benefits as a component of income tax expense. The Company recognizes unrecognized tax benefits in the period that the uncertainty is eliminated by either affirmative agreement of the uncertain tax position by the applicable taxing authority, or by expiration of the applicable statute of limitation. For the years ended December 31, 2021, 2020 and 2019, the Company did not record any uncertain tax positions. As of December 31, 2021, with few exceptions, the Company is subject to tax examinations by federal, state, and local income tax authorities for years 2003 through 2021.
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New Accounting Pronouncements | New Accounting Pronouncements In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU No. 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued 2021-01, Reference Rate Reform (Topic 848), Scope, which further clarified the scope of the reference rate reform optional practical expedients and exceptions outlined in Topic 848. As a result of identified structural risks of interbank offered rates, in particular, the London Interbank Offered Rate (LIBOR), reference rate reform is underway to identify alternative reference rates that are more observable or transaction based. The update provides guidance in accounting for changes in contracts, hedging relationships, and other transactions as a result of this reference rate reform. The provisions of these updates that will most likely affect our financial reporting process related to modifications of contracts with lenders and the related hedging contracts associated with each respective modified borrowing contract. In general, the provisions of these updates would impact the Company by allowing, among other things, the following: •Allowing modifications of debt contracts with lenders that fall under the guidance of ASC Topic 470 to be accounted for as a non-substantial modification and not be considered a debt extinguishment. •Allowing a change to contractual terms of a hedging instrument in conjunction with reference rate reform to not require a dedesignation of the hedging relationship. •Allowing a change to the interest rate used for margining, discounting, or contract price alignment for a derivative that is a cash flow hedge to not be considered a change to the critical terms of the hedge and will not require a dedesignation of the hedging relationship. We have not entered into any contract modifications yet, as it directly relates to reference rate reform but we anticipate having to undertake such modifications in the future as a majority of our contracts with lenders and hedging counterparties are indexed to LIBOR. Some debt contract modifications will occur in the normal course of business and will include other changes in the terms, for which we do not anticipate that this accounting relief will be applicable. However, we anticipate that other debt contract modifications will occur prior to the phase of LIBOR on June 30, 2023 specifically to address the LIBOR transition, for which we will be able to apply the accounting relief.
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joint Venture Properties | The following table lists the properties owned by these joint ventures:
Our properties are managed by eligible independent management companies, including Hersha Hospitality Management, LP (“HHMLP”). HHMLP is owned in part by certain of our trustees and executive officers and other unaffiliated third party investors as defined by the Internal Revenue Code.
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Property, Plant and Equipment | The Company’s investments in hotel properties are carried at cost and are depreciated using the straight-line method over the following estimated useful lives:
Investment in hotel properties consists of the following at December 31, 2021 and December 31, 2020:
*The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $39,577 and $42,487 at December 31, 2021 and December 31, 2020, respectively.
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INVESTMENT IN HOTEL PROPERTIES (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment In Hotel Properties | The Company’s investments in hotel properties are carried at cost and are depreciated using the straight-line method over the following estimated useful lives:
Investment in hotel properties consists of the following at December 31, 2021 and December 31, 2020:
*The net book value of investment in hotel property at Ritz Coconut Grove, which is a variable interest entity, is $39,577 and $42,487 at December 31, 2021 and December 31, 2020, respectively.
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Real Estate Assets Sold | During the years ended December 31, 2020 and December 31, 2021, we had the following hotel dispositions:
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Schedule of Assets Held for Sale | The table below shows the balances for the properties that were classified as assets held for sale as of December 31, 2020:
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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment In Unconsolidated Joint Ventures | As of December 31, 2021 and December 31, 2020 our investment in unconsolidated joint ventures consisted of the following:
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Income Or Loss From Unconsolidated Joint Ventures | Loss (income) recognized during the years ended December 31, 2021, 2020 and 2019, for our investments in unconsolidated joint ventures is as follows:
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Summary Financial Information Related To Unconsolidated Joint Ventures | The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of December 31, 2021 and December 31, 2020 and for the years ended December 31, 2021, 2020 and 2019.
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Reconciliation Of Share In Unconsolidated Joint Ventures' Equity In Investment In Unconsolidated Joint Ventures | The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of December 31, 2021 and December 31, 2020.
(1) Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following: •the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements; •accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Income (Loss) from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and •cumulative impairment of our investment in joint ventures not reflected on the joint ventures' financial statements, if any.
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OTHER ASSETS (Tables) |
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Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets consisted of the following at December 31, 2021 and December 31, 2020:
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DEBT (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of mortgages payable and interest expense | Mortgages payable at December 31, 2021 and December 31, 2020 consisted of the following:
Notes payable at December 31, 2021 and December 31, 2020 consisted of the following:
The table below shows the interest expense incurred by the Company during the twelve months ended December 31, 2021, 2020, and 2019:
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Summary of borrowing base assets | As of December 31, 2021, the following hotel properties were borrowing base assets:
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Summary of the balances outstanding and interest rate spread | The following table summarizes the balances outstanding and interest rate spread for each borrowing:
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Schedule of aggregate annual principal payments for mortgages and notes payable | Aggregate annual principal payments for the Company’s credit facility and secured term loans, as amended, mortgages, Statutory Trust I and Statutory Trust II notes, and Junior notes payable for the five years following December 31, 2021 and thereafter are as follows:
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LEASES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Costs | The components of lease costs for the years ended December 31, 2021, 2020, and 2019 were as follows:
Other information related to leases as of and for the years ended December 31, 2021 and 2020 is as follows:
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Future Minimum Lease Payments | Maturities of lease liabilities as of December 31, 2021 are as follows:
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FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Of Interest Rate Swaps And Caps | The table on the following page presents our derivative instruments as of December 31, 2021 and 2020. NOTE 8 – FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (CONTINUED)
(1) During the year ended December 31, 2021, we dedesignated this swap as a cash flow hedge and recorded expense of $372 accordingly.
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SHARE BASED PAYMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Unvested Share Awards Issued To Executives | A summary of our share based compensation activity from January 1, 2019 to December 31, 2021 is as follows:
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Schedule of Employee Service Share-based Compensation, Allocation of recognized Period Costs | The following table summarizes share based compensation expense and unearned compensation for the years ended December 31, 2021, 2020 and 2019 and as of December 31, 2021 and 2020:
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Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The remaining unvested target units are expected to vest as follows:
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EARNINGS PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Earnings Per Share | The following table is a reconciliation of the income or loss (numerator) and the weighted average shares (denominator) used in the calculation of basic and diluted earnings per common share. The computation of basic and diluted earnings per share is presented below.
* Income (loss) allocated to noncontrolling interest in HHLP has been excluded from the numerator and Common Units and Vested LTIP Units have been omitted from the denominator for the purpose of computing diluted earnings per share since including these amounts in the numerator and denominator would have no impact. In addition, potentially dilutive common shares, if any, have been excluded from the denominator if they are anti-dilutive to income (loss) applicable to common shareholders.
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CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-cash Investing And Financing Activities | The following non-cash investing and financing activities occurred during 2021, 2020 and 2019:
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Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019:
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Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019:
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SHAREHOLDERS’ EQUITY, NONCONTROLLING INTERESTS IN PARTNERSHIP, AND REDEEMABLE NON-CONTROLLING INTERESTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Preferred Stock | Terms of the Series C, Series D and Series E Preferred Shares outstanding at December 31, 2021 and 2020 are summarized as follows:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Income Tax Reconciliation | The provision for income taxes differs from the amount of income tax determined by applying the applicable statutory federal income tax rate (21%) to pretax income from continuing operations as a result of the following differences:
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Components Of The Company's Income Tax Expense (Benefit) | The components of the Company’s income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 were as follows:
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Components Of Consolidated TRS's Deferred Tax Assets | The components of consolidated TRS’s net deferred tax asset as of December 31, 2021 and 2020 were as follows:
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Taxability Of Common And Preferred Share Distributions | The following table sets forth certain per share information regarding the Company’s common and preferred share distributions for the years ended December 31, 2021, 2020 and 2019.
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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) |
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Joint Venture Properties) (Details) - Hersha Hospitality Trust |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Hersha Holding RC Owner, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership | |
Ownership percentage (percent) | 85.00% |
SB Partners, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership | |
Ownership percentage (percent) | 50.00% |
Hiren Boston, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership | |
Ownership percentage (percent) | 50.00% |
SB Partners Three, LLC | |
Subsidiary of Limited Liability Company or Limited Partnership | |
Ownership percentage (percent) | 50.00% |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule Of Major Asset Depreciation) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Minimum | Buildings and Improvements | |
Property, Plant and Equipment | |
Useful life of fixed asset | 7 years |
Minimum | Furniture, Fixtures and Equipment | |
Property, Plant and Equipment | |
Useful life of fixed asset | 2 years |
Maximum | Buildings and Improvements | |
Property, Plant and Equipment | |
Useful life of fixed asset | 40 years |
Maximum | Furniture, Fixtures and Equipment | |
Property, Plant and Equipment | |
Useful life of fixed asset | 7 years |
INVESTMENT IN HOTEL PROPERTIES (Investment In Hotel Properties) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | $ 2,315,766 | $ 2,382,034 |
Less Accumulated Depreciation | (650,669) | (597,196) |
Total Investment in Hotel Properties | 1,665,097 | 1,784,838 |
Variable Interest Entity, Primary Beneficiary | Ritz Coconut Grove | ||
Property, Plant and Equipment | ||
Total Investment in Hotel Properties | 39,577 | 42,487 |
Land | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 478,412 | 488,463 |
Buildings and Improvements | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 1,560,768 | 1,611,144 |
Furniture, Fixtures and Equipment | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | 274,802 | 281,440 |
Construction in Progress | ||
Property, Plant and Equipment | ||
Total investment in hotel properties, gross | $ 1,784 | $ 987 |
INVESTMENT IN HOTEL PROPERTIES (Narrative) (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021
USD ($)
property
|
Dec. 31, 2020
USD ($)
property
|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2017
property
|
|
Business Acquisition | ||||
Depreciation expense | $ 82,668 | $ 96,216 | $ 95,673 | |
Number of real estate properties acquired (property) | property | 0 | 0 | ||
Gain in excess of insurance recovery | $ 711 | $ 8,960 | (12) | |
Proceeds Received for Business Interruption Insurance Claims, net | 0 | 4,411 | 0 | |
Asset impairment charge | 222 | 1,069 | $ 0 | |
Global Pandemic | ||||
Business Acquisition | ||||
Proceeds Received for Business Interruption Insurance Claims, net | 961 | |||
South Florida Properties | Hurricane Irma | ||||
Business Acquisition | ||||
Number of real estate properties (property) | property | 6 | |||
Gain in excess of insurance recovery | 8,147 | |||
Duane Street Hotel | ||||
Business Acquisition | ||||
Asset impairment charge | $ 147 | $ 1,069 |
INVESTMENT IN HOTEL PROPERTIES (Assets Held For Sale ) (Details) - Assets Held-for-sale $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Long Lived Assets Held-for-sale | |
Assets held for sale, gross | $ 136,798 |
Less Accumulated Depreciation | (40,578) |
Assets Held for Sale | 96,220 |
Land | |
Long Lived Assets Held-for-sale | |
Assets held for sale, gross | 28,015 |
Buildings and Improvements | |
Long Lived Assets Held-for-sale | |
Assets held for sale, gross | 93,314 |
Furniture, Fixtures and Equipment | |
Long Lived Assets Held-for-sale | |
Assets held for sale, gross | $ 15,469 |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Investment In Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Investments in Unconsolidated Joint Ventures | ||
Investment in unconsolidated joint ventures | $ 5,580 | $ 6,633 |
Cindat Hersha Owner JV, LLC | Hilton and IHG branded hotels in NYC | ||
Investments in Unconsolidated Joint Ventures | ||
Percent Owned | 31.00% | |
Investment in unconsolidated joint ventures | $ 0 | 0 |
Hiren Boston, LLC | Courtyard by Marriott, South Boston, MA | ||
Investments in Unconsolidated Joint Ventures | ||
Percent Owned | 50.00% | |
Investment in unconsolidated joint ventures | $ 189 | 219 |
SB Partners, LLC | Holiday Inn Express, South Boston, MA | ||
Investments in Unconsolidated Joint Ventures | ||
Percent Owned | 50.00% | |
Investment in unconsolidated joint ventures | $ 0 | 0 |
SB Partners Three, LLC | Home2 Suites, South Boston, MA | ||
Investments in Unconsolidated Joint Ventures | ||
Percent Owned | 50.00% | |
Investment in unconsolidated joint ventures | $ 5,391 | $ 6,414 |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 3.00% | |
Investment in unconsolidated joint ventures | $ 5,580 | $ 6,633 |
Cindat Hersha Owner JV, LLC | Hilton and IHG branded hotels in NYC | ||
Investments in Unconsolidated Joint Ventures | ||
Investment in unconsolidated joint ventures | $ 0 | $ 0 |
Operating Revenue | ||
Investments in Unconsolidated Joint Ventures | ||
Percent owned (percentage) | 1.00% |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Summary of Unconsolidated Joint Ventures Income Statement) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Investments in Unconsolidated Joint Ventures | |||||||||||
Other Revenues | $ 123 | $ 217 | $ 292 | ||||||||
Lease Expense | (5,181) | (5,028) | (5,372) | ||||||||
Property Taxes and Insurance | (36,787) | (40,928) | (38,601) | ||||||||
General and Administrative | (23,027) | (20,078) | (26,431) | ||||||||
Depreciation and Amortization | (83,309) | (96,958) | (96,529) | ||||||||
Interest Expense | (57,549) | (53,279) | (52,205) | ||||||||
Net Loss | $ (14,480) | $ (15,932) | $ (23,523) | $ 9,090 | $ (43,335) | $ (48,173) | $ (71,780) | $ (25,972) | (44,845) | (189,260) | (5,847) |
Room | |||||||||||
Investments in Unconsolidated Joint Ventures | |||||||||||
Hotel Operating Revenues: | 73,797 | 68,302 | 56,539 | 39,350 | 28,492 | 27,546 | 15,139 | 71,083 | 237,988 | 142,260 | 424,698 |
Operating Expenses | $ (15,631) | $ (14,706) | $ (12,350) | $ (9,198) | $ (8,637) | $ (7,436) | $ (3,622) | $ (19,092) | (51,885) | (38,787) | (93,488) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | |||||||||||
Investments in Unconsolidated Joint Ventures | |||||||||||
Other Revenues | 731 | 1,020 | 2,408 | ||||||||
Operating Expenses | (8,451) | (18,695) | (46,175) | ||||||||
Lease Expense | (1,019) | (770) | (693) | ||||||||
Property Taxes and Insurance | (3,095) | (12,906) | (12,477) | ||||||||
General and Administrative | (87) | (2,638) | (5,783) | ||||||||
Depreciation and Amortization | (6,065) | (16,200) | (14,947) | ||||||||
Interest Expense | (4,619) | (23,908) | (28,072) | ||||||||
Loss on Dissolution of Joint Venture | (112,371) | 0 | 0 | ||||||||
Net Loss | (123,186) | (49,086) | (11,355) | ||||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Room | |||||||||||
Investments in Unconsolidated Joint Ventures | |||||||||||
Hotel Operating Revenues: | $ 11,790 | $ 25,011 | $ 94,384 |
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Reconciliation Of Share In Unconsolidated Joint Ventures' Equity In Investment In Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Equity Method Investments and Joint Ventures [Abstract] | ||
Our share of equity recorded on the joint ventures' financial statements | $ 3,328 | $ 5,699 |
Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures | 2,252 | 934 |
Investment in Unconsolidated Joint Ventures | $ 5,580 | $ 6,633 |
OTHER ASSETS (Other Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Assets [Abstract] | ||
Derivative Asset | $ 92 | $ 0 |
Deferred Financing Costs | 1,070 | 2,395 |
Prepaid Expenses | 11,632 | 5,692 |
Investment in Statutory Trusts | 1,548 | 1,548 |
Investment in Non-Hotel Property and Inventories | 2,193 | 2,443 |
Deposits with Unaffiliated Third Parties | 2,663 | 2,561 |
Deferred Tax Asset, Net of Valuation Allowance of $21,612 and $23,591, respectively | 0 | 0 |
Other | 2,561 | 855 |
Total Other Assets | 21,759 | 15,494 |
Valuation allowance | $ 21,612 | $ 23,591 |
OTHER ASSETS (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Assets [Abstract] | ||
Net deferred tax assets | $ 0 | $ 0 |
DEBT (Subordinated Notes Payable Narrative) (Details) - Junior Subordinated Debt $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021
USD ($)
loan
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2019 |
|
Hersha Statutory Trust I and Hersha Statutory Trust II | |||
Subordinated Debt | |||
Number of debt instruments (loan) | loan | 2 | ||
Subordinated notes payable | $ 51,548 | ||
Number of business days prior to quarterly interest payments for resetting rates (days) | 2 days | ||
Deferred costs, net of accumulated amortization | $ 706 | $ 759 | |
Debt instrument, interest rate during period (percent) | 3.21% | 3.95% | 5.50% |
Hersha Statutory Trust I | |||
Subordinated Debt | |||
Subordinated notes payable | $ 25,774 | ||
Basis spread on variable rate (percent) | 3.00% | ||
Hersha Statutory Trust II | |||
Subordinated Debt | |||
Subordinated notes payable | $ 25,774 | ||
Basis spread on variable rate (percent) | 3.00% |
DEBT (Junior Notes Payable) (Details) - Payment in Kind (PIK) Note - USD ($) |
12 Months Ended | |
---|---|---|
Feb. 17, 2021 |
Dec. 31, 2021 |
|
Debt Instrument | ||
Debt instrument, face amount | $ 150,000,000 | $ 156,239,000 |
Debt instrument, interest rate, percentage | 9.50% | |
Discretionary interest rate, stated percentage | 4.75% | |
PIK, stated percentage | 4.75% | |
Increase in accrued interest | $ 6,239,000 | |
Debt Instrument, Redemption, Period One | ||
Debt Instrument | ||
Redemption percentage | 104.00% | |
Debt Instrument, Redemption, Period Two | ||
Debt Instrument | ||
Redemption percentage | 102.00% |
DEBT (Aggregate Annual Principal Payments For Mortgages And Notes Payable) (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity | |
2022 | $ 385,666 |
2023 | 103,148 |
2024 | 401,654 |
2025 | 40,250 |
2026 | 147,764 |
Thereafter | 51,548 |
Total debt | $ 1,130,030 |
DEBT (Schedule of Interest Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Instrument | |||
Deferred Financing Costs Amortization | $ 4,628 | $ 3,551 | $ 2,241 |
Other | 381 | 574 | 735 |
Total Interest Expense | 57,549 | 53,279 | 52,205 |
Line of Credit | |||
Debt Instrument | |||
Interest expense | 15,587 | 21,927 | 33,745 |
Interest Rate Swap | |||
Debt Instrument | |||
Capitalized interest | 0 | (74) | |
Interest Rate Swap | Line of Credit | |||
Debt Instrument | |||
Interest expense | 8,866 | 11,018 | (2,630) |
Mortgages | |||
Debt Instrument | |||
Interest expense | 10,537 | 12,277 | 15,804 |
Mortgages | Hersha Statutory Trust I and Hersha Statutory Trust II | |||
Debt Instrument | |||
Interest expense | 15,073 | 2,037 | 2,837 |
Mortgages | Interest Rate Swap | |||
Debt Instrument | |||
Interest expense | 2,477 | $ 1,895 | $ (453) |
Capitalized interest | $ 0 |
LEASES (Narrative) (Details) |
Dec. 31, 2021
property
unit
|
---|---|
Ground Lease | |
Lessee, Lease, Description | |
Number of real estate properties (property) | property | 5 |
Office Lease | |
Lessee, Lease, Description | |
Office space (unit) | unit | 2 |
LEASES (Components of Lease Costs) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description | |||
Operating lease costs | $ 4,711 | $ 4,636 | $ 4,678 |
Variable lease costs | 470 | 392 | 694 |
Total lease costs | 5,181 | 5,028 | 5,372 |
Ground Lease | |||
Lessee, Lease, Description | |||
Operating lease costs | 4,228 | 4,153 | 4,195 |
Variable lease costs | 172 | 139 | 386 |
Total lease costs | 4,400 | 4,292 | 4,581 |
Office Lease | |||
Lessee, Lease, Description | |||
Operating lease costs | 483 | 483 | 483 |
Variable lease costs | 298 | 253 | 308 |
Total lease costs | $ 781 | $ 736 | $ 791 |
LEASES (Other information) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Leases [Abstract] | ||
Cash paid from operating cash flows for operating leases | $ 4,657 | $ 4,383 |
Weighted average remaining lease term (in years) | 63 years 6 months | 64 years 2 months 12 days |
Weighted average discount rate (in percent) | 7.86% | 7.86% |
LEASES (Minimum lease payments against lease liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Amount | ||
2022 | $ 4,965 | |
2023 | 4,612 | |
2024 | 4,473 | |
2025 | 4,515 | |
2026 | 4,578 | |
Thereafter | 279,840 | |
Total undiscounted lease payments | 302,983 | |
Less imputed interest | (249,292) | |
Lease Liabilities | $ 53,691 | $ 53,852 |
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Derivatives, Fair Value | |||
Other comprehensive income (loss), cash flow hedge | $ (366) | $ (4,083) | $ (1,007) |
Gain (loss) on fair value of derivative instruments | 18,346 | (22,348) | (3,495) |
Unrealized gain (loss) reclassified from accumulated other comprehensive income to interest expense | 366 | 4,083 | $ 1,007 |
Loss to be reclassified to interest expense during next 12 months | 6,799 | ||
Interest Rate Swap | |||
Derivatives, Fair Value | |||
Other comprehensive income (loss), cash flow hedge | 372 | ||
Estimate of Fair Value Measurement | |||
Derivatives, Fair Value | |||
Carrying value and estimated fair value of debt | 1,146,699 | 1,176,625 | |
Reported Value Measurement | |||
Derivatives, Fair Value | |||
Carrying value and estimated fair value of debt | $ 1,117,873 | $ 1,196,434 |
EARNINGS PER SHARE (Reconciliation Of Earnings Per Share) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
||||||
Basic and Diluted | ||||||||||||||||
Net Loss | $ (14,480) | $ (15,932) | $ (23,523) | $ 9,090 | $ (43,335) | $ (48,173) | $ (71,780) | $ (25,972) | $ (44,845) | $ (189,260) | $ (5,847) | |||||
Loss allocated to Noncontrolling Interests | 4,672 | 22,915 | 2,178 | |||||||||||||
Distributions to Preferred Shareholders | $ (6,043) | $ (6,044) | $ (6,044) | $ (6,043) | $ (6,044) | $ (6,044) | $ (6,044) | $ (6,044) | (24,174) | (24,176) | (24,174) | |||||
Dividends Paid on Unvested Restricted Shares and LTIP Units | 0 | 0 | (981) | |||||||||||||
Net Loss from Continuing Operations attributable to Common Shareholders | $ (64,347) | $ (190,521) | $ (28,824) | |||||||||||||
DENOMINATOR: | ||||||||||||||||
Weighted average number of common shares - basic (in shares) | 39,149,120 | 39,139,610 | 39,097,820 | 38,970,893 | 38,640,604 | 38,639,048 | 38,609,922 | 38,564,099 | 39,089,987 | 38,613,563 | 38,907,894 | |||||
Effect of dilutive securities: | ||||||||||||||||
Restricted Stock Awards and LTIP Units (unvested) (in shares) | 0 | 0 | 0 | |||||||||||||
Contingently Issued Shares (in shares) | 0 | 0 | 0 | |||||||||||||
Weighted average number of common shares - diluted (in shares) | 39,149,120 | 39,139,610 | 39,097,820 | 39,840,474 | 38,640,604 | 38,639,048 | 38,609,922 | 38,564,099 | 39,089,987 | [1] | 38,613,563 | [1] | 38,907,894 | [1] | ||
|
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Supplemental Cash Flow Elements [Abstract] | |||
Interest paid | $ 34,661 | $ 38,170 | $ 54,158 |
Net payments (proceeds) for interest rate derivatives | 11,822 | 7,635 | (4,336) |
Cash paid for income taxes | $ 113 | $ 79 | $ 53 |
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Non-cash Investing And Financing Activities) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Non-cash Investing and Financing Activities | |||
Common Shares issued as part of the Dividend Reinvestment Plan | $ 0 | $ 14 | $ 60 |
Conversion of Common Units to Common Shares | 3,026 | 0 | 0 |
Issuance of share based payments | 22,955 | 7,259 | 12,924 |
Accrued payables for fixed assets placed into service | 835 | 658 | 2,506 |
Increase in accrued liabilities related to insurance premium financing agreements | 5,820 | 0 | 0 |
Adjustment to Record Non-Controlling Interest at Redemption Value | 2,310 | (3,196) | 488 |
Right of Use Assets obtained in exchange for Lease Liabilities | $ 699 | $ 0 | $ 55,515 |
CASH FLOW DISCLOSURES AND NON CASH INVESTING AND FINANCING ACTIVITIES (Reconciliation of Cash) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 72,238 | $ 16,637 | $ 27,012 | |
Escrowed cash | 12,707 | 6,970 | 9,973 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 84,945 | $ 23,607 | $ 36,985 | $ 40,783 |
INCOME TAXES (Narrative) (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Segment Reporting Information | |
Net operating loss carryforwards subject to expiration | $ 14,429 |
Net operating loss carryforwards not subject to expiration | 41,819 |
Tax credits | 355 |
Federal | |
Segment Reporting Information | |
Net operating loss carryforwards | 56,248 |
State | |
Segment Reporting Information | |
Net operating loss carryforwards | $ 114,770 |
INCOME TAXES (Effective Income Tax Reconciliation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Statutory federal income tax provision | $ (9,241) | $ (37,365) | $ (1,208) | ||||||||
Adjustment for nontaxable income for Hersha Hospitality Trust | 13,065 | 29,636 | 1,419 | ||||||||
State income taxes, net of federal income tax effect | (1,367) | (2,720) | 456 | ||||||||
Non-deductible expenses, tax credits, and other, net | 361 | (1,317) | (575) | ||||||||
Changes in valuation allowance | (1,980) | 23,095 | 0 | ||||||||
Total income tax expense | $ 999 | $ 277 | $ 151 | $ (589) | $ (17) | $ (28) | $ 15,872 | $ (4,498) | $ 838 | $ 11,329 | $ 92 |
INCOME TAXES (Components Of The Company's Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current: | |||||||||||
Federal | $ 0 | $ (51) | $ (60) | ||||||||
State | 838 | (10) | 464 | ||||||||
Deferred: | |||||||||||
Federal | 0 | 7,688 | (302) | ||||||||
State | 0 | 3,702 | (10) | ||||||||
Total income tax expense | $ 999 | $ 277 | $ 151 | $ (589) | $ (17) | $ (28) | $ 15,872 | $ (4,498) | $ 838 | $ 11,329 | $ 92 |
INCOME TAXES (Components Of Consolidated TRS's Deferred Tax Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards | $ 19,084 | $ 21,569 |
Accrued expenses and other | 2,002 | 1,493 |
Tax credit carryforwards | 355 | 355 |
Depreciation and amortization | 171 | 174 |
Total gross deferred tax assets | 21,612 | 23,591 |
Valuation allowance | (21,612) | (23,591) |
Total Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Taxability Of Common And Preferred Share Distributions) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Preferred Shares - 6.875% Series C | |||
Income Tax | |||
Ordinary income (in hundredths) | 0.00% | 0.00% | 100.00% |
Return of Capital (in hundredths) | 0.00% | 100.00% | 0.00% |
Capital Gain Distribution (in hundredths) | 100.00% | 0.00% | 0.00% |
Preferred Shares - 6.5% Series D | |||
Income Tax | |||
Ordinary income (in hundredths) | 0.00% | 0.00% | 100.00% |
Return of Capital (in hundredths) | 0.00% | 100.00% | 0.00% |
Capital Gain Distribution (in hundredths) | 100.00% | 0.00% | 0.00% |
Preferred Shares - 6.5% Series E | |||
Income Tax | |||
Ordinary income (in hundredths) | 0.00% | 0.00% | 100.00% |
Return of Capital (in hundredths) | 0.00% | 100.00% | 0.00% |
Capital Gain Distribution (in hundredths) | 100.00% | 0.00% | 0.00% |
Common Shares - Class A | |||
Income Tax | |||
Ordinary income (in hundredths) | 0.00% | 33.03% | |
Return of Capital (in hundredths) | 100.00% | 66.97% | |
Capital Gain Distribution (in hundredths) | 0.00% | 0.00% |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
||||||
Hotel Operating Revenues: | ||||||||||||||||
Other Revenues | $ 54 | $ 44 | $ 13 | $ 12 | $ 10,082 | $ 26 | $ 31 | $ 235 | ||||||||
Hotel Operating Expenses: | ||||||||||||||||
Other Income (Expense) | 51,847 | 50,306 | 51,569 | 5,826 | 59,443 | 53,534 | 54,471 | 54,106 | ||||||||
(Loss) Income from Unconsolidated Joint Venture Investments | (434) | (611) | (589) | (658) | (749) | (669) | (502) | (1,018) | $ (2,292) | $ (2,938) | $ 691 | |||||
Loss Before Income Taxes | (13,481) | (15,655) | (23,372) | 8,501 | (43,352) | (48,201) | (55,908) | (30,470) | (44,007) | (177,931) | (5,755) | |||||
Income Tax Expense | (999) | (277) | (151) | 589 | 17 | 28 | (15,872) | 4,498 | (838) | (11,329) | (92) | |||||
Net Loss | (14,480) | (15,932) | (23,523) | 9,090 | (43,335) | (48,173) | (71,780) | (25,972) | (44,845) | (189,260) | (5,847) | |||||
Preferred Distributions | 6,043 | 6,044 | 6,044 | 6,043 | 6,044 | 6,044 | 6,044 | 6,044 | 24,174 | 24,176 | 24,174 | |||||
Net Income (Loss) applicable to Common Shareholders | $ (18,841) | $ (19,799) | $ (28,590) | $ 2,883 | $ (44,753) | $ (49,185) | $ (67,464) | $ (29,119) | $ (64,347) | $ (190,521) | $ (27,843) | |||||
Earnings per share: | ||||||||||||||||
Basic Net (Loss) Income applicable to Common Shareholders (in dollars per share) | $ (0.48) | $ (0.51) | $ (0.73) | $ 0.07 | $ (1.16) | $ (1.27) | $ (1.75) | $ (0.76) | $ (1.65) | $ (4.93) | $ (0.74) | |||||
(Loss) Income from Continuing Operations Applicable to Common Shareholders (in dollars per share) | $ (0.48) | $ (0.51) | $ (0.73) | $ 0.07 | $ (1.16) | $ (1.27) | $ (1.75) | $ (0.76) | $ (1.65) | $ (4.93) | $ (0.74) | |||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||
Weighted average number of common shares - basic (in shares) | 39,149,120 | 39,139,610 | 39,097,820 | 38,970,893 | 38,640,604 | 38,639,048 | 38,609,922 | 38,564,099 | 39,089,987 | 38,613,563 | 38,907,894 | |||||
Weighted average number of common shares - diluted (in shares) | 39,149,120 | 39,139,610 | 39,097,820 | 39,840,474 | 38,640,604 | 38,639,048 | 38,609,922 | 38,564,099 | 39,089,987 | [1] | 38,613,563 | [1] | 38,907,894 | [1] | ||
Room | ||||||||||||||||
Hotel Operating Revenues: | ||||||||||||||||
Hotel Operating Revenues: | $ 73,797 | $ 68,302 | $ 56,539 | $ 39,350 | $ 28,492 | $ 27,546 | $ 15,139 | $ 71,083 | $ 237,988 | $ 142,260 | $ 424,698 | |||||
Hotel Operating Expenses: | ||||||||||||||||
Hotel Operating Expenses: | 15,631 | 14,706 | 12,350 | 9,198 | 8,637 | 7,436 | 3,622 | 19,092 | 51,885 | 38,787 | 93,488 | |||||
Food & Beverage | ||||||||||||||||
Hotel Operating Revenues: | ||||||||||||||||
Hotel Operating Revenues: | 11,858 | 9,616 | 7,230 | 3,074 | 2,766 | 2,441 | 136 | 10,075 | 31,778 | 15,418 | 65,379 | |||||
Hotel Operating Expenses: | ||||||||||||||||
Hotel Operating Expenses: | 9,351 | 7,123 | 5,409 | 2,873 | 2,513 | 2,344 | 721 | 10,621 | 24,756 | 16,199 | 52,820 | |||||
Other | ||||||||||||||||
Hotel Operating Revenues: | ||||||||||||||||
Hotel Operating Revenues: | 7,768 | 7,289 | 6,314 | 4,729 | 4,114 | 3,734 | 2,137 | 8,780 | 26,100 | 18,765 | 39,591 | |||||
Hotel Operating Expenses: | ||||||||||||||||
Hotel Operating Expenses: | 29,695 | 28,160 | 23,551 | 20,109 | 17,464 | 17,965 | 14,035 | 35,806 | $ 101,515 | $ 85,270 | $ 171,128 | |||||
Noncontrolling Interests Common Units And LTIP Units | ||||||||||||||||
Hotel Operating Expenses: | ||||||||||||||||
Income (loss) Allocated to Noncontrolling Interests | (2,024) | (2,177) | (2,945) | 322 | (4,605) | (5,032) | (7,164) | (2,897) | ||||||||
Consolidated Joint Ventures | ||||||||||||||||
Hotel Operating Expenses: | ||||||||||||||||
Income (loss) Allocated to Noncontrolling Interests | $ 342 | $ 0 | $ 1,968 | $ (158) | $ (21) | $ 0 | $ (3,196) | $ 0 | ||||||||
|
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Real Estate and Accumulated Depreciation | |||
Aggregate cost of land, buildings and improvements | $ 1,450,092 | $ 1,633,467 | $ 1,675,650 |
Buildings and Improvements | Minimum | |||
Real Estate and Accumulated Depreciation | |||
Useful life of fixed asset | 7 years | ||
Buildings and Improvements | Maximum | |||
Real Estate and Accumulated Depreciation | |||
Useful life of fixed asset | 40 years |
SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION (Reconciliation Of Real Estate and Accumulated Depreciation) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reconciliation of Real Estate | |||
Balance at beginning of year | $ 2,220,936 | $ 2,228,864 | $ 2,206,701 |
Additions during the year | 5,322 | 17,967 | 22,163 |
Dispositions | (187,078) | (25,895) | 0 |
Total Real Estate | 2,039,180 | 2,220,936 | 2,228,864 |
Reconciliation of Accumulated Depreciation | |||
Balance at beginning of year | 396,016 | 340,499 | 277,580 |
Depreciation for year | 57,768 | 64,083 | 62,919 |
Accumulated depreciation on assets sold | (47,074) | (8,566) | 0 |
Balance at the end of year | $ 406,710 | $ 396,016 | $ 340,499 |
Label | Element | Value |
---|---|---|
Gain (Loss) On Redemption Of Joint Venture Interest | ht_GainLossOnRedemptionOfJointVentureInterest | $ 0 |
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