SHAREHOLDERS’ EQUITY, NONCONTROLLING INTERESTS IN PARTNERSHIP, AND REDEEMABLE NON-CONTROLLING INTERESTS

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

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, 2022, 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, 2022 and 2021 are summarized as follows:

							Dividend Per Share (1)
	Shares Outstanding						Year Ended December 31,
Series	December 31, 2022	December 31, 2021	Aggregate Liquidation Preference		Distribution Rate		2022		2021
Series C	3,000,000	3,000,000	$	75,000	6.875	%	$	1.7188	$	3.4376
Series D	7,701,700	7,701,700	192,543		6.500	%	1.6250		3.2500
Series E	4,001,514	4,001,514	100,038		6.500	%	1.6250		3.2500
Total	14,703,214	14,703,214

(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. The Company is current on dividend obligations on all Series of cumulative redeemable preferred stock as of December 31, 2022.

Our Board of Trustees authorized a share repurchase program for up to $50,000 of common shares which expired on December 31, 2020. For the year ended December 31, 2020, 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, 2021 and December 31, 2022.

NOTE 12 – SHAREHOLDERS’ EQUITY, NONCONTROLLING INTERESTS IN PARTNERSHIP, AND REDEEMABLE NON-CONTROLLING INTERESTS (CONTINUED)

Common Units and LTIP Units

The noncontrolling interest of Common Units and LTIP Units totaled $73,461 as of December 31, 2022 and $51,246 as of December 31, 2021. As of December 31, 2022, there were 6,940,053 Common Units and LTIP Units collectively outstanding with a fair market value of $59,129, 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, 2022, 2021 and 2020 was 1,755,193, 1,835,820 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, 2022 and 2021, 80,627 and 241,545 Common Units were converted to common shares, respectively, and there were no conversions of Common Units during the year ended December 31, 2020. In addition, as noted in “Note 9 – Share Based Payments,” during 2022, the Company issued 194,427 LTIP Units. During December 31, 2022, 100,000 LTIP Units were converted to common shares.

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, 2022, 2021 and 2020, based on the income allocation methodology described above, the noncontrolling interest in this joint venture was allocated losses of $0, $158 and $21, respectively, and is recorded as part of the (Income) Loss Allocated to Noncontrolling Interests line item within the Consolidated Statements of Operations. We reclassified $2,766 and $2,310 from Additional Paid in Capital to Noncontrolling Joint Venture Interest to recognize the minority interest at the put option redemption value of $5,076 and $2,310, at December 31, 2022 and December 31, 2021, respectively.