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Business
 9 Months Ended
Sep. 30, 2013
Business and Basis of Presentation  
Business

Note 1. Business

 

Organization

Carey Watermark Investors Incorporated (together with its consolidated subsidiaries, “CWI”, “we”, “us”, or “our”) is a publicly owned, non-listed real estate investment trust (“REIT”) formed as a Maryland corporation in March 2008 for the purpose of acquiring, owning, disposing of and, through our advisor, managing and seeking to enhance the value of, interests in lodging and lodging related properties primarily in the United States (“U.S.”). We conduct substantially all of our investment activities and own all of our assets through CWI OP, LP, (our “Operating Partnership”). We are a general partner and a limited partner and own a 99.985% capital interest in the Operating Partnership. Carey Watermark Holdings, LLC (“Carey Watermark Holdings”), which is owned indirectly by W. P. Carey Inc. (“W. P. Carey”) and Watermark Capital Partners, LLC (“Watermark Capital Partners”), holds a 0.015% special general partner interest in the Operating Partnership.

 

We are managed by our advisor, Carey Lodging Advisors, LLC, an indirect subsidiary of W. P. Carey. Our advisor manages our overall portfolio, including providing oversight and strategic guidance to the independent hotel operators that manage our hotels. Our subadvisor, CWA, LLC, a subsidiary of Watermark Capital Partners, provides services to the advisor primarily relating to acquiring, managing, financing and disposing of our hotels and overseeing the independent operators that manage the day-to-day operations of our hotels. In addition, the subadvisor provides us with the services of our chief executive officer during the term of the subadvisory agreement, subject to the approval of our independent directors.

 

The following table sets forth certain information for each of the hotels that we consolidate in our financial statements (our “Consolidated Hotels”), as further discussed in Note 4, and the hotels that we record as equity investments in our financial statements (our “Unconsolidated Hotels”), as further discussed in Note 5, at September 30, 2013.

 

               
(Dollars in thousands)             
Hotel State Number of Rooms % Owned Our Investment (a) Acquisition Date Hotel Type
Consolidated Hotels             
 Hampton Inn Boston Braintree Massachusetts  103 100% $ 12,500 May 31, 2012 Select-service
 Hilton Garden Inn New Orleans French Quarter/CBD Louisiana  155 88%   16,176 June 8, 2012 Select-service
 Lake Arrowhead Resort and Spa (b) California  173 97%   24,039 July 9, 2012 Full-service
 Courtyard San Diego Mission Valley California  317 100%   85,000 December 6, 2012 Select-service
 Hilton Southeast Portfolio:             
  Hampton Inn Atlanta Downtown Georgia  119 100%   18,000 February 14, 2013 Select-service
  Hampton Inn Frisco Legacy Park Texas  105 100%   16,100 February 14, 2013 Select-service
  Hampton Inn Memphis Beale Street Tennessee  144 100%   30,000 February 14, 2013 Select-service
  Hampton Inn Birmingham Colonnade Alabama  133 100%   15,500 February 14, 2013 Select-service
  Hilton Garden Inn Baton Rouge Airport Louisiana  131 100%   15,000 February 14, 2013 Select-service
 Courtyard Pittsburgh Shadyside Pennsylvania  132 100%   29,900 March 12, 2013 Select-service
 Hutton Hotel Nashville Tennessee  247 100%   73,600 May 29, 2013 Full-service
 Holiday Inn Manhattan 6th Avenue Chelsea New York  226 100%   113,000 June 6, 2013 Full-service
 Fairmont Sonoma Mission Inn & Spa California  226 75%   76,647 July 10, 2013 Full-service
 Marriott Raleigh City Center North Carolina  400 100%   82,193 August 13, 2013 Full-service
      2,611   $ 607,655    
Unconsolidated Hotels             
 Hyatt New Orleans French Quarter Louisiana  254 80% $ 13,000 September 6, 2011 Full-service
 Westin Atlanta Perimeter North Georgia  372 57%   13,170 October 3, 2012 Full-service
      626   $ 26,170    

____________

  • For our Consolidated Hotels, amount represents the fair value of net assets acquired less the fair market value of amounts attributable to noncontrolling interests, exclusive of acquisition expenses and any debt assumed, at time of acquisition. For Unconsolidated Hotels, amount represents purchase price plus capitalized costs, inclusive of fees paid to the advisor, at the time of acquisition.
  • This property became a member of the Autograph Collection, a collection of upper-upscale and luxury independent hotels sponsored by Marriott International, Inc. (“Marriott”), on September 30, 2013.

 

In addition, on October 23, 2013, we acquired a 100% interest in another Consolidated Hotel, the Hawks Cay Resort, a full service hotel located on Duck Key, Florida, for $133.8 million (Note 11).

Public Offering

 

In our initial public offering, which ran from September 15, 2011 through September 15, 2013, we raised $582.4 million, inclusive of reinvested distributions through our distribution reinvestment plan (“DRIP”). Our initial public offering was offered on a “best efforts” basis by Carey Financial, LLC (“Carey Financial”), an affiliate of the advisor, and other selected dealers. We intend to invest the remaining net proceeds of our initial public offering in a portfolio of interests in lodging and lodging related properties.

 

As discussed in further detail in Note 11, on October 25, 2013, we filed a registration statement with the SEC for a possible continuous public offering of up to an additional $350.0 million of our common stock, which we refer to as the “follow-on offering.”

 

Distributions

 

Our third quarter 2013 declared daily distribution was $0.0016304 per share, comprised of $0.0013587 per day payable in cash and $0.0002717 per day payable in shares of our common stock, which equated to $0.6000 per share on an annualized basis and was paid on October 15, 2013 to stockholders of record on each day during the third quarter.