Investment in Unconsolidated Entities

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

On June 9, 2014, the Company acquired a 10.3% interest in the NewINK JV, a joint venture between affiliates of NorthStar Realty Finance Corp. ("NorthStar") and the operating partnership. The Company accounts for this investment under the equity method. NorthStar merged with Colony Capital, Inc. ("Colony") on January 10, 2017 to form a new company, CLNY, which owns an 89.7% interest and the Company owns a 10.3% interest in the NewINK JV. The values of NewINK JV assets and liabilities were adjusted to reflect estimated fair market values at the time Colony merged with NorthStar. As of December 31, 2019 and December 31, 2018, the Company's share of partners' capital in the NewINK JV is approximately $40.6 million and $47.5 million, respectively, and the total difference between the carrying amount of the investment and the Company's share of partners' capital is approximately $55.8 million and $57.1 million (for which the basis difference related to amortizing assets is being recognized over the life of the related assets as a basis difference adjustment). The Company serves as managing member of the NewINK JV. During the years ended December 31, 2019 and 2018, the Company received cash distributions from the NewINK JV as follows (in thousands):


	For the year ended
	December 31,
	2019		2018
Cash generated from other activities and excess cash	$	1,542	$	3,186


Total	$	1,542	$	3,186

On November 17, 2014, the Company acquired a 10.0% interest in Inland JV, a joint venture between affiliates of NorthStar and the Operating Partnership. The Company accounts for this investment under the equity method. NorthStar merged with Colony Capital, Inc. ("Colony") on January 10, 2017 to form a new company, CLNY, which owns a 90.0% interest in the Inland JV. The values of Inland JV assets and liabilities were adjusted to reflect estimated fair market values at the time Colony merged with NorthStar. As of December 31, 2019 and 2018, the Company's share of partners capital in the Inland JV was approximately $28.4 million and $32.3 million, respectively, and the total difference between the carrying amount of the investment and the Company's share of partners' capital is approximately $10.4 million and $10.7 million, respectively (for which the basis difference related to amortizing assets is being recognized over the life of the related assets as a basis difference adjustment). The Company serves as managing member of the Inland JV. During the years ended December 31, 2019 and 2018, the Company received cash distributions from the Inland JV as follows (in thousands):


	For the year ended
	December 31,
	2019		2018
Cash generated from other activities and excess cash	$	1,150	$	1,850


Total	$	1,150	$	1,850

On May 9, 2017, the NewINK JV refinanced the $840.0 million loan collateralized by the 47 hotels with a new $850.0 million loan with an interest rate of LIBOR plus a spread of 2.79% and had an initial maturity of June 7, 2019 and three one-year extension options. The NewINK JV exercised the first extension and the maturity was extended to June 7, 2020. On November 7, 2019, the NewINK JV refinanced the $850.0 million loan with a new $855.0 million, non-recourse loan from Morgan Stanley Bank, N.A. JPMorgan Chase Bank, National Association, and Bank of America, N.A. (collectively the "Lender"), collateralized by the 46 hotels. The new loan bears interest at a rate of LIBOR plus a spread of 2.82%, has an initial maturity of November 7, 2021 and five one-year extension options.

On June 9, 2017, the Inland JV refinanced the $817.0 million loan collateralized by the 48 hotels with a new $780.0 million non-recourse loan with Column Financial, Inc. On June 9, 2017, the Company contributed an additional $5.0 million of capital related to its share in the Inland JV to reduce the debt collateralized by the 48 hotels. The new loan bears interest at a rate of LIBOR plus a spread of 3.3%, has an initial maturity of July 9, 2019 and three one-year extension options. The Inland JV exercised the first extension and the maturity was extended to July 7, 2020.

The Company’s ownership interests in the JVs are subject to change in the event that either the Company or CLNY calls for additional capital contributions to the respective JVs necessary for the conduct of business, including contributions to fund costs and expenses related to capital expenditures. In connection with (i) the non-recourse mortgage loan secured by the NewINK JV properties and the related non-recourse mezzanine loans secured by the membership interests in the owners of the NewINK JV properties and (ii) the non-recourse mortgage loan secured by the Inland JV properties, the Operating Partnership provided the applicable lenders with customary environmental indemnities, as well as guarantees of certain customary non-recourse carveout provisions such as fraud, material and intentional misrepresentations and misapplication of funds. In some circumstances, such as the bankruptcy of the applicable borrowers, the guarantees are for the full amount of the outstanding debt, but in most circumstances, the guarantees are capped at 15% of the debt outstanding at the time in question (in the case of the NewINK JV loans) or 20% of the debt outstanding at the time in question (in the case of the Inland JV loans). In connection with each of the NewINK JV and Inland JV loans, the Operating Partnership has entered into a contribution agreement with its JV partner whereby the JV partner is, in most cases, responsible to cover such JV partner’s pro rata share of any amounts due by the Operating Partnership under the applicable guarantees and environmental indemnities. The Company manages the JVs and will receive a promote interest in each applicable JV if it meets certain return thresholds for such JV. CLNY may also approve certain actions by the JVs without the Company’s consent, including certain property dispositions conducted at arm’s length, certain actions related to the restructuring of the applicable JV and removal of the Company as managing member in the event the Company fails to fulfill its material obligations under the applicable joint venture agreement.

The Company's investments in the NewInk JV and the Inland JV are $(15.2) million and $18.0 million, respectively, at December 31, 2019. The following tables sets forth the total assets, liabilities, equity and components of net income (loss), including the Company's share, related to all JVs for the years ended December 31, 2019, 2018 and 2017 (in thousands):


Balance Sheet
	December 31, 2019		December 31, 2018		December 31, 2017
Assets
Investment in hotel properties, net	$	2,221,718	$	2,309,396	$	2,363,726
Other assets	104,560		118,600		130,910
Total Assets	$	2,326,278	$	2,427,996	$	2,494,636

Liabilities
Mortgages and notes payable, net	$	1,612,217	$	1,606,334	$	1,597,351
Other Liabilities	34,948		37,051		38,773
Total Liabilities	1,647,165		1,643,385		1,636,124

Equity
Chatham Lodging Trust	69,008		79,744		87,326
Joint Venture Partner	610,105		704,867		771,186
Total Equity	679,113		784,611		858,512
Total Liabilities and Equity	$	2,326,278	$	2,427,996	$	2,494,636


	For the year ended
	December 31,
	2019		2018		2017
Revenue	$	496,485	$	498,507	$	487,174
Total hotel operating expenses	329,879		329,756		294,280
Hotel operating income	$	166,606	$	168,751	$	192,894
Impairment loss	$	41,132	$	—	$	—
Net loss from continuing operations	$	(76,869)	$	(24,400)	$	(107)
Loss on sale of hotels	$	(2,129)	$	—	$	—
Net loss	$	(78,998)	$	(24,400)	$	(107)

(Loss) income allocable to the Company	$	(8,044)	$	(2,472)	$	7
Basis difference adjustment	$	1,596	$	1,596	$	1,575
Total (loss) income from unconsolidated real estate entities attributable to Chatham	$	(6,448)	$	(876)	$	1,582