Subsequent Events

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Inland JV has not been successful in negotiating a forbearance agreement with its lenders. After June 30, 2020, at the direction of the special servicer for the Inland JV loan, control of Inland JV properties is starting to be transitioned to a court appointed receiver. When the receiver has been appointed for Inland JV hotels, it has replaced IHM with new hotel management companies. The Inland JV debt is non-recourse to Chatham with the exception of customary non-recourse carve-out provisions such as fraud, material and intentional misrepresentations and misapplication of funds. A default under the Inland JV loan agreement does not trigger a cross-default under any of Chatham’s debt agreements.

On August 4, 2020, a subsidiary of Chatham entered into an agreement with affiliates of Mack Real Estate Credit Strategies to obtain a $40 million loan to fund the remaining construction costs of the Warner Center hotel development. $1.5 million of the loan was funded at close and additional amounts will be funded over time as work on the project is completed. The loan has an initial term of 4 years and there are two six-month extension options. The rate on the loan is LIBOR, subject to a 0.25% floor, plus a spread of 7.5%. After the property has achieved a 9.0% debt yield, the spread will decrease to 6.0%. The loan is guaranteed by Chatham Lodging, L.P.