10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-K

	(Mark one)
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2017
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _______________ to _________________

Commission file number: 001-34087

Condor Hospitality Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	52-1889548
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
4800 Montgomery Lane Ste. 220, Bethesda, MD	20814
(Address of principal executive offices)	(Zip Code)

(301)  861-3305

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value per share	NYSE American

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [  ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer   [  ]  (Do not check if a smaller reporting company)	Smaller reporting company [X]
(Do not check if a smaller reporting company)	Emerging growth company [  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of June 30, 2017 the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $55.7 million based on the price at which the common stock was last sold on that date as reported on the Nasdaq Global Market. At March 13, 2018, there were 11,934,429 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive Proxy Statement for the Registrant’s 2018 Annual Meeting of Stockholders to be filed within 120 days of the fiscal year ended December 31, 2017, are incorporated into Part III.

TABLE OF CONTENTS

		Form 10-K
		Report
Item No.		Page
	PART I
1	Business	2
1A.	Risk Factors	2
1B.	Unresolved Staff Comments	23
2	Properties	24
3	Legal Proceedings	24
4	Mine Safety Disclosures	24
	PART II
5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
6	Selected Financial Data	28
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
7A.	Quantitative and Qualitative Disclosures about Market Risk	47
8	Financial Statements and Supplementary Data	49
9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	95
9A.	Controls and Procedures	95
9B.	Other Information	95
	PART III
10	Directors, Executive Officers and Corporate Governance	96
11	Executive Compensation	96
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	96
13	Certain Relationships and Related Transactions, and Director Independence	96
14	Principal Accountant Fees and Services	97
	PART IV
15	Exhibits and Financial Statement Schedules	97

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FORWARD-LOOKING STATEMENTS

Certain information both included and incorporated by reference in this Form 10-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on assumptions that management has made in light of experience in the business in which we operate, as well as management’s perceptions of historical trends, current conditions, expected future developments, and other factors believed to be appropriate under the circumstances. These statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control), and assumptions. Management believes that these forward-looking statements are based on reasonable assumptions.

Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies, and expectations are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative thereof or other variations thereon or comparable terminology. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of capital, risks associated with debt financing, interest rates, competition, supply and demand for hotel rooms in our current and proposed market areas, policies and guidelines applicable to real estate investment trusts, and other risks and uncertainties described herein, and in our filings with the Securities and Exchange Commission (“SEC”) from time to time.  These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference herein.  We caution readers not to place undue reliance on any forward-looking statements included in this report which speak only as of the date of this report.

PART I

ITEM 1. BUSINESS

References to the “Company”, “we,” “our,” and “us,” refer to Condor Hospitality Trust, Inc., including, as the context requires, its direct and indirect subsidiaries.

Overview

Condor Hospitality Trust, Inc. was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. Our common stock began  trading on October 30, 1996and today trades under the symbol “CDOR” on the NYSE American stock exchange.

The Company is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels.  As of December 31, 2017, the Company owned 18 hotels, representing 2,176 rooms, in nine states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).

We conduct our business through a traditional umbrella partnership REIT, or UPREIT, in which our hotel properties are owned by our operating partnership, Condor Hospitality Limited Partnership and its subsidiaries (the “operating partnership”), for which we serve as general partner. As of December 31, 2017, we owned an approximate 99.3% ownership interest in the operating partnership.  In the future, the operating partnership may issue limited partnership interests to third parties from time to time in connection with our acquisition of hotel properties or the raising of capital.  The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, the operating partnership and its subsidiaries lease our

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hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (“the TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels.  Our independent management companies are not affiliated with us or our management team.  The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. 

Our significant events for 2017 include:

· On February 28, 2017, all of the outstanding shares of the Company’s 6.25% Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) were voluntarily converted by the holders into 6,004,957 shares (subject to the reverse split as described below) of common stock and the holders received 925,000 shares of 6.25% Series E Cumulative Convertible Preferred Stock (“Series E Preferred Stock”) in the transaction.

· On March 1, 2017, the Company entered into a new $90.0 million secured revolving credit facility (the “credit facility”).  On May 12, 2017, the credit facility borrowing capacity was increased to $150.0 million. The credit facility borrowing capacity may be increased up to as much as $400.0 million in the future, subject to certain conditions.

· On March 15, 2017, the Company executed a 1-for-6.5 reverse stock split.  All share and per share information in this document, including information for periods prior to the stock split, has been adjusted for the stock split as if the stock split occurred on the first day of the periods presented.

· On March 29, 2017, the Company completed its underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50 with net proceeds totaling $45.9 million.  The Company repaid borrowings under its credit facility with the net proceeds, thereby increasing the borrowing availability for future acquisitions.

· On March 24, 2017, the Company acquired three Home2 Suites properties for a total of $54.75 million, including the Home2 Suites Austin/Round Rock (Texas), the Home2 Suites Lexington University/Medical Center (Kentucky), and the Home2 Suites Tallahassee State Capitol (Florida). 

· On April 14, 2017, the Company acquired the Home2 Suites Memphis Southaven (Mississippi) for $19.0 million. 

· On June 19, 2017, the Company acquired the Hampton Inn & Suites Lake Mary (Florida) for $19.25 million.

· On July 21, 2017, the Company’s management rang the opening bell of the New York Stock Exchange to celebrate its listing on the NYSE American stock exchange, transferring its listing from the NASDAQ Stock Market.

· On August 31, 2017, the Company acquired two Marriott-branded hotels for a total of $38.8 million, including the Fairfield Inn & Suites El Paso Airport (Texas) and the Residence Inn Austin Airport (Texas).  

· On October 4, 2017, the Company refinanced floating-rate debt totaling $25.0 millionwith a $26.5 million mortgage loan which was effectively converted to fixed rate debt with the simultaneous purchase of an interest rate swap.

· On various dates throughout the year, the Company sold eight legacy hotels for total gross proceeds of $29.1 million and primarily used the net proceeds, after repayment of the underlying loans, to fund acquisitions, to reduce outstanding indebtedness on its credit facility, and for general corporate purposes.

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The following events occurred after December 31, 2017, and are discussed in Note 17, Subsequent Events, to the consolidated financial statements presented elsewhere in this Form 10-K.

· On January 18, 2018, the Company acquired the TownePlace SuitesAustin  North Tech Ridge (Texas) for $19.75 million.

· On February 21, 2018, the Company acquired the Home2 Suites Summerville Charleston (South Carolina) for $16.325 million.

· The Company sold two legacy assets for gross proceeds totaling $8.2 million.

We are engaged primarily in the business of owning equity interests in hotel properties and therefore our business is disclosed as one reportable segment.  See the consolidated financial statements and notes thereto included in Item 8 of this Annual Report on Form 10-K for certain financial information required in this Item 1.

Mission Statement

Our mission is to provide to our shareholders attractive total returns for the lodging sector through (1) disciplined investment in high-quality select-service, limited-service, extended stay, and compact full service hotels, and (2) intensive asset management to achieve enhanced results.

We strive to achieve this mission through the disciplined and efficient execution of the following Core Strategies:

· Acquisition Strategy

· Disposition Strategy

· Asset Management Strategy

· Financing Strategy

We understand that we cannot achieve our mission alone and therefore work with the following independent businesses, who we collectively refer to as Business Partners, in the execution of our mission:

· Franchise Partners

· Hotel Management Company Partners

Core Strategies

Acquisition Strategy

The objective of our acquisition strategy is to enable us to acquire assets that meet our target property characteristics and investment criteria at attractive valuations. We believe that our existing relationships with owners, operators, and developers of select-service hotels will provide us with access to certain off-market acquisition opportunities ahead of other real estate investors.  Typically, off-market transactions lead to more attractive valuation outcomes.  Our organizational documents do not limit the types of investments we can make; however, our intent is to execute the acquisition strategy as detailed herein.

We believe our target property characteristics and investment criteria, coupled with our ability to source off-market transactions, differentiates us from our peers and will enable us to achieve our mission to obtain attractive returns to our shareholders.

Hotels purchased in and since 2012 are referred to throughout as “new investment platform” properties while properties owned prior to 2012 are referred to as “legacy” properties.

Target Property Characteristics

Our target properties are high-quality select-service, limited-service, extended stay, and compact full service hotels located primarily in the top 100 Metropolitan Statistical Areas (“MSAs”), with a focus on the top 21 – 60 MSAs.  From time to time, we may acquire assets outside these target MSAs if we are able to acquire the asset at an

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attractive valuation and have confidence in the value proposition of the property.  If within a top 25 MSA, the asset will typically be located within an attractive sub- market of the larger MSA.  The hotels we will look to acquire will be franchised under premium flags by brands such as Hilton, Marriott/Starwood, IHG, and Hyatt and operated by third-party management companies.

In 2017, we acquired seven assets that meet our investment criteria: Home2 Suites Lexington, KY, Home2 Suites Austin-Rock Rock, TX, Home2 Suites Tallahassee, FL, Home2 Suites Memphis-Southaven, MS, Hampton Inn & Suites Orlando-Lake Mary, FL, Fairfield Inn & Suites El Paso, TX, and Residence Inn Austin, TX.  Subsequent to the end of 2017,  we completed the acquisition of two additional properties: TownePlace Suites Austin and Home2 Suites Charleston-Summerville.

Investment Criteria

We perform thorough due diligence and utilize extensive research to evaluate any target market or property.  This due diligence and research may include, but is not limited to, analyzing the long-term economic outlook of an MSA, reviewing trends in local lodging demand and supply, assessing property condition and required capital investment, and understanding historical property financial performance.  Specific investment criteria for hotels we are looking to acquire may include but are not limited to hotels that:  

· operate under leading premium franchise brands and possess key attributes such as building design and décor that is consistent with current generation brand standards;

· are located within the top 100 MSAs, in close proximity to multiple demand drivers, including large corporations, regional hospitals, regional business hubs, recreational travel destinations, significant retail centers, and military installations, among others;

· are located within markets that have favorable economic, job growth, and demographic factors;

· have illustrated an ability to generate stabilized and dependable revenue and net operating income;

· were constructed less than ten years prior to our acquisition or have been recently significantly renovated  to current brand standards, and have significant time (generally ten or more years) remaining on the existing franchise license;

· have some value-added growth potential through operating efficiencies, institutional asset management, repositioning, renovations, or rebranding;

· can be acquired at a discount to replacement cost; and/or

· can be acquired in off-market transactions.

Select-service hotels typically generate most of their revenue from room rentals, have limited food and beverage outlets, contain less meeting space, and require fewer employees than traditional full-service hotels. We believe premium-branded upper-midscale and upscale select-service hotels have the potential to generate attractive risk-adjusted returns relative to other types of hotels due to their ability to achieve Revenue per Available Room (“RevPAR”) levels at or close to those achieved by traditional full-service hotels while achieving higher profit margins due to their more efficient operating model and less volatile cash flows.

Disposition Strategy

Currently we are nearing completion of a nine year process of transitioning our portfolio from economy hotels to high-quality select-service, limited-service, extended stay, and compact full service hotels.  In order to achieve this objective, we have focused on disposing of legacy assets that do not meet the property characteristics and investment criteria discussed above.  Since January 1, 2009 through the date of this document, we have sold 120 hotels, of which 52 have been sold since January 1, 2015.  The value unlocked from asset sales has been and will continue to be redeployed into newer, higher-quality assets meeting the acquisition strategy discussed above.  Just as we carefully evaluate the hotels we plan to acquire, our asset management team has evaluated the timing and composition of the legacy hotels to be disposed of in a manner we believe will maximize returns for our shareholders.  We are committed to a disciplined but timely monetization of the legacy assets in order to achieve the strategic repositioning of the portfolio.  In 2018, we will continue to dispose of assets that do not fit the new strategic vision of our portfolio and have three additional legacy hotels that we consider held for sale at December

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31, 2017, two of which have been soldsubsequent to December 31, 2017 and the remaining one of which is currently under contract to sell.

Additionally, from time to time, we may undertake the sale of one or more hotels that meet the property characteristics and investment criteria discussed above.  These disposition decisions are the result of a thorough analysis and typically in response to changes in market conditions, our current or projected return on our investment in the hotel, or other factors which we deem relevant to the disposition decision.

Asset Management Strategy

Through collaboration with our third-party operators, we seek to maximize value to our shareholders through improvements to our existing hotels’ operating results.  We work toward this goal by constantly monitoring the performance of each individual hotel and identifying opportunities for value-enhancement through intensive asset management strategies.  We will make recommendations to our third-party operators in all aspects of our hotels operations, including revenue management, physical design, guest experience, market positioning, and overall property strategy.  Fundamentally, all strategies are focused on growing the revenue of a hotel, controlling expenses, and/or maximizing the guest experience to drive returns.

We work with our third-party operators to develop short- and long-term capital investment plans that are focused on generating positive returns for our shareholders.  The capital improvements may involve investments in expansions, additions, renovations, technology upgrades, and/or energy efficiency improvements.

Additionally, from time to time, we may come to the conclusion that a particular asset may provide greater returns to our shareholders after an extensive repositioning of the asset in the market.  In these instances, capital investment in a greater amount than typical for an asset may be required to achieve the desired repositioning.  These decisions will be made after a thorough analysis of the property, market conditions, and the potential for a positive return on investment that exceeds our investment hurdle rates.

Financing Strategy

Our financing strategy is to seek to minimize the cost of our capital in order to maximize the returns generated for our shareholders.  We intend to finance our long-term growth with equity capital raises and debt financings that have staggered maturities.  From time to time, when purchasing hotel properties, we may issue limited partnership interests in our operating partnership to third parties as full or partial consideration to sellers.  Currently, our debt includes a revolving line of credit secured by certain hotels and mortgages secured by our hotel properties.  In the future we plan on using the revolving credit facility, term loans, equity issuances, and mortgage debt financings to fund future acquisitions as well as for property redevelopments, return on investment initiatives, and working capital requirements.

Since we are structured as an UPREIT, we may seek to issue limited partnership interest of our operating partnership for raising capital, or when acquiring hotel assets as full or partial consideration to sellers who may desire to take advantage of tax deferral on the sale of a hotel or participate in the income, and potential value appreciation, of our common stock.

Business Partners

Franchise Partners

We believe that in order to achieve our mission we must partner with the right franchisors of quality brands in our target segments.  To this end, we have built strong relationships with many of who we believe are the leading franchisors of the strongest brands in the segments we target, including Hilton, Marriott/Starwood, IHG, and Hyatt.  The franchisors provide a variety of benefits and value which include national advertising, marketing programs to increase brand awareness, personnel training, and centralized reservation systems.  We are constantly monitoring and evaluating the performance of these franchisors and their respective brands so that, when necessary, we can adapt our franchise partner strategy to maximize returns to our shareholders.

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Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue.  The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements.  Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term.

Our 18  hotels owned at December 31, 2017, including the hotel owned through the Atlanta JV, operate under the following national and independent brands.  Pursuant to our previously discussed strategy, we envision the composition of this brand portfolio to continue to change as we continue to transition the portfolio.

Franchise Brand	Number of Hotels	Number of Rooms
New Investment Platform Properties:
Aloft (1)	2	410
Courtyard by Marriott (1)	1	120
Fairfield Inn & Suites (1)	1	124
Hampton Inn & Suites (2)	1	130
Hilton Garden Inn (2)	1	100
Hotel Indigo (3)	1	142
Home2 Suites (2)	4	431
Residence Inn (1)	1	120
SpringHill Suites (1)	1	116
Legacy Properties:
Super 8 (4)	1	121
Comfort Suites (5) (8)	2	262
Quality Inn (5)	1	59
Supertel Inn (6) (7)*	1	41
Total	18	2,176

(1)	Aloft®, Courtyard by Marriott®, Fairfield Inn & Suites®, Residence Inn®, and  Springhill Suites® are registered trademarks of Marriott International
(2)	Hampton Inn®, Hilton Garden Inn®, and Home2 Suites®  are registered trademarks of Hilton Hotels Corporation
(3)	Hotel Indigo® is a registered trademark of InterContinental Hotels Group
(4)	Super 8®  is a registered trademark of Wyndham Worldwide
(5)	Comfort Suites® and Quality Inn® are registered trademarks of Choice Hotels International, Inc.
(6)	Supertel Inn®  is a registered trademark of Condor Hospitality Trust, Inc.
(7)	Asset was disposed of after December 31, 2017
(8)	One asset was disposed of after December 31, 2017 and one asset is currently under contract to be sold
(*)	Independent hotel brands

Hotel Management Company Partners

As a REIT, we are not permitted to directly operate any of our hotels.  We partner closely with some of who we believe are the leading hotel management companies in order to operate our hotels with the ultimate objective of improving same-store hotel performance throughout our portfolio.  Each management agreement provides for a set term and is subject to early termination upon the occurrence of defaults and certain other events.  As required under the REIT qualification rules, each manager must qualify as an “eligible independent contractor” during the term of the management agreement.

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Our 18 hotels owned at December 31, 2017, including the hotel owned through the Atlanta JV, are operated by the following third-party management companies:

Management Company	Number of Hotels	Number of Rooms
Peachtree Hospitality Management, LLC	4	508
Vista Host, Inc.	4	431
Hospitality Management Advisors, Inc.	2	262
Aimbridge Hospitality	2	244
Kinseth Hotel Corporation	2	162
Cherry Cove Hospitality Management, LLC	2	159
Boast Hotel Management Company	1	254
Presidian Hotels	1	156
Total	18	2,176

Seasonality of Hotel Business

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters of the year.  The results of our new investment platform hotels, because of their locations and chain scale, are less seasonal in nature than our legacy portfolio of assets.

Competition

The hotel industry is highly competitive.  Each of our hotels is located in a developed area that includes other hotel properties.  The number of competitive hotel properties in a particular area could have a material adverse effect on revenue, occupancy, and the average daily room rate of our hotels or of hotel properties acquired in the future, and thus our financial results.

We may compete for investment opportunities with entities that have substantially greater financial resources than us.  These entities generally may be able to accept more risk than we can prudently manage. Competition in general may reduce the number of suitable investment opportunities for us and increase the bargaining power of property owners seeking to sell. 

Tax Status

The Company qualifies and intends to continue to qualify as a REIT under the applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code 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, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will be unable to re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT, unless we satisfy certain relief provisions.  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 the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes. 

Employees

At December 31, 2017, the Company had 14 employees.  The staff at our hotels are employed by our third-party hotel managers.

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Available Information

Our executive offices are located at 4800 Montgomery Lane, Suite 220, Bethesda, Maryland 20814, our telephone number is (301) 861-3305, and we maintain an Internet website located at www.condorhospitality.com.  Our annual reports on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these reports are available free of charge on our website as soon as reasonably practicable after they are filed with the SEC.  We also make available the charters of our board committees and our Code of Business Conduct and Ethics on our website.  Copies of these documents are available in print to any shareholder who requests them.  Requests should be sent to Condor Hospitality Trust, Inc., 4800 Montgomery Lane, Suite 220, Bethesda, MD 20814, Attn: Corporate Secretary.

Item 1A. Risk Factors

The following discussion concerns the risks associated with our business that should be reviewed and considered carefully. Our business faces many risks and the risks described below may not be the only risks we face. Other risks and uncertainties not presently known to us may also materially and adversely affect our business, the value of our shares, and our ability to pay dividends to our shareholders. Additionally, the risks detailed below are interrelated and should be considered as a whole. In connection with the forward-looking statements that appear in this Annual Report on Form 10-K, you should carefully review the section entitled “Forward-Looking Statements.”

For presentation purposes only, we categorize the risk factors into four broad categories:

· Risk Related to Our Business & Operations

· Risks Related to the Hotel Industry

· Risks Related to the Real Estate Industry

· Risks Related to Our Structure & Organization

Risks Related to Our Business & Operations

Failure of the economy to improve or remain stable may adversely affect our ability to execute our business strategies, which in turn would adversely affect our ability to make distributions to our stockholders.

Our ability to execute our business strategy is affected by economic conditions, and we cannot assure you that economic fundamentals will improve or remain stable. The housing market collapse and world events outside our control, such as terrorism, have adversely affected the economy in the recent past.  If events like these reoccur, they may adversely affect the economy in the future.  An economic recession could have a dramatic impact on our financial results. In the event conditions in the economy do not improve or remain stable, our ability to execute our business strategies will be adversely effected, which in turn would adversely affect our ability to make distributions to our stockholders.

The departure of any of our key personnel who have significant experience and relationships in the lodging industry, particularly our Chief Executive Officer, J. William Blackham, could materially and adversely affect us.

We depend on the experience and relationships of our executive officers, especially J. William Blackham, our Chief Executive Officer and a member of our board of directors, to manage our day-to-day operations and strategic business direction. Mr. Blackham has extensive experience in the lodging industry, during which time he has established an extensive network of lodging industry contacts and relationships, including relationships with national hotel brands, hotel owners, financiers, operators, commercial real estate brokers, developers and management companies. We can provide no assurances that Mr. Blackham, or any of our key personnel, will continue their employment with us. The loss of the services of any of the members of our management team, or any difficulty attracting and retaining other talented and experienced personnel, could adversely affect our ability to source potential investment opportunities, our relationship with national hotel brands and other industry participants and the execution of our business strategy. Our ability to replace key individuals may be difficult because of the limited number of individuals with the breadth of skills and experience needed to excel in the hotel industry and

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there can be no assurance that we would be able to hire, train, retain, or motivate such individuals. Further, such a loss could be negatively perceived by investors, which could reduce the market value of our common shares.

If we are unable to successfully manage our growth, our operating results and financial condition could be adversely affected.

Our ability to implement our business strategy and grow our business depends upon our senior executive officers’ business contacts and their ability to successfully hire, train, supervise and manage additional personnel. We may not be able to hire and train sufficient personnel or develop management, information and operating systems suitable for our expected growth. If we are unable to manage any future growth effectively, our operating results and financial condition could be adversely affected.

Our future growth is dependent on obtaining new financing and if we cannot secure financing in the future,our growth will be limited.

The success of our growth strategy will depend on access to capital through use of excess cash flow,borrowings or subsequent issuances of common shares or other securities. Acquisitions of new hotel propertieswill require significant additional capital and existing hotels will require periodic capital improvement initiativesto remain competitive. We may not be able to fund acquisitions or capital improvements solely from cashprovided from our operating activities because we must distribute at least 90% of our taxable income (determinedbefore the deduction for dividends paid and excluding any net capital gains) each year to satisfy the requirementsfor qualification as a REIT for federal income tax purposes. As a result, our ability to fund capital expendituresfor acquisitions through retained earnings is very limited. Our ability to grow through acquisitions of hotels willbe limited if we cannot obtain satisfactory debt or equity financing, which will depend on capital marketsconditions.We cannot assure you that we will be able to obtain additional equity or debt financing or that we will be able to obtain such financing on favorable terms.

Our lack of industry, brand, and/or geographic diversification could have an adverse effect on results.

Historically, we  have exclusively bought ownership interest in hotels in the United States.  As a result, we are subject to the risks inherent in investing in a single industry.  A downturn in the U.S. hotel industry may have a pronounced effect on the amount of funds available to us for distribution or on the value of Company’s assets.  Our business is subject to the risks that are common to the hotel industry and that are out of our control.  Additionally, we may face risks associated with any geographic concentration or franchisor concentration. 

Our returns depend on management of our hotels by third parties.

In order to qualify as a REIT, we cannot operate any hotel or participate in the decisions effecting the daily operations of any hotel. Under the REIT Modernization Act of 1999, REITs are permitted to lease their hotels to TRSs. However, a TRS, such as our TRS, may not operate or manage the leased hotels and, therefore, must enter into management agreements with third-party eligible independent contractors to manage the hotels. Thus, an independent operator under a management agreement with our TRS controls the daily operations of each of our hotels.

Under the terms of our management agreements, our ability to participate in operating decisions regarding the hotels is limited. We depend on our management companies to adequately operate our hotels as provided in the management agreements. We do not have the authority to require any hotel to be operated in a particular manner or to govern any particular aspect of the daily operations of any hotel (for instance, setting room rates). Thus, even if we believe our hotels are being operated inefficiently or in a manner that does not result in satisfactory occupancy rates, revenue per available room, and average daily rates, we may not be able to force our management companies to change their methods of operation of our hotels. We can only seek redress if a management company violates the terms of the management agreement with our TRS, and then only to the extent of the remedies provided for under the terms of the applicable management agreement. If any of the foregoing occurs at franchised hotels, our relationship with the franchisors may be damaged, and we may be in breach of one or more of our franchise agreements. Additionally, in the event that we need to replace a management company due to the termination of an

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existing management agreement, we may experience decreased occupancy and other significant disruptions at our hotels and in our operations generally.

We face competition for the acquisition of hotels and we may not be successful in identifying or completing hotel acquisitions that meet our criteria, which may impede our growth.  

One component of our business strategy is expansion through acquisitions, and we may not be successful in identifying or completing acquisitions that are consistent with our strategy. We compete with institutional pension funds, private equity investors, other REITs, hotel companies, and others who are engaged in the acquisition of hotels, most of whom have greater financial resources than we do. This competition for hotel investments may increase the price we pay for hotels and these competitors may succeed in acquiring the hotels we seek to acquire. Furthermore, our potential acquisition targets may find our competitors to be more attractive suitors because they may have greater marketing and financial resources, may be willing to pay more, or may have a more compatible operating philosophy. In addition, the number of entities competing for suitable hotels may increase in the future, which would increase demand for these hotels and the prices we must pay to acquire them. If we pay higher prices for hotels, our returns on investment and profitability may be reduced. 

Future acquisitions may not yield the returns expected, may result in disruptions to our business, may strain management resources, may not be efficiently integrated into operations, and may result in stockholder dilution.

Our business strategy may not ultimately be successful and may not provide positive returns on our investments. Acquisitions may cause disruptions in our operations and divert management’s attention away from day-to-day operations.  If the integration of our acquisitions into our management companies’ operations is not accomplished as efficiently as planned, we will not achieve the expected operating results from the acquisitions.  The issuance of equity securities in connection with any acquisition could be substantially dilutive to our stockholders.

We may not be able to sell hotels on favorable terms.

Since January 1, 2015 through the date of this document, we have sold 52 hotels and our business strategy includes the disposition of assets.  We may not be able to sell such hotels on favorable terms, and such hotels may be sold at a loss. As with acquisitions, we face competition for buyers of our hotel properties. Other sellers of hotels may have the financial resources to dispose of their hotels on unfavorable terms that we would be unable to accept. If we cannot find buyers for any properties that are designated for sale, we will not be able to implement our disposition strategy. In the event that we cannot fully execute our disposition strategy or realize the benefits therefrom, we may not be able to fully execute our growth strategy.There cannot be any assurances that we will sell any hotels, including the hotels currently under contract for sale on the contracted terms or at all as the closing of the sale of such hotels is subject to the satisfaction of customary closing conditions, some of which may not be satisfied.

We may record additional impairment charges on our properties which will negatively impact our results of operations.

We analyze our assets for impairment when events or circumstances occur that indicate an asset’s carrying value may not be recoverable.  For impaired assets, we record an impairment charge equal to the excess of the property’s carrying value over its fair value.  Our operating results for 2017, 2016, and 2015 include $2.2 million, $1.5 million, and $3.7 million, respectively, of net impairment charges related to our hotels.  Factors, many of which are outside our control, such as increased local competition, age and condition of hotels, and national and local declines in the economy, may result in additional impairment charges, which will negatively affect our results of operations. We can provide no assurance that any impairment loss recognized would not be material to our results of operations.

We will likely seek to sell equity and/or debt securities to meet our need for additional cash, and we cannot assure you that such financing will be available and further, in connection with such sales our current shareholders could experience a material amount of dilution.

We may require additional cash resources based on business conditions and any acquisitions we may decide to pursue.  We will likely seek to sell additional equity and/or debt securities.  We cannot assure you that the sale of

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such securities will be available in amounts or on terms acceptable to us, if at all. If our board determines to sell additional shares of common stock or other debt or equity securities, a material amount of dilution may cause the market price of the common stock to decline.

We face risks associated with the use of debt, including the ability to obtain debt financing and refinancing risk.

We may not be able to successfully obtain debt financing or we may not be able to extend, refinance, or repay our existing debt due to a number of factors, including decreased property valuations, limited availability of credit, tightened lending standards, or deteriorating economic conditions. If we are unable to refinance our debt on acceptable terms, we may be forced to dispose of hotel properties on disadvantageous terms, potentially resulting in losses. We have placed mortgages on certain of our hotel properties, have assumed mortgages on other hotels we acquired and may place additional mortgages on certain of our hotels to secure other debt. To the extent we cannot meet any future debt service obligations, we will risk losing some or all of our hotel properties that are pledged to secure our obligations to foreclosure.  If we lack the ability to raise debt or refinance existing debt, our ability to execute our business strategy will be significantly hampered and our financial results may be significantly affected.

Our debt service obligations could adversely affect our operating results, may require us to liquidate our properties, and could limit our ability to make distributions to our stockholders.

We seek to maintain a total stabilized debt level of no more than 70% of our aggregate property investment at cost. We, however, may change or eliminate this target at any time without the approval of our stockholders. In the future, we and our subsidiaries may incur substantial additional debt, including secured debt. Incurring such debt could subject us to many risks, including the risks that:

· our cash flow from operations will be insufficient to make required payment of principal and interest;

· we may be more vulnerable to adverse economic and industry conditions;

· we may be required to dedicate a substantial portion of our cash flow from operations to the repayment of our debt, thereby reducing the cash available for distribution to our stockholders, funds available for operations and capital expenditures, future investment opportunities, or other purposes;

· the terms of any refinancing may not be as favorable as the terms of the debt being refinanced; and

· the use of leverage could adversely affect our stock price and our ability to make distributions to our stockholders

Our results may be negatively affected by interest rate fluctuations and our attempts to hedge this risk may not be effective.

At December 31, 2017, we had long-term debt related to held for use assets of $118.9 million, of which $68.2 million is variable rate debt without an interest rate swap in place that effectively locks its interest rate.  We may enter into new credit facilities or loans where the debt accrues interest at floating rates, or we may refinance debt that currently accrues interest at lower fixed rates.  Higher interest rates could increase our debt service requirements and could reduce the amounts available for distribution to our stockholders, as well as reduce funds available for our operations, future investment opportunities, or other purposes. We may obtain in the future one or more forms of interest rate protection—in the form of swap agreements, interest rate cap contracts, or similar agreements—to “hedge” against the possible negative effects of interest rate fluctuations. However, we cannot assure you that any hedging will adequately mitigate the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations. In addition, we may be subject to risks of default by hedging counterparties. Adverse economic conditions could also cause the terms on which we borrow to be unfavorable.

Operating our hotels under franchise agreements could adversely affect distributions to our shareholders.

At December 31, 2017, 17 of our hotels operate under third party franchise agreements and we are subject to the risks of concentrating our hotel investments in several franchise brands. These risks include reductions in business following negative publicity related to any one of our particular brands. Risks associated with our brands could adversely affect our lease revenues and the amounts available for distribution to our shareholders.

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The maintenance of the franchise licenses for our hotels is subject to our franchisors’ operating standards and other terms and conditions. Our franchisors periodically inspect our hotels to ensure that we and the TRS follow their standards. Failure to maintain these standards or other terms and conditions could result in a franchise license being canceled. As a condition of our continued holding of a franchise license, a franchisor could possibly require us to make capital expenditures, even if we do not believe the capital improvements are necessary or desirable or will result in an acceptable return on our investment. Nonetheless, we may risk losing a franchise license if we do not make franchisor-required capital expenditures.

If a franchisor terminates the franchise license, we may try either to obtain a suitable replacement franchise or to operate the hotel without a franchise license. The loss of a franchise license could materially and adversely affect the operations or the underlying value of the hotel because of the loss of associated name recognition, marketing support, and centralized reservation systems provided by the franchisor. Loss of a franchise license for several of our hotels could materially and adversely affect our revenue. This loss of revenue could, therefore, also adversely affect our cash available for distribution to shareholders.

Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on a co-venturer’s financial condition and disputes between us and our co-venturers.

On August 22, 2016, we entered into a joint venture which acquired the 254-room Aloft hotel in downtown Atlanta, Georgia. Our joint venture partner has joint approval rights with us with respect to most major decisions regarding the hotel or the joint venture. In addition,  we may co-invest in the future with third parties through partnerships, joint ventures or other entities, acquiring non-controlling interests in or sharing responsibility for managing the affairs of a property, partnership, joint venture or other entity. In such event, we would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity. Investments in partnerships, joint ventures, or other entities may, under certain circumstances, involve risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Investments in joint ventures may require that we provide the joint venture entity with the right of first offer or right of first refusal to acquire any new property we consider acquiring directly. Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full control over the partnership or joint venture.

Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. Consequently, actions by, or disputes with, partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk. We may also, in certain circumstances, be liable for the actions of our third-party partners or co-venturers. For example, we may be required to guarantee indebtedness incurred by a partnership, joint venture or other entity for the purchase or renovation of a hotel property. Such a guarantee may be on a joint and several basis with our partner or co-venturer in which case we may be liable in the event such party defaults on its guaranty obligation.Furthermore, if a joint venture partner becomes bankrupt or otherwise defaults on its obligations under a joint venture agreement, we may be unable to continue the joint venture other than by purchasing such joint venture partner’s interests or the underlying assets at a premium to the market price. If any of the above risks are realized, it could materially adversely affect our business, financial condition and results of operations and our ability to make distributions to our stockholders.

Unanticipated expenses and insufficient demand for hotels we acquire in new geographic markets could adversely affect our profitability and our ability to make distributions to our stockholders.

We may develop or acquire hotels in geographic areas in which our management may have little or no operating experience and in which potential customers may not be familiar with our franchise brands. As a result, we may have to incur costs relating to the opening, operation and promotion of those new hotel properties that are substantially greater than those incurred in other areas. These hotels may attract fewer customers than our existing hotels, while at the same time, we may incur substantial additional costs with these new hotel properties.

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Unanticipated expenses and insufficient demand at a new hotel property, therefore, could adversely affect our profitability and our ability to make distributions to our stockholders.

The growth of Internet travel intermediaries could adversely affect the Company’s business and profitability.

Although a majority of rooms sold via the Internet are sold through hotel franchisor websites, some of the Company’s hotel rooms are booked through Internet travel intermediaries, including but not limited to Travelocity.com, Expedia.com, and Priceline.com.  These Internet travel intermediaries purchase rooms at a negotiated, net of fees, discount from participating hotels, which typically results in lower room rates than the Company’s franchisor or manager otherwise could have obtained.  Although the Company’s managers and franchisors may have established agreements with many of these intermediaries that limit transaction fees for hotels, there be no assurance that the Company’s managers and franchisors will be able to renegotiate such agreements upon their expirations with terms as favorable as the provisions that exist today.  Moreover, some of these Internet travel intermediaries areattempting to offer hotel guestrooms as a commodity, by increasing the importance of price and generalindicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. These agencieshope that consumers will eventually develop brand loyalties to their reservations system rather than to the brandsunder which our hotels are franchised. If the amount of sales made through Internet intermediaries increasessignificantly, guestroom revenue may flatten or decrease and our profitability may be adversely affected.

We and our hotel managers rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.

We and our hotel managers rely on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, reservations, billing and operating data. We purchase some of our information technology from vendors, on whom our systems depend. We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential customer information, such as individually identifiable information, including information relating to financial accounts. Although we have taken steps to protect the security of our information systems and the data maintained in those systems, it is possible that our safety and security measures will not be able to prevent the systems’ improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. Any failure to maintain proper function, security and availability of our information systems could interrupt our operations, damage our reputation, subject us to liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition and results of operations and our ability to make distributions to our shareholders.

Uninsured and underinsured losses and our ability to satisfy our obligations could adversely affect our operating results and our ability to make distributions to our stockholders.

We intend to maintain comprehensive insurance on each of our hotel properties, including liability, fire, and extended coverage, of the type and amount we believe are customarily obtained for or by hotel owners. There are no assurances that current coverage will continue to be available at reasonable rates. Various types of catastrophic losses, like earthquakes and floods, or losses from foreign or domestic terrorist activities, may not be insurable or may not be economically insurable. Initially, we do not expect to obtain terrorism insurance on our hotel properties because it is costly. Lenders may require such insurance and our failure to obtain such insurance could constitute a default under loan agreements, if required by such agreements. Depending on our access to capital, liquidity and the value of the properties securing the effected loan in relation to the balance of the loan, a default could reduce our net income and limit our ability to obtain future financing.

In the event of a substantial loss, our insurance coverage may not be sufficient to cover the full current market value or replacement cost of our lost investment or the cash flows lost due to the interruption in operations. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in a hotel, as well as the anticipated future revenue from the hotel. In that event, we might nevertheless

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remain obligated for any mortgage debt or other financial obligations related to the property. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate a hotel after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.

Risks Related to the Hotel Industry

A recession could have a material adverse effect on the hotel industry and our results of operations.

The performance of the hotel industry usually follows the general economy.  During the recession of 2008 and 2009, overall travel was reduced, which had a significant effect on our results of operations.  Uncertainty in the strength and direction of the recovery have slowed the pace of the overall economic recovery.  A stall in the economic recovery or a resurgent recession could have a material adverse effect on the hotel industry and, thus, on our results of operations.

Our ability to make distributions to our shareholders may be affected by factors in the hotel industry that are beyond our control.

Our hotels are subject to various operating risks found throughout the hotel industry. Many of these risks are beyond our control. These include, among other things, the following:

· competitors with substantially greater marketing and financial resources than us;

· over-building in our markets, which adversely effects occupancy and revenues at our hotels;

· dependence on business and commercial travelers and tourism;

· terrorist incidents which may deter travel;

· increases in hotel operating costs, energy costs, airline fares and other expenses, which may affect travel patterns and reduce the number of business and commercial travelers and tourists; and

· adverse effects of general, regional and local economic conditions.

These factors could adversely affect the amount of rent we receive from leasing our hotels and reduce the net operating profits of the TRS, which in turn could adversely affect our ability to make distributions to our shareholders. Decreases in room revenues of our hotels will result in reduced operating profits for the TRS and decreased lease revenues to our company under our current percentage leases with the TRS.

The hotel industry is seasonal in nature and may affect our cash flow.

Demand for our hotels is seasonal. We generally expect that we will have lower revenue, operating income, and cash flow in the first and fourth quarters and higher revenue, operating income and cash flow in the second and third quarters. These general trends are, however, influenced by overall economic cycles and the geographic locations of our hotels. To the extent that cash flow from operations is insufficient during any quarter, due to temporary or seasonal fluctuations in revenue, we expect to utilize cash on hand or borrowings under our credit facility to pay expenses, debt service or to make distributions to our equity holders.

The cyclical nature of the lodging industry may cause fluctuations in our operating performance, which couldhave a material adverse effect on us.

The hotel industry is highly cyclical in nature. Fluctuations in lodging demand and, therefore, operating performance, are caused largely by general economic and local market conditions, which subsequently affects levels of business and leisure travel. In addition to general economic conditions, hotel room supply growth is an important factor that can affect the lodging industry's performance.  Overbuilding has in the past and will continue to have the potential to further exacerbate the negative impact of an economic recession. Room rates and occupancy, and thus Revenue per Available Room (“RevPAR”), tend to increase when demand growth exceeds supply growth. We can provide no assurancesregarding whether, or the extent to which, lodging demand will rebound or whether any such rebound will besustained. An adverse change in lodging fundamentals in our markets could result in returns that are substantiallybelow our expectations or result in losses, which could have a material adverse effect on us.

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Competition from other hotels in the markets in which we operate could have a material adverse effect on ourresults of operations.

The lodging industry is highly competitive. Our hotels compete with other hotels for guests in each market inwhich our hotels operate based on a number of factors, including location, convenience, brand affiliation, guestroom rates, range of services and guest amenities or accommodations offered and quality of customerservice. Competition is often specific to the individual markets in which our hotels are located and includescompetition from existing and new hotels. Our competitors may have an operating model that enables them tooffer guestrooms at lower rates than we can, which could result in our competitors increasing their occupancy atour expense. Competition could adversely affect our occupancy, Average Daily Rate (“ADR”) and RevPAR, and may require us toprovide additional amenities or make capital improvements that we otherwise would not have to make, whichcould reduce our profitability and could materially and adversely affect our results of operations.

The increasing use by consumers of alternative lodging market places may adversely affect our profitability.

Additional sources of competition, including alternative lodging marketplaces, such as HomeAway and Airbnb, which operate websites that market available furnished, privately-owned residential properties, including homes and condominiums, that can be rented on a nightly, weekly or monthly basis, may, as they become more accepted, lead to a reduced demand for conventional hotel guest rooms and to an increased supply of lodging alternatives. If the amount of bookings made through the use of alternative lodging market places increases significantly, room revenues may flatten or decrease and our profitability may be adversely affected.

In the past, economic trends, terrorist acts, and military action have adversely affected the hotel industry generally, and similar future events could adversely affect the industry in the future.

Terrorist attacks and the after-effects (including the prospects for more terror attacks in the United States and abroad) have, in the past, substantially reduced business and leisure travel and lodging industry RevPAR generally. We cannot predict the extent to which these factors will directly or indirectly impact your investment in our securities, the lodging industry or our operating results in the future.

Declining RevPAR at our hotels would reduce our net income and restrict our ability to fund capital improvements at our hotels and our ability to make distributions to stockholders necessary to maintain our status as a REIT. Additional terrorist attacks, acts of war or similar events could have further material adverse effects on the markets on which shares of our stock will trade, as well as on the lodging industry in general and our operations in particular.

The hotel business is capital intensive.

Our hotels have an ongoing need for renovations and other capital improvements, including replacements, from time to time, of furniture, fixtures and equipment. The franchisors of our hotels also require periodic capital improvements as a condition of keeping the franchise licenses. The costs of all of these capital improvements could adversely affect our financial condition and reduce the amounts available for distribution to our shareholders. These renovations may give rise to the following risks:

· possible environmental problems;

· construction cost overruns and delays;

· a possible shortage of available cash to fund renovations and the related possibility that financing for these renovations may not be available to us on affordable terms; and

· uncertainties as to market demand or a loss of market demand after renovations have begun

The lenders under some of the mortgage debt that we will assume will require us to set aside varying amounts each year for capital improvements at our hotels. We may not be able to fund capital improvements or acquisitions solely from cash provided from our operating activities and, thus, may need to raise capital in order to finance any required capital expenditures.

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Noncompliance with governmental regulations could adversely affect our operating results.

Environmental Matters

Our hotel properties are subject to various federal, state, and local environmental laws. Under these laws, courts and government agencies have the authority to require the owner of a contaminated property to clean up the property, even if the owner did not know of or was not responsible for the contamination. These laws also apply to persons who owned a property at the time it became contaminated. In addition to the costs of cleanup, contamination can affect the value of a property and, therefore, an owner’s ability to borrow funds using the property as collateral.

Under these environmental laws, courts and government agencies also have the authority to require that a person who sent waste to a waste disposal facility, like a landfill or an incinerator, pay for the clean-up of that facility if it becomes contaminated and threatens human health or the environment. Furthermore, court decisions have established that third parties may recover damages for injury caused by property contamination. For instance, a person exposed to asbestos while staying in a hotel may seek to recover damages if he suffers injury from the asbestos. Lastly, some of these environmental laws restrict the use of a property or place conditions on various activities at a property. One example is laws that require a business using chemicals to manage them carefully and to notify local officials that the chemicals are being used.

Our Company could be responsible for the costs discussed above if it found itself in one or more of these situations. The costs to clean up a contaminated property, to defend against a claim, or to comply with environmental laws could be material and could affect the funds available for distribution to our shareholders. To determine whether any costs of this nature might be required, we commission Phase I environmental site assessments, or “ESAs”, before we acquire our hotels, and at certain times have commissioned new ESAs for certain of our hotels in conjunction with a refinancing of the debt obligations of those hotels. These studies typically included a review of historical information and a site visit, but not soil or groundwater testing. We obtain the ESAs to help us identify whether we might be responsible for cleanup costs or other costs in connection with our hotels. The ESAs on our hotels did not reveal any environmental conditions that are likely to have a material adverse effect on our business, assets, results of operations, or liquidity. However, ESAs do not always identify all potential problems or environmental liabilities. Consequently, we may have material environmental liabilities of which we are unaware.

Americans with Disabilities Act and Other Changes in Governmental Rules and Regulations

Under the Americans with Disabilities Act of 1990, or ADA, all public accommodations must meet various federal requirements related to access and use by disabled persons. Compliance with the ADA’s requirements could require removal of access barriers and non-compliance could result in the U.S. government imposing fines or in private litigants obtaining damages. If we were required to make substantial modifications to our hotels, whether to comply with the ADA or other changes in governmental rules and regulations, our ability to make distributions to our shareholders and meet our other obligations could be adversely affected.

Risks Related to the Real Estate Industry

Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.

Because real estate investments are relatively illiquid, our ability to promptly sell one or more hotel properties or investments in our portfolio in response to changing economic, financial and investment conditions may be limited.  The real estate market is affected by many factors that are beyond our control, including:

· adverse changes in international, national, regional and local economic and market conditions;

· changes in interest rates and in the availability, cost and terms of debt financing;

· changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;

· the ongoing need for capital improvements, particularly in older structures;

· changes in operating expenses; and

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· civil unrest, acts of God, including earthquakes, floods and other natural disasters and acts of war or terrorism, including the consequences of terrorist acts such as those that occurred on September 11, 2001, which may result in uninsured losses.

We cannot predict whether we will be able to sell any hotel property or investment for the price or on the terms setby us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a hotel property or loan.

We may be required to expend funds to correct defects or to make improvements before a hotel property can be sold. We cannot assure you that we will have funds available to correct those defects or to make those improvements. In acquiring a hotel property, we may agree to lock-out provisions that materially restrict us from selling that hotel property for a period of time or impose other restrictions, such as limitation on the amount of debt that can be placed or repaid on that hotel property. These facts and any others that would impede our ability to respond to adverse changes in the performance of our hotel properties could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to stockholders.

Increases in property taxes would adversely affect our ability to make distributions to our shareholders.

Hotel properties are subject to real and personal property taxes. These taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. In particular, our property taxes could increase following our hotel purchases as the acquired hotels are reassessed. If property taxes increase, our financial condition, results of operations, and our ability to make distributions to our shareholders could be materially and adversely affected.

Our real estate may contain or develop harmful environmental challenges which could lead to liability for adverse health effects and costs of remediating the problem.

The presence or development of significant environmental challenges at any of our properties could require us to undertake a costly program to remediate the environmental challenge, which would reduce our cash available for distribution. In addition, the presence of a significant environmental challenge could expose us to liability from our guests, employees or our management companies and others if property damage or health concerns arise.  Environmental challenges for hotels may include, but is not limited to, mold and bed bugs.

Risks Related to our Organization and Structure

Our failure to qualify as a REIT under the federal tax laws would result in adverse tax consequences.

The federal income tax laws governing REITs are complex and subject to revision.

We currently operate as a REIT under the federal income tax laws. The REIT qualification requirements are extremely complex and interpretations of the federal income tax laws governing qualification as a REIT are limited. Accordingly, we cannot be certain that we would be successful in operating so that we can qualify as a REIT. At any time, new laws, interpretations, or court decisions may change the federal tax laws or the federal income tax consequences of our qualification as a REIT. We have not applied for or obtained rulings from the IRS that we will qualify as a REIT.

Failure to qualify as a REIT would subject us to federal income tax.

If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income. We might need to borrow money or sell assets in order to pay any such tax. If we cease to be a REIT, we no longer would be required to distribute most of our taxable income to our stockholders. Unless we were entitled to relief under certain federal income tax laws, we could not re-elect REIT status during the four calendar years after the year in which we failed to qualify as a REIT.

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Failure to make required distributions would subject us to tax.

In order to qualify as a REIT, we generally are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction, each year to our stockholders. To the extent that we satisfy this distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal income tax on our undistributed taxable income. In addition, we will be subject to a 4% non-deductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws. As a result, for example, of differences between cash flow and the accrual of income and expenses for tax purposes, or of nondeductible expenditures, our REIT taxable income in any given year could exceed our cash available for distribution. In addition, to the extent we may retain earnings of the TRS in those subsidiaries, such amount of cash would not be available for distribution to our stockholders to satisfy the 90% distribution requirement. Accordingly, we may be required to borrow money or sell assets to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the distribution requirement and to avoid federal corporate income tax and the 4% non-deductible excise tax in a particular year.

The formation of the TRS increases our overall tax liability.

The TRS is subject to federal and state income tax on its taxable income, which in the case of the TRS currently consists and generally will continue to consist of revenues from the hotel properties leased by the TRS, net of the operating expenses for such properties and rent payments to us. Accordingly, although our ownership of the TRS allows us to participate in the operating income from our hotel properties in addition to receiving rent, that operating income is fully subject to income tax. Such taxes could be substantial. The after-tax net income of the TRS is available for distribution to us.

We incur a 100% excise tax on transactions with the TRS that are not conducted on an arm’s-length basis. For example, to the extent that the rent paid by the TRS exceeds an arm’s-length rental amount, such amount potentially is subject to the excise tax. We intend that all transactions between us and the TRS will continue to be conducted on an arm’s-length basis and, therefore, that the rent paid by the TRS to us will not be subject to the excise tax.

Our TRS lessee structure subjects us to the risk of increased operating expenses.

Our hotel management agreements require us to bear the operating risks of our hotel properties. Our operating risks include not only changes in hotel revenue and changes in the TRS’s ability to pay the rent due under the leases, but also increased operating expenses, including, among other things:

· wage and benefits costs;

· repair and maintenance expenses;

· energy costs;

· property taxes;

· insurance costs; and

· other operating expenses.

Any decreases in hotel revenue or increases in operating expenses could have a material adverse effect on our earnings and cash flows.

Our ability to make distributions on our common and preferred stock is subject to fluctuations in our financial performance, operating results, and capital improvement requirements.

As a REIT, we generally are required to distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction, to our stockholders. Downturns in our operating results and financial performance or unanticipated capital improvements to our hotel properties may affect our ability to declare or pay distributions to our stockholders.  Further, we may not generate sufficient cash in order to fund distributions to our stockholders, which may require us to sell assets or borrow money to satisfy the REIT distribution requirements.

Among the factors which could adversely affect our results of operations and our distributions to stockholders are reduced net operating profits or operating losses, increased debt service requirements, and capital expenditures at

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our hotel properties. Among the factors which could reduce our net operating profits are decreases in hotel property revenue and increases in hotel property operating expenses. Hotel property revenue can decrease for a number of reasons, including increased competition from a new supply of rooms and decreased demand for rooms. These factors can reduce both occupancy and room rates at our hotel properties.

The timing and amount of distributions are at the sole discretion of our Board of Directors, which will consider, among other factors, our actual results of operations, debt service requirements, capital expenditure requirements for our properties, and our operating expenses.  We cannot guarantee future distributions.

We have restrictive debt covenants that could adversely affect our ability to run our business.

We are required to meet or maintain quarterly loan covenants with certain of our lenders. Weakness in theeconomy and the lodging industry at large may result in non-compliance with our loan covenants. Such noncompliance with our loan covenants may result in our lenders restricting the use of our operating funds for capital improvements to our existing hotels, including improvements required by our franchise agreements, or causing the debt maturity to accelerate. We cannot assure you that we can maintain compliance with our loan covenants and maintain our business strategy.

Our restrictive debt covenants may jeopardize our tax status as a REIT.

To maintain our REIT status, we generally must distribute at least 90% of our REIT taxable income to our stockholders annually. In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to stockholders in a calendar year is less than a minimum amount specified under federal income tax laws. In the event we do not comply with our debt service obligations, our lenders may limit our ability to make distributions to our stockholders, which could adversely affect our REIT status.

Our two largest shareholders hold significant voting power and have the right to designate seven of our nine directors, which provides these shareholders with significant power to influence our business and affairs.

RES and its affiliates hold 29% and SREP III Flight-Investco, L.P. (“SREP”) and its affiliates hold 24% of the common stock as of December 31, 2017.  RES and SREP each have a contractual preemptive right, but not the obligation, to purchase up to their pro rata share (based on their ownership on a fully diluted basis) of any equity securities we offer in future offerings on the same terms as other investors.  RES may designate up to four directors, and SREP may designate up to three directors, with the number of directors that each may designate based on their respective voting power. RES and SREP will each have the right to separately designate three directors to our board of directors at the annual meeting of shareholders on May 17, 2018.Each of RES and SREP in their respective agreements with us has agreed to vote for the election of the incumbent members of the board of directors and their successors nominated by the nominating committee of the board of directors.  As a consequence, the election of the six directors designated by RES and SREP is assured.

By virtue of their voting power and board designation rights, preemptive right to purchase additional equity securities in future stock offerings and approval rights, RES and SREP, collectively and separately, have the power to significantly influence our business and affairs and the outcome of matters required to be submitted to shareholders for approval, including the election of our directors, amendments to our charter, mergers, or sales of assets. Their influence over our business and affairs may not be consistent with the interests of some or all of our shareholders and might negatively affect the market price of our common stock.

The holders of the Series E Preferred Stock have rights senior to holders of common stock.

RES and SREP, our two largest shareholders, own all of the issued and outstanding shares our Series E Preferred Stock.  The Series E Preferred Stock ranks senior to our common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% annually per annum of the $10.00 face value per share. If we fail to pay a dividend, then during the period that dividends are not paid, the dividend rate increases to 9.50%.  Dividends on the Series E Preferred Stock accrue whether or not we have earnings, whether or not there are

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funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement.

The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of Condor, related party transactions exceeding $120,000, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from Condor’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock, or commitment or agreement to do any of the foregoing. 

We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the market price of our shares.

At any time, the federal income tax laws governing REITs or the administrative and judicial interpretations of those laws may be amended or changed. We cannot predict when or if any new federal income tax law, regulation or administrative and judicial interpretation, or any amendment to any existing federal income tax law, regulation or administrative or judicial interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively.  We and our shareholders could be adversely affected by any such change in, or any new, federal income tax law, regulation or administrative and judicial interpretation.

If our hotel managers do not qualify as "eligible independent contractors” the Company would likely fail to qualify as a REIT.

Rent paid by a lessee that is a "related party tenant" of ours will not be qualifying income for purposes of the two gross income tests applicable to REITs. We lease substantially all of our hotels to our TRS. The TRS will not be treated as a "related party tenant," and will not be treated as directly operating a lodging facility to the extent the TRS leases properties from us that are managed by an "eligible independent contractor." In addition, our TRS holding companies will fail to qualify as “taxable REIT subsidiaries” if they lease or own a lodging facility that is not managed by an “eligible independent contractor.”

If our hotel managers do not qualify as "eligible independent contractors," we would fail to qualify as a REIT. Each of the hotel management companies that enters into a management contract with our TRS must qualify as an "eligible independent contractor" under the REIT rules in order for the rent paid to us by our TRS to be qualifying income for our REIT income test requirements and for our TRS holding companies to qualify as “taxable REIT subsidiaries”. Among other requirements, in order to qualify as an eligible independent contractor a manager must not own more than 35% of our outstanding shares (by value) and no person or group of persons can own more than 35% of our outstanding shares and the ownership interests of the manager, taking into account only owners of more than 5% of our shares and, with respect to ownership interests in such managers that are publicly traded, only holders of more than 5% of such ownership interests. Complex ownership attribution rules apply for purposes of these 35% thresholds. Although we intend to monitor ownership of our shares by our property managers and their owners, there can be no assurance that these ownership levels will not be exceeded.

If our leases with our TRS are not respected as true leases for federal income tax purposes, we would fail to qualify as a REIT.

To qualify as a REIT, we are required to satisfy two gross income tests, pursuant to which specified percentages of our gross income must be passive income, such as rent. For the rent paid pursuant to the hotel leases with our TRS, which should constitute substantially all of our gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement. We have structured our leases, and intend to structure any future leases, so that the leases will be respected as true leases for federal income tax purposes, but there can be no assurance that the IRS will agree with this characterization, not challenge this treatment or that a court would not sustain such a challenge. If the leases were not respected as true leases for federal income tax purposes, we would not be able to satisfy either of the two gross income tests applicable to REITs and likely would fail to qualify for

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REIT status.

We may be subject to the 100% prohibited transaction tax on the gain recognized on the hotels we sold. 

A REIT will incur a 100% tax on the net income derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We undertook specific disposition programs beginning in 2001 (that included the sale of 23 hotels through December 31, 2004) and 2008 (that included the sale of 120hotels through December 31, 2017). We held the disposed hotels for an average period of 14.3 years and did not acquire the hotels for purposes of resale. We believe that such sales are not prohibited transactions. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Complying with REIT requirements may cause us to forego attractive opportunities that could otherwise generate strong risk-adjusted returns and instead pursue less attractive opportunities, or none at all.  

To continue to qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of generating strong risk-adjusted returns on invested capital for our stockholders.

Complying with REIT requirements may force us to liquidate otherwise attractive investments, which could result in an overall loss on our investments.

To continue to qualify as a REIT, we must also ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% of the value of our total securities can be represented by securities of one or more TRSs. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. If we fail to comply with these requirements at the end of any calendar quarter, we may be able to preserve our REIT status by benefiting from certain statutory relief provisions. Except with respect to a de minimis failure of the 5% asset test or the 10% vote or value test, we can maintain our REIT status only if the failure was due to reasonable cause and not to willful neglect. In that case, we will be required to dispose of the assets causing the failure within six months after the last day of the quarter in which we identified the failure, and we will be required to pay an additional tax of the greater of $50,000 or the product of the highest applicable tax rate (currently 35%) multiplied by the net income generated on those assets. As a result, we may be required to liquidate otherwise attractive investments.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum U.S. federal income tax rate applicable to qualified dividend income payable to certain non-corporate U.S. holders is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced qualified dividend rates. For taxable years beginning after December 31, 2017 and before January 1, 2026, under the recently enacted law informally known as the Tax Cuts and Jobs Act (“TCJA”), non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations, resulting in an effective maximum U.S. federal income tax rate of 29.6% on such income. Although the reduced U.S. federal income tax rate applicable to qualified dividend income does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends and the reduced corporate tax rate (currently 21%) could cause certain non-corporate investors to

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perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our shares.

Provisions of our charter and substantial voting power held by two shareholders may limit the ability of a third party to acquire control of our company.

In order to maintain our REIT qualification, no more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the federal income tax laws to include various kinds of entities) during the last half of any taxable year. Our articles of incorporation contain the ownership limitation, which prohibits both direct and indirect ownership of more than 9.9% of the outstanding shares of our common stock or 9.9% of any series of our preferred stock by any person, subject to several exceptions. Generally, any shares of our capital stock owned by affiliated owners will be added together for purposes of the ownership limitation.

Our articles of incorporation permit our board, in its sole discretion, to exempt a person from the 9.9% ownership limitation if the person provides representations and undertakings that enable our board to determine that granting the exemption would not result in the loss of our REIT qualification. Under the IRS rules, REIT shares owned by certain entities are considered owned proportionately by owners of the entities for REIT qualification purposes. RES and SREP each provided a letter at the time of the issuance of the Series D Preferred Stock that permitted our board to grant such an exemption. The stock ownership by RES and SREP, which was permitted with our board’s approval, represents such substantial voting power that it may limit the ability of a third party to acquire control of our company.

These ownership limitations may prevent an acquisition of control of our company by a third party without our board of directors’ approval, even if our stockholders believe the change of control is in their best interests. Our charter authorizes our board of directors to issue shares of common stock and shares of preferred stock, and to set the preferences, rights and other terms of the preferred stock. Furthermore, our board of directors may, without any action by the stockholders, amend our charter from time to time to increase or decrease the aggregate number of shares of stock of any class or series of preferred stock that we have authority to issue. Issuances of additional shares of stock may have the effect of delaying, deferring or preventing a transaction or a change in control of our company that might involve a premium to the market price of our common stock or otherwise be in our stockholders’ best interests.

Our ownership limitation may prevent a shareholder from engaging in certain transfers of our capital stock.

If anyone transfers shares in a way that would violate the ownership limitation described above or prevent us from continuing to qualify as a REIT under the federal income tax laws, we will consider the transfer to be null and void from the outset, and the intended transferee of those shares will be deemed never to have owned the shares. Those shares instead will be transferred to a trust for the benefit of a charitable beneficiary and will be either redeemed by our company or sold to a person whose ownership of the shares will not violate the ownership limitation. Anyone who acquires shares in violation of the ownership limitation or the other restrictions on transfer in our articles of incorporation bears the risk that he will suffer a financial loss when the shares are redeemed or sold if the market price of our stock falls between the date of purchase and the date of redemption or sale.

The ability of our board of directors to change our major corporate policies may not be in your interest.

Our board of directors determines our major corporate policies, including our acquisition, financing, growth, operations and distribution policies. Our board may amend or revise these and other policies from time to time without the vote or consent of our stockholders.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 2. PROPERTIES

Our Company headquarters is located in Bethesda,  Maryland, with additional office space in Omaha, Nebraska and Norfolk, Nebraska. The following table sets forth certain information with respect to the hotels owned by us as of December 31, 2017:

New Investment Platform Hotel Portfolio
Hotel Name	City	State	Rooms	Acquisition Date	Purchase Price (in thousands)
Hilton Garden Inn	Dowell/Solomons	MD	100	05/25/2012	$11,500
SpringHill Suites	San Antonio	TX	116	10/01/2015	$17,500
Courtyard by Marriott	Jacksonville	FL	120	10/02/2015	$14,000
Hotel Indigo	College Park	GA	142	10/02/2015	$11,000
Aloft (1)	Atlanta	GA	254	08/22/2016	$43,550
Aloft	Leawood	KS	156	12/14/2016	$22,500
Home2 Suites	Lexington	KY	103	03/24/2017	$16,500
Home2 Suites	Round Rock	TX	91	03/24/2017	$16,750
Home2 Suites	Tallahassee	FL	132	03/24/2017	$21,500
Home2 Suites	Southaven	MS	105	04/14/2017	$19,000
Hampton Inn & Suites	Lake Mary	FL	130	06/19/2017	$19,250
Fairfield Inn & Suites	El Paso	TX	124	08/31/2017	$16,400
Residence Inn	Austin	TX	120	08/31/2017	$22,400
			1,693		$251,850
Legacy Hotel Portfolio
Hotel Name	City	State	Rooms	Acquisition Date	Status as of December 31, 2017 2
Super 8 (5)	Creston	IA	121	09/19/1978	Hold
Quality Inn	Solomons	MD	59	06/01/1986	Hold
Comfort Suites (4)	Ft. Wayne	IN	127	11/07/2005	HFS
Comfort Suites (3)	South Bend	IN	135	11/30/2005	HFS
Supertel (3)	Creston	IA	41	06/30/2016	HFS
			483
Total Rooms			2,176

(1) This property is owned through an 80% interest in our unconsolidated Atlanta JV

(2) HFS indicatesthe asset is marketed for sale at December 31, 2017

(3) Asset was disposed of after December 31, 2017

(4) Asset is currently under contract to be sold

(5) Asset considered HFS subsequent to December 31, 2017

All of our properties are encumbered by either our revolving credit agreement orby mortgage debt at December 31, 2017.  Additional property information is found in Item 8 Schedule III of this Annual Report on Form 10-K.

ITEM 3.  LEGAL PROCEEDINGS

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties. We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us.  The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY / RELATED STOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Share and per share information included below has been adjusted for the stock split as if such stock split occurred on the first day of the periods presented.

The Company’s common stock began trading on the NYSE American under its current symbol “CDOR” at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market under the same symbol.  The closing sales price for the common stock on March 13, 2018was $10.30 per share.  The table below sets forth the high and low sales prices per share reported by the market on which the common stock was then trading for the periods indicated and cash dividends declared:

	Condor Hospitality Trust, Inc. Common Stock
	High		Low		Dividend
2017
Fourth quarter	$	10.52	$	9.26	$	0.195
Third quarter	$	11.19	$	8.13	$	0.195
Second quarter	$	11.25	$	10.05	$	0.195
First quarter	$	15.47	$	10.10	$	0.195
2016
Fourth quarter	$	14.235	$	9.945	$	0.195
Third quarter	$	20.41	$	11.05	$	0.26*
Second quarter	$	16.90	$	9.815	$	-
First quarter	$	14.56	$	4.55	$	-

*Includes $0.065 per common share declared in July 2016 that the Company considers related to operations in the second quarter of 2016.

Shareholder Information

As of March 13, 2018, the approximate number of holders of record of our common stock was 49.  However, because the vast majority of our common shares are held by brokers and other institutions on behalf of shareholders, we believe that there are considerably more beneficial holders of our common shares than record holders.

Distribution Information

Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.  Distributions in excess of current and accumulated earnings and profits generally will be treated as a nontaxable reduction of the shareholder’s basis in such shareholder’s shares, to the extent thereof, and thereafter as taxable capital gain.  Distributions that are treated as a reduction of the shareholder’s basis in its shares will have the effect of increasing the amount of gain, or reducing the amount of loss, recognized upon the sale of the shareholder’s shares.

The actual amount of future dividends will be determined by the Board of Directors based on the actual results of operations, economic conditions, capital expenditure requirements, the annual distribution requirements under the REIT provisions of the Code, and other factors that the Board of Directors deems relevant.

For income tax purposes, distributions paid per share for the years ended December 31, 2017 and 2016 were characterized as follows:

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	For the year ended December 31,
	2017				2016
	Amount		%	Amount		%
Common Shares:
Ordinary income	$	0.156000	20%	$	0.455000	100%
Capital gain		-	-		-	-
Return of capital		0.624000	80%		-	-
Total	$	0.780000	100%	$	0.455000	100%
Series C Preferred Stock:
Ordinary income	$	-	-	$	1.649124	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	-	-	$	1.649124	100%
Series D Preferred Stock:
Ordinary income	$	0.104160	100%	$	0.494792	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.104160	100%	$	0.494792	100%
Series E Preferred Stock:
Ordinary income	$	0.522569	100%	$	-	-
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.522569	100%	$	-	-

The common share distribution declared on December 19, 2017 and paid on January 10, 2018 was treated as a 2018 distribution for tax purposes.  The preferred share distribution declared on December 19, 2017 and paid on January 2, 2018 was treated as a 2017 distribution for tax purposes.  The common and preferred share distributions declared on December 6, 2016 and paid on January 5, 2017 and January 3, 2017, respectively, were treated as 2016 distributions for tax purposes.

A portion of the redemption price of the Series A and B Preferred Stock that was redeemed for cash on April 15, 2016 included amounts equal to the accrued and unpaid dividends on such stock.  However, the entire redemption price, inclusive of amounts equal to accrued and unpaid dividends, was treated as payment in exchange for the redeemed stock and none of the redemption price is treated as a distribution of dividends under the Code for federal income tax purposes.

No dividends on common stock or preferred stock were declared or paidin 2015.

Shares Authorized for Issuance Under Equity Compensation Plans

See Part III, Item 12 for a description of securities authorized for issuance under our 2016 Stock Plan.

Share Performance

The following graph compares the yearly percentage change in the cumulative total shareholder return on our common stock for the period December 31, 2012 through December 31, 2017, with the cumulative total return on the SNL Securities Hotel REIT Index, the Russell 2000 Index, and the NYSE Composite Index for the same period. The Company selected two new indices, the NYSE Composite Index and the Russell 2000 Index, to replace the NASDAQ Composite Index, which is also provided in the graph below for comparative purposes, because the Company moved its listing to the NYSE American stock exchange from the NASDAQ Stock Market in 2017. The SNL Hotel REIT Index is comprised of publicly traded REITs that focus on investments in hotel properties. 

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The comparison assumes a starting investment of $100 on December 31, 2012 in our common stock and in each of the indices shown and assumes that all dividends are reinvested.  The performance graph is not necessarily indicative of future investment performance.

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ITEM 6.  SELECTED FINANCIAL DATA

The following sets forth selected financial and operating data on a historical consolidated basis.  The following information should be read in conjunction with “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and related notes thereto, appearing elsewhere in this document.

	As of and for the years ended December 31,
In thousands, except per share data
	2017		2016		2015		2014		2013
Revenue
Room rentals and other hotel services	$	55,453	$	50,647	$	58,714	$	58,799	$	55,027
Operating expense
Hotel and property operations		37,134		37,092		43,367		44,391		43,033
Depreciation and amortization		6,898		5,190		5,400		6,437		6,300
General and administrative		6,552		5,792		5,493		4,192		3,923
Acquisitions and terminated transactions		1,250		550		684		-		713
Equity and terminated transactions		343		-		246		76		1,050
Total operating expenses		52,177		48,624		55,190		55,096		55,019
Operating income		3,276		2,023		3,524		3,703		8
Net gain (loss) on disposition of assets		6,807		23,132		4,798		(1)		(47)
Equity in earnings (loss) of joint venture		190		(244)		-		-		-
Net gain (loss) on derivatives and convertible debt		436		6,377		11,578		(14,430)		10,028
Other income (expense), net		(111)		55		114		116		34
Interest expense		(5,174)		(4,710)		(5,522)		(7,116)		(5,620)
Loss on debt extinguishment		(967)		(2,187)		(213)		(158)		(458)
Impairment loss, net		(2,151)		(1,477)		(3,829)		(1,269)		(2,438)
Earnings (loss) from continuing operations before income taxes		2,306		22,969		10,450		(19,155)		1,507
Income tax (expense) benefit		595		(125)		-		-		-
Earnings (loss) from continuing operations		2,901		22,844		10,450		(19,155)		1,507
Gain (loss) from discontinued operations, net of tax		-		678		3,872		2,896		(2,860)
Net earnings (loss)		2,901		23,522		14,322		(16,259)		(1,353)
(Earnings) loss attributable to noncontrolling interest		(20)		(727)		(1,197)		23		2
Net earnings (loss) attributable to controlling interests		2,881		22,795		13,125		(16,236)		(1,351)
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(12,243)		(20,748)		(3,632)		(3,452)		(3,349)
Net earnings (loss) attributable to common shareholders	$	(9,362)	$	2,047	$	9,493	$	(19,688)	$	(4,700)
Weighted average number of common shares - basic		9,438		761		752		600		445
Weighted average number of common shares - diluted		9,438		5,536		3,575		600		445
Earnings per Share
Continuing operations - Basic	$	(1.00)	$	1.82	$	8.06	$	(37.64)	$	(4.16)
Discontinued operations - Basic		-		0.85		4.55		4.81		(6.44)
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	2.67	$	12.61	$	(32.83)	$	(10.60)
Diluted Earnings Per Share (EPS)
Continuing operations - Diluted	$	(1.00)	$	0.78	$	(0.98)	$	(37.64)	$	(4.16)
Discontinued operations - Diluted		-		0.13		0.98		4.81		(6.44)
Total - Diluted Earnings (Loss) per Share	$	(1.00)	$	0.91	$	-	$	(32.83)	$	(10.60)
Balance sheet data
Total investment in hotel properties, net	$	219,580	$	114,871	$	130,699	$	139,182	$	164,356
Cash and cash equivalents	$	5,441	$	8,326	$	4,870	$	173	$	45
Total assets	$	242,980	$	140,665	$	142,346	$	144,820	$	169,500
Total debt, net of deferred financing costs, including convertible debt at fair value	$	121,650	$	64,035	$	86,011	$	91,063	$	115,460
Total equity	$	111,814	$	70,799	$	34,495	$	19,092	$	32,726

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ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Condor Hospitality Trust, Inc. is a self-administered REIT for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels.Substantially all of our operations are conducted through Condor Hospitality Limited Partnership, our operating partnership, for which we serve as general partner.  As of December 31, 2017, the Company owned 18 hotels, representing 2,176 rooms, in nine states, including one hotel owned through an 80% interest in an unconsolidated joint venture.

Condor achieved substantial successes in 2017.  The Company’s portfolio of high-quality, select-service assets outperformed both the Company’s peersand industry in 2017.  Additionally, Condor achieved significant accomplishments related to its portfolio composition, equity structure, and debt profile.  The repositioning strategy launched two years ago is substantially complete and we believe Condor is well-positioned to continue to drive outperformance and deliver attractive investor returns.  Significant accomplishments for 2017 are summarized as follows:

Portfolio Outperformance:  The Company’s new investment platform hotels achieved same-store 5.0% RevPAR growth in 2017.  The 5.0% RevPAR growth significantly outperformed both the industry and the Company’s direct public hotel REIT peer group.

Portfolio Composition:  The transition of the portfolio from economy hotels to high-quality, select-service assets is substantially complete.  In 2017, the Company sold eight legacy hotels generating $29.1 million of gross proceeds.  These legacy asset sales were completed in individual transactions at valuations management believes were attractive. The net proceeds from these dispositions were used to repay outstanding indebtedness on the Company’s credit facility, thereby enabling the Company to continue to acquire high-quality, select-service assets.  The Company acquired seven new investment platform assets in 2017 for $131.8 million, including the Fairfield Inn & Suite El Paso Airport (Texas), the Residence Inn Austin Airport (Texas), the Home2 Suites Austin/Round Rock (Texas), the Home2 Suites Lexington University/Medical Center (Kentucky), the Home2 Suites Tallahassee State Capitol (Florida), the Home2 Suites Memphis Southaven (Mississippi), and the Hampton Inn & Suites Lake Mary (Florida).

Additionally, subsequent to the end of the year, the Company sold two legacy assets for proceeds totaling $8.2 million and acquired two additional new investment platform hotels for $36.1 million.  The new additions to the portfolio included the TownePlace Suites Austin North Tech Ridge (Texas) and the Home2 Suites Summerville Charleston (South Carolina).

From the fourth quarter of 2015 to the date of this document, the Company has acquired $276.6 million of acquisitions representing fourteen high-quality, premium-branded, select-serve assets flagged under the leading Marriott, Hilton, and IHG hotel brands.  The Company has only three  legacy assets remaining, with one of these assets under contract for sale at the time of this document.

Equity Structure:  On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted to common stock.  At the time of conversion, the Series D holders were granted $9.3 million of newly created Series E Preferred Stock.  On March 29, 2017, the Company completed its underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50 with net proceeds totaling $45.9 million.  The Company repaid borrowings under its credit facility with the net proceeds, thereby increasing the borrowing availability for future acquisitions.  The Company now has a substantially healthier equity structure that management believes is better positioned to enable the Company to achieve its growth objectives.

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Debt Profile: On March 1, 2017, the Company closed a new $90.0 million secured credit facility.   KeyBank and The Huntington National Bank served as the joint lead arrangers for the revolving credit facility.  The new credit facility significantly reduced the Company’s weighted average cost of debt and enabled the refinancing of all 2017 and 2018 maturities.  On May 12, 2017, the credit facility borrowing capacity was increased to $150.0 million.  Management believes the facility closed and upsized in 2017 is a strong indicator of Condor’s credit-worthiness and the confidence of the debt community in the Company’s new strategic direction.

Additionally, on October 4, 2017, the Company refinanced floating-rate debt totaling $25.0 million with a $26.5 million mortgage loan which was effectively converted to fixed rate debt with the simultaneous purchase of an interest rate swap.  This refinancing was completed with a new financing partner, Wells Fargo.

With the aforementioned successes serving as a foundation for future growth, Condor’s management is excited about 2018 and is confident in its ability to achieve the mission of providing attractive total returns in the lodging sector to Condor’s shareholders.

Condor remains cautiously optimistic on the outlook of the hospitality sector in 2018.  The hospitality sector experienced its eighth straight year of positive RevPAR growth in 2017, albeit at a deaccelerated pace compared to previous years.  Most industry forecasts estimate that U.S. RevPAR will continue to grow in 2018 with industry estimates ranging from 2.0% - 3.0%.  Condor management believes the sectors and segments it targets will see growth in excess of these estimates.  While many primary markets have a large influx of new supply, the markets Condor targets continue to experience less aggressive supply growth.  Additionally, the markets Condor targets are less affected, we believe, by alternative lodging platforms like Airbnb. We believe these supply factors, combined with the possibility of continued positive economic growth, should enable our hotels to continue to outperform industry forecasts in 2018.

We believe that the performance of the hotel industry is strongly correlated with the performance of the macro-economy. The equity markets have reached new highs and experienced heightened volatility at the start of 2018.  The fundamentals of the U.S. macroeconomy remain strong.  GDP continues to grow and the United States is experiencing a period of extremely low unemployment.  That being said, the continued threat of terrorism, economic and geopolitical turbulence abroad, and gridlock in the federal government could derail the macro-economy.  Barring any major disruption to the U.S. economy, we expect a continued improvement in lodging fundamentals.  The manner in which the economy continues to grow, if at all, is not predictable and outside of our control.  As a result, there can be no assurances that we will be able to grow our hotel revenue, ADR, occupancy, or RevPAR.  Factors that might contribute to less than anticipated performance are detailed in Item 1A. Risk Factors.  Condor’s management continually monitors the economic environment and works to adjust its strategy to seek to maximize value and returns to shareholders.

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Hotel Property Portfolio Activity

Acquisitions

During the year ended December 31, 2017, the Company acquired the following seven wholly owned hotel properties (in thousands):

Hotel	Date of acquisition	Number of rooms	Total purchase price		Debt at acquisition (2)		Issuance of common units (3)		Net cash paid
Home2 Suites	03/24/2017	103	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017	91		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017	132		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017	105		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017	130		19,250 (1)		19,165		85		-
Lake Mary, FL
Fairfield Inn & Suites	08/31/2017	124		16,400		16,336		64		-
EL Paso, TX
Residence Inn	08/31/2017	120		22,400		22,314		86		-
Austin, TX
Total		805	$	131,800	$	121,513	$	435	$	9,852

(1) The Lake Mary purchase price was subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieved a stipulated hotel net operating income level in 2017. The full amount of $250 was paid to the seller in December of 2017 and is not included in this amount.

(2) Debt of $9,096 with Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 was assumed related to the Home2 Suites Southaven, MS acquisition. This loan remains outstanding at December 31, 2017. All other debt was drawn from the credit facility at acquisition.

(3) Total issuance of 1,940,451 common units.

Additionally, as discussed further in Note 17,Subsequent Events, to the consolidated financial statements presented elsewhere in this Form 10-K,  subsequent to December 31, 2017, the Company closed on the acquisition of two hotels, the 122-room TownePlace Suites Austin North Tech Ridge and the 93-room Home2 Suites Summerville / Charleston.

Dispositions

Pursuant to our disposition strategy, the following hotel sales were completed in 2017:

Date of sale	Location	Brand	Company lender	Number of rooms	Gross proceeds (in thousands)
03/27/2017	New Castle, PA	Comfort Inn	Credit facility	79	$	2,500
03/28/2017	Billings, MT	Super 8	Credit facility	106		4,250
04/03/2017	Harlan, KY	Comfort Inn	Unencumbered	61		1,850
04/18/2017	Lafayette, IN	Comfort Suites	Credit facility	62		3,885
05/17/2017	Key Largo, FL	Key West Inn	Credit facility	40		7,600
08/30/2017	Morgantown, WV	Quality Inn	Credit facility	81		2,600
09/13/2017	Bossier City, LA	Days Inn	Credit facility	176		1,400
12/20/2017	Warsaw, IN	Comfort Inn & Suites	Credit facility	71		4,982
			Total	676	$	29,067

Net proceeds, after the payment of related expenses, totaled $27.7 million in 2017.  All net proceeds from the hotel dispositions in 2017 were used to repay borrowings under the Company’s $150.0 million credit facility with the

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exception of the net proceeds from the sale of the Comfort Inn in Harlan, which was unencumbered at the time of its sale.

Additionally, as discussed further in Note 17,Subsequent Events, to the consolidated financial statements presented elsewhere in this Form 10-K,  subsequent to December 31, 2017, the Company closed on the sale of the 41-room Supertel Inn in Creston, Iowa for gross proceeds of $2.1 million and the sale of the 135-room Comfort Suites in South Bend, Indiana for gross proceeds of $6.1 million.

Based on the criteria discussed in the footnotes to the consolidated financial statements, as of December 31, 2017, the Company had three hotels classified as held for sale. At the beginning of 2017, the Company had seven hotels held for sale and during the year classified an additional four hotels as held for sale. Eight of these hotels were sold during 2017.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold in any period presented, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented.

As discussed in the footnotes to the consolidated financial statements, as of October 1, 2014 we adopted Accounting Standards Update (“ASU”) 2014-08 which changes the criteria for reporting a discontinued operation such that only disposals representing a strategic shift in operations should be presented as discontinued operations subsequent to adoption.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 (excluding those subsequently reclassified as held for use), the last of which was sold in January 2016,  are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift that has (or will have) a major effect on our operations or financial results.

Operating Performance Metrics

The following table presents our comparative same-store occupancy, ADR, and RevPAR for all our hotels owned at December 31, 2017, with the exception of the Austin Residence Inn, which was opened on August 3, 2016 (no prior period results available) for the years ended December 31, 2017 and 2016.  Same-store occupancy, ADR, and RevPAR reflect the performance of hotels during the entire period, regardless of our ownership during the period presented.  Results for the hotels for periods prior to our ownership were provided to us by prior owners and have not been adjusted by us or audited or reviewed by our independent auditors.  The performance metrics for the hotel acquired through 80% ownership of the Atlanta Aloft JV, also presented below, reflect 100% of the operating results of the property, including our interest and the interest of our partner.

	Year ended December 31,
	2017					2016
	Occupancy	ADR		RevPAR		Occupancy	ADR		RevPAR
Wholly owned new investment platform properties (11 hotels)	80.05%	$	117.76	$	94.27	77.95%	$	115.29	$	89.87
Atlanta Aloft JV	76.66%	$	137.60	$	105.49	72.62%	$	137.61	$	99.94
Total New investment platform	79.51%	$	120.85	$	96.08	77.09%	$	118.68	$	91.49
Legacy hotels held for sale hotels (3 hotels)	62.37%	$	84.47	$	52.68	61.22%	$	83.70	$	51.24
Legacy hotels held for use (2 hotels)	72.01%	$	68.53	$	49.34	70.39%	$	64.94	$	45.71
Total Legacy	65.97%	$	77.96	$	51.43	64.65%	$	76.06	$	49.18
Total Portfolio	76.32%	$	112.12	$	85.58	74.16%	$	109.94	$	81.54

Within the new investment platform, total same-store RevPAR increased 5.0% in 2017, also driven by both increases in ADR of 1.8% and occupancy of 3.1%.  The largest increases in RevPAR for these hotels related to the Dowell/Solomons Hilton Garden Inn, the San Antonio SpringHill Suites, the Lexington Home2 Suites, the Tallahassee Home2 Suites, and the Lake Mary Hampton Inn & Suites.  At the Hilton Garden Inn, the RevPAR increase was driven by significantly increased occupancy related to area construction and increased event business following a concerted sales effort.  At the SpringHill Suites, the increase was driven both by increased convention business following the completion in the third quarter of 2016 of a significant expansion and renovation of the convention center as well as increased government business following a focused sales effort to increase this sector.  At the Lexington Home2 Suites, the increase was driven by an increased relationship with the University of Kentucky as well as a soft 2016 during a period of absorption of the opening of a new hotel nearby.  At the

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Tallahassee Home2 Suites, the increase in RevPAR was primarily the result of a changed meeting schedule used by the state legislature (impacting early 2017 results) combined with increased awareness of the property by both area colleges and government travelers and a successful sales effort to increase the extended stay base at the property.  At the Lake Mary Hampton Inn & Suites, 2016 results were impacted by ongoing renovations.  Additionally, this hotel has transitioned out a lower rate piece of group business in recent periods, allowing the property to grow ADR in excess of the market.

In the legacy held for use portfolio of hotels, total RevPAR increased by 7.9% in 2017, driven by both an increase in ADR of 5.5% and an increase in occupancy of 2.3%.  These increases were driven primarily by the results of the Quality Inn Solomons, which has benefited from the same increase in area construction business discussed above in relation to the Hilton Garden Inn.  Additionally, this hotel has undergone significant renovations that have driven increased leisure business and increased rate in general.

Comparative statistics for 2016 and 2015 are not presented due to the significant change in the Company’s hotel portfolio in and since 2015 and the age of the Company’s holdings (of the 13 new investment portfolio hotels owned at December 31, 2017, six of those hotels were either opened originally or following a significant renovation subsequent to January 1, 2015).

Results of Operations

Comparison of the year ended December 31, 2017 to the year ended December 31, 2016 (in thousands, except per share amounts)

	Year ended December 31,
	2017		2016
	Continuing operations and Total		Continuing operations		Discontinued operations		Total		Continuing operations variance
Revenue	$	55,453	$	50,647		6	$	50,653	$	4,806
Hotel and property operations expense		(37,134)		(37,092)		(4)		(37,096)		(42)
Depreciation and amortization expense		(6,898)		(5,190)		-		(5,190)		(1,708)
General and administrative expense		(6,552)		(5,792)		-		(5,792)		(760)
Acquisition and terminated transactions expense		(1,250)		(550)		-		(550)		(700)
Equity and terminated transactions expense		(343)		-		-		-		(343)
Net gain on disposition of assets		6,807		23,132		681		23,813		(16,325)
Equity in earnings (loss) of joint venture		190		(244)		-		(244)		434
Net gain on derivatives and convertible debt		436		6,377		-		6,377		(5,941)
Other income (expense), net		(111)		55		-		55		(166)
Interest expense		(5,174)		(4,710)		(5)		(4,715)		(464)
Loss on extinguishment of debt		(967)		(2,187)		-		(2,187)		1,220
Impairment loss, net		(2,151)		(1,477)		-		(1,477)		(674)
Income tax benefit (expense)		595		(125)		-		(125)		720
Net earnings	$	2,901	$	22,844	$	678	$	23,522	$	(19,943)

Revenue

During 2017, revenue from continuing operations increased by $4,806 between the periods.  This increase in revenue was driven by changes in the Company’s portfolio between the periods with revenue from properties acquired in or after 2016increasing by $23,534in2017 while revenue decreased by $19,937 as a result of decreased revenue from held for sale and sold properties included in continuing operations.  The remaining increase in revenue related to held for use properties was the result of the changes in RevPAR on the new investment platform and legacy held for use hotels as discussed above.

Expenses

Hotel and property operations expense from continuing operations in total remained relatively stable between the periods, increasing by $42, driven by declines resulting from sold hotels offset by increases related to newly acquired properties.  In total, hotel and operations expenses from continuing operations decreased as a percentage of total revenue to 67.0% in 2017 from 73.2% in 2016.  This decrease was both a result of increased ADR in our hotel

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portfolio and because significantly fewer legacy hotels remain in our portfolio and new investment platform properties have higher operating margins than the hotels that were sold during and between the periods.

Depreciation expense increased by $1,708 between the periods as a result of an increase in the gross value of the Company’s held for use hotel property portfolio, largely due to the seven acquisitions made during 2017 with values totaling $131,800.  Similarly, and also driven by an increase in debt balances between the periods resulting primarily from these acquisitions, interest expense increased by $464.  Despite this increase, interest expense was favorably impacted by a decrease in the weighted average interest rate on total debt outstanding between the periods, from 4.86% at December 31, 2016 to 4.50% at December 31, 2017, largely as a result of the lower than historical interest rate obtained on the credit facility refinancing in the first quarter of 2017.

General and administrative expense increased by $760 between the periods largely as a result of increased compensation costs resulting from stock compensation issued to executive officers in 2017, as well as increased travel and conference expenses.  These increases were partially offset by period over period savings on the Company’s Directors and Officers insurance coverage.

Acquisition and terminated transaction costs will fluctuate period to period based on our acquisition activities.  Acquisition costs typically consist of transfer taxes, legal fees, and other costs associated with acquiring a hotel property as well as transactions that were terminated during the year and expense incurred pursuing potential acquisitions.  The increase in these expenses between the periods of $700 was a result of increased acquisition activity in 2017, including the completion of seven acquisitions during the year.

Equity transaction costs totaled $343 in 2017, all of which was incurred in the first quarter of 2017 as a result of the one-time non-cash expense of $289 associated with the exchange of warrants as well as expenses associated with this transaction.

Net Gain on Disposition of Assets

During the year ended December 31, 2017, eight hotels were disposed of, four of which were sold with gains totaling $7,049 and four of which were sold with no gains as these hotels had been previously impaired. During the year ended December 31, 2016, 25 hotels were sold in total, 23 with gains totaling $23,575 included in continuing operations, one with a gain totaling $681 included in discontinued operations, and one with no gain as the hotel had been previously impaired.

Net Gain on Derivatives and Convertible Debt

During the year ended December 31, 2017, the Company recognized a net gain on derivatives and convertible debt of $436, including both a gain on convertible debt of $246 and a net gain on derivatives of $190.  During the year ended December 31, 2016, the Company recognized a net gain totaling $6,377 primarily as a result of a decrease in the Company’s stock price, which in turn decreased the value assigned to the conversion feature of the Series C Preferred Stock and the outstanding common stock warrants, partially offset by a loss of $303 on the fair value of the convertible debt entered into on March 16, 2016 due to an increase in stock price from the date that note was entered into through the end of the year.

Loss on Extinguishment of Debt

The Company incurred a loss on the extinguishment of debt of $967in 2017 as a result of the refinancing of a significant portion of the Company’s existing debt with the credit facility during the first quarter and the refinancing of two variable rate Western Alliance Bank loans during the fourth quarter of 2017.  The loss on the extinguishment of debt that was incurred in 2016 was a result of prepayment penalties recognized upon the disposal of properties encumbered by the Company’s Morgan Stanley debt during that year.

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Impairment Loss, net

During the year ended December 31, 2017, we incurred $2,231 of impairment losses and $80 of recovery of previously recognized impairment.  During the year ended December 31, 2016, we recognized impairment losses totaling $1,477.  All impairments recognized in both periods related to hotels held for sale or sold during the periods.

Income Tax Expense

As of December 31, 2016 and during prior periods, a full valuation allowance was recorded against the Company’s net deferred tax asset due to the uncertainty of realization because of historical operating losses. As such, no income tax expense or benefit was recorded during 2016 with the exception of amounts totaling $125 for alternative minimum tax recorded in 2016 related to the use of net operating losses during the period.  During the fourth quarter of 2017, it was determined by management that a valuation allowance against federal and certain state net deferred tax assets is no longer required as management believes that it is more likely than not that remaining deferred tax assets will be realized.  The release of this valuation allowance, partially offset by the tax impact of the Tax Cuts and Jobs Act which was passed on December 22, 2017 and lowers the value of the deferred tax assets of the Company by way of lowering the corporate tax rate, led to the net tax benefit of $595 recognized during 2017.

Comparison of the year ended December 31, 2016 to the year ended December 31, 2015 (in thousands, except per share amounts)

	Year ended December 31,
	2016						2015
	Continuing operations		Discontinued operations		Total		Continuing operations		Discontinued operations		Total		Continuing operations variance
Revenue	$	50,647	$	6	$	50,653	$	58,714	$	2,923	$	61,637	$	(8,067)
Hotel and property operations expense		(37,092)		(4)		(37,096)		(43,367)		(1,946)		(45,313)		6,275
Depreciation and amortization expense		(5,190)		-		(5,190)		(5,400)		-		(5,400)		210
General and administrative expense		(5,792)		-		(5,792)		(5,493)		-		(5,493)		(299)
Acquisition and terminated transactions expense		(550)		-		(550)		(684)		-		(684)		134
Equity and terminated transactions expense		-		-		-		(246)		-		(246)		246
Net gain on disposition of assets		23,132		681		23,813		4,798		2,997		7,795		18,334
Equity in loss of joint venture		(244)		-		(244)		-		-		-		(244)
Net gain on derivatives and convertible debt		6,377		-		6,377		11,578		-		11,578		(5,201)
Other income, net		55		-		55		114		-		114		(59)
Interest expense		(4,710)		(5)		(4,715)		(5,522)		(223)		(5,745)		812
Loss on extinguishment of debt		(2,187)		-		(2,187)		(213)		-		(213)		(1,974)
Impairment (loss) recovery, net		(1,477)		-		(1,477)		(3,829)		121		(3,708)		2,352
Income tax expense		(125)		-		(125)		-		-		-		(125)
Net earnings	$	22,844	$	678	$	23,522	$	10,450	$	3,872	$	14,322	$	12,394

Revenue

During 2016, revenue from continuing operations decreased by $8,067 between the periods.  Revenue from properties acquired in and subsequent to the fourth quarter of 2015 increased $10,175 and revenue from our other held for use assets remained consistent, decreasing by $129.  Revenue from held for sale and sold properties decreased by $18,113 driven by property sales during the periods presented.

Expenses

Hotel and property operations expense from continuing operations decreased by $6,275, driven by declines resulting from sold hotels partially offset by increases related to newly acquired properties.  In totality, hotel and operations expenses from continuing operations decreased as a percentage of revenue by 0.6% because of increases in ADR and because the legacy hotels that remain in our portfolio and our recent acquisitions have higher operating margins than the hotels that were sold during the period.

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Interest expense and depreciation expense from continuing operations decreased by $812 and $210, respectively, between the periods as a result of a net decrease in the size of the Company’s hotel portfolio and thus its debt levels.  Additionally, interest expense was favorably impacted by a decrease in the weighted average interest rate on total debt outstanding between the periods, from 5.31% at December 31, 2015 to 4.86% at December 31, 2016, as a result of debt repaid upon the sale of properties and the lower than average interest rate obtained on the Great Western Bank debt obtained as part of the Leawood Aloft acquisition in December 2016.

The $299 increase in general and administrative expense was driven by increased compensation expense resulting from compensation arrangements put into place with the new management team in 2015 as well as increased professional fees associated with increased business activity in 2016.  These increases were partially offset by decreased directors’ and officers’ insurance premiums and decreased employee recruiting costs following significant executive recruiting in 2015.

Acquisition and terminated transaction costs will fluctuate period to period based on our acquisition activities.  Acquisition costs typically consist of transfer taxes, legal fees, and other costs associated with acquiring a hotel property as well as transactions that were terminated during the year. 

The $246 of terminated equity transactions expense in 2015 consists of charges incurred in the preparation of an exchange offer that commenced on August 6, 2015.  This offer was withdrawn on September 17, 2015.

Impairment Losses

In 2016, we incurred $1,477 of impairment losses, all of which were included in continuing operations.  In 2015, we incurred $3,708 of impairment losses, all of which were included in continuing operations with the exception of net recovery of $121 included in discontinued operations. All impairments recognized in both years related either to hotels held for sale at some point or sold during the year.

Dispositions

In 2016, twenty-four hotels were sold with gains totaling $24,256 and one hotel was sold with no gain as it had been previously impaired.  In 2015, eight hotels were sold with gains totaling $7,759 and nine hotels were sold with no gain as they had been previously impaired.

Net Gain on Derivatives and Convertible Debt

The change in net gain on derivatives and convertible debt was driven by the change in fair value of the derivative liabilities for the year ended December 31, 2016 compared to the year ended December 31, 2015. The fair value of the derivative liabilities decreased by an aggregate of $6,680 during 2016 and $11,578 during 2015. The decreases in fair value in both periods was primarily a result of a decrease in the Company’s stock price during the periods, which in turn decreases the value assigned to the conversion feature of the Series C Preferred Stock and the outstanding common stock warrants throughout 2015 and while being marked to market in the first quarter of 2016.

Income Tax Expense

As of both December 31, 2016 and 2015, a full valuation allowance continued to be recorded against the net deferred tax asset due to the uncertainty of realization because of historical operating losses. As such, no income tax expense or benefit was recorded during either year with the exception of amounts totaling $125 for alternative minimum tax recorded in 2016 related to the use of net operating losses during the period.

Non-GAAP Financial Measures

Non-GAAP financial measures are measures of our historical financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  We report Funds from Operations (“FFO”), Adjusted FFO (“AFFO”), Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), Adjusted EBITDA, and Hotel EBITDA as non-GAAP

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financial measures that we believe are useful to investors as key measures of our operating results and that management uses to facilitate a periodic evaluation of our operating results relative to those of our peers.  Our non-GAAP measures should not be considered as an alternative to GAAP net earnings as an indication of financial performance or to U.S. GAAP cash flows from operating activities as a measure of liquidity.  Additionally, these measures are not indicative of funds available to fund cash needs or our ability to make cash distributions as they have not been adjusted to consider cash requirements for capital expenditures, property acquisitions, debt service obligations, or other commitments.

FFO and AFFO

We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net earnings or loss computed in accordance with GAAP, excluding gains or losses from sales of real estate assets, impairment, and the depreciation and amortization of real estate assets.  FFO is calculated both for the Company in total and as FFO attributable to common shares and common units, which is FFO reduced by preferred stock dividends.  AFFO is FFO attributable to common shares and common units adjusted to exclude items we do not believe are representative of the results from our core operations, including non-cash gains or losses on derivatives and convertible debt, stock-based compensation expense, amortization of certain fees, losses on debt extinguishment, and in-kind dividends above stated rates, and cash charges for acquisition and equity transaction costs. All REITs do not calculate FFO and AFFO in the same manner; therefore, our calculation may not be the same as the calculation of FFO and AFFO for similar REITs.

We consider FFO to be a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a meaningful indication of our performance.  We believe that AFFO provides useful supplemental information to investors regarding our ongoing operating performance that, when considered with net income and FFO, is beneficial to an investor’s understanding of our operating performance.

The following table reconciles net earnings to FFO and AFFO for the years ended December 31 (in thousands). All amounts presented include both continuing and discontinued operations as well as our portion of the results of our unconsolidated Atlanta JV.

	Year ended December 31,
Reconciliation of Net earnings to FFO and AFFO	2017		2016		2015
Net earnings	$	2,901	$	23,522	$	14,322
Depreciation and amortization expense		6,898		5,190		5,400
Depreciation and amortization expense from JV		1,140		377		-
Net gain on disposition of assets		(6,807)		(23,813)		(7,795)
Net loss on disposition of assets from JV		7		2		-
Impairment loss, net		2,151		1,477		3,708
FFO		6,290		6,755		15,635
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(12,244)		(20,748)		(3,632)
FFO attributable to common shares and common units		(5,954)		(13,993)		12,003
Net gain on derivatives and convertible debt		(436)		(6,377)		(11,578)
Net loss on derivatives from JV		2		5		-
Acquisitions and terminated transactions expense		1,250		550		684
Acquisition expense from JV		-		239		-
Equity and terminated transactions		343		-		246
Loss on debt extinguishment		967		2,187		213
Stock-based compensation and LTIP expense		1,237		305		285
Amortization of deferred financing fees		1,066		597		714
Amortization of deferred financing fees from JV		181		68		-
Non-recurring dividends above stated rates declared and undeclared and in kind dividends deemed on preferred stock		11,110		16,738		-
AFFO attributable to common shares and common units	$	9,766	$	319	$	2,567

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EBTIDA, Adjusted EBITDA, and Hotel EBITDA

We calculate EBITDA and Adjusted EBITDA by adding back to net earnings or loss certain non-operating expenses and certain non-cash charges that are based on historical cost accounting that we believe may be of limited significance in evaluating current performance. We believe these adjustments can help eliminate the accounting effects of depreciation and amortization and financing decisions and facilitate comparisons of core operating profitability between periods. In calculating EBITDA, we add back to net earnings or loss interest expense, loss on debt extinguishment, income tax expense, and depreciation and amortization expense. In calculating Adjusted EBITDA, we adjust EBITDA to add back net gain/loss on disposition of assets, acquisition and terminated transactions expense, and equity transactions expense, which are cash charges. We also add back impairment, stock –based compensation expense, and gain/loss on derivatives and convertible debt, which are non-cash charges.  EBITDA and Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.

We believe EBITDA and Adjusted EBITDA to be useful additional measures of our operating performance, excluding the impact of our capital structure (primarily interest expense), our asset base (primarily depreciation and amortization expense), and other items we do not believe are representative of the results from our core operations.  

The Company further excludes general and administrative expenses, other non-operating income or expense, and certain hotel and property operations expenses that are not allocated to individual properties in assessing hotel performance (primarily certain general liability and other insurance costs, land lease costs, and office and banking fees) from Adjusted EBITDA to calculate Hotel EBITDA.  Hotel EBITDA, as presented, may not be comparable to similarly titled measures of other companies.   

Hotel EBITDA is intended to isolate property level operational performance over which the Company’s hotel operators have direct control.  We believe Hotel EBITDA is helpful to investors as it better communicates the comparability of our hotels’ operating results for all of the Company’s hotel properties and is used by management to measure the performance of the Company’s hotels and the effectiveness of the operators of the hotels.

The following table reconciles net earnings to EBITDA, Adjusted EBITDA, and Hotel EBITDA for the years ended December 31 (in thousands). All amounts presented include both continuing and discontinued operations as well as our portion of the results of our unconsolidated Atlanta JV.

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	Year ended December 31,
Reconciliation of Net earnings to EBITDA, Adjusted EBITDA, and Hotel EBITDA	2017		2016		2015
Net earnings	$	2,901	$	23,522	$	14,322
Interest expense		5,174		4,715		5,745
Interest expense from JV		1,941		618		-
Loss on debt extinguishment		967		2,187		213
Income tax expense		(595)		125		-
Depreciation and amortization expense		6,898		5,190		5,400
Depreciation and amortization expense from JV		1,140		377		-
EBITDA		18,426		36,734		25,680
Net gain on disposition of assets		(6,807)		(23,813)		(7,795)
Net loss on disposition of assets from JV		7		2		-
Impairment loss, net		2,151		1,477		3,708
Net gain on derivatives and convertible debt		(436)		(6,377)		(11,578)
Net loss on derivative from JV		2		5		-
Stock-based compensation and LTIP expense		1,237		305		285
Acquisition and terminated transactions expense		1,250		550		684
Acquisition and terminated transactions expense from JV		-		239		-
Equity and terminated transactions expense		343		-		246
Adjusted EBITDA		16,173		9,122		11,230
General and administrative expense, excluding stock compensation and LTIP expense		5,315		5,487		5,208
Other expense (income), net		111		(55)		(114)
Unallocated hotel and property operations expense		351		467		495
Hotel EBITDA	$	21,950	$	15,021	$	16,819
Revenue	$	55,453	$	50,653	$	61,637
JV revenue		9,266		2,962		-
Total Company and JV revenue	$	64,719	$	53,615	$	61,637
Hotel EBITDA as a percentage of revenue		34%		28%		27%

Liquidity and Capital Resources

Liquidity Requirements

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our $150.0 million secured revolving credit facility and the release of restricted cash by our lenders upon the satisfaction of usage requirements.  At December 31, 2017, the Company had $5.4 million of cash and cash equivalents on hand and $11.9 million of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to December 31, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1.4 million through March 31, 2019.  We also presently expect to invest approximately $4.0 million to $5.0 million in capital expenditures related to hotel properties we currently own through March 31, 2019.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.

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Sources and Uses of Cash

Cash provided by Operating Activities.  Our cash provided by operations was $9.1 million, $2.7 million, and $5.0 million for the years ended December 31, 2017, 2016, and 2015, respectively.  These changes in operating cash flows were driven by changes in net income, after adjusting for non-cash items, which increased by $4.1 million in 2017 from 2016 and decreased by $2.0 million in 2016 from 2015.  During the year ended December 31, 2017, an increase in accrued expenses largely due to increased accrued interest and increased hotel expense accruals due to the increased size of the Company’s portfolio also contributed to the increase in operating cash flows.  Other changes in operating assets and liabilities between the periods discussed were individually insignificant.

Cash provided by (used in) Investing Activities.  Our cash provided by (used in) investing activities was ($95.9 million), $21.9 million, and $5.4 million for the years ended December 31, 2017, 2016, and 2015, respectively.  The decrease in investing cash flows in 2017 from 2016 was primarily the result of increased cash expenditures related to hotel acquisitions of $100.6 million and decreased net proceeds from the sale of properties of $31.0 million between the periods.  These decreases were partially offset by $9.3 million of cash contributed to form the Atlanta JV in the third quarter of 2016.  The increase in investing cash flows in 2016 from 2015 was primarily the result of decreased cash expenditures related to hotel acquisitions totaling $20.1 million and increased net proceeds from the sale of properties of $5.3 million between the periods.  These increases were partially offset by the previously mentioned $9.3 million of cash contributed to form the Atlanta JV in the third quarter of 2016.

Cash provided by (used in) Financing Activities.  Our cash provided by (used in) financing activities was $83.9 million, ($21.2 million), and ($5.7 million) for the years ended December 31, 2017, 2016, and 2015, respectively.  The increase in financing cash flows in 2017 from 2016 was the result of increased cash flows from equity issuances, which included the issuance of common stock of $45.9 million in the first quarter of 2017 and shares under the Company’s ATM in 2017 of $1.6 million, and the net cash flows from preferred stock issuances and redemptions in the first quarter of 2016 of $8.7 million.  Additionally, the Company had increased net cash inflows related to debt activity in 2017 of $72.8 million resulting from increased debt issuances related to properties acquired and the credit facility during the period, including consideration of the payment of related deferred financing costs and early extinguishment penalties.  These increases were partially offset by increased dividend payments of $5.1 million in 2017.

This decrease in financing cash flows in 2016 from 2015 was driven by increased net principal payments on long-term debt of $19.0 million as a result of increased repayments upon the sale of hotel properties and fewer hotel acquisitions, partially offset by cash received in the first quarter of 2016 related to the Series D Preferred Stock issuance less cash used to redeem the Series A and B Preferred Stock and cash dividends paid on the Series C and Series D Preferred Stock, which together had a net impact to financing cash flows of $5.1 million.

Outstanding Indebtedness

At December 31, 2017, we had long-term debt of $118.9 million associated with assets held for use with a weighted average term to maturity of 3.2 years and a weighted average interest rate of 4.50%.  Of this total, at December 31, 2017, $24.3 million was fixed rate debt with a weighted average term to maturity of 2.4 years and a weighted average interest rate of 4.41% and $94.6 million was variable rate debt with a weighted average term to maturity of 4.1 years and a weighted average interest rate of 4.52%.  At December 31, 2016, we had long-term debt of $48.4 million associated with assets held for use with a weighted average term to maturity of 3.2 years and a weighted average interest rate of 4.94%.  Of this total, at December 31, 2016, $22.5 million was fixed rate debt with a weighted average term to maturity of 3.7 years and a weighted average interest rate of 4.41% and $25.9 million was variable rate debt with a weighted average term to maturity of 2.8 years and a weighted average interest rate of 5.39%. 

Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below based on its contractual maturity although the balances are expected to be

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repaid within one year upon the sale of the related hotel properties.  Aggregate annual principal payments on debt for the next five years and thereafter are as follows (in thousands):

	Held for sale		Held for use		Total
2018	$	-	$	1,083	$	1,083
2019		-		1,183		1,183
2020		5,150		69,385		74,535
2021		-		14,344		14,344
2022		-		24,886		24,886
Thereafter		-		8,054		8,054
Total	$	5,150	$	118,935	$	124,085

Financial Covenants

We are required to satisfy various financial covenants within our debt agreements, including the following financial covenants within our credit facility:

· Leverage Ratio: The ratio of consolidated total indebtedness to consolidated total asset value cannot exceed 60%. When the first extension option becomes effective, the foregoing leverage ratio will no longer be applicable, and in lieu thereof, the ratio of consolidated total indebtedness to adjusted consolidated EBITDA for the most recently ended four fiscal quarters cannot exceed 6.25 to 1.

· Secured Leverage Ratio: The ratio of consolidated secured indebtedness (excluding the credit facility) to consolidated total asset value cannot exceed 40%.

· Fixed Charge Coverage Ratio: The ratio of adjusted consolidated EBITDA for the most recently ended four fiscal quarters to consolidated fixed charges for the most recently ended four fiscal quarters cannot be less than 1.50 to 1.

· Tangible Net Worth: Consolidated tangible net worth cannot be less than $55 million plus 80% of net offering proceeds.

· Unhedged Variable Rate Debt: Consolidated unhedged variable rate debt cannot exceed 25% of consolidated total asset value.

· Distributions: The Company is permitted to make distributions during any period of four fiscal quarters in an aggregate amount of up to 95% of funds available for distribution.

Certain of the terms used in the foregoing descriptions of the financial covenants within our credit facility have the meanings given to them in the credit facility, and certain of the financial covenants are subject to pro forma adjustments for acquisitions and sales of hotel properties and for specific capital events.

As of December 31, 2017, we were in compliance with our financial covenants.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. As of December 31, 2017, we are not in default of any of our loans.

Significant Debt Transactions

On March 1, 2017, a significant portion of the Company’s debt (including all debt outstanding at December 31, 2016 with the exception of the two variable rate Western Alliance Bank loans and the two fixed rate Great Western Bank loans) was refinanced with the credit facility that matures on March 1, 2020.  The credit agreement was entered into with KeyBank National Association, as administrative agent and lender, KeyBanc Capital Markets Inc. and The Huntington National Bank, as joint leader arrangers, and other lenders and agents party thereto.

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The original credit agreement provided for a $90.0 million senior secured credit facility and includes an accordion feature that would allow the credit facility to be increased to $400.0 million with additional lender commitments. On May 11, 2017, the Company closed on an increase in the credit facility from $90.0 million to $150.0 million with the credit facility continuing to retain its $400.0 million accordion feature.  Available borrowing capacity under the credit facility is based on a borrowing base formula for the pool of hotel properties securing the facility. As of the closing date, the collateral pool consisted of 14 hotel properties and total available borrowing capacity under the credit facility was $41.05 million.  At December 31, 2017, following the purchases and sales of hotels subsequent to March 1, 2017 and the common stock equity raise, the collateral pool consisted of 12 hotel propertiesand total available borrowing capacity under the credit facility was $85.2 million.  At December 31, 2017, $73.3 million was outstanding under the credit facility.

The credit facility is guaranteed by the Company and its material subsidiaries that do not have stand-alone financing. Borrowings under the credit facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage). The credit facility matures in March 2020 and has two one-year extension options, subject to certain conditions, including the completion of specific capital achievements. The credit facility contains customary representations and warranties, covenants, and events of default. 

Upon the closing of the credit facility, $34.25 million was immediately drawn down to repay existing debt and related expenses.  Prior to December 31, 2017, net proceeds from the Company’s hotel sales were used to pay down a total of $35.7 million on the credit facility, proceeds from the credit facility totaling $113.25million were used to fund the Company’s acquisitions plus related expenses, a portion of the proceeds from the Company’s common stock offering totaling $37.0 million was used to pay down the credit facility, and additional cash payments of $1.5 million were made to reduce to credit facility.

In connection with the acquisition of the Home2 Suites Memphis / Southaven, on April 14, 2017, the Company assumed an existing securitized loan on the property with outstanding principal totaling approximately $9.1 million.  The loan bears interest at a fixed rate of 4.54%, requires monthly principal and interest payments of $0.05 million, and matures on August 1, 2024.

On October 4, 2017, the Company refinanced $14.5 million of debt outstanding under two variable rate Western Alliance Bank loans and $10.5 million of debt outstanding under the credit facility, in total collateralized by three properties, with a mortgage loan from Wells Fargo Bank, National Association (“Wells Fargo”), in the principal amount of $26.5 million.  The loan requires monthly principal and interest payments based on a 30-year amortization with the principal balance due and payable on November 1, 2022. Subject to the satisfaction of certain conditions, the loan also has two one-year extension options. The loan bears interest at one-month LIBOR plus 2.39%.  At the time of the origination of the loan, the Company also entered into an interest rate swap with Wells Fargo to effectively fix the interest rate of the loan at 4.44%.  The loan is non-recourse to the Company, except for certain customary carve-outs to the general non-recourse liability, which carve-outs are guaranteed by the Company.

Significant Equity Transactions

On January 24, 2017, the Company exchanged 23,160 warrants (the “New Warrants”) to purchase common stock of the Company for 576,923 warrants (the “Old Warrants”) held by RES. The number of New Warrants issued in exchange for the Old Warrants equaled the number of shares of common stock issuable upon exercise of the Old Warrants pursuant to a cashless exercise provisions of the Old Warrants. The New Warrants were exercisable for 23,160 shares of common stock, had an exercise price of $0.0065 for each common share, and would have expired on January 24, 2019. On the date of the exchange, the New Warrants had a fair value in excess of the Old Warrants of $0.3 million, which is reflected as equity transactions expense and an increase in additional paid-in capital as the exchange is assumed to be equivalent to the modification of an equity classified instrument.  The New Warrants were exercised in full on September 28, 2017.

On February 28, 2017, the holders of the 6.25% Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock. The terms of the Series D Preferred Stock provided for automatic

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conversion following certain future common stock offerings, and also provided for potential additional payments to the holders depending on the sales price of common stock in the offerings. As a result of the voluntary conversion, the holders are no longer entitled to the potential payments. To induce the holders of the Series D Preferred Stock to voluntarily convert their shares, the Company issued the holders $9.25 million in face value of a new series of preferred stock, the Series E Preferred Stock.  The terms of the Series E Preferred Stock are discussed in Note 10, Preferred Stock, to our consolidated financial statements presented elsewhere in this Form 10-K.

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5. No fractional shares of common stock were issued as fractional shares were settled in cash. 

On March 29, 2017, the Company closed an underwritten public offering of 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50.  Net proceeds, after the payment of related expenses, from this offering totaled $45.9 million.

The Company’s common stock began trading on the NYSE American under its current symbol “CDOR” beginning at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market.

On September 20, 2017, the Company entered into an equity distribution agreement with KeyBanc Capital Markets Inc. and BMO Capital Markets Corp. (collectively, the “Sales Agents”), pursuant to which we may sell, from time to time, up to an aggregate sales price of $50.0 million, subject to decrease in compliance with General Instruction I.B.6 of Registration Statement on Form S-3, of shares of our common stock pursuant to a prospectus supplement we filed with the Securities and Exchange Commission (“SEC”) through the Sales Agents acting as sales agent and/or principal, through an at-the-market offering program (our “ATM program”). Pursuant to Instruction I.B.6 to Registration Statement on Form S-3, we may not sell more than the equivalent of one-third of our public float during any 12 consecutive months so long as our public float is less than $75.0 million.  During the year ended December 31, 2017, we sold 169,004 shares of common stock under the ATM program at an average sales price of $10.15 per share for gross proceeds totaling $1.7 million and net proceeds of $1.6 million, after cash commissions of 2% of gross proceeds paid to the Sales Agents and additional related costs.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Contractual Obligations

Below is a summary of certain obligations that will require capital as of December 31, 2017(in thousands):

			Payments due by period
Contractual obligations	Total		2018		2019-2020		2021-2022		2023 and After
Long-term debt including interest (1)	$	136,224	$	6,391	$	78,552	$	42,622	$	8,659
Office leases		405		159		199		47		-
Total contractual obligations	$	136,629	$	6,550	$	78,751	$	42,669	$	8,659

(1) Interest rate payments on our variable rate debt have been estimated using interest rates in effect at December 31, 2017

Long-term debt and office lease payments above include only amounts related to properties classified as held for use.  Future debt payments, including interest, related to the three held for sale properties that are expected to be sold within the next 12 months of $5.7 million are not included in the table above.

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We have various standing or renewable contracts with vendors. These contracts are all cancelable with immaterial or no cancellation penalties. Contract terms are generally one year or less.  We also have management agreements in place for the management and operation of our hotel properties.

Inflation

We rely on the performance of our hotels to increase revenues to keep pace with inflation.  Generally, our hotel operators possess the ability to adjust room rates daily to reflect the effects of inflation.  However, competitive pressures may limit the ability of our management companies to raise room rates.

Off Balance Sheet Financing Transactions

We have not entered into any off balance sheet financing transactions.

Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with U.S. GAAP, which requires management to make estimates and assumptions that effect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances.

Critical accounting policies are those that are both important to the presentation of our financial condition and results of operations and require management’s most difficult, complex, or subjective judgments.  We have identified the following principal accounting policies that have a material effect on our consolidated financial statements.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method.  Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these

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undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, 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 affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the statements of cash flows using the cumulative earnings approach.  Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture.  Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold in any period presented, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

At the end of each reporting period, if the fair value of the held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the subsequent decision not to sell.

Historically, we have presented the results of operations of hotel properties that have been sold or considered held for sale as discontinued operations.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 change the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted the pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations

45

for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Gains on the sale of real estate are recognized when a property is sold, provided that the profit is determinable, meaning that collectability of the sales price is reasonably assured or can be estimated, and that the earnings process is complete, meaning that the seller is not obligated to perform significant activities after the sale in order to earn the profit. If these criteria are not met, the timing of the sale is determined based on various criteria related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the property. If the sales criteria are not met, the gain is deferred and the finance, installment, or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent we sell a property and retain a partial ownership interest in the property, we generally recognize a gain to the extent of the third party ownership interest.

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under applicable provisions of the Code, as amended.  In general, under such Code 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, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will be unable to re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT, unless we satisfy certain relief provisions.  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.  Except with respect to the TRS, the Company does not believe that it will be liable for significant federal or state income taxes in future years.

A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS 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 and their respective tax bases and for operating loss and tax credit carryforwards 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 projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

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 resolution of any related appeals or litigation processes, based on its 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 to the uncertain tax position by the applicable taxing authority or by expiration of the applicable statute of limitations.

46

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaces most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard is effective for the Company on January 1, 2018.  The Company has adopted ASU 2014-09 for the year beginning on January 1, 2018.   The standard permits the use of either the retrospective or cumulative effect transition method.  The Company has evaluated each of its revenue streams under the new model. Based on our assessments, the adoption of this standard will not materially affect the amount and timing of revenue recognition for revenues from rooms, food and beverage, and other ancillary amenities. The Company has adopted this standard for the year beginning on January 1, 2018 using the modified retrospective approach and is evaluating disclosure requirements.  Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of our accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted.  The Company has adopted ASU 2016-15 for the year beginning on January 1, 2018.  The adoption of ASU 2016-15 will not have a material impact on our consolidated financial statements. 

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statements of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted cash equivalents in the statements of cash flows. This guidance is effective for the Company for years beginning afterDecember 15, 2017, including interim periods within those years. Early adoption is permitted.  The Company has adopted ASU 2016-18 for the year beginning on January 1, 2018.  The adoption of ASU No. 2016-18 will change the presentation of the statements of cash flows for the Company and we will utilize a retrospective transition method for each period presented within the consolidated financial statements for periods subsequent to the date of adoption.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.  The Company has adopted ASU 2017-01 for the year beginning on January 1, 2018. 

47

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that effect market-sensitive instruments.  At December 31, 2017, our market risk arises primarily from interest rate risk relating to variable rate borrowings and the market risk related to our convertible debt and the embedded redemption right in the Series E Preferred Stock that fair value will fluctuate following changes in the Company’s common stock price or changes in interest rates.

Interest Rate Sensitivity

We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs by closely monitoring our variable rate debt and converting such debt to fixed rates when we deem such conversion advantageous.  From time to time, we may enter into interest rate swap agreements or other interest rate hedging agreements.  At December 31, 2017, we have an interest rate swap in place which effectively locks the variable interest rate on our Wells Fargo debt (December 31, 2017 balance of $26.5 million) at 4.44% and an interest rate cap in place which caps the 30-day LIBOR interest rate on $50.0 million of our credit facility (December 31, 2017 balance of $73.3 million) at 2.5%. We do not intend to enter into derivative or interest rate transactions for speculative purposes.

The table below provides information about financial instruments that are sensitive to changes in interest rates.  The table presents scheduled maturities, including the amortization of principal and related weighted-average interest rates for the debt maturing in each specified period, excluding $5.2 million of debt related to hotel properties held for sale (dollars in thousands).  For the purposes of this presentation, the Wells Fargo debt is considered fixed rate debt as the variable interest rate is effectively locked with the previously discussed interest rate swap.

	2018			2019			2020			2021			2022			Thereafter			Total
Fixed rate debt	$	1,083		$	1,183		$	1,232		$	14,344		$	24,886		$	8,054		$	50,782
Average fixed interest rate		4.41	%		4.40	%		4.40	%		4.34	%		4.44	%		4.54	%		4.42	%
Variable rate debt	$	-		$	-		$	68,153		$	-		$	-		$	-		$	68,153
Average variable interest rate		-	%		-	%		4.55	%		-	%		-	%		-	%		4.55	%
Total debt	$	1,083		$	1,183		$	69,385		$	14,344		$	24,886		$	8,054		$	118,935
Total average interest rate		4.41	%		4.40	%		4.55	%		4.34	%		4.44	%		4.54	%		4.50	%

At December 31, 2017, approximately 42.7% of our outstanding debt, excluding debt related to hotel properties held for sale, is subject to fixed interest rates or effectively locked with an interest rate swap, while 57.3% of our debt is subject to floating rates.  Assuming no increase in the level of our variable debt outstanding at December 31, 2017 and after giving effect to our interest rate swap, if interest rates increased by 1.0% our cash flow related to hotel properties held for use would decrease by approximately $0.7 million per year.

48

Condor Hospitality Trust, Inc. and Subsidiaries

Index to Consolidated Financial Statements and Schedule III

	Page
Report of Independent Registered Public Accounting Firm	50
Consolidated Balance Sheets as of December 31, 2017  and 2016	51
Consolidated Statements of Operations for years ended December 31, 2017,  2016, and 2015	52
Consolidated Statements of Equity for the years ended December 31, 2017,  2016, and 2015	53
Consolidated Statements of Cash Flows for the years ended December 31, 2017,  2016, and 2015	54
Notes to Consolidated Financial Statements	55
Schedule III – Real Estate and Accumulated Depreciation	92
Notes to Schedule III – Real Estate and Accumulated Depreciation	94

49

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Condor Hospitality Trust, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Condor Hospitality Trust, Inc. and subsidiaries (the Company) as of December 31, 2017 and 2016, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three year period ended December 31, 2017, and the related notes (and financial statement schedule, Schedule III – Real Estate and Accumulated Depreciation) (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

(signed) KPMG LLP

We have served as the Company’s auditor since 2001.

McLean, Virginia
March 19, 2018

50

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

		As of December 31,
	2017		2016
Assets
Investment in hotel properties, net	$	206,925	$	79,231
Investment in unconsolidated joint venture		7,747		9,036
Cash and cash equivalents		5,441		8,326
Restricted cash, property escrows		4,894		5,350
Accounts receivable, net of allowance for doubtful accounts of $11 and $21		1,707		1,416
Prepaid expenses and other assets		3,220		1,666
Derivative assets, at fair value		391		-
Investment in hotel properties held for sale, net		12,655		35,640
Total Assets	$	242,980	$	140,665
Liabilities and Equity
Liabilities
Accounts payable, accrued expenses, and other liabilities	$	7,046	$	4,698
Dividends and distributions payable		2,470		1,125
Derivative liabilities, at fair value		-		8
Convertible debt, at fair value		1,069		1,315
Long-term debt, net of deferred financing costs		115,605		47,918
Long-term debt related to hotel properties held for sale, net of deferred financing costs		4,976		14,802
Total Liabilities		131,166		69,866
Equity
Shareholders' Equity
Preferred stock,  40,000,000 shares authorized:
6.25% Series D, 6,700,000 shares authorized, $.01 par value, 6,245,156 shares outstanding, liquidation preference of $63,427 at December 31, 2016		-		61,333
6.25% Series E, 925,000 shares authorized, $.01 par value, 925,000 shares outstanding, liquidation preference of $9,395 at December 31, 2017		10,050		-
Common stock, $.01 par value, 200,000,000 shares authorized; 11,833,573 and 762,590 shares outstanding		118		8
Additional paid-in capital		230,727		118,655
Accumulated deficit		(130,489)		(112,024)
Total Shareholders' Equity		110,406		67,972
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $871 and $2,008		1,408		2,827
Total Equity		111,814		70,799
Total Liabilities and Equity	$	242,980	$	140,665

See accompanying notes to consolidated financial statements.

51

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

asd

	Year ended December 31,
	2017		2016		2015
Revenue
Room rentals and other hotel services	$	55,453	$	50,647	$	58,714
Operating Expenses
Hotel and property operations		37,134		37,092		43,367
Depreciation and amortization		6,898		5,190		5,400
General and administrative		6,552		5,792		5,493
Acquisition and terminated transactions		1,250		550		684
Equity transactions		343		-		246
Total operating expenses		52,177		48,624		55,190
Operating income		3,276		2,023		3,524
Net gain on disposition of assets		6,807		23,132		4,798
Equity in earnings (loss) of joint venture		190		(244)		-
Net gain on derivatives and convertible debt		436		6,377		11,578
Other income (expense), net		(111)		55		114
Interest expense		(5,174)		(4,710)		(5,522)
Loss on debt extinguishment		(967)		(2,187)		(213)
Impairment loss, net		(2,151)		(1,477)		(3,829)
Earnings from continuing operations before income taxes		2,306		22,969		10,450
Income tax benefit (expense)		595		(125)		-
Earnings from continuing operations		2,901		22,844		10,450
Gain from discontinued operations, net of tax		-		678		3,872
Net earnings		2,901		23,522		14,322
Earnings attributable to noncontrolling interest		(20)		(727)		(1,197)
Net earnings attributable to controlling interests		2,881		22,795		13,125
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(12,243)		(20,748)		(3,632)
Net earnings (loss) attributable to common shareholders	$	(9,362)	$	2,047	$	9,493
Earnings per Share
Continuing operations - Basic	$	(1.00)	$	1.82	$	8.06
Discontinued operations - Basic		-		0.85		4.55
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	2.67	$	12.61
Diluted Earnings Per Share
Continuing operations - Diluted	$	(1.00)	$	0.78	$	(0.98)
Discontinued operations - Diluted		-		0.13		0.98
Total - Diluted Earnings (Loss) per Share	$	(1.00)	$	0.91	$	-

See accompanying notes to consolidated financial statements.

52

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Equity

(In thousands, except per share data)

	Years ended December 31, 2017, 2016, and, 2015
	Shares of preferred stock		Preferred  stock		Shares of common stock		Common stock		Additional paid-in capital		Accumulated deficit		Total shareholders' equity		Noncontrolling interest		Total equity
Balance at December 31, 2014		3,803	$	38		722	$	7	$	137,940	$	(118,983)	$	19,002	$	90	$	19,092
Stock-based compensation		-		-		3		-		143		-		143		-		143
Long-term incentive plan		-		-		-		-		-		-		-		142		142
Issuance of common stock		-		-		35		1		345		-		346		-		346
Issuance of common units		-		-		-		-		-		-		-		450		450
Net earnings		-		-		-		-		-		13,125		13,125		1,197		14,322
Balance at December 31, 2015		3,803	$	38		760	$	8	$	138,428	$	(105,858)	$	32,616	$	1,879	$	34,495
Stock-based compensation		-		-		3		-		134		-		134		-		134
Long-term incentive plan		-		-		-		-		-		-		-		171		171
Issuance of common units		-		-		-		-		-		-		-		50		50
Dividends and distributions declared
Common stock ($0.455 per share)		-		-		-		-		-		(347)		(347)		-		(347)
Series D Preferred Stock		-		-		-		-		-		(3,090)		(3,090)		-		(3,090)
Redemption of Series A and B Preferred Stock		(803)		(8)		-		-		(7,390)		(5,107)		(12,505)		-		(12,505)
Exchange of Series C and issuance of Series D Preferred Stock		3,245		61,303		-		-		(12,517)		(20,417)		28,369		-		28,369
Net earnings		-		-		-		-		-		22,795		22,795		727		23,522
Balance at December 31, 2016		6,245	$	61,333		763	$	8	$	118,655	$	(112,024)	$	67,972	$	2,827	$	70,799
Stock-based compensation		-		-		94		1		1,151		-		1,152		-		1,152
Long-term incentive plan		-		-		-		-		-		-		-		85		85
Issuance of common stock		-		-		4,972		49		47,419		-		47,468		-		47,468
Issuance of common units		-		-		-		-		-		-		-		435		435
Dividends and distributions declared
Common stock ($0.78 per share)		-		-		-		-		-		(9,103)		(9,103)		-		(9,103)
Series D Preferred Stock		-		-		-		-		-		(650)		(650)		-		(650)
Series E Preferred Stock		-		-		-		-		-		(483)		(483)		-		(483)
Common units ($0.00375 per unit)		-		-		-		-		-		-		-		(18)		(18)
Fractional common shares settled in reverse stock split		-		-		-		-		(1)		-		(1)		-		(1)
Conversion of Series D Preferred to common stock and issuance of Series E Preferred Stock		(5,320)		(51,283)		6,005		60		61,273		(11,110)		(1,060)		-		(1,060)
Warrant exchange		-		-		-		-		289		-		289		-		289
Cancellation of LTIP units		-		-		-		-		1,941		-		1,941		(1,941)		-
Net earnings		-		-		-		-		-		2,881		2,881		20		2,901
Balance at December 31, 2017		925	$	10,050		11,834	$	118	$	230,727	$	(130,489)	$	110,406	$	1,408	$	111,814

See accompanying notes to consolidated financial statements.

53

Condor Hospitality Trust, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

	Year ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net earnings	$	2,901	$	23,522	$	14,322
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization expense		6,898		5,190		5,400
Net gain on disposition of assets		(6,807)		(23,813)		(7,794)
Net gain on derivatives and convertible debt		(436)		(6,377)		(11,578)
Equity in (earnings) loss of joint venture		(190)		244		-
Distributions from cumulative earnings of joint venture		51		-		-
Amortization of deferred financing costs		1,066		597		714
Loss on extinguishment of debt		967		2,187		213
Impairment loss, net		2,151		1,477		3,708
Stock-based compensation and long-term incentive plan expense		1,237		305		285
Warrant issuance cost		289		12		58
Provision for deferred taxes		(660)		-		-
Changes in operating assets and liabilities:
(Increase) decrease in assets		(879)		(244)		442
Increase (decrease) in liabilities		2,500		(432)		(800)
Net cash provided by operating activities		9,088		2,668		4,970
Cash flows from investing activities:
Additions to hotel properties		(2,814)		(3,446)		(3,853)
Deposit on hotel property and franchise fees		(810)		-		-
Investment in joint venture		-		(9,280)		-
Distributions in excess of cumulative earnings from joint venture		1,428		-		-
Hotel acquisitions		(122,269)		(22,450)		(42,592)
Net proceeds from sale of hotel assets		27,630		58,593		53,306
Net change in capital expenditure escrows		985		(1,475)		(1,463)
Net cash provided by (used in) investing activities		(95,850)		21,942		5,398
Cash flows from financing activities:
Deferred financing costs		(4,404)		(136)		(865)
Proceeds from long-term debt		174,000		26,123		85,772
Principal payments on long-term debt		(122,400)		(50,270)		(90,924)
Debt early extinguishment penalties		(454)		(1,752)		-
Proceeds from common stock issuance		47,468		-		346
Series A and B Preferred Stock redemption, including accumulated dividends		-		(20,167)		-
Series D Preferred Stock issuance		-		28,881		-
Series E Preferred Stock issuance costs		(1,210)		-		-
Cash dividends paid to common shareholders		(6,944)		(198)		-
Cash dividends paid to preferred shareholders		(1,965)		(3,598)		-
Contingent consideration paid subsequent to acquisition		(155)		-		-
Other items		(59)		(37)		-
Net cash provided by (used in) financing activities		83,877		(21,154)		(5,671)
Increase (decrease) in cash and cash equivalents		(2,885)		3,456		4,697
Cash and cash equivalents, beginning of year		8,326		4,870		173
Cash and cash equivalents, end of year	$	5,441	$	8,326	$	4,870
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	3,885	$	4,229	$	5,085
Income taxes paid	$	203	$	37	$	-
Schedule of noncash investing and financing activities:
Debt assumed in acquisitions	$	9,096	$	-	$	11,220
Fair value of operating partnership common units issued in acquisitions	$	435	$	50	$	450
In kind dividends deemed on preferred stock	$	9,900	$	20,218	$	-

See accompanying notes to consolidated financial statements.

54

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

NOTE 1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Condor Hospitality Trust, Inc. (“Condor”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. Condor is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels.  As of December 31, 2017, the Company owned 18 hotels in nine states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).  References to the “Company”, “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including as the context requires, our direct and indirect subsidiaries.

The Company, through its wholly owned subsidiary, Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (the “operating partnership”), and serves as its general partner.  The operating partnership, including its various subsidiary partnerships, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of 16 properties held by TRS Leasing, Inc.) and conducts all of its operations.  At December 31, 2017, the Company owned 99.3% of the common operating units (“common units”) of the operating partnership with the remaining common units owned by other limited partners.  The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, the operating partnership and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. 

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters of the year.  The results of the hotels acquired in and since 2015 (see Note 3), because of their locations and chain scale, are less seasonal in nature than our legacy portfolio of assets.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. general accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of the operating partnership and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the periods presented. Certain amounts in the notes to the consolidated financial statements may be slightly different than previously reported due to rounding of fractional shares as a result of the reverse stock split.

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period.  Actual results could differ from those estimates.  Because the state of the economy and of the real estate market can significantly impact hotel operational performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method.  Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, 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 affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the statements of cash flows using the cumulative earnings approach.  Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative

56

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

recognized equity in earnings of the joint venture.  Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold in any period presented, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

At the end of each reporting period, if the fair value of the held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the subsequent decision not to sell.

Historically, we have presented the results of operations of hotel properties that have been sold or considered held for sale as discontinued operations.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 change the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted the pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Gains on the sale of real estate are recognized when a property is sold, provided that the profit is determinable, meaning that collectability of the sales price is reasonably assured or can be estimated, and that the earnings process is complete, meaning that the seller is not obligated to perform significant activities after the sale in order to earn the profit.If these criteria are not met, the timing of the sale is determined based on various criteria related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the property. If the sales criteria are not met, the gain is deferred and the finance, installment, or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent we sell a property and retain a partial ownership interest in the property, we generally recognize a gain to the extent of the third party ownership interest.

57

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Cash and Cash Equivalents

Cash and cash equivalents includes cash and highly liquid investments with original maturities of three months or less when acquired, and are carried at cost which approximates fair value. The Company maintained a major portion of its deposits with Huntington Bancshares Incorporated at December 31, 2017 and Great Western Bank, a Nebraska Corporation, at December 31, 2016.  The balances on deposit at Huntington Bancshares Incorporated and Great Western Bank may at times exceed the federal deposit insurance limit, however, management believes that no significant credit risk exists with respect to the uninsured portion of these cash balances.

Restricted Cash

Restricted cash consists of cash held in escrow for the replacement of furniture and fixtures or for real estate taxes and property insurance as required under certain loan agreements.  For purposes of the statements of cash flows, changes in restricted cash caused by changes in required reserves for real estate taxes or property insurance are shown as operating activities. Changes in restricted cash caused by changes in required reserves for the replacement of furniture and fixtures are shown as investing activities.

Deferred Financing Costs

Direct costs incurred in financing transactions are capitalized as deferred financing costs and amortized to interest expense over the term of the related loan using the effective interest method.  Deferred financing costs are presented on the balance sheets as a direct deduction from the associated debt liability.

Derivative Assets and Liabilities

In the normal course of business, the Company is exposed to the effects of interest rate changes, and the Company may enter into derivative instruments including interest rate swaps, caps, and collars to manage or economically hedge interest rate risk.  Additionally, the Company is required to include on the balance sheets certain bifurcated embedded derivative instruments such as conversion and redemption features in convertible instruments and certain common stock warrants.

All derivatives recognized by the Company are reported as derivative assets and liabilities on the balance sheets and are adjusted to their fair value at each reporting date.  Realized and unrealized gains and losses on derivative instruments are included in net gain on derivatives and convertible debt with the exception of realized gains and losses related to interest rate instruments which are included in interest expense on the statements of operations.

Noncontrolling Interest

Noncontrolling interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership and long-term incentive plan (“LTIP”) units (see Note 12).  Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the operating partnership during the period. 

Revenue Recognition

Revenue consists of amounts derived from hotel operations, including the sale of rooms, food and beverage, and other ancillary amenities.  Revenue from the operation of the hotel properties is recognized when rooms are occupied and services have been rendered.  Sales, use, occupancy, and similar taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the statements of operations.

58

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code 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, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will be unable to re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT, unless we satisfy certain relief provisions.  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.  Except with respect to the TRS, the Company does not believe that it will be liable for significant federal or state income taxes in future years.

A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS 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 and their respective tax bases and for operating loss and tax credit carryforwards 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 projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

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 resolution of any related appeals or litigation processes, based on its 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 to the uncertain tax position by the applicable taxing authority or by expiration of the applicable statute of limitations. For the years ended December 31, 2017, 2016, and 2015, the Company did not record any uncertain tax positions.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain assets, liabilities, and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

59

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3: Unobservable inputs for which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions or valuation techniques may have a material effect on estimated fair value measurements.  We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings.  This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 (see Note 7).

Stock-Based Compensation

Stock-based compensation is measured at the fair value of the award on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. Awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement. Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock and as noncontrolling interest for LTIP awards of common units.  The Company has elected to account for forfeitures of stock-based compensation as they occur.

Recently Adopted Accounting Standards

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies certain of the criteria for determining whether derivative features in a hybrid financial instrument should be separately recognized.  ASU 2014-16 is effective for fiscal years beginning after December 15, 2015 and permits either a retrospective or cumulative effect transition method.  ASU 2014-16 was adopted by the Company on January 1, 2016 and was utilized in determining the accounting for the 6.25% Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) issued in March 2016 and the 6.25% Series E Cumulative Preferred Stock (“Series E Preferred Stock”) issues in March 2017 (see Note 10).

In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance effecting both the VIE and VOE consolidation models. The

60

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Company adopted this standard on January 1, 2016 and concluded that the operating partnership now meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company continues to consolidate the operating partnership. The Company’s sole significant asset is its investment in the operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the operating partnership. All of the Company’s debt is an obligation of the operating partnership.  This ASU was also used in the determination of the accounting for the Atlanta JV entered into in August 2016 (see Note 5).

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheets as a direct deduction from the associated debt liability.  The Company adopted this standard on January 1, 2016 and presents all debt issuance costs as a direct deduction from the carrying value of the debt liability. Adoption of this standard was applied retrospectively for all periods presented, effecting only the presentation of the balance sheets. The adoption of this standard did not have a material impact on the Company's financial position and had no impact on the results of operations or cash flows.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaces most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard is effective for the Company on January 1, 2018.  The Company has adopted ASU 2014-09 for the year beginning on January 1, 2018.   The standard permits the use of either the retrospective or cumulative effect transition method.  The Company has evaluated each of its revenue streams under the new model. Based on our assessments, the adoption of this standard will not materially affect the amount and timing of revenue recognition for revenues from rooms, food and beverage, and other ancillary amenities. The Company has adopted this standard for the year beginning on January 1, 2018 using the modified retrospective approach and is evaluating disclosure requirements.Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of our accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted.  The Company has adopted ASU 2016-15 for the year beginning on January 1, 2018.  The adoption of ASU 2016-15 will not have a material impact on our consolidated financial statements. 

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted cash equivalents in the statement of cash flows. This guidance is effective for the Company for years beginning after

61

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

December 15, 2017, including interim periods within those years. Early adoption is permitted.  The Company has adopted ASU 2016-18 for the year beginning on January 1, 2018.  The adoption of ASU No. 2016-18 will change the presentation of the statements of cash flows for the Company and we will utilize a retrospective transition method for each period presented within the consolidated financial statements for periods subsequent to the date of adoption.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.  The Company has adopted ASU 2017-01 for the year beginning on January 1, 2018. 

Reclassifications

Certain amounts in prior year financial statements have been reclassified to conform to current year presentation.

Liquidity

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our $150,000 secured revolving credit facility (the “credit facility”), and the release of restricted cash by our lenders upon the satisfaction of usage requirements.  At December 31, 2017, the Company had $5,441 of cash and cash equivalents on hand and $11,934 of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to December 31, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1,381 through March 31, 2019.  We also presently expect to invest approximately $4,000 to $5,000 in capital expenditures related to hotel properties we currently own through March 31, 2019.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.  

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

NOTE 2.  INVESTMENT IN HOTEL PROPERTIES

Investments in hotel properties consisted of the following at December 31:

	As of December 31,
	2017						2016
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	1,633	$	20,216	$	21,849	$	4,727	$	11,685	$	16,412
Buildings, improvements, vehicle		13,143		182,909		196,052		40,006		68,677		108,683
Furniture and equipment		3,463		17,840		21,303		9,330		8,011		17,341
Initial franchise fees		118		1,528		1,646		359		503		862
Construction-in-progress		2		276		278		55		31		86
Investment in hotel properties		18,359		222,769		241,128		54,477		88,907		143,384
Less accumulated depreciation		(5,704)		(15,844)		(21,548)		(18,837)		(9,676)		(28,513)
Investment in hotel properties, net	$	12,655	$	206,925	$	219,580	$	35,640	$	79,231	$	114,871

NOTE 3.  ACQUISITION OF HOTEL PROPERTIES

During the year ended December 31, 2017, the Company acquired seven wholly owned hotel properties.  The allocation of the purchase price based on fair valuewas as follows:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt at acquisition (2)		Issuance of common units (3)		Net cash paid
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Fairfield Inn & Suites	08/31/2017		1,014		14,297		1,089		-		-		16,400		16,336		64		-
EL Paso, TX
Residence Inn	08/31/2017		1,495		19,630		1,275		-		-		22,400		22,314		86		-
Austin, TX
Total		$	8,531	$	113,929	$	9,397	$	98	$	(155)	$	131,800	$	121,513	$	435	$	9,852

(1) The Lake Mary purchase price was subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieved a stipulated hotel net operating income level in 2017.  This contingent consideration was included in the purchase price allocation at its estimated fair value on the date of the acquisition.  The full amount of $250 was paid to the seller in December of 2017 with the incremental amount paid over the estimated fair value included in acquisition and terminated transactions expenses.

(2) Debt of $9,096 with Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 was assumed related to the Home2 Suites Southaven, MS acquisition. This loan remains outstanding at December 31, 2017. All other debt was drawn from the credit facility at acquisition.

(3) Total issuance of 1,940,451 common units.

Included in the consolidated statement of operations for the year ended December 31, 2017 are total revenues of $17,455 and total operating income of $4,508 which represent the results of operations for the seven hotels acquiredin 2017 since the date of acquisition.

In addition to the property acquired through the Atlanta JV (see Note 5), during the year ended December 31, 2016, the Company acquired one wholly-owned hotel, the Aloft Leawood / Overland Park (Kansas City).  The allocation of the purchase price based on fair valuewas as follows:

63

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Total purchase price		Debt at acquisition (1)		Issuance of common units (2)		Net cash paid
Aloft	12/14/2016	$	3,339	$	18,046	$	1,115	$	22,500	$	15,925	$	50	$	6,525
Leawood, KS

(1) The acquisition was funded with the proceeds of two mortgage loans provided by Great Western Bank totaling $15,925.  These loans remain outstanding at December 31, 2017.

(2) Total issuance of 213,904 common units.

Included in the consolidated statement of operations for the year ended December 31, 2016 are total revenues of $222 and total operating income of $1 which represent the results of operations for the one wholly-owned hotelacquired in 2016 since the date of acquisition.

During the year ended December 31, 2015, the Company acquired three wholly-owned hotel properties.  The allocation of the purchase price based on fair value was as follows:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Total purchase price		Debt at acquisition (1)		Issuance of common units (2)		Net cash paid (3)
Hotel Indigo	10/2/2015	$	800	$	8,700	$	1,500	$	11,000	$	5,000	$	150	$	5,850
Atlanta, GA
Marriott Courtyard	10/2/2015		2,100		11,050		850		14,000		10,100		150		3,750
Jacksonville, FL
SpringHill Suites	10/1/2015		1,597		14,353		1,550		17,500		11,220		150		6,130
San Antonio, TX
Total		$	4,497	$	34,103	$	3,900	$	42,500	$	26,320	$	450	$	15,730

(1) These acquisitions were funded with the assumption of one loan from Latitude with an aggregate outstanding principal balance of $11,220 and two newly originated GE Capital loans totaling $15,100 (subsequently sold to Western Alliance Bank in April 2016).  These loans were refinanced with a loan from Wells Fargo in 2017.

(2) Total issuance of 2,298,879 common units.

(3) Includes $830 funded by borrowings from the Company’s then existing credit facility with Great Western Bank.

Included in the consolidated statement of operations for the year ended December 31, 2015 are total revenues of $2,611 and total operating income of $356 which represent the results of operations for the three hotelsacquired in 2015 since the date of acquisition.

All purchase price allocations were determined using Level 3 fair value inputs.

As discussed further in the Subsequent Events footnote (see Note 17), subsequent to December 31, 2017, the Company closed on the acquisition of two hotels, the TownePlace Suites Austin North Tech Ridge and the Home2 Suites Summerville / Charleston.

Pro Forma Results (Unaudited)

The following condensed pro forma financial data is presented as if all acquisitions completed during the year ended December 31, 2017 were completed on January 1, 2016 and all acquisitions completed in 2016, including that completed by the Atlanta JV (see Note 5), had been completed on January 1, 2015.  Supplemental pro forma earnings were adjusted to exclude all acquisition expenses recognized in the periods presented as if these acquisition costs had been incurred in prior periods but were not adjusted to remove the results of hotels sold during the periods.  Results for periods prior to the Company’s ownership are based on information provided by the prior owners, adjusted for differences in interest expense, depreciation expense, and management fees following the Company’s ownership and have not been audited or reviewed by our independent auditors.  All hotels were in operation for all periods presented with the exception of the Residence Inn Austin which opened on August 3, 2016.  The condensed

64

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

pro forma financial data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the acquisitions had been consummated on January 1, 2016 or 2015, nor do they purport to represent the results of operations for future periods.

	Years ended December 31,
	2017		2016
Total revenue	$	66,894	$	81,439
Operating income	$	7,204	$	9,156
Net earnings (loss) attributable to common shareholders	$	(7,497)	$	3,877
Net earnings (loss) per share - Basic	$	(0.79)	$	5.09
Net earnings (loss) per share - Diluted	$	(0.79)	$	1.26

NOTE 4: DISPOSITION OF HOTEL PROPERTIES AND DISCONTINUED OPERATIONS

As of December 31, 2017, the Company had three hotels classified as held for sale. At the beginning of 2017, the Company had seven hotels held for sale and during the year classified an additional four hotels as held for sale. Eight of these hotels were sold during 2017.  None of the hotels reclassified as held for sale since the Company’s adoption of ASU 2014-08 on October 1, 2014 represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.  As a result, only hotels classified as held for sale prior to October 1, 2014 (excluding those subsequent reclassified as held for use),  the last of which was sold in January 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations.

In 2017,  2016, and 2015, the Company sold eight hotels, 25 hotels, and 17 hotels, respectively, resulting in total gains of $7,049,  $24,256, and $7,759, respectively, of which $7,049,  $23,575, and $4,996, respectively, was included in continuing operations.  As discussed further in the Subsequent Events footnote (see Note 17), subsequent to December 31, 2017, the Company closed on the disposition of two hotels.

Included in these 2015 sales were two hotels in Alexandria, Virginia that were sold on July 13, 2015 for a combined gross sales price of $19,000.  These hotels represent a significant disposition,and as such, their operating results are disclosed.  The Alexandria Comfort Inn and Days Inn hotels had a  combined net lossof $665for the year ended December 31, 2015. Net loss for the year ended December 31, 2015 includes impairment expense of $1,020 which was recognized following the hotels classification as held for sale. Loss attributable to noncontrolling interest related to these properties for the year ended December 31, 2015 was$3.

The Company allocates interest expense to discontinued operations for debt that is to be assumed or that is required to be repaid as a result of the disposal transaction. The following table sets forth the components of discontinued operations for the years ended December 31, 2016 and 2015:

	2016		2015
Revenue	$	6	$	2,923
Hotel and property operations expense		(4)		(1,946)
Net gain on dispositions of assets		681		2,997
Interest expense		(5)		(223)
Impairment recovery (loss)		-		121
	$	678	$	3,872
Capital expenditures	$	-	$	90

65

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

NOTE 5.  INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

On August 1, 2016, the Company entered into a joint venture with Three Wall Capital LLC and certain of its affiliates (“TWC”) to acquire an Aloft hotel in downtown Atlanta, Georgia.  The Company accounts for the Atlanta JV under the equity method.  The Company owns 80% of the Atlanta JV with TWC owning the remaining 20%.  The Atlanta JV is comprised of two companies: Spring Street Hotel Property II LLC, of which our operating partnership indirectly owns an 80% equity interest, and Spring Street Hotel OpCo II LLC, of which our TRS indirectly owns an 80% equity interest.  TWC owns the remaining 20% equity interest in these two companies.

On August 22, 2016, the Atlanta JV closed on the acquisition of the Atlanta Aloft for a purchase price of $43,550, subject to working capital and similar adjustments.  The purchase price was allocated by the Atlanta JV based on fair value, which was determined using Level 3 fair value inputs, as documented in the table below:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Land option (1)		Total purchase price		Debt at acquisition		Net cash paid
Aloft	08/22/2016	$	13,025	$	34,048	$	2,667	$	(6,190)	$	43,550	$	33,750	$	9,800
Atlanta, GA

(1) The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for ten years at less than market rates

The purchase price for the Atlanta Aloft was paid with $9,800 in cash, of which $7,840 was contributed by Condor and $1,960 was contributed by TWC, and $33,750 of proceeds from a term loan secured by the property.  Condor additionally contributed $1,440 and TWC additionally contributed $360 to the Atlanta JV to cover acquisition costs and to provide working capital to the entity.  The term loan, obtained from LoanCore Capital Credit REIT LLC, has an initial term of 24 months with three12-month extension periods which may be exercised at the Atlanta JV’s option subject to certain conditions and fees.  The interest rate is a floating rate calculated on the one-month LIBOR plus 5.0%, and as a condition to closing, the Atlanta JV purchased a LIBOR cap of 3.0%.  This loan remains outstanding at December 31, 2017 and has a current interest rate of6.5%.  The loan is non-recourse to the Atlanta JV, subject to specified exceptions.  The loan is also non-recourse to Condor, except for certain customary carve-outs which are guaranteed by the Company.

Under the Atlanta JV agreement, the Atlanta JV is managed by TWC in accordance with business plans and budgets approved by both partners.  Major decisions as detailed in the agreement also require joint approval.  Condor may remove TWC as manager of the Atlanta JV and appoint a new manager only upon the occurrence of certain events.  The Atlanta Aloft hotel is managed by Boast Hotel Management Company LLC (“Boast”), an affiliate of TWC.  The Atlanta JV paid to Boast total management fees of $348 and $110 during the years ended December 31, 2017 and 2016, respectively.

Net cash flow from the Atlanta JV is distributed each fiscal year first with a 10% preferred return on capital contributions to Condor, second with a 10% preferred return on capital contributions to TWC, and third with any remainder distributed to the partners based on their pro-rata equity ownership. Profits are allocated in the same proportion as net cash flow.  Losses are allocated based on pro-rata equity ownership. Cash distributions totaling $1,479 were received by the Company from the Atlanta JV during the year ended December 31, 2017.  The Atlanta JV agreement also includes buy-sell rights for both members (generally after three years of hotel ownership for Condor and after five years for TWC) and Condor has a purchase option for TWC’s Atlanta JV ownership interest exercisable between the third and fifth anniversary of the hotel closing.

The following tables represent the total assets, liabilities, equity, and components of net income (loss), including the Company’s share, of the Atlanta JV as of and for the years ended December 31, 2017 and 2016:

66

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

	As of December 31,
	2017		2016
Investment in hotel properties, net	$	48,013	$	49,305
Cash and cash equivalents		1,404		1,184
Restricted cash, property escrows		682		464
Accounts receivable, prepaid expenses, and other assets		176		320
Total Assets	$	50,275	$	51,273
Accounts payable, accrued expenses, and other liabilities	$	1,019	$	633
Land option liability		6,190		6,190
Long-term debt, net of deferred financing costs		33,382		33,155
Total Liabilities		40,591		39,978
Condor equity		7,747		9,036
TWC equity		1,937		2,259
Total Equity		9,684		11,295
Total Liabilities and Equity	$	50,275	$	51,273

	Year ended December 31,
	2017		2016
Revenue
Room rentals and other hotel services	$	11,582	$	3,703
Operating Expenses
Hotel and property operations		7,585		2,457
Depreciation and amortization		1,425		471
Acquisition		-		299
Total operating expenses		9,010		3,227
Operating income		2,572		476
Net loss on disposition of assets		(8)		(2)
Net loss on derivative		(3)		(6)
Interest expense		(2,323)		(773)
Net earnings (loss)	$	238	$	(305)
Condor allocated earnings (loss)	$	190	$	(244)
TWC allocated earnings (loss)		48		(61)
Net earnings (loss)	$	238	$	(305)

67

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

NOTE 6.  LONG-TERM DEBT

Long-term debt related to wholly owned properties, including debt related to hotel properties held for sale, consisted of the following loans payable at December 31:

Lender	Balance at December 31, 2017		Interest rate at December 31, 2017	Maturity	Amortization provision	Properties encumbered at December 31, 2017	Balance at December 31, 2016
Fixed rate debt
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18	$	8,987	4.54%	08/2024	25 years	1	$	-
Great Western Bank (1)		13,950	4.33%	12/2021 (13)	25 years	1		14,326
Great Western Bank (1)		1,380	4.33%	12/2021 (13)	7 years	-		1,599
Western Alliance Bank		-	(2)	02/2017	15 years	-		4,806
Western Alliance Bank		-	(3)	02/2018	15 years	-		2,803
Cantor Commercial Real Estate Lending		-	(4)	11/2017	30 years	-		5,713
Morgan Stanley Mortgage Capital Holdings, LLC		-	(5)	12/2017	25 years	-		912
Total fixed rate debt		24,317						30,159
Variable rate debt
Wells Fargo		26,465	4.44% (6)	11/2022 (14)	30 years	3		-
KeyBank credit facility (7)		73,303	4.55% (8)	03/2020 (15)	Interest only	12		-
Western Alliance Bank		-	(9)	11/2020	25 years	-		4,882
Western Alliance Bank		-	(9)	11/2020	25 years	-		9,863
The Huntington National Bank		-	(10)	11/2020	25 years	-		7,361
LMREC 2015 - CREI, Inc. (Latitude)		-	(11)	05/2018	$12 monthly (12)	-		11,124
Total variable rate debt		99,768				17		33,230
Total long-term debt	$	124,085					$	63,389
Less: Deferred financing costs		(3,504)						(669)
Total long-term debt, net of deferred financing costs		120,581						62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $174 and $168		(4,976)						(14,802)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,330 and $501	$	115,605					$	47,918

(1) Both loans are collateralized by Aloft Leawood

(2) Fixed rate of 7.17% prior to extinguishment with origination of credit facility on March 1, 2017

(3) Fixed rate of 4.75% prior to extinguishment with origination of credit facility on March 1, 2017

(4) Fixed rate of 4.25% prior to extinguishment with origination of credit facility on March 1, 2017

(5) Fixed rate of 5.83% prior to extinguishment with origination of credit facility on March 1, 2017

(6) Variable rate of 30-day LIBOR plus 2.39%, effectively fixed at 4.44% after giving effect to interest rate swap (see Note 8)

(7) Total unused availability under this credit facility was $11,934 at December 31, 2017; commitment fee on unused facility is 0.20%

(8) Borrowings under the facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage); 30-day LIBOR for $50,000 notional effectively capped at 2.5% after giving effect to interest rate cap (see Note 8)

(9) Variable rate of 90-day LIBOR plus 3.25% prior to extinguishment with origination of Wells Fargo debt on October 4, 2017

(10) Variable rate of 30-day LIBOR plus 2.25%, effectively fixed at 4.13% after giving effect to interest rate swap (see Note 8) prior to extinguishment with origination of credit facility on March 1, 2017

(11) Variable rate of 30-day LIBOR plus 6.25%,30-day LIBOR capped at 1.0% after giving effect to interest rate cap (see Note 8) prior to extinguishment with origination of credit facility on March 1, 2017

(12) $12 monthly payments began May 2016

(13) Term may be extended for additional two years subject to interest rate adjustments

(14) Two one-year extension options subject to the satisfaction of certain conditions

(15) Two one-year extension options available subject to certain conditions including the completion of specific capital achievements

68

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

At December 31, 2017, we had long-term debt of $118,935 associated with assets held for use with a weighted average term to maturity of 3.2 years and a weighted average interest rate of4.50%.  Of this total, at December 31, 2017, $24,317 was fixed rate debt with a weighted average term to maturity of 2.4 years and a weighted average interest rate of 4.41% and 94,618 was variable rate debt with a weighted average term to maturity of 4.1 years and a weighted average interest rate of4.52%.  At December 31, 2016, we had long-term debt of $48,419 associated with assets held for use with a weighted average term to maturity of 3.2 years and a weighted average interest rate of 4.94%.  Of this total, at December 31, 2016, $22,550 was fixed rate debt with a weighted average term to maturity of 3.7 years and a weighted average interest rate of  4.41% and $25,869 was variable rate debt with a weighted average term to maturity of 2.8 years and a weighted average interest rate of 5.39%.

Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below based on its contractual maturity although the balances are expected to be repaid within one year upon the sale of the related hotel properties.  Aggregate annual principal payments on debt for the next five years and thereafter are as follows:

	Held for sale		Held for use		Total
2018	$	-	$	1,083	$	1,083
2019		-		1,183		1,183
2020		5,150		69,385		74,535
2021		-		14,344		14,344
2022		-		24,886		24,886
Thereafter		-		8,054		8,054
Total	$	5,150	$	118,935	$	124,085

Financial Covenants

We are required to satisfy various financial covenants within our debt agreements, including the following financial covenants within our credit facility:

· Leverage Ratio: The ratio of consolidated total indebtedness to consolidated total asset value cannot exceed 60%. When the first extension option becomes effective, the foregoing leverage ratio will no longer be applicable, and in lieu thereof, the ratio of consolidated total indebtedness to adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the most recently ended four fiscal quarters cannot exceed 6.25 to 1.

· Secured Leverage Ratio: The ratio of consolidated secured indebtedness (excluding the credit facility) to consolidated total asset value cannot exceed 40%.

· Fixed Charge Coverage Ratio: The ratio of adjusted consolidated EBITDA for the most recently ended four fiscal quarters to consolidated fixed charges for the most recently ended four fiscal quarters cannot be less than 1.50 to 1.

· Tangible Net Worth: Consolidated tangible net worth cannot be less than $55 million plus 80% of net offering proceeds.

· Unhedged Variable Rate Debt: Consolidated unhedged variable rate debt cannot exceed 25% of consolidated total asset value.

· Distributions: The Company is permitted to make distributions during any period of four fiscal quarters in an aggregate amount of up to 95% of funds available for distribution.

Certain of the terms used in the foregoing descriptions of the financial covenants within our credit facility have the meanings given to them in the credit facility, and certain of the financial covenants are subject to pro forma adjustments for acquisitions and sales of hotel properties and for specific capital events.

As of December 31, 2017, we were in compliance with our financial covenants.

69

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. As of December 31, 2017, we are not in default of any of our loans.

NOTE 7: CONVERTIBLE DEBT AT FAIR VALUE

As part of an agreement entered into on March 16, 2016 (the “Exchange Agreement”) with Real Estate Strategies, L.P. (“RES”) (see Note 10), the Company issued to RES a Convertible Promissory Note (the “Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012 initially convertible into shares of Series D Preferred Stock, which could be subsequently converted into 97,269 shares of common stock.  Following the conversion of all of the outstanding Series D Preferred Stock into common stock and the issuance of the Series E Preferred Stock on March 1, 2017, the Note was amended to be convertible directly into 97,269 shares of common stock at any time at the option of RES or automatically when the Series E Preferred Stock is required to be converted or is redeemed in whole (see Note 10).  The Note is not convertible to the extent that a conversion would cause RES, together with its affiliates, to beneficially own more than 49% of the voting stock of the Company at the time of the conversion.  Any conversion reduces the principal amount of the Note proportionally.

The Company has made an irrevocable election to record this Note in its entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of this Note. As such, gains and losses on the Note are included in net gain on derivatives and convertible debt within net earnings each reporting period. Gains (losses) related to this Note were recognized totaling $246 and ($303) during the years ended December 31, 2017 and 2016, respectively.  The fair value of the Note is determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options and is considered a Level 3 fair value measurement.  The fair value of the Note on the date of issuance was determined to be equal to its principal amount. Interest expense related to this Note is recorded separately from other changes in its fair value within interest expense each period.

The following table represents the difference between the fair value and the unpaid principal balance of the Note as of December 31, 2017:

	Fair value as of December 31, 2017		Unpaid principal balance as of December 31, 2017		Fair value carrying amount (over)/under unpaid principal
6.25% Convertible Debt	$	(1,069)	$	(1,012)	$	(57)

NOTE 8: FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Our determination of fair value measurements is based on the assumptions that market participants would use in pricing the asset or liability. At December 31, 2017, the Company’s convertible debt (see Note 7) and certain derivative instruments were the only financial instruments measured in the consolidated financial statements at fair value on a recurring basis.  Nonrecurring fair value measurements were utilized in the determination of the fair value of acquired hotel properties and related assumed debt in 2017, 2016, and 2015 (see Note 3), the acquisition accounting performed by the Atlanta JV in 2016 (see Note 5), in accounting for the equity transactions that occurred in March 2016 and 2017 (see Note 10), in the valuation of stock-based compensation grants (see Note 12), and in the valuation of impaired hotels during the years ended December 31, 2017, 2016, and 2015.

70

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Derivative Instruments

Currently, the Company uses derivatives, such as interest rate swaps and caps, to manage its interest rate risk.  The fair value of interest rate positions is determined using the standard market methodology of netting the discounted expected future cash receipts and payments. Variable interest rates used in the calculation of projected receipts and payments on the positions are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.  Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements.  The Company believes it minimizes this credit risk by transacting with major creditworthy financial institutions.  These interest rate positions at December 31, 2017 and 2016 are as follows:

Associated debt	Type	Terms	Effective Date	Maturity Date	Notional amount at December  31, 2017		Notional amount at December 31, 2016
Wells Fargo	Swap	Swaps 30-day LIBOR for fixed rate of 2.053%	11/2017	11/2022	$	26,465 (1)	$	-
Credit facility	Cap	Caps 30-day LIBOR at 2.50%	03/2017	03/2019	$	50,000	$	-
Huntington	Swap	Swaps 30-day LIBOR + 2.25% for fixed rate of	11/2015	11/2020	$	-	$	7,361 (1)
		4.13 %; cancellable at Company's option anytime
		after 11/01/2018 without penalty
Latitude	Cap	Caps 30-day LIBOR at 1.0%	03/2016	06/2017	$	-	$	11,124 (1)

(1) Notional amounts amortize consistently with the principal amortization of the associated loans

Additionally, prior to the execution of the Exchange Agreement (see Note 10) on March 16, 2016 which extinguished the instrument, the Company was required to bifurcate and include on the balance sheet at fair value the embedded conversion option in the 6.25% Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”) due to the presence of an antidilution provision that required an adjustment in the common stock conversion ratio should subsequent issuances of the Company’s common stock be issued below the instrument’s original conversion price.

Similarly, prior to the execution of the Exchange Agreement, the terms of the common stock warrants issued to the holders of the Series C Preferred Stock (see Note 10) also included an antidilution provision that required a reduction in the warrant’s exercise price should the conversion ratio of the Series C Preferred Stock be adjusted due to antidilution provisions. Accordingly, the warrants did not qualify for equity classification, and, as a result, the fair value of the derivative was shown as a derivative liability on the balance sheets. With the execution of the Exchange Agreement, this provision of these warrants was effectively eliminated and the conversion price was locked permanently.  Following this modification of terms, the warrants qualified for equity classification and were reclassified to additional paid-in capital at their fair value of $611 on the date of the modification.

The fair value of these derivative liabilities recognized in connection with the Series C Preferred Stock were determined using the Monte Carlo simulation method. The Monte Carlo simulation method is a generally accepted statistical method used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and its peer group and minimize standard error and is considered a Level 3 fair value measurement.  

Included in the Series E Preferred Stock issued on March 1, 2017 is a redemption right that allows the Company to redeem up to a total of 490,250 shares of Series E Preferred Stock for specific percentages of its liquidation preference (see Note 10).  This option requires bifurcation and was determined to be an asset with a fair value on the date of issuance of $150 using a trinomial lattice-based model, considered a Level 3 fair value measurement.

All derivatives recognized by the Company are reported as either derivative assets or liabilities on the balance sheets and are adjusted to their fair value at each reporting date.  All gains and losses on derivative instruments are

71

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

included in net gain on derivatives and convertible debt and with the exception of realized gains and losses related to the interest rate instruments, which are included in interest expense on the statements of operations. Net gains of $190,  $6,680, and $11,578 were recognized related to derivative instruments for the years ended December 31, 2017, 2016, and 2015, respectively.

Recurring Fair Value Measurements

The following tables provide the fair value of the Company’s financial assets and (liabilities) carried at fair value and measured on a recurring basis:

	Fair value at December 31, 2017		Level 1		Level 2		Level 3
Interest rate derivatives	$	77	$	-	$	77	$	-
Series E Preferred embedded redemption option		314		-		-		314
Convertible debt		(1,069)		-		-		(1,069)
Total	$	(678)	$	-	$	77	$	(755)

	Fair value at December 31, 2016		Level 1		Level 2		Level 3
Interest rate derivatives	$	(8)	$	-	$	(8)	$	-
Convertible debt		(1,315)		-		-		(1,315)
Total	$	(1,323)	$	-	$	(8)	$	(1,315)

There were no transfers between levels during the years ended December 31, 2017, 2016, or 2015.

The following tables present a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related gains and losses recorded in the statements of operations during the periods:

	Year ended December 31,
		2017					2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Series C Preferred embedded derivative		RES warrant derivative		Convertible debt		Total
Fair value, beginning of period	$	-	$	(1,315)	$	(1,315)	$	(6,271)	$	(2,411)	$	-	$	(8,682)
Net gains (losses) recognized in earnings		164		246		410		4,848		1,800		(303)		6,345
Purchase and issuances		150		-		150		-		-		(1,012)		(1,012)
Sales and settlements		-		-		-		1,423		-		-		1,423
Gross transfers into Level 3		-		-		-		-		-		-		-
Gross transfers out of Level 3		-		-		-		-		611 (1)		-		611
Fair value, end of period	$	314	$	(1,069)	$	(755)	$	-	$	-	$	(1,315)	$	(1,315)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	164	$	246	$	410	$	-	$	-	$	(303)	$	(303)

(1) RES warrants were permanently reclassified to additional paid-in capital as discussed above

Fair Value of Debt

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of debt obligations with similar credit policies. Credit spreads take into consideration general market conditions and maturity. The inputs utilized in

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

estimating the fair value of debt are classified in Level 2 of the fair value hierarchy. Both the carrying value and the estimated fair value of the Company’s long-term debt, excluding convertible debt which is presented in the balance sheets at fair value, are presented in the table below net of deferred financing costs:

	Carrying value at December 31,				Estimated fair value at December 31,
	2017		2016		2017		2016
Held for use	$	115,605	$	47,918	$	115,239	$	48,034
Held for sale		4,976		14,802		4,976		15,186
Total	$	120,581	$	62,720	$	120,215	$	63,220

Impaired Hotel Properties

In the performance of impairment analysis for both held for sale and held for use properties, fair value is determined with the assistance of independent real estate brokers and through the use of operating results and revenue multiples based on the Company’s experience with hotel sales as well as available industry information.  For held for sale properties, estimated selling costs are based on our experience with similar asset sales.  These are considered Level 3 fair value measurements.  The amount of impairment and recovery of previously recorded impairment recognized in the years ended December 31, 2017, 2016, and 2015 is shown in the tables below:

	Year ended December 31,
	2017			2016			2015
	Number of hotels	Impairment (loss) recovery		Number of hotels	Impairment (loss) recovery		Number of hotels	Impairment (loss) recovery
Continuing Operations:
Held for sale hotels:
Impairment loss	1	$	(1,448)	-	$	-	1	$	(1,537)
Sold hotels:
Impairment loss	2		(783)	5		(1,477)	5		(2,377)
Recovery of impairment	2		80	-		-	1		85
Net impairment loss reported in continuing operations	5	$	(2,151)	5	$	(1,477)	7	$	(3,829)
Discontinued Operations:
Sold hotels:
Impairment loss	-	$	-	-	$	-	1	$	(117)
Recovery of impairment	-		-	-		-	3		238
Net impairment loss reported in discontinued operations	-	$	-	-	$	-	4	$	121
Total net impairment:	5	$	(2,151)	5	$	(1,477)	11	$	(3,708)

NOTE 9.  COMMON STOCK

The Company’s common stock is duly authorized, full paid, and non-assessable.

On March 11, 2015, an executive officer exercised a warrant to purchase 35,060 shares at the price of $9.88 per share (see Note 12).

On January 24, 2017, the Company exchanged 23,160 warrants (the “New Warrants”) to purchase common stock of the Company for 576,923 warrants (the “Old Warrants”) held by RES. The number of New Warrants issued in exchange for the Old Warrants equaled the number of shares of common stock issuable upon exercise of the Old Warrants pursuant to a cashless exercise provisions of the Old Warrants. The New Warrants were exercisable for 23,160 shares of common stock, had an exercise price of $0.0065 for each common share, and would have expired on January 24, 2019. On the date of the exchange, the New Warrants had a fair value in excess of the Old Warrants

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

of $289, which is reflected as equity transactions expense and an increase in additional paid-in capital as the exchange is assumed to be equivalent to the modification of an equity classified instrument.  The New Warrants were exercised in full on September 28, 2017.

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock (see Note 10).

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash.  A total of 73 shares   were settled for $1. Impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the periods presented.

On March 29, 2017, the Company sold in an underwritten public offering 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50. Net proceeds, after the payment of related expenses, from this offering totaled $45,850.  

The Company’s common stock began trading on the NYSE American under its current symbol “CDOR” beginning at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market.

On September 20, 2017, the Company entered into an equity distribution agreement with KeyBanc Capital Markets Inc. and BMO Capital Markets Corp. (collectively, the “Sales Agents”), pursuant to which we may sell, from time to time, up to an aggregate sales price of $50,000, subject to decrease in compliance with General Instruction I.B.6 of Registration Statement on Form S-3, of shares of our common stock pursuant to a prospectus supplement we filed with the Securities and Exchange Commission (“SEC”) through the Sales Agents acting as sales agent and/or principal, through an at-the-market offering program (our “ATM program”). Pursuant to Instruction I.B.6 to Registration Statement on Form S-3, we may not sell more than the equivalent of one-third of our public float during any 12 consecutive months so long as our public float is less than $75,000.  During the year ended December 31, 2017, we sold 169,004 shares of common stock under the ATM program at an average sales price of $10.15 per share for gross proceeds totaling $1,715 and net proceeds of $1,619, after cash commissions of 2% of gross proceeds paid to the Sales Agents and additional related costs.

NOTE 10.  PREFERRED STOCK

On March 16, 2016, the Company entered into a series of agreements providing for:

· the issuance and sale of the Company’s Series D Preferred Stock under a private transaction to SREP III Flight-Investco, L.P. (“SREP”), an affiliate of StepStone Group LP;

· the exchange of all of the Company’s outstanding Series C Preferred Stock for Series D Preferred Stock; and

· the cash redemption of all of the Company’s outstanding 8% Series A Cumulative Preferred Stock (“Series A Preferred Stock”) and 10% Series B Cumulative Preferred Stock (“Series B Preferred Stock”).

In connection with these transactions, the Company and SREP entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) dated March 16, 2016 pursuant to which the Company issued and sold 3,000,000 shares of Series D Preferred Stock to SREP on the March 16, 2016 for an aggregate purchase price of $30,000. The Stock Purchase Agreement required that $20,147 of the purchase price be deposited into an escrow account for the purpose of effecting the redemption of the Series A and Series B Preferred Stock and that the remaining amount of the purchase price be delivered to the Company. 

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Simultaneously, the Company entered into the Exchange Agreement with RES pursuant to which all 3,000,000 outstanding shares of Series C Preferred Stock were exchanged for 3,000,000 shares of Series D Preferred Stock. Under the Exchange Agreement, in lieu of payment of accrued and unpaid dividends in the amount of $4,947 on the Series C Preferred Stock, the Company (a) paid to RES an amount of cash equal to $1,484, (b) issued to RES 245,156 shares of Series D Preferred Stock (such that RES,IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA”), and their affiliates do not beneficially own in excess of 49% of the voting stock of the Company) and (c) issued to RES a convertible promissory note, bearing interest at 6.25% per annum, in the principal amount of $1,012 (see Note 7).

Pursuant to the Stock Purchase Agreement, on April 15, 2016, the Company redeemed all of the outstanding Series A and Series B Preferred Stock, in accordance with redemption notices issued on March 16, 2016, as follows:

· all 803,270 outstanding shares of the Series A Preferred Stock at the redemption price of $10.00 per share plus $2.084940 per share in accrued and unpaid dividends (plus compounded interest) through the redemption date for a total redemption price of $9,707; and

· all 332,500 outstanding shares of the Series B Preferred Stock at the redemption price of $25.00 per share plus $6.354167 per share in accrued and unpaid dividends through the redemption date for a total redemption price of $10,425.

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock. The terms of the Series D Preferred Stock provided for automatic conversion following certain future common stock offerings, and also provided for potential additional payments to the holders depending on the sales price of common stock in the offerings. As a result of the voluntary conversion, the holders are no longer entitled to the potential payments. To induce the holders of the Series D Preferred Stock to voluntarily convert their shares, the Company issued the holders 925,000 shares of a new series of preferred stock, the Series E Preferred Stock.

The effect of these transactions on the Company’s preferred stock and the key terms of the remaining series of the Company’s preferred stock are discussed individually below.

Series A Preferred Stock

On December 30, 2005, the Company offered and sold 1,521,258 shares of Series A Preferred Stock.  At December 31, 2015, 803,270 shares of Series A Preferred Stock remained outstanding until the completion of the redemption on April 15, 2016.

Dividends on the Series A Preferred Stock were cumulative and payable monthly in arrears on the last day of each month, at the annual rate of 8% of the $10.00 liquidation preference per share, equivalent to a fixed annual amount of $.80 per share. The Company was able to redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time for cash at a redemption price of $10.00 per share, plus all accrued and unpaid dividends. Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series A Preferred Stock to preserve capital and improve liquidity. Unpaid dividends accumulated and bore additional dividends at 8%, compounded monthly.

The difference between the recorded value of the Series A Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series A Preferred Stock plus related expenses, a total of $2,326, was recorded as a reduction of accumulated deficit during the year ended December 31, 2016 as the amount is considered a deemed dividend on the Series A Preferred Stock. Of this amount, $874 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividends that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

75

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Series B Preferred Stock

At December 31, 2015, there were 332,500 shares of Series B Preferred Stock outstanding, originally sold on June 3, 2008, which remained outstanding until the completion of the redemption on April 15, 2016.

Dividends on the Series B Preferred Stock were cumulative and are payable quarterly in arrears on each  March 31, June 30, September 30, and December 31, or, if not a business day, the next succeeding business day, at the annual rate of 10.0% of the $25.00 liquidation preference per share, equivalent to a fixed annual amount of $2.50 per share.  The Company was able to redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends. Also, upon a change of control, each outstanding share of the Company’s Series B Preferred Stock would be redeemed for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends.Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series B Preferred Stock to preserve capital and improve liquidity. Unpaid dividends on the Series B Preferred Stock did not bear interest.

The difference between the recorded value of the Series B Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series B Preferred Stock, a total $2,781, was recorded as a reduction of accumulated deficit during the year ended December 31, 2016 as the amount is considered a deemed dividend on the Series B Preferred Stock.  Of this amount, $911 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

Series C Preferred Stock

The Company entered into a Purchase Agreement dated November 16, 2011 for the issuance and sale of Series C Preferred Stock under a private transaction with RES. In two closings on February 1, 2012 and February 15, 2012, the Company completed the sale to RES of 3,000,000shares of Series C Preferred Stock.All of the Series C Preferred Stock remained outstanding prior to the execution of the Exchange Agreement on March 16, 2016. 

Each of the 3,000,000 shares of Series C Preferred Stock was convertible, in whole or in part, at RES’s option, at any time, but subject to RES’s beneficial ownership limitation, into the number of shares of common stock equal to the $10.00 per share liquidation preference, divided by the conversion price then in effect,  which was equal to a rate of 0.9615385 shares of common stock for each share of Series C Preferred Stock.  A holder of Series C Preferred Stock would not have conversion rights to the extent the conversion would cause the holder and its affiliates to beneficially own more than 34% of voting stock.

Each share of Series C Preferred Stock was entitled to a dividend of $0.625 per year payable in equal quarterly dividends. Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series C Preferred Stock to preserve capital and improve liquidity. Unpaid dividends accumulated and bore additional dividends at 6.25%, compounded quarterly.

The Series C Preferred Stock voted with the common stock as one class, subject to certain voting limitations. For any vote, the voting power of the Series C Preferred Stock was equal to the lesser of: (a) 0.12096 vote per share or (b) an amount of votes per share such that the vote of all shares of Series C Preferred Stock in the aggregate equal 34% of the combined voting power of all the Company voting stock, minus an amount equal to the number of votes represented by the other shares of voting stock beneficially owned by RES and its affiliates. 

On March 16, 2016, the Series C Preferred Stock was extinguished under the Exchange Agreement discussed above.  Upon this extinguishment, the difference between the recorded value of the Series C Preferred Stock prior to the exchange and the fair value of the consideration received in the exchange, a total of $20,366, was recorded as a reduction of accumulated deficit as the amount is considered a deemed dividend on the Series C Preferred Stock.  Of this amount, $15,873 was recorded as a reduction of net earnings attributable to common shareholders as the portion

76

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

Series D Preferred Stock

Following the execution of the Stock Purchase Agreement and Exchange Agreement on March 16, 2016, there were 6,245,156 shares of Series D Preferred Stock outstanding at December 31, 2016.

The Series D Preferred stockholders ranked senior to the Company’s common stock and any other preferred stock issuances and received preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly in arrears on each March 31, June 30, September 30, and December 31, or, if not a business day, the next succeeding business day, of the $10.00 face value per share.  Dividends on the Series D Preferred Stock accrued whether or not the Company had earnings, whether or not there were funds legally available for the payment of such dividends, whether or not such dividends were declared, and whether or not such dividends were prohibited by agreement. Whenever the dividends on the Series D Preferred Stock were in arrears for four consecutive quarters, then upon notice by holders of in the aggregate not less than 40% of the outstanding Series D Preferred Stock, the Company would (a) take all appropriate action reasonably within its means to maximize the assets legally available for paying such dividends and to monetize such assets (for example, but without limiting the generality of the foregoing, by selling or liquidating all of some of the Company’s assets or by selling the Company as a going concern), (b) pay out of all such assets legally available (including any proceeds from any sale or liquidation of such assets) the maximum possible amount of such unpaid dividends, and (c) thereafter, at any time and from time to time when additional assets of the Company (including any proceeds from any sale or liquidation of such assets) become legally available to pay such unpaid dividends, pay such remaining unpaid dividends until all dividends accumulated on the Series D Preferred Stock had been fully paid.  Dividends on the Series D Preferred Stock were paid when due throughout the life of the instrument.

Each share of Series D Preferred Stock was convertible, at the option of the holder, at any time into a number of shares of common stock determined by dividing the conversion price of $10.40 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. The conversion price was subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends.  Each outstanding share of Series D Preferred Stock would be converted into a number of shares of common stock determined by dividing the conversion price of $10.40 into the $10.00 face value per share, which is equal to a rate of 0.9615385 shares of common stock for each share of Series D Preferred Stock, automatically upon closing of a Qualified Offering (defined as a single offering of common stock of at least $50,000 or up to three offerings in the aggregate of at least $75,000, all with certain minimum prices per share and a potential make whole payment required in certain scenarios) without any further action by the holders of such shares or the Company.

The Series D Preferred Stock was redeemable by the Company at any time subject to certain restrictions, in whole or in a partial redemption of up to $30,000, at $12.00 per share on or before March 16, 2019, $13.00 per share from March 16, 2019 to March 16, 2020, and $14.00 per share on or after March 16, 2020, plus all accrued and unpaid dividends.  If a Qualified Offering has not occurred on or before September 30, 2021, holders that hold in the aggregate not less than 40% of the outstanding shares of the Series D Preferred Stock have the right to elect to have the Company fully liquidate in a commercially reasonable manner as determined by the Board of Directors of the Company to provide for liquidation distributions to the holders of the Series D Preferred Stock in an amount per share equal to $14.00 in cash plus accrued and unpaid dividends.  Once this right had been exercised and the Company had been notified, the dividend rate on the Series D Preferred Stock after September 30, 2021 would increase from 6.25% per annum to 12.5% per annum. The holders of Series D Preferred Stock voted their Series D Preferred Stock as a single class with the holders of the common stock on all matters submitted to such holders for vote or consent. For each such vote or consent, each share of Series D Preferred Stock entitled the holder to cast one vote for each whole vote (rounded to the nearest whole number) that such holder would be entitled to cast had such holder converted its Series D Preferred Stock into shares of common stock as of the date immediately prior to the record date for determining the shareholders of the Company eligible to vote on any such matter.

77

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

The fair value of the Series D Preferred Stock was determined to be equal to its face value on the date of issuance.

As discussed above, on February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock.  At the time of conversion, the Series D holders were granted $9,250 of newly created Series E Preferred Stock.

Series E Redeemable Convertible Preferred Stock

Following the voluntary conversion of the Series D Preferred Stock on February 28, 2017, the only shares of preferred stock outstanding are 925,000 shares of Series E Preferred Stock.  

The Series E Preferred Stock ranks senior to the Company’s common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly of the $10.00 face value per share. If the Company fails to pay a dividend then during the period that dividends are not paid, the dividend rate increases to 9.50% per annum. Dividends on the Series E Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement. 

Each share of Series E Preferred Stock is convertible, at the option of the holder, at any time on or after February 28, 2019, into a number of shares of common stock determined by dividing the conversion price of $13.845 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. Upon liquidation, each share of Series E Preferred Stock is entitled to $10.00 per share and accrued and unpaid dividends. The conversion price is subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends. Following a specific equity offering or offerings, from time to time a number of shares of Series E Preferred Stock automatically converts into common stock if the common stock trades at 120% of the conversion price for 60 trading days, and the number of shares converted will be determined by certain trading volumes measures. 

The Company has rights to redeem up to 490,250 shares of the Series E Preferred Stock at prices from 110% to 130% of its liquidation value.  The holders have put rights commencing March 16, 2021 to put the Series E Preferred Stock to the Company at 130% of its liquidation preference, which the Company can satisfy with cash or common stock. The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of the Company, related party transactions exceeding $120, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from the Company’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock or commitment or agreement to do any of the foregoing.

The Series E Preferred Stock was determined to have a fair value of $9,900 on the date of issuance as measured using a trinomial lattice-based model.  From this value, the embedded redemption option (see Note 8), which was determined to be an asset with a fair value on the date of issuance of $150 using the same model, was bifurcated and will be accounted for at fair value at each period end.  These are considered Level 3 fair value measurements.  The issuance of the Series E Preferred Stock is considered an inducement to convert the Series D Preferred Stock to common stock and as such, its fair value at issuance, plus related expenses totaling $1,210 in the year ended December 31, 2017, are reflected as a reduction of retained earnings and an increase in dividends declared and undeclared and in kind dividends deemed on preferred stock.

78

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Impact of Preferred Stock on Net Earnings (Loss) Attributable to Common Shareholders

The components of dividends declared and undeclared and in kind dividends deemed on preferred stock are as follows:

	Year ended December 31,
	2017		2016		2015
Preferred A dividends accrued at stated rate	$	-	$	222	$	727
Preferred A additional deemed dividends upon redemption		-		652		-
Preferred B dividends accrued at stated rate		-		243		831
Preferred B additional deemed dividends upon redemption		-		668		-
Preferred C dividends accrued at stated rate		-		455		2,074
Preferred C additional deemed dividends at exchange		-		15,418		-
Preferred D dividends accrued at stated rate		650		3,090		-
Preferred D inducement to convert		11,110		-		-
Preferred E dividends accrued at stated rate		483		-		-
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$	12,243	$	20,748	$	3,632

NOTE 11.  NONCONTROLLING INTEREST OF COMMON UNITS IN THE OPERATING PARTNERSHIP

At December 31, 2017 and 2016,  4,550,242and 7,872,943of the operating partnership’s common units were outstanding, respectively. These amounts include 4,550,242and 2,609,791 common units held by limited partners at December 31, 2017 and 2016, respectively, and 5,263,152 LTIP units outstanding at December 31, 2016 which were not earned at that date and were subsequently cancelled on June 28, 2017 (see Note 12).The combined redemption value for the common units and LTIP units was $871and $2,008at December 31, 2017 and 2016, respectively.

Our ownership interest in the operating partnership as of December 31, 2017 and 2016 was 99.3% and 97.8%,  respectively, which includes consideration of the common units of the limited partners as well as the LTIP units.

Each limited partner of the operating partnership may, subject to certain limitations, require that the operating partnership redeem all or a portion of his or her common units at any time after a specified period following the date the units were acquired, by delivering a redemption notice to the operating partnership. When a limited partner tenders common units for redemption, the Company can, at its sole discretion, choose to purchase the units for either (1) a number of shares of Company common stock at a rate of one share of common stock for each 52 common units redeemed or (2) cash in an amount equal to the market value of the number of shares of Company common stock the limited partner would have received if the Company chose to purchase the units for common stock. No common units were redeemed in 2017, 2016, or 2015.

NOTE 12.  STOCK-BASED COMPENSATION

The Company previously had a 2006 Stock Plan which had been approved by the Company’s shareholders. The 2006 Stock Plan authorized the grant of stock options, stock appreciation rights, restricted stock, and stock bonuses for up to 9,615 shares of common stock. The 2006 Stock Plan expired onDecember 31, 2015.As a replacement for the 2006 Stock Plan, the Board of Directors adopted the Condor 2016 Stock Plan, which was approved by the Company’s shareholders at the annual shareholders meeting on June 15, 2016.  The 2016 Stock Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units, and other forms of stock-based compensation.  The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 461,538.  As of December 31, 2017, there were 357,742 common shares available for issuance under the 2016 Stock Plan.

79

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Options

At December 31, 2016, the Company had a total of 865 vested stock options outstanding with a weighted average exercise price of $48.945 per share.  These options expired unexercised on July 15, 2017.

Service Condition Share Awards

From time to time, the Company awards restricted shares of common stock to employees, officers, and members of the Board of Directors under the 2016 Stock Plan.  These shares generally vest ratably over five years for employees and officers and three years for members of the Board of Directors based on continued service or employment.  Dividends paid on these restricted shares during the vesting period are not forfeited in the event that the shares fail to vest.

The fair value of the service condition unvested share awards was determined based on the closing price of the Company’s common stock on the grant date.  The following table presents a summary of the service condition unvested share activity for the year ended December 31, 2017:

	Shares	Weighted-average grant date fair value
Unvested at December 31, 2016	-	$	-
Granted	96,286	$	10.54
Vested	(234)	$	10.60
Forfeited	(220)	$	10.54
Unvested at December 31, 2017	95,832	$	10.54

Market Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain market share prices of common stock are attained.  Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan.  The executive officer will earn and be issued 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days.  

The compensation cost related to awards that are contingent upon achieving a market based criteria is measured at the fair value of the award on the date of grant using the Monte Carlo simulation, including consideration of the market criteria, and amortized on a straight line basis over the derived performance period which is also estimated using this model.  The grant date fair value of this award, totaling $1,305, was determined using the following assumptions:

Volatility	25.0	%
Stock price	$                                                                 10.60
Dividend yield	7.4	%
Risk free interest rate	0.89% - 1.81% based upon expected time of vesting

Performance Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain operating results of the Company are obtained.  Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan.  For each of the Company’s fiscal years 2017 through 2021, if the Company achieves between 85% and 101% of budgeted Funds from Operations (“FFO”) as approved by the Board of Directors, the executive shall earn and be issued between 11,741 and 19,569 shares of

80

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

common stock, determined on a straight-line basis based on the percentage of budgeted FFO achieved.  In addition, for any fiscal year in which the Company achieves in excess of 101% of budgeted FFO, an additional 391 shares of common stock will be earned for each two percent actual FFO exceeds 101% of budgeted FFO, up to a total of 3,910 additional shares of common stock per year.

The fair value of the performance based share awards is based on the closing price of the Company’s common stock on the grant date, discounted for estimated common stock dividends to be declared prior to the shares being issued.  The grant date occurs on an annual basis when budgeted FFO is approved by the Board of Directors.  The total grant date fair value of the 2017 portion of this performance based share award, assuming that 100% of budgeted FFO is achieved, was $191.

Warrants

On March 2, 2015, the Company granted a warrant to an executive officer of the Company outside of the 2006 Stock Plan as an inducement material to the executive’s acceptance of employment. The warrant entitles the executive to purchase a total of 101,213 authorized but previously unissued shares of the Company’s common stock with a grant date price at (i) $9.88 per share (the adjusted closing bid price of the common stock on Nasdaq on March 2, 2015) if at least one-third but not more than one-half of the shares were purchased on or prior to March 17, 2015, and (ii) $12.48 per share for shares purchased after. The warrant has a three-year term. The executive officer exercised the warrant in part to purchase 35,060 shares on March 11, 2015 at the price of $9.88 per share. The warrant remains exercisable for 66,153 shares at an exercise price of $12.48 per share.

The Company records compensation expense for warrants based on the estimated fair value of the warrants on the date of grant determined using the Black-Scholes option-pricing model.  The Company uses historical data among other factors to estimate expected price volatility, expected warrant life, dividend rate, and expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield in effect at the time of grant for the estimated life of thewarrants.  The following table summarizes the estimates used in the Black-Scholes option-pricing model related to the warrants granted in 2015:

	$9.88 Grant		$12.48 Grant
	March 2, 2015		March 2, 2015
Volatility	53.10	%	78.60	%
Expected forfeitures	0.00	%	0.00	%
Expected term	15	days	3.00	years
Risk free interest rate	0.02	%	1.06	%

LTIP Awards

On March 2, 2015, the Company granted an equity award of 5,263,152 LTIP units, representing profit interests in the operating partnership, to an executive officer of the company. The LTIP units were earned in one-third increments upon the Company’s common stock achieving price per share milestones of $22.75,  $29.25, and $35.75, respectively.  Earned LTIP units vested in March 2018, or earlier upon a change in control of the Company, and could be redeemed at the rate of one share of common stock for each 52 earned LTIP units for up to 101,213 common shares. These LTIP units were cancelled on June 28, 2017 pursuant to an amendment of the employment agreement with the executive officer.

The Company recorded compensation expense for the LTIP units based on the estimated fair value of the units on the date of grant determined using the Monte Carlo simulation model.  The Company used historical data among other factors to estimate expected price volatility, expected LTIP life, volume weighted average price, and expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield in effect at the time of grant for the estimated life of the LTIP.  The following table summarizes the estimates used in the Monte Carlo option-pricing model related to the LTIP grant in 2015:

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

	Grant Date March 2, 2015
Volatility		75.5	%
Expected forfeitures		0.00	%
Weighted average price	$	9.945
Expected term		3.00	years
Risk free interest rate		1.06	%

DirectorFully Vested Share Compensation

Independent directors serving as members of the Investment Committee of the Board of Directors receive their monthly Investment Committee fees in the form of shares of the Company’s common stock.  Certain independent directors serving as members of the Board of Directors also elect to receive a portion of their director fees in the form of shares of the Company’s common stock.  A total of 5,369 and 2,361 shares were issued to independent directors under the 2016 Stock Plan during the years ended December 31, 2017 and 2016, respectively.  Shares issued for the year ended December 31, 2015 under the 2006 Stock Plan totaled 3,295.

Stock-Based Compensation Expense

The expense recognized in the consolidatedfinancial statements for stock-based compensation, including the LTIP, related to employees and directors for the years ended December 31, 2017, 2016, and 2015 was $1,237,  $305, and $285, respectively, all of which is included in general and administrative expense.  Total unrecognized compensation cost related to all awards at December 31, 2017 was $1,573, which is expected to be recognized over a weighted-average remaining service period of 3.2 years.

NOTE 13.  INCOME TAXES

For the years ended December 2017, 2016, and 2015, the income tax expense related to the operating partnership, including primarily Alternative Minimum Tax (“AMT”) and certain state and local taxes, totaled $20,  $35, and $0, respectively.

The components of the income tax expense (benefit) from the TRS from continuing operations for the years ended December 31, 2017, 2016, and 2015 were as follows:

	Year ended December 31,
	2017		2016		2015
Federal:
Current	$	33	$	90	$	-
Deferred		(615)		-		-
State and local:
Current		12		-		-
Deferred		(45)		-		-
Income tax expense (benefit)	$	(615)	$	90	$	-

Actual income tax expense of the TRS for the years ended December 31, 2017, 2016, and 2015 differs from the “expected” income tax expense (benefit) (computed by applying the appropriate U.S. federal income tax rate of 34% to earnings before income taxes) as a result of the following:

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

	Year ended December 31,
	2017		2016		2015
Computed "expected" income tax (benefit) expense	$	546	$	993	$	684
State income taxes, net of federal income tax (benefit) expense		47		139		82
(Decrease) increase in valuation allowance		(1,097)		(1,082)		(722)
Other		(145)		(50)		(44)
AMT		34		90		-
Total income tax expense (benefit)	$	(615)	$	90	$	-

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are as follows:

	As of December 31,
	2017		2016
Deferred Tax Assets
Accrued expenses and other	$	104	$	99
Net operating losses carried forward for federal income tax purposes		814		1,295
Net operating losses carried forward for state income tax purposes		579		182
AMT		123		-
Book depreciation in excess of tax depreciation		-		38
Subtotal deferred tax assets		1,620		1,614
Valuation allowance		(454)		(1,551)
Total deferred tax assets		1,166		63
Deferred Liabilities
Tax depreciation in excess of book depreciation		363		-
Atlanta JV basis difference		143		63
Total deferred tax liabilities		506		63
Net deferred tax assets	$	660	$	-

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers projected reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result of this analysis, the Company believed that a full valuation allowance against the net deferred tax asset position was necessary at December 31, 2016 and 2015 and as such no current or deferred federal income tax was recognized in the years then ended.  At December 31, 2017, it was determined by management that a valuation allowance against deferred tax assets was no longer required, with the exception of an allowance against certain state net operating losses, as management believes that it is more likely than not that remaining deferred tax assets will be realized.

After consideration of limitations related to a change in control as defined under Internal Revenue Code Section 382 following the Company’s common and preferred equity transactions,  the TRS’s net operating loss carryforward at December 31, 2017 as determined for federal income tax purposes was $3,876.  The availability of the loss carryforwards will expire in 2027 through 2034.

On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act (“TCJA”), was enacted. The TCJA made many significant changes to the U.S. federal income tax laws as of January 1, 2018.  Pursuant to this legislation, the federal income tax rate applicable to corporations is permanently reduced to 21% and the corporate alternative minimum tax is repealed, and the deduction of net interest expense is limited for all businesses, provided

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

that certain businesses, including real estate businesses, may elect not to be subject to such limitations and instead to depreciate their real property related assets over longer depreciable lives.

The reduced 21% federal income tax rate applicable to corporations will apply to taxable earnings reported for the full 2018 fiscal year. Accordingly, the Company has remeasured its net deferred tax assets using the lower federal tax rate that will apply when these amounts are expected to reverse.  As a result, in the fourth quarter of 2017, we recognized tax expense of $304 resulting from the revaluation of U.S. net deferred tax assets.

The SEC has issued Staff Accounting Bulletin No. 118 which permits the recording of provision amounts related to the impact of the TCJA during a measurement period which is not to exceed one year from the enactment date of the law.  The Company has included estimates related to the TCJA in these consolidated financial statements and will revalue those impacts as we continue to gather and analyze information.

As of December 31, 2017, the tax years that remain subject to examination by major tax jurisdictions generally include 2014 through 2017.

Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.  Distributions in excess of current and accumulated earnings and profits generally will be treated as a nontaxable reduction of the shareholder’s basis in such shareholder’s shares, to the extent thereof, and thereafter as taxable capital gain.  Distributions that are treated as a reduction of the shareholder’s basis in its shares will have the effect of increasing the amount of gain, or reducing the amount of loss, recognized upon the sale of the shareholder’s shares.

For income tax purposes, distributions paid per share for the years ended December 31, 2017 and 2016 were characterized as follows:

	For the year ended December 31,
	2017				2016
	Amount		%	Amount		%
Common Shares:
Ordinary income	$	0.156000	20%	$	0.455000	100%
Capital gain		-	-		-	-
Return of capital		0.624000	80%		-	-
Total	$	0.780000	100%	$	0.455000	100%
Series C Preferred Stock:
Ordinary income	$	-	-	$	1.649124	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	-	-	$	1.649124	100%
Series D Preferred Stock:
Ordinary income	$	0.104160	100%	$	0.494792	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.104160	100%	$	0.494792	100%
Series E Preferred Stock:
Ordinary income	$	0.522569	100%	$	-	-
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.522569	100%	$	-	-

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Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

The common share distribution declared on December 19, 2017 and paid on January 10, 2018 was treated as a 2018 distribution for tax purposes.  The preferred share distribution declared on December 19, 2017 and paid on January 2, 2018 was treated as a 2017 distribution for tax purposes.  The common and preferred share distributions declared on December 6, 2016 and paid on January 5, 2017 and January 3, 2017, respectively, were treated as 2016 distributions for tax purposes.

A portion of the redemption price of the Series A and B Preferred Stock that was redeemed for cash on April 15, 2016 included amounts equal to the accrued and unpaid dividends on such stock.  However, the entire redemption price, inclusive of amounts equal to accrued and unpaid dividends, was treated as payment in exchange for the redeemed stock and none of the redemption price is treated as a distribution of dividends under the Code for federal income tax purposes.

No dividends on common stock or preferred stock were declared or paid in 2015.

85

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

NOTE 14. EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities.  Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company.  Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses.  The following is a reconciliation of basic and diluted EPS:

	Year ended December 31,
	2017		2016		2015
Numerator: Basic (1)
Net earnings (loss) attributable to common shareholders:
Continuing operations	$	(9,362)	$	1,390	$	6,055
Discontinued operations		-		657		3,438
Total Net earnings (loss) attributable to common shareholders		(9,362)		2,047		9,493
Less: Allocation to participating securities		(56)		-		-
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	(9,418)	$	2,047	$	9,493
Numerator: Diluted (1)
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	$	(9,418)	$	1,390	$	6,055
Dividends on Series C Preferred Stock		-		-		2,074
Dividends on Series D Preferred Stock		-		3,090		-
Unrealized gain on warrant derivative		-		-		(4,122)
Unrealized gain on Series C Preferred Embedded Derivative		-		-		(7,533)
Continuing operations - Diluted		(9,418)		4,480		(3,526)
Discontinued operations - Diluted		-		657		3,438
Total Diluted	$	(9,418)	$	5,137	$	(88)
Denominator
Weighted average number of common shares - Basic		9,437,824		761,112		751,634
Unvested stock		-		-		619
Series C Preferred Stock		-		-		2,884,615
Series D Preferred Stock		-		4,774,433		-
Warrants - Employees		-		-		106
Warrants - RES		-		-		(61,504)
Weighted average number of common shares - Diluted		9,437,824		5,535,545		3,575,470
Earnings Per Share
Continuing operations - Basic	$	(1.00)	$	1.82	$	8.06
Discontinued operations - Basic		-		0.85		4.55
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	2.67	$	12.61
Continuing operations - Diluted	$	(1.00)	$	0.78	$	(0.98)
Discontinued operations - Diluted		-		0.13		0.98
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	0.91	$	-

(1) The loss (earnings) attributable to noncontrolling interest is allocated between continuing and discontinued operations for the purpose of the EPS calculation

86

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:

	Year ended December 31,
	2017	2016	2015
Outstanding stock options (2)	258	865	865
Unvested restricted stock	48,869	-	-
Warrants - RES (2)	53,608	576,923	-
Warrants - Employees	66,153	66,153	55,249
Series C Preferred Stock	-	598,991	-
Series D Preferred Stock (2)	970,606	-	-
Series E Preferred Stock	560,115	-	-
Convertible debt	97,269	77,336	-
LTIP common units (1) (2)	49,636	101,213	84,576
Operating partnership common units (1)	70,722	46,265	13,008
Total potentially dilutive securities excluded from the denominator	1,917,236	1,467,746	153,698

(1) LTIP and common units have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

(2) Amounts above are weighted average amounts outstanding for the year.  These instruments were no longer outstanding at December 31, 2017.  

NOTE 15.  COMMITMENTS AND CONTINGENCIES

Management Agreements

Our TRS engages eligible independent contractors as property managers for each of our hotels in accordance with the requirements for qualification as a REIT.  The hotel management agreements provide that the management companies have control of all operational aspects of the hotels, including employee-related matters. The management companies must generally maintain each hotel under their management in good repair and condition and perform routine maintenance, repairs, and minor alterations. Additionally, the management companies must operate the hotels in accordance with the national franchise agreements that cover the hotels, which includes, as applicable, using franchisor sales and reservation systems and abiding by franchisors’ marketing standards.  The management agreements generally require the TRS to fund debt service, working capital needs, and capital expenditures and to fund the management companies’ third-party operating expenses, except those expenses not related to the operation of hotels. The TRS also is responsible for obtaining and maintaining certain insurance policies with respect to the hotels.

Each of the management companies employed by the TRS at December 31, 2017 receives a base monthly management fee of 3.0% to 3.5% of gross hotel revenue, with incentives for performance which increase such fee to a maximum of 5.0%.  For the years ended December 31, 2017, 2016, and 2015, base management fees incurred totaled $1,700,  $1,619, and $2,466, respectively, of which $1,700,  $1,619, and $2,348, respectively, was included in continuing operations as hotel and property operations expense.  For the years ended December 31, 2017, 2016 and 2015, incentive management fees, included in continuing operations in their entirety, totaled$306,$190, and $158, respectively.

The management agreements generally have initial terms of one to three years and renew for additional terms of one year unless either party to the agreement gives the other party written notice of termination at least 90 days before the end of a term.  The Company may terminate a management agreement, subject to cure rights, if certain performance metrics tied to both individual hotel and total managed portfolio performance are not met. The Company may also terminate a management agreement with respect to a hotel at any time without reason upon payment of a termination fee.The management agreements terminate with respect to a hotel upon sale of the hotel, subject to certain notice requirements.

87

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Franchise Agreements

As of December 31, 2017,  16 of our 17 wholly owned properties operate under franchise licenses from national hotel companies.  Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue.  The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements.  Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term.  Franchise fee expense totaled $3,800,  $3,123, and $3,883, for the years ended December 31, 2017, 2016, and 2015, respectively, of which $3,800,  $3,123, and $3,853, respectively, was included in continuing operations as hotel and property operations expense.

Leases

The Company has no land lease agreements in place related to properties owned at December 31, 2017.  Land lease expense related to properties previously ownedtotaled $9,  $105, and $105 for the years ended December 31, 2017, 2016, and 2015, respectively, all of which is included in continuing operationsas hotel and property operations expense.

The Company entered intothree new office lease agreements in 2016, replacing all existing office lease agreements.  These leases expire in 2019 through 2021 and have combined rent expense of approximately $154 annually.  Office lease expense totaled $154,  $199, and $163 in the years ended December 31, 2017, 2016, and 2015, respectively, and is included in general and administrative expense.

As of December 31, 2017, the future minimum lease payments applicable to non-cancellable operating leases are as follows:

		Lease rents
2018	$	159
2019		138
2020		61
2021		47
2022		-
	$	405

As of December 31, 2017, the Company had agreements with one restaurant and a cell tower operator for leased space at our hotel locations. Lease income totaled $71,  $86, and $198 for the years ended December 31, 2017, 2016, and 2015, respectively, of which $71,  $86, and $177, respectively, was included in continuing operations in room rentals and other hotel services revenue.

Benefit Plans

The Company has a qualified contributory retirement plan under Section 401(k) of the Code (the “401(k) Plan”) which covers all employees who meet certain eligibility requirements.  Voluntary contributions may be made to the 401(k) Plan by employees.  The 401(k) Plan is a Safe Harbor Plan and requires a mandatory employer contribution.  The employer contribution expense for the years ended December 31, 2017, 2016, and 2015 was $67,  $73, and $66, respectively, and is included in general and administrative expenses.

88

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

Litigation

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties.  We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us.  The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

NOTE 16. QUARTERLY OPERATING RESULTS (UNAUDITED)

	Quarter ended (unaudited)
	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017		Total 2017
Revenue	$	10,361	$	14,252	$	15,562	$	15,278	$	55,453
Operating expenses		11,001		12,719		14,417		14,040		52,177
Operating income (loss)		(640)		1,533		1,145		1,238		3,276
Net gain (loss) on dispositions of assets		(3)		4,852		(46)		2,004		6,807
Equity in earnings (loss) of joint venture		111		25		159		(105)		190
Net gain on derivatives and convertible debt		175		227		14		20		436
Other income (expense), net		(1)		(39)		(43)		(28)		(111)
Interest expense		(971)		(1,092)		(1,405)		(1,706)		(5,174)
Loss on debt extinguishment		(800)		-		-		(167)		(967)
Impairment loss, net		(271)		(479)		(848)		(553)		(2,151)
Earnings (loss) before income tax expense		(2,400)		5,027		(1,024)		703		2,306
Income tax benefit (expense)		-		(35)		(15)		645		595
Net earnings (loss)		(2,400)		4,992		(1,039)		1,348		2,901
(Earnings) loss attributable to noncontrolling interest		50		(67)		7		(10)		(20)
Earnings (loss) attributable to controlling interests		(2,350)		4,925		(1,032)		1,338		2,881
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(11,603)		(271)		(205)		(164)		(12,243)
Net earnings (loss) attributable to common shareholders	$	(13,953)	$	4,654	$	(1,237)	$	1,174	$	(9,362)
Earnings per Share (1)
Total - Basic Earnings (Loss) per Share	$	(4.75)	$	0.40	$	(0.11)	$	0.10	$	(1.00)
Diluted Earnings Per Share (1)
Total - Diluted Earnings (Loss) per Share	$	(4.75)	$	0.37	$	(0.11)	$	0.10	$	(1.00)

(1) Quarterly and total annual EPS are based on the weighted average number of shares outstanding during each quarter and the annual period.Due to rounding and differences in earnings and losses between the quarterly and annual periods, the sum of the quarterly EPS amounts may not equal the reported amounts for the year.

89

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

	Quarter ended (unaudited)
	March 31, 2016		June 30, 2016		September 30, 2016		December 31, 2016		Total 2016
Revenue	$	12,503	$	14,155	$	13,519	$	10,470	$	50,647
Operating expenses		12,662		12,508		12,445		11,009		48,624
Operating income (loss)		(159)		1,647		1,074		(539)		2,023
Net gain on dispositions of assets		3,367		8,856		3,591		7,318		23,132
Equity in loss of joint venture		-		-		(54)		(190)		(244)
Net gain on derivatives and convertible debt		6,117		162		26		72		6,377
Other income (expense), net		(21)		23		85		(32)		55
Interest expense		(1,329)		(1,248)		(1,127)		(1,006)		(4,710)
Loss on debt extinguishment		(173)		(976)		(399)		(639)		(2,187)
Impairment loss, net		(793)		(121)		(343)		(220)		(1,477)
Earnings from continuing operations before income tax expense		7,009		8,343		2,853		4,764		22,969
Income tax expense		-		-		-		(125)		(125)
Earnings from continuing operations		7,009		8,343		2,853		4,639		22,844
Gain from discontinued operations, net of tax		678		-		-		-		678
Net earnings		7,687		8,343		2,853		4,639		23,522
Earnings attributable to noncontrolling interest		(389)		(178)		(61)		(99)		(727)
Earnings attributable to controlling interests		7,298		8,165		2,792		4,540		22,795
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(17,740)		(1,057)		(976)		(975)		(20,748)
Net earnings (loss) attributable to common shareholders	$	(10,442)	$	7,108	$	1,816	$	3,565	$	2,047
Earnings per Share (1)
Continuing operations - Basic	$	(14.63)	$	9.36	$	2.41	$	4.68	$	1.82
Discontinued operations - Basic		0.91		-		-		-		0.85
Total - Basic Earnings (Loss) per Share	$	(13.72)	$	9.36	$	2.41	$	4.68	$	2.67
Diluted Earnings Per Share (1)
Continuing operations - Diluted	$	(14.63)	$	1.17	$	0.39	$	0.65	$	0.78
Discontinued operations - Diluted		0.91		-		-		-		0.13
Total - Diluted Earnings (Loss) per Share	$	(13.72)	$	1.17	$	0.39	$	0.65	$	0.91

(1) Quarterly and total annual EPS are based on the weighted average number of shares outstanding during each quarter and the annual period.Due to rounding and differences in earnings and losses between the quarterly and annual periods, the sum of the quarterly EPS amounts may not equal the reported amounts for the year.

90

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(In thousands, except share and per share data)

NOTE 17.  SUBSEQUENT EVENTS

Subsequent Property Activity

On January 18, 2018, the Company closed on the acquisition of the122-roomTownePlace SuitesAustin North Tech Ridge for a purchase price of $19,750.  This acquisition was financed using proceeds from the Company’s credit facility.

The Company sold the 41-room Supertel Inn in Creston, Iowa on January 25, 2018 for gross proceeds of $2,050. Net proceeds from the sales were applied to the Company’s credit facility.

On February 21, 2018, the Company closed on the acquisition of the93-roomHome2 Suites Summerville / Charleston for a purchase price of $16,325.  This acquisition was financed using proceeds from the Company’s credit facility of $14,818 as well as cash totaling $1,507.

The Company sold the 135-room Comfort Suites in South Bend, Indiana on March 15, 2018 for gross proceeds of $6,100. Net proceeds from the sales were applied to the Company’s credit facility.

Subsequent to December 31, 2017 through March 16, 2018,  one additional hotel property met the criteria to be considered held for sale. Investment in hotel property, net of $1,191 and debt of $3,089 related to this property remain classified in the December 31, 2017 balance sheet as held for use.

Subsequent Equity Transactions

Subsequent to December 31, 2017 through March 16, 2018, the Company has sold 12,334 shares of common stock under the ATM program at an average sales price of $10.40 per share for gross proceeds totaling $128 and net proceeds of $125, including cash commission fees paid to the Sales Agents and additional related costs.

91

Condor Hospitality Trust, Inc. and Subsidiaries

Schedule III Real Estate and Accumulated Depreciation

As of December 31, 2017

(In thousands)

										Additions, (dispositions), and (impairments)
				Initial cost						Subsequent to acquisition							Gross amount at December 31, 2017
Brand	Location	Acquisition date	Encumbrance	Land		Buildings & Other		Furniture & equipment		Land		Buildings & Other			Furniture & equipment		Land		Buildings & Other		Furniture & equipment		Accumulated depreciation		Net book value
Super 8	Creston, Iowa	09/19/1978	KEY	$	56	$	765	$	76	$	89	$	1,572		$	907	$	145	$	2,337	$	983	$	(2,274)	$	1,191
Quality Inn	Solomons, Maryland	06/01/1986	KEY		2,304		2,719		269		-		1,565			462		2,304		4,284		731		(3,356)		3,963
Comfort Suites	Ft. Wayne, Indiana	11/07/2005	KEY		1,200		3,964		840		-		1,060			617		1,200		5,024		1,457		(2,765)		4,916
Comfort Suites	South Bend, Indiana	11/30/2005	KEY		500		10,602		910		(302)		(4,714)			684		198		5,888		1,594		(1,884)		5,796
Supertel Inn	Creston, Iowa	06/30/2006	KEY		235		2,364		344		-		(16)			69		235		2,348		413		(1,055)		1,941
Hilton Garden Inn	Dowell, Maryland	05/25/2012	KEY		1,400		9,492		323		-		657			459		1,400		10,149		782		(1,987)		10,344
SpringHill Suites	San Antonio, Texas	10/01/2015	WELLS		1,597		14,353		1,550		-		114			34		1,597		14,467		1,584		(1,416)		16,232
Courtyard by Marriott	Jacksonville, Florida	10/02/2015	WELLS		2,100		11,050		850		-		178			68		2,100		11,228		918		(1,279)		12,967
Hotel Indigo	Atlanta, Georgia	10/02/2015	WELLS		800		8,700		1,500		-		97			212		800		8,797		1,712		(1,335)		9,974
Aloft	Leawood, Kansas	12/14/2016	GWB		3,339		18,046		1,115		-		133			61		3,339		18,179		1,176		(794)		21,900
Home2 Suites	Lexington, Kentucky	03/24/2017	KEY		905		14,204		1,351		-		150			12		905		14,354		1,363		(501)		16,121
Home2 Suites	Round Rock, Texas	03/24/2017	KEY		1,087		14,345		1,285		-		150			2		1,087		14,495		1,287		(480)		16,389
Home2 Suites	Tallahassee, Florida	03/24/2017	KEY		1,519		18,229		1,727		-		159			-		1,519		18,388		1,727		(623)		21,011
Home2 Suites	Southaven, Mississippi	04/14/17	MS		1,311		16,792		897		-		184			9		1,311		16,976		906		(593)		18,600
Hampton Inn & Suites	Lake Mary, Florida	06/19/2017	KEY		1,200		16,432		1,773		-		175			3		1,200		16,607		1,776		(387)		19,196
Fairfield Inn & Suites	El Paso, Texas	08/31/2017	KEY		1,014		14,297		1,089		-		100			-		1,014		14,397		1,089		(203)		16,297
Residence Inn	Austin, Texas	08/31/2017	KEY		1,495		19,630		1,275		-		150			25		1,495		19,780		1,300		(248)		22,327
Subtotal Hotel Properties					22,062		195,984		17,174		(213)		1,714	-		3,624		21,849		197,698		20,798		(21,180)		219,165
Construction in progress					-		-		-		-		87			191		-		87		191		-		278
Office building					69		1,517		-		(69)		(1,517)			505		-		-		505		(368)		137
Total				$	22,131	$	197,501	$	17,174	$	(282)	$	284		$	4,320	$	21,849	$	197,785	$	21,494	$	(21,548)	$	219,580

92

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Schedule III Real Estate and Accumulated Depreciation

As of December 31, 2017

(In thousands)

Encumbrance codes refer to the following lenders:

KEY	KeyBank credit facility
GWB	Great Western Bank
Wells	Wells Fargo
MS	Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18

See accompanying report of independent registered public accounting firm

93

Condor Hospitality Trust, Inc. and Subsidiaries

Notes to Schedule III Real Estate and Accumulated Depreciation

As of December 31, 2017

(In thousands)

	ASSET BASIS	Total
(a)	Balance at January 1, 2015	$	214,585
	Additions		46,489
	Disposals		(65,802)
	Impairment loss, net		(6,373)
	Balance at December 31, 2015		188,899
	Additions		25,618
	Disposals		(68,256)
	Impairment loss, net		(2,877)
	Balance at December 31, 2016		143,384
	Additions		134,709
	Disposals		(34,814)
	Impairment loss, net		(2,151)
	Balance at December 31, 2017	$	241,128
	ACCUMULATED  DEPRECIATION	Total
(b)	Balance at January 1, 2015	$	75,403
	Depreciation for the period ended December 31, 2015		5,400
	Depreciation on assets sold or disposed		(19,938)
	Impairment loss, net		(2,665)
	Balance at December 31, 2015		58,200
	Depreciation for the period ended December 31, 2016		5,190
	Depreciation on assets sold or disposed		(33,477)
	Impairment loss, net		(1,400)
	Balance at December 31, 2016		28,513
	Depreciation for the period ended December 31, 2017		6,898
	Depreciation on assets sold or disposed		(13,863)
	Balance at December 31, 2017	$	21,548

(a) The aggregate cost of land, buildings, furniture and equipment for Federal income tax purposes is approximately $245 million (unaudited).

(b) Depreciation is computed based upon the following useful lives:

Buildings and improvements     15 - 40 years

Furniture and equipment             3 - 12 years

(c) The Company has mortgages payable on the properties as noted.  Additional mortgage information can be found in Note 6 to the consolidated financial statements.

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ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation was performed under the supervision of management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 of the rules promulgated under the Securities and Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 was (a) accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures and (b) recorded, processed, summarized,  and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Other than as discussed below, no changes in the Company’s internal controls over financial reporting occurred during the last fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Annual Report On Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Securities Exchange Act Rule 13a-15(f). The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017. The Company’s management used the framework in Internal Control—Integrated Framework (2013)  issued by the Committee of Sponsoring Organizations (COSO) to perform this evaluation. Based on that evaluation, the Company’s management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2017.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Internal control over financial reporting was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.  OTHER INFORMATION

None.

95

PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for the 2018 Annual Meeting of Stockholders.

ITEM 11.  EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for the 2018 Annual Meeting of Stockholders.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND

RELATED STOCKHOLDER MATTERS

Certain of the information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for the 2018 Annual Meeting of Stockholders.

Equity Compensation Plan Information

The following table provides information about the Company’s common stock that may be issued upon exercise of options, warrants, and rights under existing equity compensation plans as of December 31, 2017:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a)		Weighted average exercise price of outstanding options, warrants, and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (including securities plans reflected in column(a)) (c)
Equity compensation plans approved by security holders		-	$	-		357,742(1)
Equity compensation plans not approved by security holders		66,153		12.48		-
Total		66,153	$	12.48		357,742

(1) Represents shares issuable under the Company’s 2016 Stock Plan. The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 461,538.Additionally, an executive officer will be issued shares under the 2016 Stock Plan, if sufficient shares are then available under the 2016 Stock Plan, of 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days, and between 11,741 and 23,479 shares annually if budgeted Funds from Operations targets are achieved.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for the 2018 Annual Meeting of Stockholders.

96

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to the Company’s definitive Proxy Statement for the 2018 Annual Meeting of Stockholders.

PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements and Financial Statement Schedules

The following financial statements and financial statement schedule are included in this report on the pages listed below:

	Page
Report of Independent Registered Public Accounting Firm	50
Consolidated Balance Sheets as of December 31, 2017 and 2016	51
Consolidated Statements of Operations for the Years Ended December 31, 2017,  2016, and 2015	52
Consolidated Statements of Equity for the Years Ended December 31, 2017,  2016, and 2015	53
Consolidated Statements of Cash Flows for the Years Ended December 31, 2017,  2016, and 2015	54
Notes to Consolidated Financial Statements	55
Schedule III – Real Estate and Accumulated Depreciation	92
Notes to Schedule III – Real Estate and Accumulated Depreciation	94

All other schedules for which provision is made in Regulation S-X are either not required to be included herein pursuant to the related instructions are inapplicable, or the related information is included in the footnotes to the applicable financial statement, and, therefore, have been omitted from this Item 15.

Exhibits

3.1	Amended and Restated Articles of Incorporation of the Company, as amended (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 24, 2017).
3.2	Bylaws of the Company, as amended (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 28, 2017).
10.1	Third Amended and Restated Agreement of Limited Partnership of Condor Hospitality Limited Partnership, as amended (incorporated herein by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (Commission file number 001-34087) for the quarter ended September 30, 2016).
10.2	Amended and Restated Limited Liability Company Agreement of Spring Street Hotel Property II LLC dated as of August 22, 2016 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 22, 2016).
10.3	Limited Liability Company Agreement of Spring Street Hotel OpCo II LLC dated as of August 22, 2016 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 22, 2016).

97

10.4	Hotel Management Agreement dated June 29, 2016 by and between TRS Leasing, Inc., TRS Subsidiary, LLC and Kinseth Hotel Corporation (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 29, 2016).
10.5	Hotel Management Agreement dated June 29, 2016 by and between TRS Leasing, Inc., TRS Subsidiary, LLC and Strand Development Company, LLC (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 29, 2016).
10.6	Hotel Management Agreement dated June 29, 2016 by and between TRS Leasing, Inc., TRS Subsidiary, LLC, SPPR TRS Subsidiary, LLC, BMI Alexandria TRS Subsidiary, LLC and Hospitality Management Advisors, Inc. (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 29, 2016).
10.7	Hotel Management Agreement dated June 29, 2016 by and between SPPR-Dowell TRS Subsidiary, LLC and Cherry Cove Hospitality Management, LLC (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 29, 2016).
10.8	Hotel Management Agreement dated October 1, 2015 between TRS San Spring, LLC and Peachtree Hospitality Management, LLC (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated October 1, 2015).
10.9	Hotel Management Agreement dated October 1, 2015 between TRS Atl Indy, LLC and Peachtree Hospitality Management, LLC (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated October 1, 2015).
10.10	Hotel Management Agreement dated October 1, 2015 between TRS Jax Court, LLC and Peachtree Hospitality Management, LLC (incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated October 1, 2015).
10.11	Hotel Management Agreement, dated June 29, 2016, by and between TRS Leasing, Inc., TRS Subsidiary, LLC and K Partners Hospitality Group LP (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 29, 2016).
10.12	Agreement between Spring Street Hotel OpCo LLC and Boast Hotel Management Company LLC dated effective August 19, 2016 (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 22, 2016).
10.13	Hotel Management Agreement dated as of December 14, 2016 between TRS KCI Loft, LLC and Presidian Destinations, Ltd. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated December 14, 2016).
10.14	Hotel Management Agreement dated as of March 24, 2017 between TRS TLH Magnolia, LLC and Vista Host Inc. (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 24, 2017).
10.15	Hotel Management Agreement dated as of March 24, 2017 between TRS AUS Louis, LLC and Vista Host Inc. (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 24, 2017).

98

10.16	Hotel Management Agreement dated as of March 24, 2017 between TRS LEX Lowry, LLC and Vista Host Inc. (incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 24, 2017).
10.17	Hotel Management Agreement dated as of April 14, 2017 between TRS MEM Southcrest, LLC and Vista Host Inc. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K/A (Commission file number 001-34087) dated March 24, 2017).
10.18	Hotel Management Agreement dated as of June 19, 2017 between TRS MCO Village, LLC and Peachtree Hospitality Management, LLC. (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 19, 2017).
10.19	Hotel Management Agreement dated as of August 31, 2017 between TRS ELP Edge, LLC and Pillar Hotels & Resorts, LLC (incorporated by reference to Exhibit 10.7 filed with the Company’s Form 8-K (Commission file number 001-34087) dated August 31, 2017).
10.20	Hotel Management Agreement dated as of August 31, 2017 between TRS AUS Casey, LLC and Pillar Hotels & Resorts, LLC (incorporated by reference to Exhibit 10.8 filed with the Company’s Form 8-K (Commission file number 001-34087) dated August 31, 2017).
10.21	Loan Agreement dated as of August 22, 2016 between Spring Street Hotel Property LLC, Spring Street Hotel Opco LLC and LoanCore Capital Credit REIT LLC (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 22, 2016).
10.22	Guaranty of Recourse Obligations by the Company and Alan Kanders and Raviraj Kiran Dave dated August 22, 2016 in favor of LoanCore Capital Credit REIT LLC (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 22, 2016).
10.23	Loan Agreement dated as of December 14, 2016 among CDOR KCI Loft, LLC, TRS KCI Loft, LLC and Great Western Bank (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated December 14, 2016).
10.24	Springing Unconditional Guaranty of Payment and Performance dated as of December 14, 2016 by the Company in favor of Great Western Bank (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated December 14, 2016).
10.25	Limited Guaranty of Payment and Performance dated as of December 14, 2016 by the Company in favor of Great Western Bank (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated December 14, 2016).
10.26	Credit Agreement dated as of March 1, 2017 by and among Condor Hospitality Limited Partnership, as Borrower, Keybank National Association and the other lenders party thereto, as Lenders, and Keybank National Association, as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 1, 2017).
10.27	Unconditional Guaranty of Payment and Performance dated as of March 1, 2017 by Condor Hospitality REIT Trust, the Company and the subsidiary guarantors party thereto (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 1, 2017).

99

10.28	First Amendment to Credit Agreement dated as of May 11, 2017 among Condor Hospitality Limited Partnership, as Borrower, the Company and the subsidiary guarantors party thereto, as Guarantors, Keybank National Association and the other lenders party thereto, as Lenders, and Keybank National Association, as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 11, 2017).
10.29	Second Amendment to Credit Agreement dated as of December 13, 2017 among Condor Hospitality Limited Partnership, as Borrower,  the Company and the subsidiary guarantors party thereto, as Guarantors, Keybank National Association and the other lenders party thereto, as Lenders, and Keybank National Association, as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated December 13, 2017).
10.30	Loan Agreement dated as of October 4, 2017 between CDOR Jax Court, LLC, TRS Jax Court, LLC, CDOR Atl Indy, LLC, TRS Atl Indy, LLC, CDOR San Spring, LLC and TRS San Spring, LLC and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated October 4, 2017).
10.31	Guaranty of Recourse Obligations dated as of October 4, 2017 by the Company to Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated October 4, 2017).
10.32	Cash Management Agreement dated as of October 4, 2017 by and among Wells Fargo Bank, National Association and CDOR Jax Court, LLC, TRS Jax Court, LLC, CDOR Atl Indy, LLC, TRS Atl Indy, LLC, CDOR San Spring, LLC and TRS San Spring, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated October 4, 2017).
10.33	Purchase Agreement, dated November 16, 2011, by and among the Company, Condor Hospitality Limited Partnership and Real Estate Strategies L.P. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A (Commission file number 001-34087) dated November 16, 2011).
10.34	Warrants issued to Real Estate Strategies L.P. dated February 1, 2012 and February 15, 2012 (incorporated herein by reference to Exhibit 10.39 to the Company’s Annual Report on Form 10-K (Commission file number 001-34087) for the year ended December 31, 2011).
10.35	Investor Rights and Conversion Agreement, dated February 1, 2012, by and among the Company, Real Estate Strategies L.P. and IRSA Inversiones y Representaciones Sociedad Anónima (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 30, 2012).
10.36	Registration Rights Agreement, dated February 1, 2012, by and among the Company, Real Estate Strategies L.P. and IRSA Inversiones y Representaciones Sociedad Anónima (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 30, 2012).
10.37	Directors Designation Agreement, dated February 1, 2012, by and among the Company, Real Estate Strategies L.P. and IRSA Inversiones y Representaciones Sociedad Anónima (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 30, 2012).

100

10.38	Agreement, dated August 9, 2013, by and among the Company, Real Estate Strategies L.P. and IRSA Inversiones y Representaciones Sociedad Anonima (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 9, 2013).
10.39	Agreement, dated July 23, 2015, between Real Estate Strategies L.P., IRSA Inversiones y Representaciones Sociedad Anonima and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 23, 2015).
10.40	Warrant dated January 24, 2017 issued to Real Estate Strategies L.P. (incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 23, 2017).
10.41	Agreement, dated as of February 28, 2017, by and among Real Estate Strategies L.P., IRSA Inversiones y Representaciones Sociedad Anónima and the Company (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated February 28, 2017).
10.42	Stock Purchase Agreement, dated as of March 16, 2016, between SREP III Flight-Investco, L.P. and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 16, 2016).
10.43	Investor Rights Agreement, dated as of March 16, 2016, by and among SREP III Flight-Investco, L.P., StepStone Group Real Estate LP and the Company (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 16, 2016).
10.44	Agreement, dated as of March 16, 2016, by and among Real Estate Strategies L.P., IRSA Inversiones y Representaciones Sociedad Anónima and the Company (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 16, 2016).
10.45	Agreement, dated as of February 28, 2017, between SREP III Flight-Investco, L.P., StepStone Group Real Estate LP and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated February 28, 2017).
10.46	The Company’s 2006 Stock Plan (incorporated herein by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K (Commission file number 001-34087) for the year ended December 31, 2011).
10.47	Amendment to the Company’s 2006 Stock Plan dated May 28, 2009 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 28, 2009).
10.48	Amendment to the Company’s 2006 Stock Plan dated May 22, 2012 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated May 22, 2012).
10.49	Form of Stock Option Agreement (incorporated herein by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K (Commission file number 001-34087) for the year ended December 31, 2011).

101

10.50	The Company’s 2016 Stock Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 15, 2016).
10.51	Jeffrey W. Dougan Employment Agreement dated July 15, 2013 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 9, 2013).
10.52	Jeffrey W. Dougan Restricted Stock Agreement dated July 15, 2013 (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 9, 2013).
10.53	Jeffrey W. Dougan Stock Option Agreement dated July 15, 2013 (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 9, 2013).
10.54	Amended and Restated Employment Agreement dated March 2, 2015 by and between the Company and J. William Blackham, as amended and restated on September 16, 2016 (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated September 16, 2016).
10.55	Common Stock Purchase Warrant dated March 2, 2015 between the Company and J. William Blackham (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 2, 2015).
10.56	Amendment of Employment Agreement dated June 28, 2017 between J. William Blackham and the Company (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 28, 2017).
10.57	Form of Executive Officer and Director Indemnification Agreement (incorporated herein by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (Commission file number 001-34087) for the quarter ended March 31, 2016).
10.58	Form of Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated March 29, 2017).
10.59	Form of Director Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated June 19, 2017).
10.60	Agreement of Purchase and Sale dated as of August 29, 2016 between Leawood ADP, Ltd. and Condor Hospitality Limited Partnership (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 29, 2016).
10.61	Purchase and Sale Agreement dated as of January 23, 2017 between Condor Hospitality Limited Partnership and VHRMR TALL, LLC (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 23, 2017).

102

10.62	Purchase and Sale Agreement dated as of January 23, 2017 between Condor Hospitality Limited Partnership and EASTVHR HS ROUND ROCK, LLC (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 23, 2017).
10.63	Purchase and Sale Agreement dated as of January 23, 2017 between Condor Hospitality Limited Partnership and CVH LEXINGTON, LLC (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 23, 2017).
10.64	Purchase and Sale Agreement dated as of January 23, 2017 between Condor Hospitality Limited Partnership and CVH SOUTHAVEN, LLC (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated January 23, 2017).
10.65	Purchase and Sale Agreement dated as of April 29, 2017 between Condor Hospitality Limited Partnership and SI Lake Mary, LP. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated April 29, 2017).
10.66	Purchase and Sale Agreement Fairfield Inn & Suites El Paso Airport dated as of July 17, 2017 between Condor Hospitality Limited Partnership and MB Hospitality (EP), LP (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 17, 2017).
10.67	First Amendment to Purchase and Sale Agreement Fairfield Inn & Suites El Paso Airport dated as of August 31, 2017 between Condor Hospitality Limited Partnership and MB Hospitality (EP), LP (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 31, 2017).
10.68	Purchase and Sale Agreement Residence Inn Austin Airport dated as of July 17, 2017 between Condor Hospitality Limited Partnership and MB Hospitality (AUSAP), LP (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 17, 2017).
10.69	First Amendment to Purchase and Sale Agreement Residence Inn Austin Airport dated as of August 31, 2017 between Condor Hospitality Limited Partnership and MB Hospitality (AUSAP), LP (incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 31, 2017).
10.70	Purchase and Sale Agreement TownePlace Suites Austin North Tech Ridge dated as of July 17, 2017 between Condor Hospitality Limited Partnership and MB Hospitality (AUSN), LP (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated July 17, 2017).
10.71	First Amendment to Purchase and Sale Agreement TownePlace Suites Austin North Tech Ridge dated as of August 31, 2017 between Condor Hospitality Limited Partnership and MB Hospitality (AUSN), LP (incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K (Commission file number 001-34087) dated August 31, 2017).
21.0*	Subsidiaries.
23.1*	Consent of KPMG LLP

103

31.1*	Section 302 Certification of Chief Executive Officer.
31.2*	Section 302 Certification of Chief Financial Officer.
32.1*	Section 906 Certifications.
101.1*	The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Equity, (iv) the Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements.

Pursuant to Item 601 (b)(4) of Regulation S-K, certain instruments with respect to the Company’s long-term debt are not filed with this Form 10-K. The Company will furnish a copy of any such long-term debt agreement to the Securities and Exchange Commission upon request.

Management contracts and compensatory plans are set forth as Exhibits 10.46 through 10.59.  

* Filed herewith.

104

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto dually authorized
	March 19, 2018	/s/J. William Blackham
		J. William Blackham
		Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature		Title	Date
/s/J. William Blackham		Chief Executive Officer	March 19, 2018
J. William Blackham		(Principal Executive Officer)
/s/Jonathan J. Gantt		Chief Financial Officer	March 19, 2018
Jonathan J. Gantt		(Principal Financial Officer)
/s/Arinn A. Cavey		Chief Accounting Officer	March 19, 2018
Arinn A. Cavey		(Principal Accounting Officer)
/s/James H. Friend		Chairmen of the Board	March 19, 2018
James H. Friend
/s/Daphne J. Dufresne		Board Member	March 19, 2018
Daphne J. Dufresne
/s/Daniel R. Elsztain		Board Member	March 19, 2018
Daniel R. Elsztain
/s/Donald J. Landry		Board Member	March 19, 2018
Donald J. Landry
/s/Brendan MacDonald		Board Member	March 19, 2018
Brendan MacDonald
/s/John M. Sabin		Board Member	March 19, 2018
John M. Sabin
/s/Benjamin Wall		Board Member	March 19, 2018
Benjamin Wall

105

EX-21.0

EXHIBIT 21.0

LIST OF SUBSIDIARIES

Condor Hospitality Trust, Inc. owns, directly or indirectly, 100% of the voting securities, partnership interests or limited liability company interests of the entities listed below (unless otherwise indicated).

Subsidiary	Jurisdiction of Incorporation
Condor Hospitality REIT Trust	Maryland
TRS Leasing, Inc. (TRS)	Virginia
Supertel Hospitality Management, Inc.	Maryland
Condor Hospitality Limited Partnership (CHLP) (99.3%)	Virginia
Solomons GP, LLC (SGLLC) (100% owned by CHLP)	Delaware
Solomons Beacon Inn Limited Partnership (1%; 99% owned by SGLLC)	Maryland
TRS Subsidiary, LLC	Delaware
SPPR Holdings, Inc.	Delaware
SPPR – Hotels, LLC (1%; 99% owned by CHLP)	Delaware
SPPR – South Bend, LLC (100% owned by CHLP)	Delaware
SPPR TRS Subsidiary, LLC	Delaware
SPPR-Dowell Holdings, Inc.	Delaware
SPPR-Dowell, LLC (1%; 99% owned by CHLP)	Delaware
SPPR-Dowell TRS Subsidiary, LLC	Delaware
CDOR San Spring, LLC (100% owned by CHLP)	Delaware
TRS SanSpring, LLC	Delaware
CDOR JAX Court, LLC (100% owned by CHLP)	Delaware
TRS JAX Court, LLC	Delaware
CDOR ATL Indy, LLC (100% owned by CHLP)	Delaware
TRS ATL Indy, LLC	Delaware
Spring Streel Hotel Property II LLC (Propco II) (80% owned by CHLP)	Delaware
Spring Street Hotel Opco II LLC (Opco II) (80% owned by TRS Leasing)	Delaware
CDOR KCI Loft, LLC (100% owned by CHLP)	Delaware
TRS KCI Loft, LLC	Delaware
CDOR LEX Lowry, LLC (100% owned by CHLP)	Delaware
TRS LEX Lowry, LLC	Delaware
CDOR MEM Southcrest, LLC (100% owned by CHLP)	Delaware
TRS MEM Southcrest, LLC	Delaware
CDOR AUS Louis, LLC (100% owned by CHLP)	Delaware

TRS AUS Louis, LLC	Delaware
CDOR ELP Edge, LLC (100% owned by CHLP)	Delaware
TRS ELP Edge, LLC	Delaware
CDOR AUS Casey, LLC (100% owned by CHLP)	Delaware
TRS AUS Casey, LLC	Delaware
CDOR CHS Holiday, LLC (100% owned by CHLP)	Delaware
TRS CHS Holiday, LLC	Delaware
CDOR MCO Village, LLC (100% owned by CHLP)	Delaware
TRS MCO Village, LLC	Delaware
CDOR TLH Magnolia, LLC (100% owned by CHLP)	Delaware
TRS TLH Magnolia, LLC	Delaware
TRS Springing Member, LLC	Delaware
TRS AUS Tech, LLC	Delaware
CDOR AUS Tech, LLC (100% owned by CHLP)	Delaware
Spring Street Hotel OpCo LLC (100% owned by Opco II)	Delaware
Spring Street Hotel Property LLC (100% owned by Propco II)	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Condor Hospitality Trust, Inc.:

We consent to the incorporation by reference in the registration statement (Nos. 333-180479 and333-220182) on Form S-3 and (No. 333-212264) on Form S-8 of Condor Hospitality Trust, Inc. (the Company) of our report dated March 19, 2018, with respect to the consolidated balance sheets of Condor Hospitality Trust, Inc. as of December 31, 2017 and 2016, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedule, Schedule III – Real Estate and Accumulated Depreciation (collectively, the consolidated financial statements), which report appears in the December 31, 2017 annual report on Form 10-K of Condor Hospitality Trust, Inc. 

(signed) KPMG LLP

McLean, Virginia
March 19, 2018

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, J. William Blackham, certify that:

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2017 of Condor Hospitality Trust, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 19, 2018	/s/ J. William Blackham
	J. William Blackham
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Jonathan J. Gantt, certify that:

1.	I have reviewed this annual report on Form 10-K for the year ended December 31, 2017 of Condor Hospitality Trust, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 19, 2018	/s/ Jonathan J. Gantt
	Jonathan J. Gantt
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Condor Hospitality Trust, Inc., on Form 10-K for the year ending December 31, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, J. William Blackham, Chief Executive Officer of Condor Hospitality Trust, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Condor Hospitality Trust, Inc. at the dates and for the periods indicated.
March 19, 2018			/s/ J. William Blackham
			J. William Blackham
			Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-K or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.1is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of The Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Condor Hospitality Trust, Inc., on Form 10-K for the year ending December 31, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Jonathan J. Gantt, Chief Financial Officer of Condor Hospitality Trust, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Condor Hospitality Trust, Inc. at the dates and for the periods indicated.
March19, 2018			/s/ Jonathan J. Gantt
			Jonathan J. Gantt
			Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-K or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.1is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Mar. 13, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Fiscal Period Focus	FY
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Entity Registrant Name	CONDOR HOSPITALITY TRUST, INC.
Entity Central Index Key	0000929545
Current Fiscal Year End Date	--12-31
Trading Symbol	cdor
Entity Filer Category	Smaller Reporting Company
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		11,934,429
Entity Public Float			$ 55.7

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Assets
Investment in hotel properties, net	$ 206,925	$ 79,231
Investment in unconsolidated joint venture	7,747	9,036
Cash and cash equivalents	5,441	8,326
Restricted cash, property escrows	4,894	5,350
Accounts receivable, net of allowance for doubtful accounts of $11 and $21	1,707	1,416
Prepaid expenses and other assets	3,220	1,666
Derivative assets, at fair value	391
Investment in hotel properties held for sale, net	12,655	35,640
Total Assets	242,980	140,665
Liabilities
Accounts payable, accrued expenses, and other liabilities	7,046	4,698
Dividends and distributions payable	2,470	1,125
Derivative liabilities, at fair value		8
Convertible debt, at fair value	1,069	1,315
Long-term debt, net of deferred financing costs	115,605	47,918
Long-term debt related to hotel properties held for sale, net of deferred financing costs	4,976	14,802
Total Liabilities	131,166	69,866
Shareholders' Equity
Common stock, $.01 par value, 200,000,000 shares authorized; 11,833,573 and 762,590 shares outstanding	118	8
Additional paid-in capital	230,727	118,655
Accumulated deficit	(130,489)	(112,024)
Total Shareholders' Equity	110,406	67,972
Noncontrolling interest in consolidated partnership (Condor Hospitality Limited Partnership), redemption value of $871 and $2,008	1,408	2,827
Total Equity	111,814	70,799
Total Liabilities and Equity	242,980	140,665
Series D Preferred Stock [Member]
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:		$ 61,333
Series E Preferred Stock [Member]
Shareholders' Equity
Preferred stock, 40,000,000 shares authorized:	$ 10,050

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Accounts receivable, allowance for doubtful accounts	$ 11	$ 21
Preferred stock, shares authorized	40,000,000	40,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares outstanding	11,833,573	762,590
Noncontrolling interest in consolidated partnership, redemption value	$ 871	$ 2,008
Series D Preferred Stock [Member]
Preferred stock, annual dividend rate		6.25%
Preferred stock, shares authorized		6,700,000
Preferred stock, par value		$ 0.01
Preferred stock, shares outstanding		6,245,156
Preferred stock, liquidation preference		$ 63,427
Series E Preferred Stock [Member]
Preferred stock, annual dividend rate	6.25%
Preferred stock, shares authorized	925,000
Preferred stock, par value	$ 0.01
Preferred stock, shares outstanding	925,000
Preferred stock, liquidation preference	$ 9,395

XML

Consolidated Statements Of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue
Room rentals and other hotel services	$ 55,453	$ 50,647	$ 58,714
Operating Expenses
Hotel and property operations	37,134	37,092	43,367
Depreciation and amortization	6,898	5,190	5,400
General and administrative	6,552	5,792	5,493
Acquisition and terminated transactions	1,250	550	684
Equity transactions	343		246
Total operating expenses	52,177	48,624	55,190
Operating income	3,276	2,023	3,524
Net gain on disposition of assets	6,807	23,132	4,798
Equity in earnings (loss) of joint venture	190	(244)
Net gain on derivatives and convertible debt	436	6,377	11,578
Other income (expense), net	(111)	55	114
Interest expense	(5,174)	(4,710)	(5,522)
Loss on debt extinguishment	(967)	(2,187)	(213)
Impairment loss, net	(2,151)	(1,477)	(3,829)
Earnings from continuing operations before income taxes	2,306	22,969	10,450
Income tax benefit (expense)	595	(125)
Earnings from continuing operations	2,901	22,844	10,450
Gain from discontinued operations, net of tax		678	3,872
Net earnings	2,901	23,522	14,322
Earnings attributable to noncontrolling interest	(20)	(727)	(1,197)
Net earnings attributable to controlling interests	2,881	22,795	13,125
Dividends declared and undeclared and in kind dividends deemed on preferred stock	(12,243)	(20,748)	(3,632)
Net earnings (loss) attributable to common shareholders	$ (9,362)	$ 2,047	$ 9,493
Earnings per Share
Continuing operations - Basic	$ (1.00)	$ 1.82	$ 8.06
Discontinued operations - Basic		0.85	4.55
Total - Basic Earnings (Loss) per Share	(1.00)	2.67	12.61
Diluted Earnings Per Share
Continuing operations - Diluted	(1.00)	0.78	(0.98)
Discontinued operations - Diluted		0.13	$ 0.98
Total - Diluted Earnings (Loss) per Share	$ (1.00)	$ 0.91

XML

Consolidated Statements Of Equity - USD ($) shares in Thousands, $ in Thousands	Series D Preferred Stock [Member] Accumulated Deficit [Member]	Series D Preferred Stock [Member] Parent [Member]	Series D Preferred Stock [Member]	Series E Preferred Stock [Member] Accumulated Deficit [Member]	Series E Preferred Stock [Member] Parent [Member]	Series E Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2014							$ 38	$ 7	$ 137,940	$ (118,983)	$ 19,002	$ 90	$ 19,092
Balance, shares at Dec. 31, 2014							3,803	722
Stock-based compensation								$ 3	143		143		143
Long-term incentive plan												142	142
Issuance of common stock								$ 1	345		346		346
Issuance of common stock, shares								35
Issuance of common units												450	450
Net earnings										13,125	13,125	1,197	14,322
Balance at Dec. 31, 2015							$ 38	$ 8	138,428	(105,858)	32,616	1,879	34,495
Balance, shares at Dec. 31, 2015							3,803	760
Stock-based compensation									134		134		134
Stock-based compensation, shares								3
Long-term incentive plan												171	171
Issuance of common units												50	50
Dividends and distributions declared: Common stock (per share)										(347)	(347)		(347)
Dividends and distributions declared: Preferred stock	$ (3,090)	$ (3,090)	$ (3,090)
Redemption of Series A and Series B Preferred							$ (8)		(7,390)	(5,107)	(12,505)		(12,505)
Redemption of Series A and Series B Preferred, shares							(803)
Exchange of Series C and issuance of Series D Preferred Stock							$ 61,303		(12,517)	(20,417)	28,369		28,369
Exchange of Series C and issuance of Series D Preferred Stock, shares							3,245
Net earnings										22,795	22,795	727	23,522
Balance at Dec. 31, 2016							$ 61,333	$ 8	118,655	(112,024)	67,972	2,827	70,799
Balance, shares at Dec. 31, 2016							6,245	763
Stock-based compensation								$ 1	1,151		1,152		1,152
Stock-based compensation, shares								94
Long-term incentive plan												85	85
Issuance of common stock						$ 1,210		$ 49	47,419		47,468		47,468
Issuance of common stock, shares								4,972
Issuance of common units												435	435
Dividends and distributions declared: Common stock (per share)										(9,103)	(9,103)		(9,103)
Dividends and distributions declared: Preferred stock	$ (650)	$ (650)	$ (650)	$ (483)	$ (483)	$ (483)
Dividends and distributions declared: Common units ($0.195 per share)												$ (18)	(18)
Fractional common shares settled in reverse stock split									(1)		(1)		(1)
Conversion of Series D Preferred to common stock and issuance of Series E Preferred Stock							$ (51,283)	$ 60	61,273	(11,110)	(1,060)		(1,060)
Conversion of Series D Preferred to common stock and issuance of Series E Preferred Stock, shares							(5,320)	6,005
Warrant exchange									$ 289		$ 289		289
Cancellation of LTIP units									1,941		1,941	(1,941)
Net earnings										2,881	$ 2,881	$ 20	2,901
Balance at Dec. 31, 2017							$ 10,050	$ 118	$ 230,727	$ (130,489)	$ 110,406	$ 1,408	$ 111,814
Balance, shares at Dec. 31, 2017							925	11,834

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Consolidated Statements Of Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements Of Equity [Abstract]
Dividends and distributions declared: Common stock, per share	$ 0.78	$ 0.455
Dividends and distributions declared: Common units, per unit	$ 0.00375

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net earnings	$ 2,901	$ 23,522	$ 14,322
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization expense	6,898	5,190	5,400
Net gain on disposition of assets	(6,807)	(23,813)	(7,794)
Net gain on derivatives and convertible debt	(436)	(6,377)	(11,578)
Equity in (earnings) loss of joint venture	(190)	244
Distributions from cumulative earnings of joint venture	51
Amortization of deferred financing costs	1,066	597	714
Loss on extinguishment of debt	967	2,187	213
Impairment loss, net	2,151	1,477	3,708
Stock-based compensation and long-term incentive plan expense	1,237	305	285
Warrant issuance costs	289	12	58
Provision for deferred taxes	(660)
Changes in operating assets and liabilities:
(Increase) decrease in assets	(879)	(244)	442
Increase (decrease) in liabilities	2,500	(432)	(800)
Net cash provided by operating activities	9,088	2,668	4,970
Cash flows from investing activities:
Additions to hotel properties	(2,814)	(3,446)	(3,853)
Deposit on hotel property and franchise fees	(810)
Investment in joint venture		(9,280)
Distributions in excess of cumulative earnings from joint venture	1,428
Hotel acquisitions	(122,269)	(22,450)	(42,592)
Net proceeds from sale of hotel assets	27,630	58,593	53,306
Net change in capital expenditure escrows	985	(1,475)	(1,463)
Net cash provided by (used in) investing activities	(95,850)	21,942	5,398
Cash flows from financing activities:
Deferred financing costs	(4,404)	(136)	(865)
Proceeds from long-term debt	174,000	26,123	85,772
Principal payments on long-term debt	(122,400)	(50,270)	(90,924)
Debt early extinguishment penalties	(454)	(1,752)
Proceeds from common stock issuance	47,468		346
Series A and B Preferred Stock redemption, including accumulated dividends		(20,167)
Series D Preferred Stock issuance		28,881
Series E Preferred Stock issuance costs	(1,210)
Cash dividends paid to common shareholders	(6,944)	(198)
Cash dividends paid to preferred shareholders	(1,965)	(3,598)
Contingent consideration paid subsequent to acquisition	(155)
Other items	(59)	(37)
Net cash provided by (used in) financing activities	83,877	(21,154)	(5,671)
Increase (decrease) in cash and cash equivalents	(2,885)	3,456	4,697
Cash and cash equivalents, beginning of year	8,326	4,870	173
Cash and cash equivalents, end of year	5,441	8,326	4,870
Supplemental cash flow information:
Interest paid, net of amounts capitalized	3,885	4,229	5,085
Income taxes paid	203	37
Schedule of noncash investing and financing activities:
Debt assumed in acquisitions	9,096		11,220
Fair value of operating partnership common units issued in acquisitions	435	50	$ 450
In kind dividends deemed on preferred stock	$ 9,900	$ 20,218

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Organization And Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Organization And Summary Of Significant Accounting Policies [Abstract]

Organization And Summary Of Significant Accounting Policies

NOTE 1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Condor Hospitality Trust, Inc. (“Condor”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. Condor is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels.  As of December 31, 2017, the Company owned 18 hotels in nine states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).  References to the “Company”, “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including as the context requires, our direct and indirect subsidiaries.

The Company, through its wholly owned subsidiary, Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (the “operating partnership”), and serves as its general partner.  The operating partnership, including its various subsidiary partnerships, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of 16 properties held by TRS Leasing, Inc.) and conducts all of its operations.  At December 31, 2017, the Company owned 99.3% of the common operating units (“common units”) of the operating partnership with the remaining common units owned by other limited partners.  The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, the operating partnership and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. 

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters of the year.  The results of the hotels acquired in and since 2015 (see Note 3), because of their locations and chain scale, are less seasonal in nature than our legacy portfolio of assets.

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. general accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of the operating partnership and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the periods presented. Certain amounts in the notes to the consolidated financial statements may be slightly different than previously reported due to rounding of fractional shares as a result of the reverse stock split.

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period.  Actual results could differ from those estimates.  Because the state of the economy and of the real estate market can significantly impact hotel operational performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method.  Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, 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 affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the statements of cash flows using the cumulative earnings approach.  Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture.  Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold in any period presented, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

At the end of each reporting period, if the fair value of the held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the subsequent decision not to sell.

Historically, we have presented the results of operations of hotel properties that have been sold or considered held for sale as discontinued operations.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 change the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted the pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Gains on the sale of real estate are recognized when a property is sold, provided that the profit is determinable, meaning that collectability of the sales price is reasonably assured or can be estimated, and that the earnings process is complete, meaning that the seller is not obligated to perform significant activities after the sale in order to earn the profit.If these criteria are not met, the timing of the sale is determined based on various criteria related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the property. If the sales criteria are not met, the gain is deferred and the finance, installment, or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent we sell a property and retain a partial ownership interest in the property, we generally recognize a gain to the extent of the third party ownership interest.

Cash and Cash Equivalents

Cash and cash equivalents includes cash and highly liquid investments with original maturities of three months or less when acquired, and are carried at cost which approximates fair value. The Company maintained a major portion of its deposits with Huntington Bancshares Incorporated at December 31, 2017 and Great Western Bank, a Nebraska Corporation, at December 31, 2016.  The balances on deposit at Huntington Bancshares Incorporated and Great Western Bank may at times exceed the federal deposit insurance limit, however, management believes that no significant credit risk exists with respect to the uninsured portion of these cash balances.

Restricted Cash

Restricted cash consists of cash held in escrow for the replacement of furniture and fixtures or for real estate taxes and property insurance as required under certain loan agreements.  For purposes of the statements of cash flows, changes in restricted cash caused by changes in required reserves for real estate taxes or property insurance are shown as operating activities. Changes in restricted cash caused by changes in required reserves for the replacement of furniture and fixtures are shown as investing activities.

Deferred Financing Costs

Direct costs incurred in financing transactions are capitalized as deferred financing costs and amortized to interest expense over the term of the related loan using the effective interest method.  Deferred financing costs are presented on the balance sheets as a direct deduction from the associated debt liability.

Derivative Assets and Liabilities

In the normal course of business, the Company is exposed to the effects of interest rate changes, and the Company may enter into derivative instruments including interest rate swaps, caps, and collars to manage or economically hedge interest rate risk.  Additionally, the Company is required to include on the balance sheets certain bifurcated embedded derivative instruments such as conversion and redemption features in convertible instruments and certain common stock warrants.

All derivatives recognized by the Company are reported as derivative assets and liabilities on the balance sheets and are adjusted to their fair value at each reporting date.  Realized and unrealized gains and losses on derivative instruments are included in net gain on derivatives and convertible debt with the exception of realized gains and losses related to interest rate instruments which are included in interest expense on the statements of operations.

Noncontrolling Interest

Noncontrolling interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership and long-term incentive plan (“LTIP”) units (see Note 12).  Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the operating partnership during the period. 

Revenue Recognition

Revenue consists of amounts derived from hotel operations, including the sale of rooms, food and beverage, and other ancillary amenities.  Revenue from the operation of the hotel properties is recognized when rooms are occupied and services have been rendered.  Sales, use, occupancy, and similar taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the statements of operations.

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code 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, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will be unable to re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT, unless we satisfy certain relief provisions.  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.  Except with respect to the TRS, the Company does not believe that it will be liable for significant federal or state income taxes in future years.

A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS 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 and their respective tax bases and for operating loss and tax credit carryforwards 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 projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

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 resolution of any related appeals or litigation processes, based on its 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 to the uncertain tax position by the applicable taxing authority or by expiration of the applicable statute of limitations. For the years ended December 31, 2017, 2016, and 2015, the Company did not record any uncertain tax positions.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain assets, liabilities, and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3: Unobservable inputs for which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions or valuation techniques may have a material effect on estimated fair value measurements.  We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings.  This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 (see Note 7).

Stock-Based Compensation

Stock-based compensation is measured at the fair value of the award on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. Awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement. Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock and as noncontrolling interest for LTIP awards of common units.  The Company has elected to account for forfeitures of stock-based compensation as they occur.

Recently Adopted Accounting Standards

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies certain of the criteria for determining whether derivative features in a hybrid financial instrument should be separately recognized.  ASU 2014-16 is effective for fiscal years beginning after December 15, 2015 and permits either a retrospective or cumulative effect transition method.  ASU 2014-16 was adopted by the Company on January 1, 2016 and was utilized in determining the accounting for the 6.25% Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) issued in March 2016 and the 6.25% Series E Cumulative Preferred Stock (“Series E Preferred Stock”) issues in March 2017 (see Note 10).

In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance effecting both the VIE and VOE consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Company adopted this standard on January 1, 2016 and concluded that the operating partnership now meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company continues to consolidate the operating partnership. The Company’s sole significant asset is its investment in the operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the operating partnership. All of the Company’s debt is an obligation of the operating partnership.  This ASU was also used in the determination of the accounting for the Atlanta JV entered into in August 2016 (see Note 5).

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheets as a direct deduction from the associated debt liability.  The Company adopted this standard on January 1, 2016 and presents all debt issuance costs as a direct deduction from the carrying value of the debt liability. Adoption of this standard was applied retrospectively for all periods presented, effecting only the presentation of the balance sheets. The adoption of this standard did not have a material impact on the Company's financial position and had no impact on the results of operations or cash flows.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaces most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard is effective for the Company on January 1, 2018.  The Company has adopted ASU 2014-09 for the year beginning on January 1, 2018.   The standard permits the use of either the retrospective or cumulative effect transition method.  The Company has evaluated each of its revenue streams under the new model. Based on our assessments, the adoption of this standard will not materially affect the amount and timing of revenue recognition for revenues from rooms, food and beverage, and other ancillary amenities. The Company has adopted this standard for the year beginning on January 1, 2018 using the modified retrospective approach and is evaluating disclosure requirements.  Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of our accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted.  The Company has adopted ASU 2016-15 for the year beginning on January 1, 2018.  The adoption of ASU 2016-15 will not have a material impact on our consolidated financial statements. 

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted cash equivalents in the statement of cash flows. This guidance is effective for the Company for years beginning afterDecember 15, 2017, including interim periods within those years. Early adoption is permitted.  The Company has adopted ASU 2016-18 for the year beginning on January 1, 2018.  The adoption of ASU No. 2016-18 will change the presentation of the statements of cash flows for the Company and we will utilize a retrospective transition method for each period presented within the consolidated financial statements for periods subsequent to the date of adoption.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.  The Company has adopted ASU 2017-01 for the year beginning on January 1, 2018. 

Reclassifications

Certain amounts in prior year financial statements have been reclassified to conform to current year presentation.

Liquidity

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our $150,000 secured revolving credit facility (the “credit facility”), and the release of restricted cash by our lenders upon the satisfaction of usage requirements.  At December 31, 2017, the Company had $5,441 of cash and cash equivalents on hand and $11,934 of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to December 31, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1,381 through March 31, 2019.  We also presently expect to invest approximately $4,000 to $5,000 in capital expenditures related to hotel properties we currently own through March 31, 2019.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility.  

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Investment In Hotel Properties

12 Months Ended

Dec. 31, 2017

Investment In Hotel Properties [Abstract]

Investments In Hotel Properties

NOTE 2.  INVESTMENT IN HOTEL PROPERTIES

Investments in hotel properties consisted of the following at December 31:

	As of December 31,
	2017						2016
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	1,633	$	20,216	$	21,849	$	4,727	$	11,685	$	16,412
Buildings, improvements, vehicle		13,143		182,909		196,052		40,006		68,677		108,683
Furniture and equipment		3,463		17,840		21,303		9,330		8,011		17,341
Initial franchise fees		118		1,528		1,646		359		503		862
Construction-in-progress		2		276		278		55		31		86
Investment in hotel properties		18,359		222,769		241,128		54,477		88,907		143,384
Less accumulated depreciation		(5,704)		(15,844)		(21,548)		(18,837)		(9,676)		(28,513)
Investment in hotel properties, net	$	12,655	$	206,925	$	219,580	$	35,640	$	79,231	$	114,871

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Acquisition Of Hotel Properties

12 Months Ended

Dec. 31, 2017

Acquisition Of Hotel Properties [Abstract]

Acquisition Of Hotel Properties

NOTE 3.  ACQUISITION OF HOTEL PROPERTIES

During the year ended December 31, 2017, the Company acquired seven wholly owned hotel properties.  The allocation of the purchase price based on fair valuewas as follows:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt at acquisition (2)		Issuance of common units (3)		Net cash paid
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Fairfield Inn & Suites	08/31/2017		1,014		14,297		1,089		-		-		16,400		16,336		64		-
EL Paso, TX
Residence Inn	08/31/2017		1,495		19,630		1,275		-		-		22,400		22,314		86		-
Austin, TX
Total		$	8,531	$	113,929	$	9,397	$	98	$	(155)	$	131,800	$	121,513	$	435	$	9,852

(1) The Lake Mary purchase price was subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieved a stipulated hotel net operating income level in 2017.  This contingent consideration was included in the purchase price allocation at its estimated fair value on the date of the acquisition.  The full amount of $250 was paid to the seller in December of 2017 with the incremental amount paid over the estimated fair value included in acquisition and terminated transactions expenses.

(2) Debt of $9,096 with Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 was assumed related to the Home2 Suites Southaven, MS acquisition. This loan remains outstanding at December 31, 2017. All other debt was drawn from the credit facility at acquisition.

(3) Total issuance of 1,940,451 common units.

Included in the consolidated statement of operations for the year ended December 31, 2017 are total revenues of $17,455 and total operating income of $4,508 which represent the results of operations for the seven hotels acquiredin 2017 since the date of acquisition.

In addition to the property acquired through the Atlanta JV (see Note 5), during the year ended December 31, 2016, the Company acquired one wholly-owned hotel, the Aloft Leawood / Overland Park (Kansas City).  The allocation of the purchase price based on fair valuewas as follows:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Total purchase price		Debt at acquisition (1)		Issuance of common units (2)		Net cash paid
Aloft	12/14/2016	$	3,339	$	18,046	$	1,115	$	22,500	$	15,925	$	50	$	6,525
Leawood, KS

(1) The acquisition was funded with the proceeds of two mortgage loans provided by Great Western Bank totaling $15,925.  These loans remain outstanding at December 31, 2017.

(2) Total issuance of 213,904 common units.

Included in the consolidated statement of operations for the year ended December 31, 2016 are total revenues of $222 and total operating income of $1 which represent the results of operations for the one wholly-owned hotelacquired in 2016 since the date of acquisition.

During the year ended December 31, 2015, the Company acquired three wholly-owned hotel properties.  The allocation of the purchase price based on fair value was as follows:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Total purchase price		Debt at acquisition (1)		Issuance of common units (2)		Net cash paid (3)
Hotel Indigo	10/2/2015	$	800	$	8,700	$	1,500	$	11,000	$	5,000	$	150	$	5,850
Atlanta, GA
Marriott Courtyard	10/2/2015		2,100		11,050		850		14,000		10,100		150		3,750
Jacksonville, FL
SpringHill Suites	10/1/2015		1,597		14,353		1,550		17,500		11,220		150		6,130
San Antonio, TX
Total		$	4,497	$	34,103	$	3,900	$	42,500	$	26,320	$	450	$	15,730

(1) These acquisitions were funded with the assumption of one loan from Latitude with an aggregate outstanding principal balance of $11,220 and two newly originated GE Capital loans totaling $15,100 (subsequently sold to Western Alliance Bank in April 2016).  These loans were refinanced with a loan from Wells Fargo in 2017.

(2) Total issuance of 2,298,879 common units.

(3) Includes $830 funded by borrowings from the Company’s then existing credit facility with Great Western Bank.

Included in the consolidated statement of operations for the year ended December 31, 2015 are total revenues of $2,611 and total operating income of $356 which represent the results of operations for the three hotelsacquired in 2015 since the date of acquisition.

All purchase price allocations were determined using Level 3 fair value inputs.

As discussed further in the Subsequent Events footnote (see Note 17), subsequent to December 31, 2017, the Company closed on the acquisition of two hotels, the TownePlace Suites Austin North Tech Ridge and the Home2 Suites Summerville / Charleston.

Pro Forma Results (Unaudited)

The following condensed pro forma financial data is presented as if all acquisitions completed during the year ended December 31, 2017 were completed on January 1, 2016 and all acquisitions completed in 2016, including that completed by the Atlanta JV (see Note 5), had been completed on January 1, 2015.  Supplemental pro forma earnings were adjusted to exclude all acquisition expenses recognized in the periods presented as if these acquisition costs had been incurred in prior periods but were not adjusted to remove the results of hotels sold during the periods.  Results for periods prior to the Company’s ownership are based on information provided by the prior owners, adjusted for differences in interest expense, depreciation expense, and management fees following the Company’s ownership and have not been audited or reviewed by our independent auditors.  All hotels were in operation for all periods presented with the exception of the Residence Inn Austin which opened on August 3, 2016.  The condensed pro forma financial data is not necessarily indicative of what the actual results of operations of the Company would have been assuming the acquisitions had been consummated on January 1, 2016 or 2015, nor do they purport to represent the results of operations for future periods.

	Years ended December 31,
	2017		2016
Total revenue	$	66,894	$	81,439
Operating income	$	7,204	$	9,156
Net earnings (loss) attributable to common shareholders	$	(7,497)	$	3,877
Net earnings (loss) per share - Basic	$	(0.79)	$	5.09
Net earnings (loss) per share - Diluted	$	(0.79)	$	1.26

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Dispositions Of Hotel Properties And Discontinued Operations

12 Months Ended

Dec. 31, 2017

Dispositions Of Hotel Properties And Discontinued Operations [Abstract]

Dispositions Of Hotel Properties And Discontinued Operations

NOTE 4: DISPOSITION OF HOTEL PROPERTIES AND DISCONTINUED OPERATIONS

As of December 31, 2017, the Company had three hotels classified as held for sale. At the beginning of 2017, the Company had seven hotels held for sale and during the year classified an additional four hotels as held for sale. Eight of these hotels were sold during 2017.  None of the hotels reclassified as held for sale since the Company’s adoption of ASU 2014-08 on October 1, 2014 represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results.  As a result, only hotels classified as held for sale prior to October 1, 2014 (excluding those subsequent reclassified as held for use),  the last of which was sold in January 2016, are included in discontinued operations with all other hotels, including those subsequently sold or classified as held for sale, reported in continuing operations.

In 2017,  2016, and 2015, the Company sold eight hotels, 25 hotels, and 17 hotels, respectively, resulting in total gains of $7,049,  $24,256, and $7,759, respectively, of which $7,049,  $23,575, and $4,996, respectively, was included in continuing operations.  As discussed further in the Subsequent Events footnote (see Note 17), subsequent to December 31, 2017, the Company closed on the disposition of two hotels.

Included in these 2015 sales were two hotels in Alexandria, Virginia that were sold on July 13, 2015 for a combined gross sales price of $19,000.  These hotels represent a significant disposition,and as such, their operating results are disclosed.  The Alexandria Comfort Inn and Days Inn hotels had a  combined net lossof $665for the year ended December 31, 2015. Net loss for the year ended December 31, 2015 includes impairment expense of $1,020 which was recognized following the hotels classification as held for sale. Loss attributable to noncontrolling interest related to these properties for the year ended December 31, 2015 was$3.

The Company allocates interest expense to discontinued operations for debt that is to be assumed or that is required to be repaid as a result of the disposal transaction. The following table sets forth the components of discontinued operations for the years ended December 31, 2016 and 2015:

	2016		2015
Revenue	$	6	$	2,923
Hotel and property operations expense		(4)		(1,946)
Net gain on dispositions of assets		681		2,997
Interest expense		(5)		(223)
Impairment recovery (loss)		-		121
	$	678	$	3,872
Capital expenditures	$	-	$	90

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Investment In Unconsolidated Joint Venture

12 Months Ended

Dec. 31, 2017

Investment In Unconsolidated Joint Venture [Abstract]

Investment In Unconsolidated Joint Venture

NOTE 5.  INVESTMENT IN UNCONSOLIDATED JOINT VENTURE

On August 1, 2016, the Company entered into a joint venture with Three Wall Capital LLC and certain of its affiliates (“TWC”) to acquire an Aloft hotel in downtown Atlanta, Georgia.  The Company accounts for the Atlanta JV under the equity method.  The Company owns 80% of the Atlanta JV with TWC owning the remaining 20%.  The Atlanta JV is comprised of two companies: Spring Street Hotel Property II LLC, of which our operating partnership indirectly owns an 80% equity interest, and Spring Street Hotel OpCo II LLC, of which our TRS indirectly owns an 80% equity interest.  TWC owns the remaining 20% equity interest in these two companies.

On August 22, 2016, the Atlanta JV closed on the acquisition of the Atlanta Aloft for a purchase price of $43,550, subject to working capital and similar adjustments.  The purchase price was allocated by the Atlanta JV based on fair value, which was determined using Level 3 fair value inputs, as documented in the table below:

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Land option (1)		Total purchase price		Debt at acquisition		Net cash paid
Aloft	08/22/2016	$	13,025	$	34,048	$	2,667	$	(6,190)	$	43,550	$	33,750	$	9,800
Atlanta, GA

(1) The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for ten years at less than market rates

The purchase price for the Atlanta Aloft was paid with $9,800 in cash, of which $7,840 was contributed by Condor and $1,960 was contributed by TWC, and $33,750 of proceeds from a term loan secured by the property.  Condor additionally contributed $1,440 and TWC additionally contributed $360 to the Atlanta JV to cover acquisition costs and to provide working capital to the entity.  The term loan, obtained from LoanCore Capital Credit REIT LLC, has an initial term of 24 months with three12-month extension periods which may be exercised at the Atlanta JV’s option subject to certain conditions and fees.  The interest rate is a floating rate calculated on the one-month LIBOR plus 5.0%, and as a condition to closing, the Atlanta JV purchased a LIBOR cap of 3.0%.  This loan remains outstanding at December 31, 2017 and has a current interest rate of6.5%.  The loan is non-recourse to the Atlanta JV, subject to specified exceptions.  The loan is also non-recourse to Condor, except for certain customary carve-outs which are guaranteed by the Company.

Under the Atlanta JV agreement, the Atlanta JV is managed by TWC in accordance with business plans and budgets approved by both partners.  Major decisions as detailed in the agreement also require joint approval.  Condor may remove TWC as manager of the Atlanta JV and appoint a new manager only upon the occurrence of certain events.  The Atlanta Aloft hotel is managed by Boast Hotel Management Company LLC (“Boast”), an affiliate of TWC.  The Atlanta JV paid to Boast total management fees of $348 and $110 during the years ended December 31, 2017 and 2016, respectively.

Net cash flow from the Atlanta JV is distributed each fiscal year first with a 10% preferred return on capital contributions to Condor, second with a 10% preferred return on capital contributions to TWC, and third with any remainder distributed to the partners based on their pro-rata equity ownership. Profits are allocated in the same proportion as net cash flow.  Losses are allocated based on pro-rata equity ownership. Cash distributions totaling $1,479 were received by the Company from the Atlanta JV during the year ended December 31, 2017.  The Atlanta JV agreement also includes buy-sell rights for both members (generally after three years of hotel ownership for Condor and after five years for TWC) and Condor has a purchase option for TWC’s Atlanta JV ownership interest exercisable between the third and fifth anniversary of the hotel closing.

The following tables represent the total assets, liabilities, equity, and components of net income (loss), including the Company’s share, of the Atlanta JV as of and for the years ended December 31, 2017 and 2016:

	As of December 31,
	2017		2016
Investment in hotel properties, net	$	48,013	$	49,305
Cash and cash equivalents		1,404		1,184
Restricted cash, property escrows		682		464
Accounts receivable, prepaid expenses, and other assets		176		320
Total Assets	$	50,275	$	51,273
Accounts payable, accrued expenses, and other liabilities	$	1,019	$	633
Land option liability		6,190		6,190
Long-term debt, net of deferred financing costs		33,382		33,155
Total Liabilities		40,591		39,978
Condor equity		7,747		9,036
TWC equity		1,937		2,259
Total Equity		9,684		11,295
Total Liabilities and Equity	$	50,275	$	51,273

	Year ended December 31,
	2017		2016
Revenue
Room rentals and other hotel services	$	11,582	$	3,703
Operating Expenses
Hotel and property operations		7,585		2,457
Depreciation and amortization		1,425		471
Acquisition		-		299
Total operating expenses		9,010		3,227
Operating income		2,572		476
Net loss on disposition of assets		(8)		(2)
Net loss on derivative		(3)		(6)
Interest expense		(2,323)		(773)
Net earnings (loss)	$	238	$	(305)
Condor allocated earnings (loss)	$	190	$	(244)
TWC allocated earnings (loss)		48		(61)
Net earnings (loss)	$	238	$	(305)

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Long-Term Debt

12 Months Ended

Dec. 31, 2017

Long-Term Debt [Abstract]

Long-Term Debt

NOTE 6.  LONG-TERM DEBT

Long-term debt related to wholly owned properties, including debt related to hotel properties held for sale, consisted of the following loans payable at December 31:

Lender	Balance at December 31, 2017		Interest rate at December 31, 2017	Maturity	Amortization provision	Properties encumbered at December 31, 2017	Balance at December 31, 2016
Fixed rate debt
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18	$	8,987	4.54%	08/2024	25 years	1	$	-
Great Western Bank (1)		13,950	4.33%	12/2021 (13)	25 years	1		14,326
Great Western Bank (1)		1,380	4.33%	12/2021 (13)	7 years	-		1,599
Western Alliance Bank		-	(2)	02/2017	15 years	-		4,806
Western Alliance Bank		-	(3)	02/2018	15 years	-		2,803
Cantor Commercial Real Estate Lending		-	(4)	11/2017	30 years	-		5,713
Morgan Stanley Mortgage Capital Holdings, LLC		-	(5)	12/2017	25 years	-		912
Total fixed rate debt		24,317						30,159
Variable rate debt
Wells Fargo		26,465	4.44% (6)	11/2022 (14)	30 years	3		-
KeyBank credit facility (7)		73,303	4.55% (8)	03/2020 (15)	Interest only	12		-
Western Alliance Bank		-	(9)	11/2020	25 years	-		4,882
Western Alliance Bank		-	(9)	11/2020	25 years	-		9,863
The Huntington National Bank		-	(10)	11/2020	25 years	-		7,361
LMREC 2015 - CREI, Inc. (Latitude)		-	(11)	05/2018	$12 monthly (12)	-		11,124
Total variable rate debt		99,768				17		33,230
Total long-term debt	$	124,085					$	63,389
Less: Deferred financing costs		(3,504)						(669)
Total long-term debt, net of deferred financing costs		120,581						62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $174 and $168		(4,976)						(14,802)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,330 and $501	$	115,605					$	47,918

(1) Both loans are collateralized by Aloft Leawood

(2) Fixed rate of 7.17% prior to extinguishment with origination of credit facility on March 1, 2017

(3) Fixed rate of 4.75% prior to extinguishment with origination of credit facility on March 1, 2017

(4) Fixed rate of 4.25% prior to extinguishment with origination of credit facility on March 1, 2017

(5) Fixed rate of 5.83% prior to extinguishment with origination of credit facility on March 1, 2017

(6) Variable rate of 30-day LIBOR plus 2.39%, effectively fixed at 4.44% after giving effect to interest rate swap (see Note 8)

(7) Total unused availability under this credit facility was $11,934 at December 31, 2017; commitment fee on unused facility is 0.20%

(8) Borrowings under the facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage); 30-day LIBOR for $50,000 notional effectively capped at 2.5% after giving effect to interest rate cap (see Note 8)

(9) Variable rate of 90-day LIBOR plus 3.25% prior to extinguishment with origination of Wells Fargo debt on October 4, 2017

(10) Variable rate of 30-day LIBOR plus 2.25%, effectively fixed at 4.13% after giving effect to interest rate swap (see Note 8) prior to extinguishment with origination of credit facility on March 1, 2017

(11) Variable rate of 30-day LIBOR plus 6.25%,30-day LIBOR capped at 1.0% after giving effect to interest rate cap (see Note 8) prior to extinguishment with origination of credit facility on March 1, 2017

(12) $12 monthly payments began May 2016

(13) Term may be extended for additional two years subject to interest rate adjustments

(14) Two one-year extension options subject to the satisfaction of certain conditions

(15) Two one-year extension options available subject to certain conditions including the completion of specific capital achievements

At December 31, 2017, we had long-term debt of $118,935 associated with assets held for use with a weighted average term to maturity of 3.2 years and a weighted average interest rate of4.50%.  Of this total, at December 31, 2017, $24,317 was fixed rate debt with a weighted average term to maturity of 2.4 years and a weighted average interest rate of 4.41% and 94,618 was variable rate debt with a weighted average term to maturity of 4.1 years and a weighted average interest rate of4.52%.  At December 31, 2016, we had long-term debt of $48,419 associated with assets held for use with a weighted average term to maturity of 3.2 years and a weighted average interest rate of 4.94%.  Of this total, at December 31, 2016, $22,550 was fixed rate debt with a weighted average term to maturity of 3.7 years and a weighted average interest rate of  4.41% and $25,869 was variable rate debt with a weighted average term to maturity of 2.8 years and a weighted average interest rate of 5.39%.

Debt is classified as held for sale if the properties collateralizing it are held for sale. Debt associated with assets held for sale is classified in the table below based on its contractual maturity although the balances are expected to be repaid within one year upon the sale of the related hotel properties.  Aggregate annual principal payments on debt for the next five years and thereafter are as follows:

	Held for sale		Held for use		Total
2018	$	-	$	1,083	$	1,083
2019		-		1,183		1,183
2020		5,150		69,385		74,535
2021		-		14,344		14,344
2022		-		24,886		24,886
Thereafter		-		8,054		8,054
Total	$	5,150	$	118,935	$	124,085

Financial Covenants

We are required to satisfy various financial covenants within our debt agreements, including the following financial covenants within our credit facility:

· Leverage Ratio: The ratio of consolidated total indebtedness to consolidated total asset value cannot exceed 60%. When the first extension option becomes effective, the foregoing leverage ratio will no longer be applicable, and in lieu thereof, the ratio of consolidated total indebtedness to adjusted consolidated earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the most recently ended four fiscal quarters cannot exceed 6.25 to 1.

· Secured Leverage Ratio: The ratio of consolidated secured indebtedness (excluding the credit facility) to consolidated total asset value cannot exceed 40%.

· Fixed Charge Coverage Ratio: The ratio of adjusted consolidated EBITDA for the most recently ended four fiscal quarters to consolidated fixed charges for the most recently ended four fiscal quarters cannot be less than 1.50 to 1.

· Tangible Net Worth: Consolidated tangible net worth cannot be less than $55 million plus 80% of net offering proceeds.

· Unhedged Variable Rate Debt: Consolidated unhedged variable rate debt cannot exceed 25% of consolidated total asset value.

· Distributions: The Company is permitted to make distributions during any period of four fiscal quarters in an aggregate amount of up to 95% of funds available for distribution.

Certain of the terms used in the foregoing descriptions of the financial covenants within our credit facility have the meanings given to them in the credit facility, and certain of the financial covenants are subject to pro forma adjustments for acquisitions and sales of hotel properties and for specific capital events.

As of December 31, 2017, we were in compliance with our financial covenants.

If we fail to pay our indebtedness when due, fail to comply with covenants or otherwise default on our loans, unless waived, we could incur higher interest rates during the period of such loan defaults, be required to immediately pay our indebtedness, and ultimately lose our hotels through lender foreclosure if we are unable to obtain alternative sources of financing with acceptable terms. Our credit facility contains cross-default provisions which would allow the lenders under our credit facility to declare a default and accelerate our indebtedness to them if we default on our other loans and such default would permit that lender to accelerate our indebtedness under any such loan. As of December 31, 2017, we are not in default of any of our loans.

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Convertible Debt At Fair Value

12 Months Ended

Dec. 31, 2017

Convertible Debt At Fair Value [Abstract]

Convertible Debt At Fair Value

NOTE 7: CONVERTIBLE DEBT AT FAIR VALUE

As part of an agreement entered into on March 16, 2016 (the “Exchange Agreement”) with Real Estate Strategies, L.P. (“RES”) (see Note 10), the Company issued to RES a Convertible Promissory Note (the “Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012 initially convertible into shares of Series D Preferred Stock, which could be subsequently converted into 97,269 shares of common stock.  Following the conversion of all of the outstanding Series D Preferred Stock into common stock and the issuance of the Series E Preferred Stock on March 1, 2017, the Note was amended to be convertible directly into 97,269 shares of common stock at any time at the option of RES or automatically when the Series E Preferred Stock is required to be converted or is redeemed in whole (see Note 10).  The Note is not convertible to the extent that a conversion would cause RES, together with its affiliates, to beneficially own more than 49% of the voting stock of the Company at the time of the conversion.  Any conversion reduces the principal amount of the Note proportionally.

The Company has made an irrevocable election to record this Note in its entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of this Note. As such, gains and losses on the Note are included in net gain on derivatives and convertible debt within net earnings each reporting period. Gains (losses) related to this Note were recognized totaling $246 and ($303) during the years ended December 31, 2017 and 2016, respectively.  The fair value of the Note is determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options and is considered a Level 3 fair value measurement.  The fair value of the Note on the date of issuance was determined to be equal to its principal amount. Interest expense related to this Note is recorded separately from other changes in its fair value within interest expense each period.

The following table represents the difference between the fair value and the unpaid principal balance of the Note as of December 31, 2017:

	Fair value as of December 31, 2017		Unpaid principal balance as of December 31, 2017		Fair value carrying amount (over)/under unpaid principal
6.25% Convertible Debt	$	(1,069)	$	(1,012)	$	(57)

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Fair Value Measurements And Derivative Instruments

12 Months Ended

Dec. 31, 2017

Fair Value Measurements And Derivative Instruments [Abstract]

Fair Value Measurements And Derivative Instruments

NOTE 8: FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS

Our determination of fair value measurements is based on the assumptions that market participants would use in pricing the asset or liability. At December 31, 2017, the Company’s convertible debt (see Note 7) and certain derivative instruments were the only financial instruments measured in the consolidated financial statements at fair value on a recurring basis.  Nonrecurring fair value measurements were utilized in the determination of the fair value of acquired hotel properties and related assumed debt in 2017, 2016, and 2015 (see Note 3), the acquisition accounting performed by the Atlanta JV in 2016 (see Note 5), in accounting for the equity transactions that occurred in March 2016 and 2017 (see Note 10), in the valuation of stock-based compensation grants (see Note 12), and in the valuation of impaired hotels during the years ended December 31, 2017, 2016, and 2015.

Derivative Instruments

Currently, the Company uses derivatives, such as interest rate swaps and caps, to manage its interest rate risk.  The fair value of interest rate positions is determined using the standard market methodology of netting the discounted expected future cash receipts and payments. Variable interest rates used in the calculation of projected receipts and payments on the positions are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.  Derivatives expose the Company to credit risk in the event of non-performance by the counterparties under the terms of the agreements.  The Company believes it minimizes this credit risk by transacting with major creditworthy financial institutions.  These interest rate positions at December 31, 2017 and 2016 are as follows:

Associated debt	Type	Terms	Effective Date	Maturity Date	Notional amount at December  31, 2017		Notional amount at December 31, 2016
Wells Fargo	Swap	Swaps 30-day LIBOR for fixed rate of 2.053%	11/2017	11/2022	$	26,465 (1)	$	-
Credit facility	Cap	Caps 30-day LIBOR at 2.50%	03/2017	03/2019	$	50,000	$	-
Huntington	Swap	Swaps 30-day LIBOR + 2.25% for fixed rate of	11/2015	11/2020	$	-	$	7,361 (1)
		4.13 %; cancellable at Company's option anytime
		after 11/01/2018 without penalty
Latitude	Cap	Caps 30-day LIBOR at 1.0%	03/2016	06/2017	$	-	$	11,124 (1)

(1) Notional amounts amortize consistently with the principal amortization of the associated loans

Additionally, prior to the execution of the Exchange Agreement (see Note 10) on March 16, 2016 which extinguished the instrument, the Company was required to bifurcate and include on the balance sheet at fair value the embedded conversion option in the 6.25% Series C Cumulative Convertible Preferred Stock (“Series C Preferred Stock”) due to the presence of an antidilution provision that required an adjustment in the common stock conversion ratio should subsequent issuances of the Company’s common stock be issued below the instrument’s original conversion price.

Similarly, prior to the execution of the Exchange Agreement, the terms of the common stock warrants issued to the holders of the Series C Preferred Stock (see Note 10) also included an antidilution provision that required a reduction in the warrant’s exercise price should the conversion ratio of the Series C Preferred Stock be adjusted due to antidilution provisions. Accordingly, the warrants did not qualify for equity classification, and, as a result, the fair value of the derivative was shown as a derivative liability on the balance sheets. With the execution of the Exchange Agreement, this provision of these warrants was effectively eliminated and the conversion price was locked permanently.  Following this modification of terms, the warrants qualified for equity classification and were reclassified to additional paid-in capital at their fair value of $611 on the date of the modification.

The fair value of these derivative liabilities recognized in connection with the Series C Preferred Stock were determined using the Monte Carlo simulation method. The Monte Carlo simulation method is a generally accepted statistical method used to generate a defined number of stock price paths in order to develop a reasonable estimate of the range of future expected stock prices of the Company and its peer group and minimize standard error and is considered a Level 3 fair value measurement.  

Included in the Series E Preferred Stock issued on March 1, 2017 is a redemption right that allows the Company to redeem up to a total of 490,250 shares of Series E Preferred Stock for specific percentages of its liquidation preference (see Note 10).  This option requires bifurcation and was determined to be an asset with a fair value on the date of issuance of $150 using a trinomial lattice-based model, considered a Level 3 fair value measurement.

All derivatives recognized by the Company are reported as either derivative assets or liabilities on the balance sheets and are adjusted to their fair value at each reporting date.  All gains and losses on derivative instruments are included in net gain on derivatives and convertible debt and with the exception of realized gains and losses related to the interest rate instruments, which are included in interest expense on the statements of operations. Net gains of $190,  $6,680, and $11,578 were recognized related to derivative instruments for the years ended December 31, 2017, 2016, and 2015, respectively.

Recurring Fair Value Measurements

The following tables provide the fair value of the Company’s financial assets and (liabilities) carried at fair value and measured on a recurring basis:

	Fair value at December 31, 2017		Level 1		Level 2		Level 3
Interest rate derivatives	$	77	$	-	$	77	$	-
Series E Preferred embedded redemption option		314		-		-		314
Convertible debt		(1,069)		-		-		(1,069)
Total	$	(678)	$	-	$	77	$	(755)

	Fair value at December 31, 2016		Level 1		Level 2		Level 3
Interest rate derivatives	$	(8)	$	-	$	(8)	$	-
Convertible debt		(1,315)		-		-		(1,315)
Total	$	(1,323)	$	-	$	(8)	$	(1,315)

There were no transfers between levels during the years ended December 31, 2017, 2016, or 2015.

The following tables present a reconciliation of the beginning and ending balances of items measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related gains and losses recorded in the statements of operations during the periods:

	Year ended December 31,
		2017					2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Series C Preferred embedded derivative		RES warrant derivative		Convertible debt		Total
Fair value, beginning of period	$	-	$	(1,315)	$	(1,315)	$	(6,271)	$	(2,411)	$	-	$	(8,682)
Net gains (losses) recognized in earnings		164		246		410		4,848		1,800		(303)		6,345
Purchase and issuances		150		-		150		-		-		(1,012)		(1,012)
Sales and settlements		-		-		-		1,423		-		-		1,423
Gross transfers into Level 3		-		-		-		-		-		-		-
Gross transfers out of Level 3		-		-		-		-		611 (1)		-		611
Fair value, end of period	$	314	$	(1,069)	$	(755)	$	-	$	-	$	(1,315)	$	(1,315)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	164	$	246	$	410	$	-	$	-	$	(303)	$	(303)

(1) RES warrants were permanently reclassified to additional paid-in capital as discussed above

Fair Value of Debt

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates or credit spreads consistent with the maturity of debt obligations 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. Both the carrying value and the estimated fair value of the Company’s long-term debt, excluding convertible debt which is presented in the balance sheets at fair value, are presented in the table below net of deferred financing costs:

	Carrying value at December 31,				Estimated fair value at December 31,
	2017		2016		2017		2016
Held for use	$	115,605	$	47,918	$	115,239	$	48,034
Held for sale		4,976		14,802		4,976		15,186
Total	$	120,581	$	62,720	$	120,215	$	63,220

Impaired Hotel Properties

In the performance of impairment analysis for both held for sale and held for use properties, fair value is determined with the assistance of independent real estate brokers and through the use of operating results and revenue multiples based on the Company’s experience with hotel sales as well as available industry information.  For held for sale properties, estimated selling costs are based on our experience with similar asset sales.  These are considered Level 3 fair value measurements.  The amount of impairment and recovery of previously recorded impairment recognized in the years ended December 31, 2017, 2016, and 2015 is shown in the tables below:

	Year ended December 31,
	2017			2016			2015
	Number of hotels	Impairment (loss) recovery		Number of hotels	Impairment (loss) recovery		Number of hotels	Impairment (loss) recovery
Continuing Operations:
Held for sale hotels:
Impairment loss	1	$	(1,448)	-	$	-	1	$	(1,537)
Sold hotels:
Impairment loss	2		(783)	5		(1,477)	5		(2,377)
Recovery of impairment	2		80	-		-	1		85
Net impairment loss reported in continuing operations	5	$	(2,151)	5	$	(1,477)	7	$	(3,829)
Discontinued Operations:
Sold hotels:
Impairment loss	-	$	-	-	$	-	1	$	(117)
Recovery of impairment	-		-	-		-	3		238
Net impairment loss reported in discontinued operations	-	$	-	-	$	-	4	$	121
Total net impairment:	5	$	(2,151)	5	$	(1,477)	11	$	(3,708)

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Common Stock

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

Common Stock

NOTE 9.  COMMON STOCK

The Company’s common stock is duly authorized, full paid, and non-assessable.

On March 11, 2015, an executive officer exercised a warrant to purchase 35,060 shares at the price of $9.88 per share (see Note 12).

On January 24, 2017, the Company exchanged 23,160 warrants (the “New Warrants”) to purchase common stock of the Company for 576,923 warrants (the “Old Warrants”) held by RES. The number of New Warrants issued in exchange for the Old Warrants equaled the number of shares of common stock issuable upon exercise of the Old Warrants pursuant to a cashless exercise provisions of the Old Warrants. The New Warrants were exercisable for 23,160 shares of common stock, had an exercise price of $0.0065 for each common share, and would have expired on January 24, 2019. On the date of the exchange, the New Warrants had a fair value in excess of the Old Warrants of $289, which is reflected as equity transactions expense and an increase in additional paid-in capital as the exchange is assumed to be equivalent to the modification of an equity classified instrument.  The New Warrants were exercised in full on September 28, 2017.

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock (see Note 10).

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash.  A total of 73 shares   were settled for $1. Impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the periods presented.

On March 29, 2017, the Company sold in an underwritten public offering 4,772,500 shares of its common stock, including 622,500 shares issued pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, at a public offering price per share of $10.50. Net proceeds, after the payment of related expenses, from this offering totaled $45,850.  

The Company’s common stock began trading on the NYSE American under its current symbol “CDOR” beginning at the open of market trading on July 21, 2017.  The Company’s common stock previously traded on the NASDAQ Stock Market.

On September 20, 2017, the Company entered into an equity distribution agreement with KeyBanc Capital Markets Inc. and BMO Capital Markets Corp. (collectively, the “Sales Agents”), pursuant to which we may sell, from time to time, up to an aggregate sales price of $50,000, subject to decrease in compliance with General Instruction I.B.6 of Registration Statement on Form S-3, of shares of our common stock pursuant to a prospectus supplement we filed with the Securities and Exchange Commission (“SEC”) through the Sales Agents acting as sales agent and/or principal, through an at-the-market offering program (our “ATM program”). Pursuant to Instruction I.B.6 to Registration Statement on Form S-3, we may not sell more than the equivalent of one-third of our public float during any 12 consecutive months so long as our public float is less than $75,000.  During the year ended December 31, 2017, we sold 169,004 shares of common stock under the ATM program at an average sales price of $10.15 per share for gross proceeds totaling $1,715 and net proceeds of $1,619, after cash commissions of 2% of gross proceeds paid to the Sales Agents and additional related costs.

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Preferred Stock

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

Preferred Stock

NOTE 10.  PREFERRED STOCK

On March 16, 2016, the Company entered into a series of agreements providing for:

· the issuance and sale of the Company’s Series D Preferred Stock under a private transaction to SREP III Flight-Investco, L.P. (“SREP”), an affiliate of StepStone Group LP;

· the exchange of all of the Company’s outstanding Series C Preferred Stock for Series D Preferred Stock; and

· the cash redemption of all of the Company’s outstanding 8% Series A Cumulative Preferred Stock (“Series A Preferred Stock”) and 10% Series B Cumulative Preferred Stock (“Series B Preferred Stock”).

In connection with these transactions, the Company and SREP entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) dated March 16, 2016 pursuant to which the Company issued and sold 3,000,000 shares of Series D Preferred Stock to SREP on the March 16, 2016 for an aggregate purchase price of $30,000. The Stock Purchase Agreement required that $20,147 of the purchase price be deposited into an escrow account for the purpose of effecting the redemption of the Series A and Series B Preferred Stock and that the remaining amount of the purchase price be delivered to the Company. 

Simultaneously, the Company entered into the Exchange Agreement with RES pursuant to which all 3,000,000 outstanding shares of Series C Preferred Stock were exchanged for 3,000,000 shares of Series D Preferred Stock. Under the Exchange Agreement, in lieu of payment of accrued and unpaid dividends in the amount of $4,947 on the Series C Preferred Stock, the Company (a) paid to RES an amount of cash equal to $1,484, (b) issued to RES 245,156 shares of Series D Preferred Stock (such that RES,IRSA Inversiones y Representaciones Sociedad Anónima (“IRSA”), and their affiliates do not beneficially own in excess of 49% of the voting stock of the Company) and (c) issued to RES a convertible promissory note, bearing interest at 6.25% per annum, in the principal amount of $1,012 (see Note 7).

Pursuant to the Stock Purchase Agreement, on April 15, 2016, the Company redeemed all of the outstanding Series A and Series B Preferred Stock, in accordance with redemption notices issued on March 16, 2016, as follows:

· all 803,270 outstanding shares of the Series A Preferred Stock at the redemption price of $10.00 per share plus $2.084940 per share in accrued and unpaid dividends (plus compounded interest) through the redemption date for a total redemption price of $9,707; and

· all 332,500 outstanding shares of the Series B Preferred Stock at the redemption price of $25.00 per share plus $6.354167 per share in accrued and unpaid dividends through the redemption date for a total redemption price of $10,425.

On February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock. The terms of the Series D Preferred Stock provided for automatic conversion following certain future common stock offerings, and also provided for potential additional payments to the holders depending on the sales price of common stock in the offerings. As a result of the voluntary conversion, the holders are no longer entitled to the potential payments. To induce the holders of the Series D Preferred Stock to voluntarily convert their shares, the Company issued the holders 925,000 shares of a new series of preferred stock, the Series E Preferred Stock.

The effect of these transactions on the Company’s preferred stock and the key terms of the remaining series of the Company’s preferred stock are discussed individually below.

Series A Preferred Stock

On December 30, 2005, the Company offered and sold 1,521,258 shares of Series A Preferred Stock.  At December 31, 2015, 803,270 shares of Series A Preferred Stock remained outstanding until the completion of the redemption on April 15, 2016.

Dividends on the Series A Preferred Stock were cumulative and payable monthly in arrears on the last day of each month, at the annual rate of 8% of the $10.00 liquidation preference per share, equivalent to a fixed annual amount of $.80 per share. The Company was able to redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time for cash at a redemption price of $10.00 per share, plus all accrued and unpaid dividends. Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series A Preferred Stock to preserve capital and improve liquidity. Unpaid dividends accumulated and bore additional dividends at 8%, compounded monthly.

The difference between the recorded value of the Series A Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series A Preferred Stock plus related expenses, a total of $2,326, was recorded as a reduction of accumulated deficit during the year ended December 31, 2016 as the amount is considered a deemed dividend on the Series A Preferred Stock. Of this amount, $874 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividends that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

Series B Preferred Stock

At December 31, 2015, there were 332,500 shares of Series B Preferred Stock outstanding, originally sold on June 3, 2008, which remained outstanding until the completion of the redemption on April 15, 2016.

Dividends on the Series B Preferred Stock were cumulative and are payable quarterly in arrears on each  March 31, June 30, September 30, and December 31, or, if not a business day, the next succeeding business day, at the annual rate of 10.0% of the $25.00 liquidation preference per share, equivalent to a fixed annual amount of $2.50 per share.  The Company was able to redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends. Also, upon a change of control, each outstanding share of the Company’s Series B Preferred Stock would be redeemed for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends.Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series B Preferred Stock to preserve capital and improve liquidity. Unpaid dividends on the Series B Preferred Stock did not bear interest.

The difference between the recorded value of the Series B Preferred Stock prior to the issuance of the redemption notice and the redemption value of the Series B Preferred Stock, a total $2,781, was recorded as a reduction of accumulated deficit during the year ended December 31, 2016 as the amount is considered a deemed dividend on the Series B Preferred Stock.  Of this amount, $911 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

Series C Preferred Stock

The Company entered into a Purchase Agreement dated November 16, 2011 for the issuance and sale of Series C Preferred Stock under a private transaction with RES. In two closings on February 1, 2012 and February 15, 2012, the Company completed the sale to RES of 3,000,000shares of Series C Preferred Stock.All of the Series C Preferred Stock remained outstanding prior to the execution of the Exchange Agreement on March 16, 2016. 

Each of the 3,000,000 shares of Series C Preferred Stock was convertible, in whole or in part, at RES’s option, at any time, but subject to RES’s beneficial ownership limitation, into the number of shares of common stock equal to the $10.00 per share liquidation preference, divided by the conversion price then in effect, which was equal to a rate of 0.9615385 shares of common stock for each share of Series C Preferred Stock.  A holder of Series C Preferred Stock would not have conversion rights to the extent the conversion would cause the holder and its affiliates to beneficially own more than 34% of voting stock.

Each share of Series C Preferred Stock was entitled to a dividend of $0.625 per year payable in equal quarterly dividends. Commencing with dividends due on December 31, 2013, the Company suspended payment of dividends on its Series C Preferred Stock to preserve capital and improve liquidity. Unpaid dividends accumulated and bore additional dividends at 6.25%, compounded quarterly.

The Series C Preferred Stock voted with the common stock as one class, subject to certain voting limitations. For any vote, the voting power of the Series C Preferred Stock was equal to the lesser of: (a) 0.12096 vote per share or (b) an amount of votes per share such that the vote of all shares of Series C Preferred Stock in the aggregate equal 34% of the combined voting power of all the Company voting stock, minus an amount equal to the number of votes represented by the other shares of voting stock beneficially owned by RES and its affiliates. 

On March 16, 2016, the Series C Preferred Stock was extinguished under the Exchange Agreement discussed above.  Upon this extinguishment, the difference between the recorded value of the Series C Preferred Stock prior to the exchange and the fair value of the consideration received in the exchange, a total of $20,366, was recorded as a reduction of accumulated deficit as the amount is considered a deemed dividend on the Series C Preferred Stock.  Of this amount, $15,873 was recorded as a reduction of net earnings attributable to common shareholders as the portion of this deemed dividend that was in excess of preferred dividends deducted to arrive at net earnings attributable to common shareholders in previous periods.

Series D Preferred Stock

Following the execution of the Stock Purchase Agreement and Exchange Agreement on March 16, 2016, there were 6,245,156 shares of Series D Preferred Stock outstanding at December 31, 2016.

The Series D Preferred stockholders ranked senior to the Company’s common stock and any other preferred stock issuances and received preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly in arrears on each March 31, June 30, September 30, and December 31, or, if not a business day, the next succeeding business day, of the $10.00 face value per share.  Dividends on the Series D Preferred Stock accrued whether or not the Company had earnings, whether or not there were funds legally available for the payment of such dividends, whether or not such dividends were declared, and whether or not such dividends were prohibited by agreement. Whenever the dividends on the Series D Preferred Stock were in arrears for four consecutive quarters, then upon notice by holders of in the aggregate not less than 40% of the outstanding Series D Preferred Stock, the Company would (a) take all appropriate action reasonably within its means to maximize the assets legally available for paying such dividends and to monetize such assets (for example, but without limiting the generality of the foregoing, by selling or liquidating all of some of the Company’s assets or by selling the Company as a going concern), (b) pay out of all such assets legally available (including any proceeds from any sale or liquidation of such assets) the maximum possible amount of such unpaid dividends, and (c) thereafter, at any time and from time to time when additional assets of the Company (including any proceeds from any sale or liquidation of such assets) become legally available to pay such unpaid dividends, pay such remaining unpaid dividends until all dividends accumulated on the Series D Preferred Stock had been fully paid.  Dividends on the Series D Preferred Stock were paid when due throughout the life of the instrument.

Each share of Series D Preferred Stock was convertible, at the option of the holder, at any time into a number of shares of common stock determined by dividing the conversion price of $10.40 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. The conversion price was subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends.  Each outstanding share of Series D Preferred Stock would be converted into a number of shares of common stock determined by dividing the conversion price of $10.40 into the $10.00 face value per share, which is equal to a rate of 0.9615385 shares of common stock for each share of Series D Preferred Stock, automatically upon closing of a Qualified Offering (defined as a single offering of common stock of at least $50,000 or up to three offerings in the aggregate of at least $75,000, all with certain minimum prices per share and a potential make whole payment required in certain scenarios) without any further action by the holders of such shares or the Company.

The Series D Preferred Stock was redeemable by the Company at any time subject to certain restrictions, in whole or in a partial redemption of up to $30,000, at $12.00 per share on or before March 16, 2019, $13.00 per share from March 16, 2019 to March 16, 2020, and $14.00 per share on or after March 16, 2020, plus all accrued and unpaid dividends.  If a Qualified Offering has not occurred on or before September 30, 2021, holders that hold in the aggregate not less than 40% of the outstanding shares of the Series D Preferred Stock have the right to elect to have the Company fully liquidate in a commercially reasonable manner as determined by the Board of Directors of the Company to provide for liquidation distributions to the holders of the Series D Preferred Stock in an amount per share equal to $14.00 in cash plus accrued and unpaid dividends.  Once this right had been exercised and the Company had been notified, the dividend rate on the Series D Preferred Stock after September 30, 2021 would increase from 6.25% per annum to 12.5% per annum. The holders of Series D Preferred Stock voted their Series D Preferred Stock as a single class with the holders of the common stock on all matters submitted to such holders for vote or consent. For each such vote or consent, each share of Series D Preferred Stock entitled the holder to cast one vote for each whole vote (rounded to the nearest whole number) that such holder would be entitled to cast had such holder converted its Series D Preferred Stock into shares of common stock as of the date immediately prior to the record date for determining the shareholders of the Company eligible to vote on any such matter.

The fair value of the Series D Preferred Stock was determined to be equal to its face value on the date of issuance.

As discussed above, on February 28, 2017, the holders of the Series D Preferred Stock voluntarily converted their shares into 6,004,957 shares of common stock at $10.40 per share pursuant to the terms of the preferred stock.  At the time of conversion, the Series D holders were granted $9,250 of newly created Series E Preferred Stock.

Series E Redeemable Convertible Preferred Stock

Following the voluntary conversion of the Series D Preferred Stock on February 28, 2017, the only shares of preferred stock outstanding are 925,000 shares of Series E Preferred Stock.  

The Series E Preferred Stock ranks senior to the Company’s common stock and any other preferred stock issuances and receives preferential cumulative cash dividends at a rate of 6.25% per annum, payable quarterly of the $10.00 face value per share. If the Company fails to pay a dividend then during the period that dividends are not paid, the dividend rate increases to 9.50% per annum. Dividends on the Series E Preferred Stock accrue whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends, whether or not such dividends are declared, and whether or not such dividends are prohibited by agreement. 

Each share of Series E Preferred Stock is convertible, at the option of the holder, at any time on or after February 28, 2019, into a number of shares of common stock determined by dividing the conversion price of $13.845 into an amount equal to the $10.00 face value per share plus accrued and unpaid dividends, if any. Upon liquidation, each share of Series E Preferred Stock is entitled to $10.00 per share and accrued and unpaid dividends. The conversion price is subject to anti-dilution adjustments upon the occurrence of stock splits and stock dividends. Following a specific equity offering or offerings, from time to time a number of shares of Series E Preferred Stock automatically converts into common stock if the common stock trades at 120% of the conversion price for 60 trading days, and the number of shares converted will be determined by certain trading volumes measures. 

The Company has rights to redeem up to 490,250 shares of the Series E Preferred Stock at prices from 110% to 130% of its liquidation value.  The holders have put rights commencing March 16, 2021 to put the Series E Preferred Stock to the Company at 130% of its liquidation preference, which the Company can satisfy with cash or common stock. The Series E Preferred Stock votes as a class on matters generally affecting the Series E Preferred Stock, and as long as 434,750 shares of Series E Preferred Stock (47% of the originally issued shares of Series E Preferred Stock) remain outstanding, then 75% approval of the Series E Preferred Stock will be required to approve merger, consolidation, liquidation or winding up of the Company, related party transactions exceeding $120, payment of dividends on common stock except from funds from operations or to maintain REIT status, the grant of exemptions from the Company’s charter limitation on ownership of 9.9% of any class or series of its securities (exclusive of persons currently holding exemptions), issuance of preferred stock or commitment or agreement to do any of the foregoing.

The Series E Preferred Stock was determined to have a fair value of $9,900 on the date of issuance as measured using a trinomial lattice-based model.  From this value, the embedded redemption option (see Note 8), which was determined to be an asset with a fair value on the date of issuance of $150 using the same model, was bifurcated and will be accounted for at fair value at each period end.  These are considered Level 3 fair value measurements.  The issuance of the Series E Preferred Stock is considered an inducement to convert the Series D Preferred Stock to common stock and as such, its fair value at issuance, plus related expenses totaling $1,210 in the year ended December 31, 2017, are reflected as a reduction of retained earnings and an increase in dividends declared and undeclared and in kind dividends deemed on preferred stock.

Impact of Preferred Stock on Net Earnings (Loss) Attributable to Common Shareholders

The components of dividends declared and undeclared and in kind dividends deemed on preferred stock are as follows:

	Year ended December 31,
	2017		2016		2015
Preferred A dividends accrued at stated rate	$	-	$	222	$	727
Preferred A additional deemed dividends upon redemption		-		652		-
Preferred B dividends accrued at stated rate		-		243		831
Preferred B additional deemed dividends upon redemption		-		668		-
Preferred C dividends accrued at stated rate		-		455		2,074
Preferred C additional deemed dividends at exchange		-		15,418		-
Preferred D dividends accrued at stated rate		650		3,090		-
Preferred D inducement to convert		11,110		-		-
Preferred E dividends accrued at stated rate		483		-		-
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$	12,243	$	20,748	$	3,632

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Noncontrolling Interest Of Common Units In The Operating Partnership

12 Months Ended

Dec. 31, 2017

Noncontrolling Interest Of Common Units In The Operating Partnership [Abstract]

Noncontrolling Interest Of Common Units In The Operating Partnership

NOTE 11.  NONCONTROLLING INTEREST OF COMMON UNITS IN THE OPERATING PARTNERSHIP

At December 31, 2017 and 2016,  4,550,242and 7,872,943of the operating partnership’s common units were outstanding, respectively. These amounts include 4,550,242and 2,609,791 common units held by limited partners at December 31, 2017 and 2016, respectively, and 5,263,152 LTIP units outstanding at December 31, 2016 which were not earned at that date and were subsequently cancelled on June 28, 2017 (see Note 12).The combined redemption value for the common units and LTIP units was $871 and $2,008at December 31, 2017 and 2016, respectively.

Our ownership interest in the operating partnership as of December 31, 2017 and 2016 was 99.3% and 97.8%,  respectively, which includes consideration of the common units of the limited partners as well as the LTIP units.

Each limited partner of the operating partnership may, subject to certain limitations, require that the operating partnership redeem all or a portion of his or her common units at any time after a specified period following the date the units were acquired, by delivering a redemption notice to the operating partnership. When a limited partner tenders common units for redemption, the Company can, at its sole discretion, choose to purchase the units for either (1) a number of shares of Company common stock at a rate of one share of common stock for each 52 common units redeemed or (2) cash in an amount equal to the market value of the number of shares of Company common stock the limited partner would have received if the Company chose to purchase the units for common stock. No common units were redeemed in 2017, 2016, or 2015.

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2017

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 12.  STOCK-BASED COMPENSATION

The Company previously had a 2006 Stock Plan which had been approved by the Company’s shareholders. The 2006 Stock Plan authorized the grant of stock options, stock appreciation rights, restricted stock, and stock bonuses for up to 9,615 shares of common stock. The 2006 Stock Plan expired onDecember 31, 2015.As a replacement for the 2006 Stock Plan, the Board of Directors adopted the Condor 2016 Stock Plan, which was approved by the Company’s shareholders at the annual shareholders meeting on June 15, 2016.  The 2016 Stock Plan authorizes the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, deferred stock units, and other forms of stock-based compensation.  The maximum number of shares of the Company’s common stock that may be issued under the 2016 Stock Plan is 461,538.  As of December 31, 2017, there were 357,742 common shares available for issuance under the 2016 Stock Plan.

Options

At December 31, 2016, the Company had a total of 865 vested stock options outstanding with a weighted average exercise price of $48.945 per share.  These options expired unexercised on July 15, 2017.

Service Condition Share Awards

From time to time, the Company awards restricted shares of common stock to employees, officers, and members of the Board of Directors under the 2016 Stock Plan.  These shares generally vest ratably over five years for employees and officers and three years for members of the Board of Directors based on continued service or employment.  Dividends paid on these restricted shares during the vesting period are not forfeited in the event that the shares fail to vest.

The fair value of the service condition unvested share awards was determined based on the closing price of the Company’s common stock on the grant date.  The following table presents a summary of the service condition unvested share activity for the year ended December 31, 2017:

	Shares	Weighted-average grant date fair value
Unvested at December 31, 2016	-	$	-
Granted	96,286	$	10.54
Vested	(234)	$	10.60
Forfeited	(220)	$	10.54
Unvested at December 31, 2017	95,832	$	10.54

Market Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain market share prices of common stock are attained.  Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan.  The executive officer will earn and be issued 36,692 common shares each time stock market price targets of $11.00 to $18.00 (in one dollar increments) per common share are first achieved prior to March 31, 2022 based on the weighted-average common stock price for 60 consecutive trading days.  

The compensation cost related to awards that are contingent upon achieving a market based criteria is measured at the fair value of the award on the date of grant using the Monte Carlo simulation, including consideration of the market criteria, and amortized on a straight line basis over the derived performance period which is also estimated using this model.  The grant date fair value of this award, totaling $1,305, was determined using the following assumptions:

Volatility	25.0	%
Stock price	$                                                                 10.60
Dividend yield	7.4	%
Risk free interest rate	0.89% - 1.81% based upon expected time of vesting

Performance Based Share Awards

Pursuant to an amendment of an employment agreement on June 28, 2017, an executive officer may earn shares of common stock if certain operating results of the Company are obtained.  Any such shares, if earned, will be issued under the 2016 Stock Plan or another shareholder approved plan.  For each of the Company’s fiscal years 2017 through 2021, if the Company achieves between 85% and 101% of budgeted Funds from Operations (“FFO”) as approved by the Board of Directors, the executive shall earn and be issued between 11,741 and 19,569 shares of common stock, determined on a straight-line basis based on the percentage of budgeted FFO achieved.  In addition, for any fiscal year in which the Company achieves in excess of 101% of budgeted FFO, an additional 391 shares of common stock will be earned for each two percent actual FFO exceeds 101% of budgeted FFO, up to a total of 3,910 additional shares of common stock per year.

The fair value of the performance based share awards is based on the closing price of the Company’s common stock on the grant date, discounted for estimated common stock dividends to be declared prior to the shares being issued.  The grant date occurs on an annual basis when budgeted FFO is approved by the Board of Directors.  The total grant date fair value of the 2017 portion of this performance based share award, assuming that 100% of budgeted FFO is achieved, was $191.

Warrants

On March 2, 2015, the Company granted a warrant to an executive officer of the Company outside of the 2006 Stock Plan as an inducement material to the executive’s acceptance of employment. The warrant entitles the executive to purchase a total of 101,213 authorized but previously unissued shares of the Company’s common stock with a grant date price at (i) $9.88 per share (the adjusted closing bid price of the common stock on Nasdaq on March 2, 2015) if at least one-third but not more than one-half of the shares were purchased on or prior to March 17, 2015, and (ii) $12.48 per share for shares purchased after. The warrant has a three-year term. The executive officer exercised the warrant in part to purchase 35,060 shares on March 11, 2015 at the price of $9.88 per share. The warrant remains exercisable for 66,153 shares at an exercise price of $12.48 per share.

The Company records compensation expense for warrants based on the estimated fair value of the warrants on the date of grant determined using the Black-Scholes option-pricing model.  The Company uses historical data among other factors to estimate expected price volatility, expected warrant life, dividend rate, and expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield in effect at the time of grant for the estimated life of thewarrants.  The following table summarizes the estimates used in the Black-Scholes option-pricing model related to the warrants granted in 2015:

	$9.88 Grant		$12.48 Grant
	March 2, 2015		March 2, 2015
Volatility	53.10	%	78.60	%
Expected forfeitures	0.00	%	0.00	%
Expected term	15	days	3.00	years
Risk free interest rate	0.02	%	1.06	%

LTIP Awards

On March 2, 2015, the Company granted an equity award of 5,263,152 LTIP units, representing profit interests in the operating partnership, to an executive officer of the company. The LTIP units were earned in one-third increments upon the Company’s common stock achieving price per share milestones of $22.75,  $29.25, and $35.75, respectively.  Earned LTIP units vested in March 2018, or earlier upon a change in control of the Company, and could be redeemed at the rate of one share of common stock for each 52 earned LTIP units for up to 101,213 common shares. These LTIP units were cancelled on June 28, 2017 pursuant to an amendment of the employment agreement with the executive officer.

The Company recorded compensation expense for the LTIP units based on the estimated fair value of the units on the date of grant determined using the Monte Carlo simulation model.  The Company used historical data among other factors to estimate expected price volatility, expected LTIP life, volume weighted average price, and expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield in effect at the time of grant for the estimated life of the LTIP.  The following table summarizes the estimates used in the Monte Carlo option-pricing model related to the LTIP grant in 2015:

	Grant Date March 2, 2015
Volatility		75.5	%
Expected forfeitures		0.00	%
Weighted average price	$	9.945
Expected term		3.00	years
Risk free interest rate		1.06	%

DirectorFully Vested Share Compensation

Independent directors serving as members of the Investment Committee of the Board of Directors receive their monthly Investment Committee fees in the form of shares of the Company’s common stock.  Certain independent directors serving as members of the Board of Directors also elect to receive a portion of their director fees in the form of shares of the Company’s common stock.  A total of 5,369 and 2,361 shares were issued to independent directors under the 2016 Stock Plan during the years ended December 31, 2017 and 2016, respectively.  Shares issued for the year ended December 31, 2015 under the 2006 Stock Plan totaled 3,295.

Stock-Based Compensation Expense

The expense recognized in the consolidated financial statements for stock-based compensation, including the LTIP, related to employees and directors for the years ended December 31, 2017, 2016, and 2015 was $1,237,  $305, and $285, respectively, all of which is included in general and administrative expense.  Total unrecognized compensation cost related to all awards at December 31, 2017 was $1,573, which is expected to be recognized over a weighted-average remaining service period of 3.2 years.

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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes [Abstract]

Income Taxes

NOTE 13.  INCOME TAXES

For the years ended December 2017, 2016, and 2015, the income tax expense related to the operating partnership, including primarily Alternative Minimum Tax (“AMT”) and certain state and local taxes, totaled $20,  $35, and $0, respectively.

The components of the income tax expense (benefit) from the TRS from continuing operations for the years ended December 31, 2017, 2016, and 2015 were as follows:

	Year ended December 31,
	2017		2016		2015
Federal:
Current	$	33	$	90	$	-
Deferred		(615)		-		-
State and local:
Current		12		-		-
Deferred		(45)		-		-
Income tax expense (benefit)	$	(615)	$	90	$	-

Actual income tax expense of the TRS for the years ended December 31, 2017, 2016, and 2015 differs from the “expected” income tax expense (benefit) (computed by applying the appropriate U.S. federal income tax rate of 34% to earnings before income taxes) as a result of the following:

	Year ended December 31,
	2017		2016		2015
Computed "expected" income tax (benefit) expense	$	546	$	993	$	684
State income taxes, net of federal income tax (benefit) expense		47		139		82
(Decrease) increase in valuation allowance		(1,097)		(1,082)		(722)
Other		(145)		(50)		(44)
AMT		34		90		-
Total income tax expense (benefit)	$	(615)	$	90	$	-

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are as follows:

	As of December 31,
	2017		2016
Deferred Tax Assets
Accrued expenses and other	$	104	$	99
Net operating losses carried forward for federal income tax purposes		814		1,295
Net operating losses carried forward for state income tax purposes		579		182
AMT		123		-
Book depreciation in excess of tax depreciation		-		38
Subtotal deferred tax assets		1,620		1,614
Valuation allowance		(454)		(1,551)
Total deferred tax assets		1,166		63
Deferred Liabilities
Tax depreciation in excess of book depreciation		363		-
Atlanta JV basis difference		143		63
Total deferred tax liabilities		506		63
Net deferred tax assets	$	660	$	-

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers projected reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  As a result of this analysis, the Company believed that a full valuation allowance against the net deferred tax asset position was necessary at December 31, 2016 and 2015 and as such no current or deferred federal income tax was recognized in the years then ended.  At December 31, 2017, it was determined by management that a valuation allowance against deferred tax assets was no longer required, with the exception of an allowance against certain state net operating losses, as management believes that it is more likely than not that remaining deferred tax assets will be realized.

After consideration of limitations related to a change in control as defined under Internal Revenue Code Section 382 following the Company’s common and preferred equity transactions,  the TRS’s net operating loss carryforward at December 31, 2017 as determined for federal income tax purposes was $3,876.  The availability of the loss carryforwards will expire in 2027 through 2034.

On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act (“TCJA”), was enacted. The TCJA made many significant changes to the U.S. federal income tax laws as of January 1, 2018.  Pursuant to this legislation, the federal income tax rate applicable to corporations is permanently reduced to 21% and the corporate alternative minimum tax is repealed, and the deduction of net interest expense is limited for all businesses, provided that certain businesses, including real estate businesses, may elect not to be subject to such limitations and instead to depreciate their real property related assets over longer depreciable lives.

The reduced 21% federal income tax rate applicable to corporations will apply to taxable earnings reported for the full 2018 fiscal year. Accordingly, the Company has remeasured its net deferred tax assets using the lower federal tax rate that will apply when these amounts are expected to reverse.  As a result, in the fourth quarter of 2017, we recognized tax expense of $304 resulting from the revaluation of U.S. net deferred tax assets.

The SEC has issued Staff Accounting Bulletin No. 118 which permits the recording of provision amounts related to the impact of the TCJA during a measurement period which is not to exceed one year from the enactment date of the law.  The Company has included estimates related to the TCJA in these consolidated financial statements and will revalue those impacts as we continue to gather and analyze information.

As of December 31, 2017, the tax years that remain subject to examination by major tax jurisdictions generally include 2014 through 2017.

Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a shareholder as ordinary income.  Distributions in excess of current and accumulated earnings and profits generally will be treated as a nontaxable reduction of the shareholder’s basis in such shareholder’s shares, to the extent thereof, and thereafter as taxable capital gain.  Distributions that are treated as a reduction of the shareholder’s basis in its shares will have the effect of increasing the amount of gain, or reducing the amount of loss, recognized upon the sale of the shareholder’s shares.

For income tax purposes, distributions paid per share for the years ended December 31, 2017 and 2016 were characterized as follows:

	For the year ended December 31,
	2017				2016
	Amount		%	Amount		%
Common Shares:
Ordinary income	$	0.156000	20%	$	0.455000	100%
Capital gain		-	-		-	-
Return of capital		0.624000	80%		-	-
Total	$	0.780000	100%	$	0.455000	100%
Series C Preferred Stock:
Ordinary income	$	-	-	$	1.649124	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	-	-	$	1.649124	100%
Series D Preferred Stock:
Ordinary income	$	0.104160	100%	$	0.494792	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.104160	100%	$	0.494792	100%
Series E Preferred Stock:
Ordinary income	$	0.522569	100%	$	-	-
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.522569	100%	$	-	-

The common share distribution declared on December 19, 2017 and paid on January 10, 2018 was treated as a 2018 distribution for tax purposes.  The preferred share distribution declared on December 19, 2017 and paid on January 2, 2018 was treated as a 2017 distribution for tax purposes.  The common and preferred share distributions declared on December 6, 2016 and paid on January 5, 2017 and January 3, 2017, respectively, were treated as 2016 distributions for tax purposes.

A portion of the redemption price of the Series A and B Preferred Stock that was redeemed for cash on April 15, 2016 included amounts equal to the accrued and unpaid dividends on such stock.  However, the entire redemption price, inclusive of amounts equal to accrued and unpaid dividends, was treated as payment in exchange for the redeemed stock and none of the redemption price is treated as a distribution of dividends under the Code for federal income tax purposes.

No dividends on common stock or preferred stock were declared or paid in 2015.

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Earnings Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 14. EARNINGS PER SHARE

The two-class method is utilized to compute earnings per common share (“EPS”) as our unvested restricted stock awards with non-forfeitable dividends are considered participating securities.  Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company.  Our unvested restricted stock is not obligated to absorb Company losses and accordingly is not allocated losses.  The following is a reconciliation of basic and diluted EPS:

	Year ended December 31,
	2017		2016		2015
Numerator: Basic (1)
Net earnings (loss) attributable to common shareholders:
Continuing operations	$	(9,362)	$	1,390	$	6,055
Discontinued operations		-		657		3,438
Total Net earnings (loss) attributable to common shareholders		(9,362)		2,047		9,493
Less: Allocation to participating securities		(56)		-		-
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	(9,418)	$	2,047	$	9,493
Numerator: Diluted (1)
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	$	(9,418)	$	1,390	$	6,055
Dividends on Series C Preferred Stock		-		-		2,074
Dividends on Series D Preferred Stock		-		3,090		-
Unrealized gain on warrant derivative		-		-		(4,122)
Unrealized gain on Series C Preferred Embedded Derivative		-		-		(7,533)
Continuing operations - Diluted		(9,418)		4,480		(3,526)
Discontinued operations - Diluted		-		657		3,438
Total Diluted	$	(9,418)	$	5,137	$	(88)
Denominator
Weighted average number of common shares - Basic		9,437,824		761,112		751,634
Unvested stock		-		-		619
Series C Preferred Stock		-		-		2,884,615
Series D Preferred Stock		-		4,774,433		-
Warrants - Employees		-		-		106
Warrants - RES		-		-		(61,504)
Weighted average number of common shares - Diluted		9,437,824		5,535,545		3,575,470
Earnings Per Share
Continuing operations - Basic	$	(1.00)	$	1.82	$	8.06
Discontinued operations - Basic		-		0.85		4.55
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	2.67	$	12.61
Continuing operations - Diluted	$	(1.00)	$	0.78	$	(0.98)
Discontinued operations - Diluted		-		0.13		0.98
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	0.91	$	-

(1) The loss (earnings) attributable to noncontrolling interest is allocated between continuing and discontinued operations for the purpose of the EPS calculation

The following table summarizes the weighted average number of potentially dilutive securities that have been excluded from the denominator for the purpose of computing diluted EPS as they are antidilutive:

	Year ended December 31,
	2017	2016	2015
Outstanding stock options (2)	258	865	865
Unvested restricted stock	48,869	-	-
Warrants - RES (2)	53,608	576,923	-
Warrants - Employees	66,153	66,153	55,249
Series C Preferred Stock	-	598,991	-
Series D Preferred Stock (2)	970,606	-	-
Series E Preferred Stock	560,115	-	-
Convertible debt	97,269	77,336	-
LTIP common units (1) (2)	49,636	101,213	84,576
Operating partnership common units (1)	70,722	46,265	13,008
Total potentially dilutive securities excluded from the denominator	1,917,236	1,467,746	153,698

(1) LTIP and common units have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

(2) Amounts above are weighted average amounts outstanding for the year.  These instruments were no longer outstanding at December 31, 2017.

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Commitments And Contingencies

12 Months Ended

Dec. 31, 2017

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 15.  COMMITMENTS AND CONTINGENCIES

Management Agreements

Our TRS engages eligible independent contractors as property managers for each of our hotels in accordance with the requirements for qualification as a REIT.  The hotel management agreements provide that the management companies have control of all operational aspects of the hotels, including employee-related matters. The management companies must generally maintain each hotel under their management in good repair and condition and perform routine maintenance, repairs, and minor alterations. Additionally, the management companies must operate the hotels in accordance with the national franchise agreements that cover the hotels, which includes, as applicable, using franchisor sales and reservation systems and abiding by franchisors’ marketing standards.  The management agreements generally require the TRS to fund debt service, working capital needs, and capital expenditures and to fund the management companies’ third-party operating expenses, except those expenses not related to the operation of hotels. The TRS also is responsible for obtaining and maintaining certain insurance policies with respect to the hotels.

Each of the management companies employed by the TRS at December 31, 2017 receives a base monthly management fee of 3.0% to 3.5% of gross hotel revenue, with incentives for performance which increase such fee to a maximum of 5.0%.  For the years ended December 31, 2017, 2016, and 2015, base management fees incurred totaled $1,700,  $1,619, and $2,466, respectively, of which $1,700,  $1,619, and $2,348, respectively, was included in continuing operations as hotel and property operations expense.  For the years ended December 31, 2017, 2016 and 2015, incentive management fees, included in continuing operations in their entirety, totaled$306,$190, and $158, respectively.

The management agreements generally have initial terms of one to three years and renew for additional terms of one year unless either party to the agreement gives the other party written notice of termination at least 90 days before the end of a term.  The Company may terminate a management agreement, subject to cure rights, if certain performance metrics tied to both individual hotel and total managed portfolio performance are not met. The Company may also terminate a management agreement with respect to a hotel at any time without reason upon payment of a termination fee.The management agreements terminate with respect to a hotel upon sale of the hotel, subject to certain notice requirements.

Franchise Agreements

As of December 31, 2017,  16 of our 17 wholly owned properties operate under franchise licenses from national hotel companies.  Under our franchise agreements, we are required to pay franchise fees generally between 3.3% and 5.5% of room revenue, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 2.5% and 6.0% of room revenue.  The franchise agreements typically have 10 to 25 year terms although certain agreements may be terminated by either party on certain anniversary dates specified in the agreements.  Further, each agreement provides for early termination fees in the event the agreement is terminated before the stated term.  Franchise fee expense totaled $3,800,  $3,123, and $3,883, for the years ended December 31, 2017, 2016, and 2015, respectively, of which $3,800,  $3,123, and $3,853, respectively, was included in continuing operations as hotel and property operations expense.

Leases

The Company has no land lease agreements in place related to properties owned at December 31, 2017.  Land lease expense related to properties previously owned totaled $9,  $105, and $105 for the years ended December 31, 2017, 2016, and 2015, respectively, all of which is included in continuing operationsas hotel and property operations expense.

The Company entered intothree new office lease agreements in 2016, replacing all existing office lease agreements.  These leases expire in 2019 through 2021 and have combined rent expense of approximately $154 annually.  Office lease expense totaled $154,  $199, and $163 in the years ended December 31, 2017, 2016, and 2015, respectively, and is included in general and administrative expense.

As of December 31, 2017, the future minimum lease payments applicable to non-cancellable operating leases are as follows:

		Lease rents
2018	$	159
2019		138
2020		61
2021		47
2022		-
	$	405

As of December 31, 2017, the Company had agreements with one restaurant and a cell tower operator for leased space at our hotel locations. Lease income totaled $71,  $86, and $198 for the years ended December 31, 2017, 2016, and 2015, respectively, of which $71,  $86, and $177, respectively, was included in continuing operations in room rentals and other hotel services revenue.

Benefit Plans

The Company has a qualified contributory retirement plan under Section 401(k) of the Code (the “401(k) Plan”) which covers all employees who meet certain eligibility requirements.  Voluntary contributions may be made to the 401(k) Plan by employees.  The 401(k) Plan is a Safe Harbor Plan and requires a mandatory employer contribution.  The employer contribution expense for the years ended December 31, 2017, 2016, and 2015 was $67,  $73, and $66, respectively, and is included in general and administrative expenses.

Litigation

Various claims and legal proceedings arise in the ordinary course of business and may be pending against the Company and its properties.  We are not currently involved in any material litigation, nor, to our knowledge, is any material litigation threatened against us.  The Company has insurance to cover potential material losses and we believe it is not reasonably possible that such matters will have a material impact on our financial condition or results of operations.

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Quarterly Operating Results

12 Months Ended

Dec. 31, 2017

Quarterly Operating Results [Abstract]

Quarterly Operating Results

NOTE 16. QUARTERLY OPERATING RESULTS (UNAUDITED)

	Quarter ended (unaudited)
	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017		Total 2017
Revenue	$	10,361	$	14,252	$	15,562	$	15,278	$	55,453
Operating expenses		11,001		12,719		14,417		14,040		52,177
Operating income (loss)		(640)		1,533		1,145		1,238		3,276
Net gain (loss) on dispositions of assets		(3)		4,852		(46)		2,004		6,807
Equity in earnings (loss) of joint venture		111		25		159		(105)		190
Net gain on derivatives and convertible debt		175		227		14		20		436
Other income (expense), net		(1)		(39)		(43)		(28)		(111)
Interest expense		(971)		(1,092)		(1,405)		(1,706)		(5,174)
Loss on debt extinguishment		(800)		-		-		(167)		(967)
Impairment loss, net		(271)		(479)		(848)		(553)		(2,151)
Earnings (loss) before income tax expense		(2,400)		5,027		(1,024)		703		2,306
Income tax benefit (expense)		-		(35)		(15)		645		595
Net earnings (loss)		(2,400)		4,992		(1,039)		1,348		2,901
(Earnings) loss attributable to noncontrolling interest		50		(67)		7		(10)		(20)
Earnings (loss) attributable to controlling interests		(2,350)		4,925		(1,032)		1,338		2,881
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(11,603)		(271)		(205)		(164)		(12,243)
Net earnings (loss) attributable to common shareholders	$	(13,953)	$	4,654	$	(1,237)	$	1,174	$	(9,362)
Earnings per Share (1)
Total - Basic Earnings (Loss) per Share	$	(4.75)	$	0.40	$	(0.11)	$	0.10	$	(1.00)
Diluted Earnings Per Share (1)
Total - Diluted Earnings (Loss) per Share	$	(4.75)	$	0.37	$	(0.11)	$	0.10	$	(1.00)

(1) Quarterly and total annual EPS are based on the weighted average number of shares outstanding during each quarter and the annual period.Due to rounding and differences in earnings and losses between the quarterly and annual periods, the sum of the quarterly EPS amounts may not equal the reported amounts for the year.

	Quarter ended (unaudited)
	March 31, 2016		June 30, 2016		September 30, 2016		December 31, 2016		Total 2016
Revenue	$	12,503	$	14,155	$	13,519	$	10,470	$	50,647
Operating expenses		12,662		12,508		12,445		11,009		48,624
Operating income (loss)		(159)		1,647		1,074		(539)		2,023
Net gain on dispositions of assets		3,367		8,856		3,591		7,318		23,132
Equity in loss of joint venture		-		-		(54)		(190)		(244)
Net gain on derivatives and convertible debt		6,117		162		26		72		6,377
Other income (expense), net		(21)		23		85		(32)		55
Interest expense		(1,329)		(1,248)		(1,127)		(1,006)		(4,710)
Loss on debt extinguishment		(173)		(976)		(399)		(639)		(2,187)
Impairment loss, net		(793)		(121)		(343)		(220)		(1,477)
Earnings from continuing operations before income tax expense		7,009		8,343		2,853		4,764		22,969
Income tax expense		-		-		-		(125)		(125)
Earnings from continuing operations		7,009		8,343		2,853		4,639		22,844
Gain from discontinued operations, net of tax		678		-		-		-		678
Net earnings		7,687		8,343		2,853		4,639		23,522
Earnings attributable to noncontrolling interest		(389)		(178)		(61)		(99)		(727)
Earnings attributable to controlling interests		7,298		8,165		2,792		4,540		22,795
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(17,740)		(1,057)		(976)		(975)		(20,748)
Net earnings (loss) attributable to common shareholders	$	(10,442)	$	7,108	$	1,816	$	3,565	$	2,047
Earnings per Share (1)
Continuing operations - Basic	$	(14.63)	$	9.36	$	2.41	$	4.68	$	1.82
Discontinued operations - Basic		0.91		-		-		-		0.85
Total - Basic Earnings (Loss) per Share	$	(13.72)	$	9.36	$	2.41	$	4.68	$	2.67
Diluted Earnings Per Share (1)
Continuing operations - Diluted	$	(14.63)	$	1.17	$	0.39	$	0.65	$	0.78
Discontinued operations - Diluted		0.91		-		-		-		0.13
Total - Diluted Earnings (Loss) per Share	$	(13.72)	$	1.17	$	0.39	$	0.65	$	0.91

(1) Quarterly and total annual EPS are based on the weighted average number of shares outstanding during each quarter and the annual period.Due to rounding and differences in earnings and losses between the quarterly and annual periods, the sum of the quarterly EPS amounts may not equal the reported amounts for the year.

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Subsequent Events

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

NOTE 17.  SUBSEQUENT EVENTS

Subsequent Property Activity

On January 18, 2018, the Company closed on the acquisition of the122-roomTownePlace SuitesAustin North Tech Ridge for a purchase price of $19,750.  This acquisition was financed using proceeds from the Company’s credit facility.

The Company sold the 41-room Supertel Inn in Creston, Iowa on January 25, 2018 for gross proceeds of $2,050. Net proceeds from the sales were applied to the Company’s credit facility.

On February 21, 2018, the Company closed on the acquisition of the93-roomHome2 Suites Summerville / Charleston for a purchase price of $16,325.  This acquisition was financed using proceeds from the Company’s credit facility of $14,818 as well as cash totaling $1,507.

The Company sold the 135-room Comfort Suites in South Bend, Indiana on March 15, 2018 for gross proceeds of $6,100. Net proceeds from the sales were applied to the Company’s credit facility.

Subsequent to December 31, 2017 through March 16, 2018,  one additional hotel property met the criteria to be considered held for sale. Investment in hotel property, net of $1,191 and debt of $3,089 related to this property remain classified in the December 31, 2017 balance sheet as held for use.

Subsequent Equity Transactions

Subsequent to December 31, 2017 through March 16, 2018, the Company has sold 12,334 shares of common stock under the ATM program at an average sales price of $10.40 per share for gross proceeds totaling $128 and net proceeds of $125, including cash commission fees paid to the Sales Agents and additional related costs.

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Schedule III Real Estate And Accumulated Depreciation

12 Months Ended

Dec. 31, 2017

Schedule III Real Estate And Accumulated Depreciation [Abstract]

Schedule III Real Estate And Accumulated Depreciation

										Additions, (dispositions), and (impairments)
				Initial cost						Subsequent to acquisition							Gross amount at December 31, 2017
Brand	Location	Acquisition date	Encumbrance	Land		Buildings & Other		Furniture & equipment		Land		Buildings & Other			Furniture & equipment		Land		Buildings & Other		Furniture & equipment		Accumulated depreciation		Net book value
Super 8	Creston, Iowa	09/19/1978	KEY	$	56	$	765	$	76	$	89	$	1,572		$	907	$	145	$	2,337	$	983	$	(2,274)	$	1,191
Quality Inn	Solomons, Maryland	06/01/1986	KEY		2,304		2,719		269		-		1,565			462		2,304		4,284		731		(3,356)		3,963
Comfort Suites	Ft. Wayne, Indiana	11/07/2005	KEY		1,200		3,964		840		-		1,060			617		1,200		5,024		1,457		(2,765)		4,916
Comfort Suites	South Bend, Indiana	11/30/2005	KEY		500		10,602		910		(302)		(4,714)			684		198		5,888		1,594		(1,884)		5,796
Supertel Inn	Creston, Iowa	06/30/2006	KEY		235		2,364		344		-		(16)			69		235		2,348		413		(1,055)		1,941
Hilton Garden Inn	Dowell, Maryland	05/25/2012	KEY		1,400		9,492		323		-		657			459		1,400		10,149		782		(1,987)		10,344
SpringHill Suites	San Antonio, Texas	10/01/2015	WELLS		1,597		14,353		1,550		-		114			34		1,597		14,467		1,584		(1,416)		16,232
Courtyard by Marriott	Jacksonville, Florida	10/02/2015	WELLS		2,100		11,050		850		-		178			68		2,100		11,228		918		(1,279)		12,967
Hotel Indigo	Atlanta, Georgia	10/02/2015	WELLS		800		8,700		1,500		-		97			212		800		8,797		1,712		(1,335)		9,974
Aloft	Leawood, Kansas	12/14/2016	GWB		3,339		18,046		1,115		-		133			61		3,339		18,179		1,176		(794)		21,900
Home2 Suites	Lexington, Kentucky	03/24/2017	KEY		905		14,204		1,351		-		150			12		905		14,354		1,363		(501)		16,121
Home2 Suites	Round Rock, Texas	03/24/2017	KEY		1,087		14,345		1,285		-		150			2		1,087		14,495		1,287		(480)		16,389
Home2 Suites	Tallahassee, Florida	03/24/2017	KEY		1,519		18,229		1,727		-		159			-		1,519		18,388		1,727		(623)		21,011
Home2 Suites	Southaven, Mississippi	04/14/17	MS		1,311		16,792		897		-		184			9		1,311		16,976		906		(593)		18,600
Hampton Inn & Suites	Lake Mary, Florida	06/19/2017	KEY		1,200		16,432		1,773		-		175			3		1,200		16,607		1,776		(387)		19,196
Fairfield Inn & Suites	El Paso, Texas	08/31/2017	KEY		1,014		14,297		1,089		-		100			-		1,014		14,397		1,089		(203)		16,297
Residence Inn	Austin, Texas	08/31/2017	KEY		1,495		19,630		1,275		-		150			25		1,495		19,780		1,300		(248)		22,327
Subtotal Hotel Properties					22,062		195,984		17,174		(213)		1,714	-		3,624		21,849		197,698		20,798		(21,180)		219,165
Construction in progress					-		-		-		-		87			191		-		87		191		-		278
Office building					69		1,517		-		(69)		(1,517)			505		-		-		505		(368)		137
Total				$	22,131	$	197,501	$	17,174	$	(282)	$	284		$	4,320	$	21,849	$	197,785	$	21,494	$	(21,548)	$	219,580

Encumbrance codes refer to the following lenders:

KEY	KeyBank credit facility
GWB	Great Western Bank
Wells	Wells Fargo
MS	Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18

See accompanying report of independent registered public accounting firm

	ASSET BASIS	Total
(a)	Balance at January 1, 2015	$	214,585
	Additions		46,489
	Disposals		(65,802)
	Impairment loss, net		(6,373)
	Balance at December 31, 2015		188,899
	Additions		25,618
	Disposals		(68,256)
	Impairment loss, net		(2,877)
	Balance at December 31, 2016		143,384
	Additions		134,709
	Disposals		(34,814)
	Impairment loss, net		(2,151)
	Balance at December 31, 2017	$	241,128
	ACCUMULATED  DEPRECIATION	Total
(b)	Balance at January 1, 2015	$	75,403
	Depreciation for the period ended December 31, 2015		5,400
	Depreciation on assets sold or disposed		(19,938)
	Impairment loss, net		(2,665)
	Balance at December 31, 2015		58,200
	Depreciation for the period ended December 31, 2016		5,190
	Depreciation on assets sold or disposed		(33,477)
	Impairment loss, net		(1,400)
	Balance at December 31, 2016		28,513
	Depreciation for the period ended December 31, 2017		6,898
	Depreciation on assets sold or disposed		(13,863)
	Balance at December 31, 2017	$	21,548

(a) The aggregate cost of land, buildings, furniture and equipment for Federal income tax purposes is approximately $245 million (unaudited).

(b) Depreciation is computed based upon the following useful lives:

Buildings and improvements     15 - 40 years

Furniture and equipment             3 - 12 years

(c) The Company has mortgages payable on the properties as noted.  Additional mortgage information can be found in Note 6 to the consolidated financial statements.

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Organization And Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2017

Organization And Summary Of Significant Accounting Policies [Abstract]

Description Of Business

Description of Business

Condor Hospitality Trust, Inc. (“Condor”) was incorporated in Virginia on August 23, 1994 and was reincorporated in Maryland on November 19, 2014. Condor is a self-administered real estate investment trust (“REIT”) for federal income tax purposes that specializes in the investment and ownership of high-quality select-service, limited-service, extended stay, and compact full service hotels.  As of December 31, 2017, the Company owned 18 hotels in nine states, including one hotel owned through an 80% interest in an unconsolidated joint venture (the “Atlanta JV”).  References to the “Company”, “we,” “our,” and “us” herein refer to Condor Hospitality Trust, Inc., including as the context requires, our direct and indirect subsidiaries.

The Company, through its wholly owned subsidiary, Condor Hospitality REIT Trust, owns a controlling interest in Condor Hospitality Limited Partnership (the “operating partnership”), and serves as its general partner.  The operating partnership, including its various subsidiary partnerships, holds substantially all of the Company’s assets (with the exception of the furniture and equipment of 16 properties held by TRS Leasing, Inc.) and conducts all of its operations.  At December 31, 2017, the Company owned 99.3% of the common operating units (“common units”) of the operating partnership with the remaining common units owned by other limited partners.  The Company’s 100% owned E&P Financing Limited Partnership no longer owns any assets or conducts any operations following the sale of its last remaining property in January 2016.

In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required by the Internal Revenue Service (“IRS”) for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels.  Therefore, the operating partnership and its subsidiaries lease our hotel properties to the Company’s wholly owned taxable REIT subsidiary, TRS Leasing, Inc., and its wholly owned subsidiaries (the “TRS”). The TRS in turn engages third-party eligible independent contractors to manage the hotels. The operating partnership, the TRS, and their respective subsidiaries are consolidated into the Company’s financial statements. 

Historically, as a result of the geographic areas in which we operate, the operations of our hotels have been seasonal in nature.  Generally, occupancy rates, revenue, and operating income have been greater in the second and third quarters of the calendar year than in the first and fourth quarters, with the exception of our hotels located in Florida, which experience peak demand in the first and fourth quarters of the year.  The results of the hotels acquired in and since 2015 (see Note 3), because of their locations and chain scale, are less seasonal in nature than our legacy portfolio of assets.

Basis Of Presentation

Basis of Presentation

The consolidated financial statements have been prepared in accordance with U.S. general accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company, as well as the accounts of the operating partnership and its subsidiaries and our wholly owned TRS and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Effective on March 15, 2017, the Company effected a reverse stock split of its common stock at a ratio of 1-for-6.5.  No fractional shares of common stock were issued as fractional shares were settled in cash. Impacted amounts and share information included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the periods presented. Certain amounts in the notes to the consolidated financial statements may be slightly different than previously reported due to rounding of fractional shares as a result of the reverse stock split.

Estimates, Risks And Uncertainties

Estimates, Risks, and Uncertainties

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements as well as revenue and expenses recognized during the reporting period.  Actual results could differ from those estimates.  Because the state of the economy and of the real estate market can significantly impact hotel operational performance and the estimated fair value of our assets, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change.

Investment In Hotel Properties

Investment in Hotel Properties

At the time of acquisition, the Company allocates the purchase price of assets to asset classes based on the fair value of the acquired real estate, furniture, fixtures, and equipment, and intangible assets, if any, and the fair value of liabilities assumed, including debt. Acquisition date fair values are determined based on replacement costs, appraised values, and estimated fair values using methods similar to those used by independent appraisers including discounted cash flows and capitalization rates.  Acquisition costs, such as transfer taxes, title insurance, environmental and property condition reviews, and legal and accounting fees, are expensed as incurred.

The Company’s investments in hotel properties are recorded at cost and are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and improvements and 3 to 12 years for furniture and equipment.

Renovations and/or replacements that improve or extend the life of the hotel properties are capitalized and depreciated over their useful lives. Repairs and maintenance are expensed as incurred.

The initial fees incurred to enter into the franchise agreements are capitalized and amortized over the life of the franchise agreements using the straight-line method.  Amortization expense is included in depreciation and amortization in the consolidated statements of operations.

On an ongoing basis, the Company reviews the carrying value of each held for use hotel to determine if certain circumstances, known as triggering events, exist indicating impairment to the carrying value of the hotel or that depreciation periods should be modified.  These triggering events include a significant change in the cash flows of or a significant adverse change in the business climate for a hotel.  If facts or circumstances support the possibility of impairment, the Company will prepare an estimate of the undiscounted future cash flows, without interest charges, of the specific hotel and determine if the investment in such hotel is recoverable based on these undiscounted future cash flows. If the investment is not recoverable based on this analysis, an impairment charge will be taken, if necessary, to reduce the carrying value of the hotel to the hotel’s estimated fair value.

Investment In Joint Venture

Investment in Joint Venture

If it is determined that we do not have a controlling interest in a joint venture, either through our financial interest in a variable interest entity (“VIE”) or through our voting interest in a voting interest entity (“VOE”) and we have the ability to provide significant influence, 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 affiliate as they occur, with losses limited to the extent of our investment in, advances to, and commitments to the investee. Pursuant to our Atlanta JV agreement, allocations of the profits and losses of our Atlanta JV may be allocated disproportionately to nominal ownership percentages due to specified preferred return rate thresholds.

Distributions received from a joint venture are classified in the statements of cash flows using the cumulative earnings approach.  Distributions are classified as cash inflows from operating activities unless cumulative distributions, including those from prior periods not designated as a return of investment, exceed cumulative recognized equity in earnings of the joint venture.  Excess distributions are classified as cash inflows from investing activities as a return of investment.

On an annual basis or at interim periods if events and circumstances indicate that the investment may be impaired, the Company reviews the carrying value of its investment in unconsolidated joint venture to determine if circumstances indicate impairment to the carrying value of the investment that is other than temporary. The investment is considered impaired if its estimated fair value is less than the carrying amount of the investment and that impairment is other than temporary.

Assets Held For Sale And Discontinued Operations

Assets Held for Sale and Discontinued Operations

A hotel is considered held for sale (a) when a contract for sale is entered into, a substantial, nonrefundable deposit has been committed by the purchaser, and sale is expected to occur within one year, or (b) if management has committed to and is actively engaged in a plan to sell the property, the property is available for sale in its current condition, and it is probable the sale will be completed within one year.  If a hotel is considered held for sale as of the most recent balance sheet presented or was sold in any period presented, the hotel property and the debt it collateralizes are shown as held for sale in all periods presented. Depreciation of our hotels is discontinued at the time they are considered held for sale. 

At the end of each reporting period, if the fair value of the held for sale property less costs to sell is lower than the carrying value of the hotel, the Company will record an impairment loss.  Impairment losses on held for sale properties may be subsequently recovered up to the amount of the cumulative impairment losses taken while the property is held for sale should future revisions to fair value estimates be required.  If active marketing ceases or the property no longer meets the criteria to be classified as held for sale, the property is reclassified to held for use and measured at the lower of its (a) carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held for use, or (b) its fair value at the date of the subsequent decision not to sell.

Historically, we have presented the results of operations of hotel properties that have been sold or considered held for sale as discontinued operations.  In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in ASU 2014-08 change the criteria for reporting a discontinued operation and require new disclosures of both discontinued operations and certain other significant disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations that have a major effect on an entity’s operations and financial results should be presented as discontinued operations subsequent to adoption. The Company adopted the pronouncement on October 1, 2014.  As a result of this adoption, only the operations of hotels meeting the criteria to be considered held for sale prior to October 1, 2014 are included in discontinued operations for all periods presented as no individual hotel disposition represents a strategic shift in operations or has a major effect on our operations or financial results.

Gains on the sale of real estate are recognized when a property is sold, provided that the profit is determinable, meaning that collectability of the sales price is reasonably assured or can be estimated, and that the earnings process is complete, meaning that the seller is not obligated to perform significant activities after the sale in order to earn the profit.If these criteria are not met, the timing of the sale is determined based on various criteria related to the terms of the transaction and any continuing involvement in the form of management or financial assistance associated with the property. If the sales criteria are not met, the gain is deferred and the finance, installment, or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent we sell a property and retain a partial ownership interest in the property, we generally recognize a gain to the extent of the third party ownership interest.

Cash And Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents includes cash and highly liquid investments with original maturities of three months or less when acquired, and are carried at cost which approximates fair value. The Company maintained a major portion of its deposits with Huntington Bancshares Incorporated at December 31, 2017 and Great Western Bank, a Nebraska Corporation, at December 31, 2016.  The balances on deposit at Huntington Bancshares Incorporated and Great Western Bank may at times exceed the federal deposit insurance limit, however, management believes that no significant credit risk exists with respect to the uninsured portion of these cash balances.

Restricted Cash

Restricted Cash

Restricted cash consists of cash held in escrow for the replacement of furniture and fixtures or for real estate taxes and property insurance as required under certain loan agreements.  For purposes of the statements of cash flows, changes in restricted cash caused by changes in required reserves for real estate taxes or property insurance are shown as operating activities. Changes in restricted cash caused by changes in required reserves for the replacement of furniture and fixtures are shown as investing activities.

Deferred Financing Cost

Deferred Financing Costs

Direct costs incurred in financing transactions are capitalized as deferred financing costs and amortized to interest expense over the term of the related loan using the effective interest method.  Deferred financing costs are presented on the balance sheets as a direct deduction from the associated debt liability.

Derivative Assets and Liabilities

Derivative Assets and Liabilities

In the normal course of business, the Company is exposed to the effects of interest rate changes, and the Company may enter into derivative instruments including interest rate swaps, caps, and collars to manage or economically hedge interest rate risk.  Additionally, the Company is required to include on the balance sheets certain bifurcated embedded derivative instruments such as conversion and redemption features in convertible instruments and certain common stock warrants.

All derivatives recognized by the Company are reported as derivative assets and liabilities on the balance sheets and are adjusted to their fair value at each reporting date.  Realized and unrealized gains and losses on derivative instruments are included in net gain on derivatives and convertible debt with the exception of realized gains and losses related to interest rate instruments which are included in interest expense on the statements of operations.

Noncontrolling Interest

Noncontrolling Interest

Noncontrolling interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership and long-term incentive plan (“LTIP”) units (see Note 12).  Earnings and loss are allocated to noncontrolling interest in accordance with the weighted average percentage ownership of the operating partnership during the period. 

Revenue Recognition

Revenue Recognition

Revenue consists of amounts derived from hotel operations, including the sale of rooms, food and beverage, and other ancillary amenities.  Revenue from the operation of the hotel properties is recognized when rooms are occupied and services have been rendered.  Sales, use, occupancy, and similar taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue in the statements of operations.

Income Taxes

Income Taxes

The Company qualifies and intends to continue to qualify as a REIT under applicable provisions of the Internal Revenue Code (the “Code”), as amended.  In general, under such Code 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, will not be subject to federal income tax to the extent of the income currently distributed to shareholders.  If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will be unable to re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT, unless we satisfy certain relief provisions.  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.  Except with respect to the TRS, the Company does not believe that it will be liable for significant federal or state income taxes in future years.

A REIT will incur a 100% tax on the net gain derived from any sale or other disposition of property that the REIT holds primarily for sale to customers in the ordinary course of a trade or business. We do not believe any of our hotels were held primarily for sale in the ordinary course of our trade or business. However, if the IRS would successfully assert that we held such hotels primarily for sale in the ordinary course of our business, the gain from such sales could be subject to a 100% prohibited transaction tax.

Taxable income from non-REIT activities managed through the TRS, which is taxed as a C-Corporation, is subject to federal, state, and local income taxes.  We account for the federal income taxes of our TRS 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 and their respective tax bases and for operating loss and tax credit carryforwards 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 projections for future taxable income over the periods in which the remaining deferred tax assets are deductible.  In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not (defined as a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

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 resolution of any related appeals or litigation processes, based on its 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 to the uncertain tax position by the applicable taxing authority or by expiration of the applicable statute of limitations. For the years ended December 31, 2017, 2016, and 2015, the Company did not record any uncertain tax positions.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are utilized to determine the value of certain assets, liabilities, and equity instruments, to perform impairment assessments, to account for hotel acquisitions, in the valuation of stock-based compensation, and for disclosure purposes. Fair value measurements are classified into a three-tiered fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations whose inputs are observable.

Level 3: Unobservable inputs for which there is little or no market data, which require a reporting entity to develop its own assumptions.

Our estimates of fair value were determined using available market information and appropriate valuation methods.  Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions or valuation techniques may have a material effect on estimated fair value measurements.  We classify assets and liabilities in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement.

With the exception of fixed rate debt (see Note 8) and other financial instruments carried at fair value, the carrying amounts of the Company’s financial instruments approximates their fair values due to their short-term nature or variable market-based interest rates.

Fair Value Option

Fair Value Option

Under U.S. GAAP, the Company has the irrevocable option to report most financial assets and financial liabilities at fair value on an instrument by instrument basis, with changes in fair value reported in net earnings.  This option was elected for the treatment of the Company’s convertible debt entered into on March 16, 2016 (see Note 7).

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation is measured at the fair value of the award on the date of grant and recognized as compensation expense on a straight-line basis over the requisite service period. Awards that contain a performance condition are reviewed at least quarterly to assess the achievement of the performance condition. Compensation expense will be adjusted when a change in the assessment of achievement of the specific performance condition level is determined to be probable. The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of our stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve performance thresholds. We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the point of measurement. Compensation cost is recognized as additional paid-in capital for awards of the Company’s common stock and as noncontrolling interest for LTIP awards of common units.  The Company has elected to account for forfeitures of stock-based compensation as they occur.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies certain of the criteria for determining whether derivative features in a hybrid financial instrument should be separately recognized.  ASU 2014-16 is effective for fiscal years beginning after December 15, 2015 and permits either a retrospective or cumulative effect transition method.  ASU 2014-16 was adopted by the Company on January 1, 2016 and was utilized in determining the accounting for the 6.25% Series D Cumulative Convertible Preferred Stock (“Series D Preferred Stock”) issued in March 2016 and the 6.25% Series E Cumulative Preferred Stock (“Series E Preferred Stock”) issues in March 2017 (see Note 10).

In February 2015, the FASB issued ASU No. 2015-02, Consolidation - Amendments to the Consolidation Analysis, which amends the current consolidation guidance effecting both the VIE and VOE consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Company adopted this standard on January 1, 2016 and concluded that the operating partnership now meets the criteria to be considered a VIE of which the Company is the primary beneficiary and, accordingly, the Company continues to consolidate the operating partnership. The Company’s sole significant asset is its investment in the operating partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the operating partnership. All of the Company’s debt is an obligation of the operating partnership.  This ASU was also used in the determination of the accounting for the Atlanta JV entered into in August 2016 (see Note 5).

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheets as a direct deduction from the associated debt liability.  The Company adopted this standard on January 1, 2016 and presents all debt issuance costs as a direct deduction from the carrying value of the debt liability. Adoption of this standard was applied retrospectively for all periods presented, effecting only the presentation of the balance sheets. The adoption of this standard did not have a material impact on the Company's financial position and had no impact on the results of operations or cash flows.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU replaces most existing revenue recognition guidance in U.S. GAAP when it becomes effective.  The original updated accounting guidance was effective for annual and interim reporting periods in fiscal years beginning after December 15, 2016, however, in July 2015, the FASB approved a one year delay of the effective date to fiscal years beginning after December 15, 2017.  As such, the standard is effective for the Company on January 1, 2018.  The Company has adopted ASU 2014-09 for the year beginning on January 1, 2018.   The standard permits the use of either the retrospective or cumulative effect transition method.  The Company has evaluated each of its revenue streams under the new model. Based on our assessments, the adoption of this standard will not materially affect the amount and timing of revenue recognition for revenues from rooms, food and beverage, and other ancillary amenities. The Company has adopted this standard for the year beginning on January 1, 2018 using the modified retrospective approach and is evaluating disclosure requirements.  Furthermore, for real estate sales to third parties, primarily a result of disposition of real estate in exchange for cash with few contingencies, we do not expect the standard to significantly impact the recognition of our accounting for these sales.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes most existing lease guidance in U.S. GAAP when it becomes effective. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use asset and lease liability and additional qualitative and quantitative disclosures. ASU 2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 2018, permits early adoption, and mandates a modified retrospective transition method. The Company is required to adopt ASU 2016-02 on January 1, 2019. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Payment, which clarifies and provides specific guidance on eight cash flow classification issues with an objective to reduce the current diversity in practice. This guidance is effective for the Company for years beginning after December 15, 2017 but earlier adoption is permitted.  The Company has adopted ASU 2016-15 for the year beginning on January 1, 2018.  The adoption of ASU 2016-15 will not have a material impact on our consolidated financial statements. 

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies how companies should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires companies to show the changes in the total of cash, cash equivalents, and restricted cash equivalents in the statement of cash flows. This guidance is effective for the Company for years beginning afterDecember 15, 2017, including interim periods within those years. Early adoption is permitted.  The Company has adopted ASU 2016-18 for the year beginning on January 1, 2018.  The adoption of ASU No. 2016-18 will change the presentation of the statements of cash flows for the Company and we will utilize a retrospective transition method for each period presented within the consolidated financial statements for periods subsequent to the date of adoption.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions of assets or business combinations. As a result of the standard, we anticipate that the majority of our hotel purchases will be considered asset purchases as opposed to business combinations and as such the related acquisition costs will be capitalized. However, the determination will be made on a transaction-by-transaction basis. This standard will be applied on a prospective basis and, therefore, it does not affect the accounting for any of our previous transactions.  This standard will be effective for annual periods beginning after December 15, 2017, although early adoption is permitted.  The Company has adopted ASU 2017-01 for the year beginning on January 1, 2018. 

Reclassifications

Reclassifications

Certain amounts in prior year financial statements have been reclassified to conform to current year presentation.

Liquidity

Liquidity

We expect to meet our short-term liquidity requirements through net cash provided by operations, existing cash balances and working capital, short-term borrowings under our $150,000 secured revolving credit facility (the “credit facility”), and the release of restricted cash by our lenders upon the satisfaction of usage requirements.  At December 31, 2017, the Company had $5,441 of cash and cash equivalents on hand and $11,934 of unused availability under its credit facility.  Our short-term liquidity requirements consist primarily of operating expenses and other expenditures directly associated with our hotel properties, recurring maintenance and capital expenditures necessary to maintain our hotels in accordance with brand standards, interest expense and scheduled principal payments on outstanding indebtedness, restricted cash funding obligations, and the payment of dividends in accordance with the REIT requirements of the Code and as required in connection with our Series E Preferred Stock. Prior to the consideration of any asset sales or our ability to refinance debt subsequent to December 31, 2017, contractual principal payments on our debt outstanding, which include only normal amortization, total $1,381 through March 31, 2019.  We also presently expect to invest approximately $4,000 to $5,000 in capital expenditures related to hotel properties we currently own through March 31, 2019.

To maintain our REIT tax status, we generally must distribute at least 90% of our taxable income to our shareholders annually.  In addition, we are subject to a 4% non-deductible excise tax if the actual amount distributed to shareholders in a calendar year is less than a minimum amount specified under the federal income tax laws.  We have a general dividend policy of paying out approximately 100% of annual REIT taxable income.  The actual amount of any future dividends will be determined by the Board of Directors based on our actual results of operations, economic conditions, capital expenditure requirements, and other factors that the Board of Directors deems relevant.

Our longer-term liquidity requirements consist primarily of the cost of acquiring additional hotel properties, renovations and other one-time capital expenditures that periodically are made related to our hotel properties, and scheduled debt payments, including maturing loans.  Possible sources of liquidity to fund debt maturities and acquisitions and to meet other obligations include additional secured or unsecured debt financings, proceeds from public or private issuances of debt or equity securities, and additional borrowings under our existing credit facility

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Investment In Hotel Properties (Tables)

12 Months Ended

Dec. 31, 2017

Investment In Hotel Properties [Abstract]

Schedule Of Investment In Hotel Properties

	As of December 31,
	2017						2016
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	1,633	$	20,216	$	21,849	$	4,727	$	11,685	$	16,412
Buildings, improvements, vehicle		13,143		182,909		196,052		40,006		68,677		108,683
Furniture and equipment		3,463		17,840		21,303		9,330		8,011		17,341
Initial franchise fees		118		1,528		1,646		359		503		862
Construction-in-progress		2		276		278		55		31		86
Investment in hotel properties		18,359		222,769		241,128		54,477		88,907		143,384
Less accumulated depreciation		(5,704)		(15,844)		(21,548)		(18,837)		(9,676)		(28,513)
Investment in hotel properties, net	$	12,655	$	206,925	$	219,580	$	35,640	$	79,231	$	114,871

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Acquisition Of Hotel Properties (Tables)

12 Months Ended

Dec. 31, 2017

Schedule Of Purchase Price Allocation

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicle		Furniture and equipment		Intangible asset		Estimated earn out		Total purchase price		Debt at acquisition (2)		Issuance of common units (3)		Net cash paid
Home2 Suites	03/24/2017	$	905	$	14,204	$	1,351	$	40	$	-	$	16,500	$	16,455	$	45	$	-
Lexington, KY
Home2 Suites	03/24/2017		1,087		14,345		1,285		33		-		16,750		16,705		45		-
Round Rock, TX
Home2 Suites	03/24/2017		1,519		18,229		1,727		25		-		21,500		21,442		58		-
Tallahassee, FL
Home 2 Suites	04/14/2017		1,311		16,792		897		-		-		19,000		9,096		52		9,852
Southaven, MS
Hampton Inn & Suites	06/19/2017		1,200		16,432		1,773		-		(155) (1)		19,250		19,165		85		-
Lake Mary, FL
Fairfield Inn & Suites	08/31/2017		1,014		14,297		1,089		-		-		16,400		16,336		64		-
EL Paso, TX
Residence Inn	08/31/2017		1,495		19,630		1,275		-		-		22,400		22,314		86		-
Austin, TX
Total		$	8,531	$	113,929	$	9,397	$	98	$	(155)	$	131,800	$	121,513	$	435	$	9,852

(1) The Lake Mary purchase price was subject to a post-closing adjustment of up to $250 to be paid to the seller if the hotel achieved a stipulated hotel net operating income level in 2017.  This contingent consideration was included in the purchase price allocation at its estimated fair value on the date of the acquisition.  The full amount of $250 was paid to the seller in December of 2017 with the incremental amount paid over the estimated fair value included in acquisition and terminated transactions expenses.

(2) Debt of $9,096 with Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 was assumed related to the Home2 Suites Southaven, MS acquisition. This loan remains outstanding at December 31, 2017. All other debt was drawn from the credit facility at acquisition.

(3) Total issuance of 1,940,451 common units.

Schedule Of Pro Forma Results

	Years ended December 31,
	2017		2016
Total revenue	$	66,894	$	81,439
Operating income	$	7,204	$	9,156
Net earnings (loss) attributable to common shareholders	$	(7,497)	$	3,877
Net earnings (loss) per share - Basic	$	(0.79)	$	5.09
Net earnings (loss) per share - Diluted	$	(0.79)	$	1.26

Aloft Hotel, Leawood, Kansas [Member]

Schedule Of Purchase Price Allocation

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Total purchase price		Debt at acquisition (1)		Issuance of common units (2)		Net cash paid
Aloft	12/14/2016	$	3,339	$	18,046	$	1,115	$	22,500	$	15,925	$	50	$	6,525
Leawood, KS

Hotel Indigo, Marriott And Springhill Suites [Member]

Schedule Of Purchase Price Allocation

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Total purchase price		Debt at acquisition (1)		Issuance of common units (2)		Net cash paid (3)
Hotel Indigo	10/2/2015	$	800	$	8,700	$	1,500	$	11,000	$	5,000	$	150	$	5,850
Atlanta, GA
Marriott Courtyard	10/2/2015		2,100		11,050		850		14,000		10,100		150		3,750
Jacksonville, FL
SpringHill Suites	10/1/2015		1,597		14,353		1,550		17,500		11,220		150		6,130
San Antonio, TX
Total		$	4,497	$	34,103	$	3,900	$	42,500	$	26,320	$	450	$	15,730

(1) These acquisitions were funded with the assumption of one loan from Latitude with an aggregate outstanding principal balance of $11,220 and two newly originated GE Capital loans totaling $15,100 (subsequently sold to Western Alliance Bank in April 2016).  These loans were refinanced with a loan from Wells Fargo in 2017.

(2) Total issuance of 2,298,879 common units.

(3) Includes $830 funded by borrowings from the Company’s then existing credit facility with Great Western Bank.

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Dispositions Of Hotel Properties And Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2017

Dispositions Of Hotel Properties And Discontinued Operations [Abstract]

Components Of Discontinued Operations

	2016		2015
Revenue	$	6	$	2,923
Hotel and property operations expense		(4)		(1,946)
Net gain on dispositions of assets		681		2,997
Interest expense		(5)		(223)
Impairment recovery (loss)		-		121
	$	678	$	3,872
Capital expenditures	$	-	$	90

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Investment In Unconsolidated Joint Venture (Tables)

12 Months Ended

Dec. 31, 2017

Investment In Unconsolidated Joint Venture [Abstract]

Schedule Of Purchase Price Allocation

Hotel	Date of acquisition	Land		Buildings, improvements, and vehicles		Furniture and equipment		Land option (1)		Total purchase price		Debt at acquisition		Net cash paid
Aloft	08/22/2016	$	13,025	$	34,048	$	2,667	$	(6,190)	$	43,550	$	33,750	$	9,800
Atlanta, GA

(1) The purchase agreement includes a provision which permits the seller to purchase the surface parking lot north of the hotel exercisable for ten years at less than market rates

Schedule Of Financial Position of Unconsolidated Joint Ventures

	As of December 31,
	2017		2016
Investment in hotel properties, net	$	48,013	$	49,305
Cash and cash equivalents		1,404		1,184
Restricted cash, property escrows		682		464
Accounts receivable, prepaid expenses, and other assets		176		320
Total Assets	$	50,275	$	51,273
Accounts payable, accrued expenses, and other liabilities	$	1,019	$	633
Land option liability		6,190		6,190
Long-term debt, net of deferred financing costs		33,382		33,155
Total Liabilities		40,591		39,978
Condor equity		7,747		9,036
TWC equity		1,937		2,259
Total Equity		9,684		11,295
Total Liabilities and Equity	$	50,275	$	51,273

Summary Of Results Of Operations Of Unconsolidated Joint Ventures

	Year ended December 31,
	2017		2016
Revenue
Room rentals and other hotel services	$	11,582	$	3,703
Operating Expenses
Hotel and property operations		7,585		2,457
Depreciation and amortization		1,425		471
Acquisition		-		299
Total operating expenses		9,010		3,227
Operating income		2,572		476
Net loss on disposition of assets		(8)		(2)
Net loss on derivative		(3)		(6)
Interest expense		(2,323)		(773)
Net earnings (loss)	$	238	$	(305)
Condor allocated earnings (loss)	$	190	$	(244)
TWC allocated earnings (loss)		48		(61)
Net earnings (loss)	$	238	$	(305)

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2017

Long-Term Debt [Abstract]

Summary Of Long Term Debt

Lender	Balance at December 31, 2017		Interest rate at December 31, 2017	Maturity	Amortization provision	Properties encumbered at December 31, 2017	Balance at December 31, 2016
Fixed rate debt
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18	$	8,987	4.54%	08/2024	25 years	1	$	-
Great Western Bank (1)		13,950	4.33%	12/2021 (13)	25 years	1		14,326
Great Western Bank (1)		1,380	4.33%	12/2021 (13)	7 years	-		1,599
Western Alliance Bank		-	(2)	02/2017	15 years	-		4,806
Western Alliance Bank		-	(3)	02/2018	15 years	-		2,803
Cantor Commercial Real Estate Lending		-	(4)	11/2017	30 years	-		5,713
Morgan Stanley Mortgage Capital Holdings, LLC		-	(5)	12/2017	25 years	-		912
Total fixed rate debt		24,317						30,159
Variable rate debt
Wells Fargo		26,465	4.44% (6)	11/2022 (14)	30 years	3		-
KeyBank credit facility (7)		73,303	4.55% (8)	03/2020 (15)	Interest only	12		-
Western Alliance Bank		-	(9)	11/2020	25 years	-		4,882
Western Alliance Bank		-	(9)	11/2020	25 years	-		9,863
The Huntington National Bank		-	(10)	11/2020	25 years	-		7,361
LMREC 2015 - CREI, Inc. (Latitude)		-	(11)	05/2018	$12 monthly (12)	-		11,124
Total variable rate debt		99,768				17		33,230
Total long-term debt	$	124,085					$	63,389
Less: Deferred financing costs		(3,504)						(669)
Total long-term debt, net of deferred financing costs		120,581						62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $174 and $168		(4,976)						(14,802)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $3,330 and $501	$	115,605					$	47,918

(1) Both loans are collateralized by Aloft Leawood

(2) Fixed rate of 7.17% prior to extinguishment with origination of credit facility on March 1, 2017

(3) Fixed rate of 4.75% prior to extinguishment with origination of credit facility on March 1, 2017

(4) Fixed rate of 4.25% prior to extinguishment with origination of credit facility on March 1, 2017

(5) Fixed rate of 5.83% prior to extinguishment with origination of credit facility on March 1, 2017

(6) Variable rate of 30-day LIBOR plus 2.39%, effectively fixed at 4.44% after giving effect to interest rate swap (see Note 8)

(7) Total unused availability under this credit facility was $11,934 at December 31, 2017; commitment fee on unused facility is 0.20%

(8) Borrowings under the facility accrue interest based on a leverage-based pricing grid, at the Company’s option, at either LIBOR plus a spread ranging from 2.25% to 3.00% (depending on leverage) or a base rate plus a spread ranging from 1.25% to 2.00% (depending on leverage); 30-day LIBOR for $50,000 notional effectively capped at 2.5% after giving effect to interest rate cap (see Note 8)

(9) Variable rate of 90-day LIBOR plus 3.25% prior to extinguishment with origination of Wells Fargo debt on October 4, 2017

(10) Variable rate of 30-day LIBOR plus 2.25%, effectively fixed at 4.13% after giving effect to interest rate swap (see Note 8) prior to extinguishment with origination of credit facility on March 1, 2017

(11) Variable rate of 30-day LIBOR plus 6.25%,30-day LIBOR capped at 1.0% after giving effect to interest rate cap (see Note 8) prior to extinguishment with origination of credit facility on March 1, 2017

(12) $12 monthly payments began May 2016

(13) Term may be extended for additional two years subject to interest rate adjustments

(14) Two one-year extension options subject to the satisfaction of certain conditions

(15) Two one-year extension options available subject to certain conditions including the completion of specific capital achievements

Aggregate Annual Principal Payments On Debt Associated With Assets Held For Use And Held For Sale

	Held for sale		Held for use		Total
2018	$	-	$	1,083	$	1,083
2019		-		1,183		1,183
2020		5,150		69,385		74,535
2021		-		14,344		14,344
2022		-		24,886		24,886
Thereafter		-		8,054		8,054
Total	$	5,150	$	118,935	$	124,085

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Convertible Debt At Fair Value (Tables)

12 Months Ended

Dec. 31, 2017

Convertible Debt At Fair Value [Abstract]

Difference Between Fair Value And Unpaid Principal Balance Of Note

	Fair value as of December 31, 2017		Unpaid principal balance as of December 31, 2017		Fair value carrying amount (over)/under unpaid principal
6.25% Convertible Debt	$	(1,069)	$	(1,012)	$	(57)

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Fair Value Measurements And Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Measurements And Derivative Instruments [Abstract]

Schedule Of Interest Rate Swaps And Caps

Associated debt	Type	Terms	Effective Date	Maturity Date	Notional amount at December  31, 2017		Notional amount at December 31, 2016
Wells Fargo	Swap	Swaps 30-day LIBOR for fixed rate of 2.053%	11/2017	11/2022	$	26,465 (1)	$	-
Credit facility	Cap	Caps 30-day LIBOR at 2.50%	03/2017	03/2019	$	50,000	$	-
Huntington	Swap	Swaps 30-day LIBOR + 2.25% for fixed rate of	11/2015	11/2020	$	-	$	7,361 (1)
		4.13 %; cancellable at Company's option anytime
		after 11/01/2018 without penalty
Latitude	Cap	Caps 30-day LIBOR at 1.0%	03/2016	06/2017	$	-	$	11,124 (1)

(1) Notional amounts amortize consistently with the principal amortization of the associated loans

Schedule Of Fair Value Assets And (Liabilities) Carried At Fair Value And Measured On Recurring Basis

	Fair value at December 31, 2017		Level 1		Level 2		Level 3
Interest rate derivatives	$	77	$	-	$	77	$	-
Series E Preferred embedded redemption option		314		-		-		314
Convertible debt		(1,069)		-		-		(1,069)
Total	$	(678)	$	-	$	77	$	(755)

	Fair value at December 31, 2016		Level 1		Level 2		Level 3
Interest rate derivatives	$	(8)	$	-	$	(8)	$	-
Convertible debt		(1,315)		-		-		(1,315)
Total	$	(1,323)	$	-	$	(8)	$	(1,315)

Reconciliation Of Fair Value Liabilities Measured On Recurring Basis

	Year ended December 31,
		2017					2016
	Series E Preferred embedded redemption option		Convertible debt		Total		Series C Preferred embedded derivative		RES warrant derivative		Convertible debt		Total
Fair value, beginning of period	$	-	$	(1,315)	$	(1,315)	$	(6,271)	$	(2,411)	$	-	$	(8,682)
Net gains (losses) recognized in earnings		164		246		410		4,848		1,800		(303)		6,345
Purchase and issuances		150		-		150		-		-		(1,012)		(1,012)
Sales and settlements		-		-		-		1,423		-		-		1,423
Gross transfers into Level 3		-		-		-		-		-		-		-
Gross transfers out of Level 3		-		-		-		-		611 (1)		-		611
Fair value, end of period	$	314	$	(1,069)	$	(755)	$	-	$	-	$	(1,315)	$	(1,315)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$	164	$	246	$	410	$	-	$	-	$	(303)	$	(303)

(1) RES warrants were permanently reclassified to additional paid-in capital as discussed above

Schedule Of Carrying Value And Estimated Fair Value Of Long-Term Debt

	Carrying value at December 31,				Estimated fair value at December 31,
	2017		2016		2017		2016
Held for use	$	115,605	$	47,918	$	115,239	$	48,034
Held for sale		4,976		14,802		4,976		15,186
Total	$	120,581	$	62,720	$	120,215	$	63,220

Schedule Of Impairment And Recovery Of Previously Recorded Impairment

	Year ended December 31,
	2017			2016			2015
	Number of hotels	Impairment (loss) recovery		Number of hotels	Impairment (loss) recovery		Number of hotels	Impairment (loss) recovery
Continuing Operations:
Held for sale hotels:
Impairment loss	1	$	(1,448)	-	$	-	1	$	(1,537)
Sold hotels:
Impairment loss	2		(783)	5		(1,477)	5		(2,377)
Recovery of impairment	2		80	-		-	1		85
Net impairment loss reported in continuing operations	5	$	(2,151)	5	$	(1,477)	7	$	(3,829)
Discontinued Operations:
Sold hotels:
Impairment loss	-	$	-	-	$	-	1	$	(117)
Recovery of impairment	-		-	-		-	3		238
Net impairment loss reported in discontinued operations	-	$	-	-	$	-	4	$	121
Total net impairment:	5	$	(2,151)	5	$	(1,477)	11	$	(3,708)

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Preferred Stock (Tables)

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

Components Of Dividends Declared And Undeclared And In Kind Dividends Deemed On Preferred Stock

	Year ended December 31,
	2017		2016		2015
Preferred A dividends accrued at stated rate	$	-	$	222	$	727
Preferred A additional deemed dividends upon redemption		-		652		-
Preferred B dividends accrued at stated rate		-		243		831
Preferred B additional deemed dividends upon redemption		-		668		-
Preferred C dividends accrued at stated rate		-		455		2,074
Preferred C additional deemed dividends at exchange		-		15,418		-
Preferred D dividends accrued at stated rate		650		3,090		-
Preferred D inducement to convert		11,110		-		-
Preferred E dividends accrued at stated rate		483		-		-
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$	12,243	$	20,748	$	3,632

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Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary Of Service Condition Unvested Share Activity

	Shares	Weighted-average grant date fair value
Unvested at December 31, 2016	-	$	-
Granted	96,286	$	10.54
Vested	(234)	$	10.60
Forfeited	(220)	$	10.54
Unvested at December 31, 2017	95,832	$	10.54

Black-Scholes Option-Pricing Model [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Estimated Fair Value Of Options

	$9.88 Grant		$12.48 Grant
	March 2, 2015		March 2, 2015
Volatility	53.10	%	78.60	%
Expected forfeitures	0.00	%	0.00	%
Expected term	15	days	3.00	years
Risk free interest rate	0.02	%	1.06	%

Monte Carlo Option-Pricing Model [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Estimated Fair Value Of Options

	Grant Date March 2, 2015
Volatility		75.5	%
Expected forfeitures		0.00	%
Weighted average price	$	9.945
Expected term		3.00	years
Risk free interest rate		1.06	%

Monte Carlo Option-Pricing Model [Member] | Market Based Share Awards [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Estimated Fair Value Of Options

Volatility	25.0	%
Stock price	$                                                                 10.60
Dividend yield	7.4	%
Risk free interest rate	0.89% - 1.81% based upon expected time of vesting

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Line Items]

Schedule Of Deferred Tax Assets And Deferred Tax Liabilities

	As of December 31,
	2017		2016
Deferred Tax Assets
Accrued expenses and other	$	104	$	99
Net operating losses carried forward for federal income tax purposes		814		1,295
Net operating losses carried forward for state income tax purposes		579		182
AMT		123		-
Book depreciation in excess of tax depreciation		-		38
Subtotal deferred tax assets		1,620		1,614
Valuation allowance		(454)		(1,551)
Total deferred tax assets		1,166		63
Deferred Liabilities
Tax depreciation in excess of book depreciation		363		-
Atlanta JV basis difference		143		63
Total deferred tax liabilities		506		63
Net deferred tax assets	$	660	$	-

Summary of Distributions Paid

	For the year ended December 31,
	2017				2016
	Amount		%	Amount		%
Common Shares:
Ordinary income	$	0.156000	20%	$	0.455000	100%
Capital gain		-	-		-	-
Return of capital		0.624000	80%		-	-
Total	$	0.780000	100%	$	0.455000	100%
Series C Preferred Stock:
Ordinary income	$	-	-	$	1.649124	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	-	-	$	1.649124	100%
Series D Preferred Stock:
Ordinary income	$	0.104160	100%	$	0.494792	100%
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.104160	100%	$	0.494792	100%
Series E Preferred Stock:
Ordinary income	$	0.522569	100%	$	-	-
Capital gain		-	-		-	-
Return of capital		-	-		-	-
Total	$	0.522569	100%	$	-	-

TRS Leasing, Inc [Member]

Income Tax Disclosure [Line Items]

Schedule Of Components Of Income Tax Expense (Benefit)

	Year ended December 31,
	2017		2016		2015
Federal:
Current	$	33	$	90	$	-
Deferred		(615)		-		-
State and local:
Current		12		-		-
Deferred		(45)		-		-
Income tax expense (benefit)	$	(615)	$	90	$	-

Schedule Of Actual Income Benefit From Continuing Operations

	Year ended December 31,
	2017		2016		2015
Computed "expected" income tax (benefit) expense	$	546	$	993	$	684
State income taxes, net of federal income tax (benefit) expense		47		139		82
(Decrease) increase in valuation allowance		(1,097)		(1,082)		(722)
Other		(145)		(50)		(44)
AMT		34		90		-
Total income tax expense (benefit)	$	(615)	$	90	$	-

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Reconciliation Of Basic And Diluted Earnings Per Common Share

	Year ended December 31,
	2017		2016		2015
Numerator: Basic (1)
Net earnings (loss) attributable to common shareholders:
Continuing operations	$	(9,362)	$	1,390	$	6,055
Discontinued operations		-		657		3,438
Total Net earnings (loss) attributable to common shareholders		(9,362)		2,047		9,493
Less: Allocation to participating securities		(56)		-		-
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities	$	(9,418)	$	2,047	$	9,493
Numerator: Diluted (1)
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities	$	(9,418)	$	1,390	$	6,055
Dividends on Series C Preferred Stock		-		-		2,074
Dividends on Series D Preferred Stock		-		3,090		-
Unrealized gain on warrant derivative		-		-		(4,122)
Unrealized gain on Series C Preferred Embedded Derivative		-		-		(7,533)
Continuing operations - Diluted		(9,418)		4,480		(3,526)
Discontinued operations - Diluted		-		657		3,438
Total Diluted	$	(9,418)	$	5,137	$	(88)
Denominator
Weighted average number of common shares - Basic		9,437,824		761,112		751,634
Unvested stock		-		-		619
Series C Preferred Stock		-		-		2,884,615
Series D Preferred Stock		-		4,774,433		-
Warrants - Employees		-		-		106
Warrants - RES		-		-		(61,504)
Weighted average number of common shares - Diluted		9,437,824		5,535,545		3,575,470
Earnings Per Share
Continuing operations - Basic	$	(1.00)	$	1.82	$	8.06
Discontinued operations - Basic		-		0.85		4.55
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	2.67	$	12.61
Continuing operations - Diluted	$	(1.00)	$	0.78	$	(0.98)
Discontinued operations - Diluted		-		0.13		0.98
Total - Basic Earnings (Loss) per Share	$	(1.00)	$	0.91	$	-

(1) The loss (earnings) attributable to noncontrolling interest is allocated between continuing and discontinued operations for the purpose of the EPS calculation

Schedule Of Potentially Dilutive Securities Excluded From Computation Of Earnings Per Share

	Year ended December 31,
	2017	2016	2015
Outstanding stock options (2)	258	865	865
Unvested restricted stock	48,869	-	-
Warrants - RES (2)	53,608	576,923	-
Warrants - Employees	66,153	66,153	55,249
Series C Preferred Stock	-	598,991	-
Series D Preferred Stock (2)	970,606	-	-
Series E Preferred Stock	560,115	-	-
Convertible debt	97,269	77,336	-
LTIP common units (1) (2)	49,636	101,213	84,576
Operating partnership common units (1)	70,722	46,265	13,008
Total potentially dilutive securities excluded from the denominator	1,917,236	1,467,746	153,698

(1) LTIP and common units have been omitted from the denominator for the purpose of computing diluted EPS since the effect of including these amounts in the numerator and denominator would have no impact on calculated EPS.

(2) Amounts above are weighted average amounts outstanding for the year.  These instruments were no longer outstanding at December 31, 2017.

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Commitments And Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments And Contingencies [Abstract]

Schedule Of Future Minimum Lease Payments

		Lease rents
2018	$	159
2019		138
2020		61
2021		47
2022		-
	$	405

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Quarterly Operating Results (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Operating Results [Abstract]

Schedule Of Quarterly Operations

	Quarter ended (unaudited)
	March 31, 2017		June 30, 2017		September 30, 2017		December 31, 2017		Total 2017
Revenue	$	10,361	$	14,252	$	15,562	$	15,278	$	55,453
Operating expenses		11,001		12,719		14,417		14,040		52,177
Operating income (loss)		(640)		1,533		1,145		1,238		3,276
Net gain (loss) on dispositions of assets		(3)		4,852		(46)		2,004		6,807
Equity in earnings (loss) of joint venture		111		25		159		(105)		190
Net gain on derivatives and convertible debt		175		227		14		20		436
Other income (expense), net		(1)		(39)		(43)		(28)		(111)
Interest expense		(971)		(1,092)		(1,405)		(1,706)		(5,174)
Loss on debt extinguishment		(800)		-		-		(167)		(967)
Impairment loss, net		(271)		(479)		(848)		(553)		(2,151)
Earnings (loss) before income tax expense		(2,400)		5,027		(1,024)		703		2,306
Income tax benefit (expense)		-		(35)		(15)		645		595
Net earnings (loss)		(2,400)		4,992		(1,039)		1,348		2,901
(Earnings) loss attributable to noncontrolling interest		50		(67)		7		(10)		(20)
Earnings (loss) attributable to controlling interests		(2,350)		4,925		(1,032)		1,338		2,881
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(11,603)		(271)		(205)		(164)		(12,243)
Net earnings (loss) attributable to common shareholders	$	(13,953)	$	4,654	$	(1,237)	$	1,174	$	(9,362)
Earnings per Share (1)
Total - Basic Earnings (Loss) per Share	$	(4.75)	$	0.40	$	(0.11)	$	0.10	$	(1.00)
Diluted Earnings Per Share (1)
Total - Diluted Earnings (Loss) per Share	$	(4.75)	$	0.37	$	(0.11)	$	0.10	$	(1.00)

(1) Quarterly and total annual EPS are based on the weighted average number of shares outstanding during each quarter and the annual period.Due to rounding and differences in earnings and losses between the quarterly and annual periods, the sum of the quarterly EPS amounts may not equal the reported amounts for the year.

	Quarter ended (unaudited)
	March 31, 2016		June 30, 2016		September 30, 2016		December 31, 2016		Total 2016
Revenue	$	12,503	$	14,155	$	13,519	$	10,470	$	50,647
Operating expenses		12,662		12,508		12,445		11,009		48,624
Operating income (loss)		(159)		1,647		1,074		(539)		2,023
Net gain on dispositions of assets		3,367		8,856		3,591		7,318		23,132
Equity in loss of joint venture		-		-		(54)		(190)		(244)
Net gain on derivatives and convertible debt		6,117		162		26		72		6,377
Other income (expense), net		(21)		23		85		(32)		55
Interest expense		(1,329)		(1,248)		(1,127)		(1,006)		(4,710)
Loss on debt extinguishment		(173)		(976)		(399)		(639)		(2,187)
Impairment loss, net		(793)		(121)		(343)		(220)		(1,477)
Earnings from continuing operations before income tax expense		7,009		8,343		2,853		4,764		22,969
Income tax expense		-		-		-		(125)		(125)
Earnings from continuing operations		7,009		8,343		2,853		4,639		22,844
Gain from discontinued operations, net of tax		678		-		-		-		678
Net earnings		7,687		8,343		2,853		4,639		23,522
Earnings attributable to noncontrolling interest		(389)		(178)		(61)		(99)		(727)
Earnings attributable to controlling interests		7,298		8,165		2,792		4,540		22,795
Dividends declared and undeclared and in kind dividends deemed on preferred stock		(17,740)		(1,057)		(976)		(975)		(20,748)
Net earnings (loss) attributable to common shareholders	$	(10,442)	$	7,108	$	1,816	$	3,565	$	2,047
Earnings per Share (1)
Continuing operations - Basic	$	(14.63)	$	9.36	$	2.41	$	4.68	$	1.82
Discontinued operations - Basic		0.91		-		-		-		0.85
Total - Basic Earnings (Loss) per Share	$	(13.72)	$	9.36	$	2.41	$	4.68	$	2.67
Diluted Earnings Per Share (1)
Continuing operations - Diluted	$	(14.63)	$	1.17	$	0.39	$	0.65	$	0.78
Discontinued operations - Diluted		0.91		-		-		-		0.13
Total - Diluted Earnings (Loss) per Share	$	(13.72)	$	1.17	$	0.39	$	0.65	$	0.91

(1) Quarterly and total annual EPS are based on the weighted average number of shares outstanding during each quarter and the annual period.Due to rounding and differences in earnings and losses between the quarterly and annual periods, the sum of the quarterly EPS amounts may not equal the reported amounts for the year.

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Organization And Summary Of Significant Accounting Policies (Details)			1 Months Ended			12 Months Ended
	Mar. 15, 2017 shares	Feb. 28, 2017	Mar. 31, 2019 USD ($)	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2017 USD ($) property state	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Number of hotels | property						18
Number of states the entity owns hotels | state						9
Reverse stock split, conversion ratio	0.1538
Reverse stock split, fractional shares issued | shares	0
Uncertain tax position						$ 0	$ 0	$ 0
Cash and cash equivalents on hand						5,441,000	8,326,000	$ 4,870,000	$ 173,000
Long-term debt						$ 124,085,000	$ 63,389,000
Forecast [Member]
Long-term debt			$ 1,381,000
Minimum [Member] | Forecast [Member]
Capital expenditures			4,000,000
Maximum [Member] | Forecast [Member]
Capital expenditures			$ 5,000,000
Building And Improvements [Member] | Minimum [Member]
Estimated useful life						15 years
Building And Improvements [Member] | Maximum [Member]
Estimated useful life						40 years
Furniture And Equipment [Member] | Minimum [Member]
Estimated useful life						3 years
Furniture And Equipment [Member] | Maximum [Member]
Estimated useful life						12 years
KeyBank Credit Facility [Member]
Line of credit facility, maximum borrowing capacity						$ 150,000,000
Available borrowing capacity						$ 11,934,000
Atlanta Joint Venture [Member]
Number of hotels | property						1
Ownership percentage						80.00%
TRS Leasing, Inc [Member]
Number of properties held by related parties | property						16
Condor Hospitality Limited Partnership [Member]
Ownership percentage of minority interest						99.30%	97.80%
E&P Financing Limited Partnership [Member]
Ownership percentage of minority interest						100.00%
Series D Preferred Stock [Member]
Preferred stock, annual dividend rate					6.25%		6.25%
Series E Preferred Stock [Member]
Preferred stock, annual dividend rate		6.25%		6.25%		6.25%

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Investment In Hotel Properties (Schedule Of Investment In Hotel Properties) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Investment in hotel properties, Held for sale	$ 18,359	$ 54,477
Less accumulated depreciation, Held For Sale	(5,704)	(18,837)
Investment in hotel properties, net, Held For Sale	12,655	35,640
Investment in hotel properties, Held For Use	222,769	88,907
Less accumulated depreciation, Held For Use	(15,844)	(9,676)
Investments in hotel properties, net, Held For Use	206,925	79,231
Investments in hotel properties	241,128	143,384
Less accumulated depreciation	(21,548)	(28,513)
Investments in hotel properties, net, Total	219,580	114,871
Land [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties, Held for sale	1,633	4,727
Investment in hotel properties, Held For Use	20,216	11,685
Investments in hotel properties	21,849	16,412
Building, Improvements, Vehicle [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties, Held for sale	(13,143)	40,006
Investment in hotel properties, Held For Use	182,909	68,677
Investments in hotel properties	196,052	108,683
Furniture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties, Held for sale	3,463	9,330
Investment in hotel properties, Held For Use	17,840	8,011
Investments in hotel properties	21,303	17,341
Initial Franchise Fees [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties, Held for sale	118	359
Investment in hotel properties, Held For Use	1,528	503
Investments in hotel properties	1,646	862
Construction-In-Progress [Member]
Property, Plant and Equipment [Line Items]
Investment in hotel properties, Held for sale	2	55
Investment in hotel properties, Held For Use	276	31
Investments in hotel properties	$ 278	$ 86

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Acquisition Of Hotel Properties (Narrative) (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) property shares	Dec. 31, 2016 USD ($) property shares	Dec. 31, 2015 USD ($) property shares
Business Acquisition [Line Items]
Number of wholly owned properties acquired | property									7		3
Revenue	$ 15,278	$ 15,562	$ 14,252	$ 10,361	$ 10,470	$ 13,519	$ 14,155	$ 12,503	$ 55,453	$ 50,647	$ 58,714
Net income (loss)	$ 1,338	$ (1,032)	$ 4,925	$ (2,350)	$ 4,540	$ 2,792	$ 8,165	$ 7,298	2,881	$ 22,795	$ 13,125
Aloft Hotel, Leawood, Kansas [Member]
Business Acquisition [Line Items]
Number of wholly owned properties acquired | property										1
Revenue										$ 222
Net income (loss)										$ 1
Hotel Indigo, Marriott And Springhill Suites [Member]
Business Acquisition [Line Items]
Number of wholly owned properties acquired | property											3
Revenue											$ 2,611
Net income (loss)											$ 356
Wholly Owned Properties Acquired [Member]
Business Acquisition [Line Items]
Revenue									17,455
Net income (loss)									$ 4,508
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member]
Business Acquisition [Line Items]
Common units issued | shares									1,940,451		2,298,879
Condor Hospitality Limited Partnership [Member] | Aloft Hotel, Leawood, Kansas [Member] | Noncontrolling Interest [Member]
Business Acquisition [Line Items]
Common units issued | shares										213,904

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Acquisition Of Hotel Properties (Schedule Of Purchase Price Allocation) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) loan	Dec. 31, 2015 USD ($) loan
Business Acquisition [Line Items]
Land	$ 8,531		$ 4,497
Building, improvements, and vehicles	113,929		34,103
Furniture and equipment	9,397		3,900
Intangible asset	98
Estimated earn out	(155)
Total purchase price	131,800		42,500
Debt at acquisition	121,513		26,320
Net cash	$ 9,852		$ 15,730
Home2 Suites [Member] | Lexington, Kentucky [Member]
Business Acquisition [Line Items]
Date of acquisition	Mar. 24, 2017
Land	$ 905
Building, improvements, and vehicles	14,204
Furniture and equipment	1,351
Intangible asset	40
Total purchase price	16,500
Debt at acquisition	$ 16,455
Home2 Suites [Member] | Round Rock, Texas [Member]
Business Acquisition [Line Items]
Date of acquisition	Mar. 24, 2017
Land	$ 1,087
Building, improvements, and vehicles	14,345
Furniture and equipment	1,285
Intangible asset	33
Total purchase price	16,750
Debt at acquisition	$ 16,705
Home2 Suites [Member] | Tallahassee, Florida [Member]
Business Acquisition [Line Items]
Date of acquisition	Mar. 24, 2017
Land	$ 1,519
Building, improvements, and vehicles	18,229
Furniture and equipment	1,727
Intangible asset	25
Total purchase price	21,500
Debt at acquisition	$ 21,442
Home2 Suites [Member] | Southaven, Mississippi [Member]
Business Acquisition [Line Items]
Date of acquisition	Apr. 14, 2017
Land	$ 1,311
Building, improvements, and vehicles	16,792
Furniture and equipment	897
Total purchase price	19,000
Debt at acquisition	9,096
Net cash	9,852
Assumption of debt	$ 9,096
Hampton Inn And Suites [Member] | Lake Mary, Florida [Member]
Business Acquisition [Line Items]
Date of acquisition	Jun. 19, 2017
Land	$ 1,200
Building, improvements, and vehicles	16,432
Furniture and equipment	1,773
Estimated earn out	(155)
Total purchase price	19,250
Debt at acquisition	19,165
Contingent consideration liability	$ 250
Aloft Hotel, Leawood, Kansas [Member]
Business Acquisition [Line Items]
Date of acquisition		Dec. 14, 2016
Land		$ 3,339
Building, improvements, and vehicles		18,046
Furniture and equipment		1,115
Total purchase price		22,500
Debt at acquisition		15,925
Net cash		6,525
Fairfield Inn & Suites [Member] | El Paso, Texas [Member]
Business Acquisition [Line Items]
Date of acquisition	Aug. 31, 2017
Land	$ 1,014
Building, improvements, and vehicles	14,297
Furniture and equipment	1,089
Total purchase price	16,400
Debt at acquisition	$ 16,336
Residence Inn [Member] | Austin, Texas [Member]
Business Acquisition [Line Items]
Date of acquisition	Aug. 31, 2017
Land	$ 1,495
Building, improvements, and vehicles	19,630
Furniture and equipment	1,275
Total purchase price	22,400
Debt at acquisition	22,314
Hotel Indigo, Atlanta, GA [Member]
Business Acquisition [Line Items]
Date of acquisition			Oct. 02, 2015
Land			$ 800
Building, improvements, and vehicles			8,700
Furniture and equipment			1,500
Total purchase price			11,000
Debt at acquisition			5,000
Net cash			$ 5,850
Marriott Courtyard, Jacksonville, FL [Member]
Business Acquisition [Line Items]
Date of acquisition			Oct. 02, 2015
Land			$ 2,100
Building, improvements, and vehicles			11,050
Furniture and equipment			850
Total purchase price			14,000
Debt at acquisition			10,100
Net cash			$ 3,750
Springhill Suites, San Antonio, TX [Member]
Business Acquisition [Line Items]
Date of acquisition			Oct. 01, 2015
Land			$ 1,597
Building, improvements, and vehicles			14,353
Furniture and equipment			1,550
Total purchase price			17,500
Debt at acquisition			11,220
Net cash			6,130
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member]
Business Acquisition [Line Items]
Issuance of common units	435		450
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Lexington, Kentucky [Member]
Business Acquisition [Line Items]
Issuance of common units	45
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Round Rock, Texas [Member]
Business Acquisition [Line Items]
Issuance of common units	45
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Tallahassee, Florida [Member]
Business Acquisition [Line Items]
Issuance of common units	58
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Home2 Suites [Member] | Southaven, Mississippi [Member]
Business Acquisition [Line Items]
Issuance of common units	52
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Hampton Inn And Suites [Member] | Lake Mary, Florida [Member]
Business Acquisition [Line Items]
Issuance of common units	85
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Aloft Hotel, Leawood, Kansas [Member]
Business Acquisition [Line Items]
Issuance of common units		$ 50
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Fairfield Inn & Suites [Member] | El Paso, Texas [Member]
Business Acquisition [Line Items]
Issuance of common units	64
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Residence Inn [Member] | Austin, Texas [Member]
Business Acquisition [Line Items]
Issuance of common units	$ 86
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Hotel Indigo, Atlanta, GA [Member]
Business Acquisition [Line Items]
Issuance of common units			150
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Marriott Courtyard, Jacksonville, FL [Member]
Business Acquisition [Line Items]
Issuance of common units			150
Condor Hospitality Limited Partnership [Member] | Noncontrolling Interest [Member] | Springhill Suites, San Antonio, TX [Member]
Business Acquisition [Line Items]
Issuance of common units			$ 150
Multiple Great Western Bank Loans [Member] | Aloft Hotel, Leawood, Kansas [Member]
Business Acquisition [Line Items]
Number of loans obtained | loan		2
Debt originated at acquisition		$ 15,925
LMREC 2015 - CREI, Inc. (Latitude) [Member]
Business Acquisition [Line Items]
Number of loans assumed | loan			1
Assumption of debt			$ 11,220
Multiple GE Capital Loans [Member]
Business Acquisition [Line Items]
Number of loans obtained | loan			2
Debt originated at acquisition			$ 15,100
Great Western Bank [Member]
Business Acquisition [Line Items]
Debt originated at acquisition			$ 830

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Acquisition Of Hotel Properties (Schedule Of Pro Forma Results) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Acquisition Of Hotel Properties [Abstract]
Total revenue	$ 66,894	$ 81,439
Operating income	7,204	9,156
Net earnings (loss) attributable to common shareholders	$ (7,497)	$ 3,877
Net earnings (loss) per share - Basic	$ (0.79)	$ 5.09
Net earnings (loss) per share - Diluted	$ (0.79)	$ 1.26

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Dispositions Of Hotel Properties And Discontinued Operations (Narrative) (Details) $ in Thousands		3 Months Ended								12 Months Ended
	Jul. 13, 2015 USD ($) property	Dec. 31, 2017 USD ($) property	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) property	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($) property	Dec. 31, 2015 USD ($) property	Jan. 01, 2017 property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels | property		18								18
Number of hotels reclassified as held for sale that represent a strategic shift | property										0
Net gain on disposition of assets		$ 2,004	$ (46)	$ 4,852	$ (3)	$ 7,318	$ 3,591	$ 8,856	$ 3,367	$ 6,807	$ 23,132	$ 4,798
Net income (loss)		1,338	(1,032)	4,925	(2,350)	4,540	2,792	8,165	7,298	2,881	22,795	13,125
Net earnings (loss) attributable to controlling interests		$ 10	$ (7)	$ 67	$ (50)	$ 99	$ 61	$ 178	$ 389	$ 20	$ 727	$ 1,197
Sold [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels | property		8				25				8	25	17
Net gain on disposition of assets										$ 7,049	$ 24,256	$ 7,759
Held For Sale [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels | property		3								3			7
Number of hotels reclassified as held for sale | property										4
Alexandria Comfort Inn And Days Inn [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income (loss)												(665)
Impairment expense												1,020
Net earnings (loss) attributable to controlling interests												(3)
Alexandria, Virginia [Member] | Sold [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of hotels | property	2
Net gain on disposition of assets	$ 19,000
Continuing Operations [Member] | Sold [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net gain on disposition of assets										$ 7,049	$ 23,575	$ 4,996

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Dispositions Of Hotel Properties And Discontinued Operations (Components Of Discontinued Operations) (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Gain from discontinued operations, net of tax	$ 678	$ 678	$ 3,872
Discontinued Operations, Disposed of by Sale [Member]
Revenue		6	2,923
Hotel and property operations expense		(4)	(1,946)
Net gain on disposition of assets		681	2,997
Interest expense		(5)	(223)
Impairment recovery (loss)			121
Gain from discontinued operations, net of tax		$ 678	3,872
Capital expenditures			$ 90

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Investment In Unconsolidated Joint Venture (Narrative) (Details) $ in Thousands		12 Months Ended
	Aug. 22, 2016 USD ($)	Dec. 31, 2017 USD ($) entity item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Schedule of Equity Method Investments [Line Items]
Management fees incurred		$ 1,700	$ 1,619	$ 2,466
Three Wall Capital LLC [Member | Spring Street Hotel Property II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		20.00%
Three Wall Capital LLC [Member | Spring Street Hotel OpCo II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		20.00%
Atlanta Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		80.00%
Number of companies comprised in joint venture | entity		2
Management fees incurred		$ 348	$ 110
Cash distribution received		$ 1,479
Atlanta Joint Venture [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Preferred return on capital contributions		10.00%
Buy-sell rights		3 years
Atlanta Joint Venture [Member] | Minimum [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Purchase option period		3 years
Atlanta Joint Venture [Member] | Maximum [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Purchase option period		5 years
Atlanta Joint Venture [Member] | Three Wall Capital LLC [Member
Schedule of Equity Method Investments [Line Items]
Ownership percentage		20.00%
Preferred return on capital contributions		10.00%
Buy-sell rights		5 years
Condor Hospitality Limited Partnership [Member] | Spring Street Hotel Property II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		80.00%
TRS Leasing, Inc [Member] | Spring Street Hotel OpCo II LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage		80.00%
Aloft Hotel, Atlanta, Georgia [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Loan term		24 months
Number of loan extensions | item		3
Extension period		12 months
Variable rate, interest rate		6.50%
Aloft Hotel, Atlanta, Georgia [Member] | LIBOR [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Reference rate		one-month LIBOR
Basis spread		5.00%
Interest Rate Cap [Member] | Aloft Hotel, Atlanta, Georgia [Member] | LIBOR [Member] | Atlanta Joint Venture [Member] | Term Loan [Member]
Schedule of Equity Method Investments [Line Items]
Basis spread		3.00%
Level 3 [Member] | Aloft Hotel, Atlanta, Georgia [Member] | Atlanta Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Purchase price	$ 43,550
Cash paid for acquisition	9,800
Debt originated at acquisition	33,750
Level 3 [Member] | Aloft Hotel, Atlanta, Georgia [Member] | Atlanta Joint Venture [Member] | Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Cash paid for acquisition	7,840
Acquisition costs	1,440
Level 3 [Member] | Aloft Hotel, Atlanta, Georgia [Member] | Atlanta Joint Venture [Member] | Three Wall Capital LLC [Member
Schedule of Equity Method Investments [Line Items]
Cash paid for acquisition	1,960
Acquisition costs	$ 360

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Investment In Unconsolidated Joint Venture (Schedule Of Purchase Price Allocation) (Details) - USD ($) $ in Thousands		12 Months Ended
	Aug. 22, 2016	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2015
Business Acquisition [Line Items]
Land			$ 8,531	$ 4,497
Building, improvements, and vehicles			113,929	34,103
Furniture and equipment			9,397	3,900
Total purchase price			131,800	42,500
Debt at acquisition			121,513	26,320
Net cash			$ 9,852	$ 15,730
Atlanta Joint Venture [Member] | Aloft Hotel, Atlanta, Georgia [Member]
Business Acquisition [Line Items]
Provision permitting seller to purchase surface parking lot at less than market prices, exercise period		10 years
Atlanta Joint Venture [Member] | Level 3 [Member] | Aloft Hotel, Atlanta, Georgia [Member]
Business Acquisition [Line Items]
Date of acquisition	Aug. 22, 2016
Land	$ 13,025
Building, improvements, and vehicles	34,048
Furniture and equipment	2,667
Land option	(6,190)
Total purchase price	43,550
Debt at acquisition	33,750
Net cash	$ 9,800

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Investment In Unconsolidated Joint Venture (Schedule Of Financial Position of Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Investment In Unconsolidated Joint Venture [Abstract]
Investment in hotel properties, net	$ 48,013	$ 49,305
Cash and cash equivalents	1,404	1,184
Restricted cash, property escrows	682	464
Accounts receivable, prepaid expenses, and other assets	176	320
Total Assets	50,275	51,273
Accounts payable, accrued expenses, and other liabilities	1,019	633
Land option liability	6,190	6,190
Long-term debt, net of deferred financing costs	33,382	33,155
Total Liabilities	40,591	39,978
Condor equity	7,747	9,036
TWC equity	1,937	2,259
Total Equity	9,684	11,295
Total Liabilities and Equity	$ 50,275	$ 51,273

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Investment In Unconsolidated Joint Venture (Summary Of Results Of Operations Of Unconsolidated Joint Ventures) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
Room rentals and other hotel services	$ 11,582	$ 3,703
Hotel and property operations	7,585	2,457
Depreciation and amortization	1,425	471
Acquisition		299
Total operating expenses	9,010	3,227
Operating income	2,572	476
Net loss on disposition of assets	(8)	(2)
Net loss on derivative	(3)	(6)
Interest expense	(2,323)	(773)
Net earnings	238	(305)
Three Wall Capital LLC [Member
Schedule of Equity Method Investments [Line Items]
Allocated earnings	48	(61)
Condor Hospitality Trust, Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Allocated earnings	$ 190	$ (244)

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Long-Term Debt (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt, net of deferred financing costs	$ 115,605	$ 47,918
Fixed rate debt	24,317	30,159
Variable rate debt	99,768	33,230
Tangible net worth	$ 55,000
Percentage of net offering proceeds added to tangible net worth	80.00%
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Maturity date of debt	Feb. 28, 2017
Fixed rate debt		4,806
KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Maturity date of debt	Mar. 31, 2020
Weighted average interest rate	4.55%
Variable rate debt	$ 73,303
Held For Use [Member]
Debt Instrument [Line Items]
Long-term debt, net of deferred financing costs	$ 118,935	$ 48,419
Weighted average term	3 years 2 months 12 days	3 years 2 months 12 days
Weighted average interest rate	4.50%	4.94%
Fixed rate debt	$ 24,317	$ 22,550
Fixed rate, weighted average term	2 years 4 months 24 days	3 years 8 months 12 days
Fixed rate, weighted average interest	4.41%	4.41%
Variable rate debt	$ 94,618	$ 25,869
Variable rate, weighted average term	4 years 1 month 6 days	2 years 9 months 18 days
Variable rate, weighted average interest	4.52%	5.39%
Minimum [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio	1.50
Maximum [Member]
Debt Instrument [Line Items]
Leverage ratio	60.00%
Leverage ratio after extension option	6.25
Secured leverage ratio	40.00%
Unhedged variable rate debt	25.00%
Distributions, percentage of funds available aloowed	95.00%

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Long-Term Debt (Summary Of Long Term Debt) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Total fixed rate debt	$ 24,317	$ 30,159
Total variable rate debt	99,768	33,230
Total Long-term debt	124,085	63,389
Less: Deferred financing costs	(3,504)	(669)
Total long-term debt, net of deferred financing costs	120,581	62,720
Less: Long-term debt related to hotel properties held for sale, net of deferred financing costs of $233 and $168	(4,976)	(14,802)
Long-term debt related to hotel properties held for use, net of deferred financing costs of $2,985 and $501	$ 115,605	47,918
Number of hotels | property	18
Deferred financing costs	$ 174	168
Deferred finance costs, assets held-for-sale	$ 3,330	501
Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property	17
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 [Member]
Debt Instrument [Line Items]
Total fixed rate debt	$ 8,987
Fixed rate, interest rate	4.54%
Maturity	Aug. 31, 2024
Amortization provision	25 years
Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property	1
Great Western Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt	$ 13,950	14,326
Fixed rate, interest rate	4.33%
Maturity	Dec. 31, 2021
Amortization provision	25 years
Great Western Bank [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property	1
Great Western Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt	$ 1,380	1,599
Fixed rate, interest rate	4.33%
Maturity	Dec. 31, 2021
Amortization provision	7 years
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt		4,806
Fixed rate, interest rate	7.17%
Maturity	Feb. 28, 2017
Amortization provision	15 years
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total fixed rate debt		2,803
Fixed rate, interest rate	4.75%
Maturity	Feb. 28, 2018
Amortization provision	15 years
Cantor Commercial Real Estate Lending [Member]
Debt Instrument [Line Items]
Total fixed rate debt		5,713
Fixed rate, interest rate	4.25%
Maturity	Nov. 30, 2017
Amortization provision	30 years
Cantor Commercial Real Estate Lending [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property
Morgan Stanley Mortgage Capital Holdings, LLC [Member]
Debt Instrument [Line Items]
Total fixed rate debt		912
Fixed rate, interest rate	5.83%
Maturity	Dec. 31, 2017
Amortization provision	25 years
Wells Fargo [Member]
Debt Instrument [Line Items]
Total variable rate debt	$ 26,465
Variable rate, interest rate	4.44%
Maturity	Nov. 30, 2022
Amortization provision	30 years
Wells Fargo [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property	3
Wells Fargo [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	2.39%
Reference rate	30-day LIBOR
Wells Fargo [Member] | Federal Funds Effective Swap Rate [Member]
Debt Instrument [Line Items]
Basis spread	4.44%
KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Total variable rate debt	$ 73,303
Variable rate, interest rate	4.55%
Maturity	Mar. 31, 2020
Available borrowing capacity	$ 11,934
Commitment fee	0.20%
KeyBank Credit Facility [Member] | Encumbered Wholly Owned Properties [Member]
Debt Instrument [Line Items]
Number of hotels | property	12
KeyBank Credit Facility [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Reference rate	30-day LIBOR
KeyBank Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread	2.25%
KeyBank Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread	3.00%
KeyBank Credit Facility [Member] | Base Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Basis spread	1.25%
KeyBank Credit Facility [Member] | Base Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Basis spread	2.00%
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total variable rate debt		4,882
Maturity	Nov. 30, 2020
Amortization provision	25 years
Western Alliance Bank [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	3.25%
Reference rate	90-day LIBOR
Western Alliance Bank [Member]
Debt Instrument [Line Items]
Total variable rate debt		9,863
Maturity	Nov. 30, 2020
Amortization provision	25 years
Western Alliance Bank [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	3.25%
Reference rate	90-day LIBOR
The Huntington National Bank [Member]
Debt Instrument [Line Items]
Total variable rate debt		7,361
Maturity	Nov. 30, 2020
Amortization provision	25 years
The Huntington National Bank [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	2.25%
Reference rate	30-day LIBOR
The Huntington National Bank [Member] | Federal Funds Effective Swap Rate [Member]
Debt Instrument [Line Items]
Basis spread	4.13%
LMREC 2015 - CREI, Inc. (Latitude) [Member]
Debt Instrument [Line Items]
Total variable rate debt		11,124
Maturity	May 31, 2018
Monthly payment	$ 12
LMREC 2015 - CREI, Inc. (Latitude) [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	6.25%
Reference rate	30-day LIBOR
Interest Rate Cap [Member] | KeyBank Credit Facility [Member]
Debt Instrument [Line Items]
Notional amount	$ 50,000
Cap interest rate	2.50%
Interest Rate Cap [Member] | KeyBank Credit Facility [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	2.50%
Reference rate	30-day LIBOR
Interest Rate Cap [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member]
Debt Instrument [Line Items]
Notional amount		$ 11,124
Interest Rate Cap [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread	1.00%
Reference rate	30-day LIBOR

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Long-Term Debt (Aggregate Annual Principal Payments On Debt Associated With Assets Held For Use And Held For Sale) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
2018	$ 1,083
2019	1,183
2020	74,535
2021	14,344
2022	24,886
Thereafter	8,054
Total Long-term debt	124,085	$ 63,389
Held For Sale [Member]
Debt Instrument [Line Items]
2020	5,150
Total Long-term debt	5,150
Held For Use [Member]
Debt Instrument [Line Items]
2018	1,083
2019	1,183
2020	69,385
2021	14,344
2022	24,886
Thereafter	8,054
Total Long-term debt	$ 118,935

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Convertible Debt At Fair Value (Narrative) (Details) - USD ($)			3 Months Ended								12 Months Ended
	Mar. 01, 2017	Mar. 16, 2016	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Gain (loss) on derivatives and convertible debt			$ 20,000	$ 14,000	$ 227,000	$ 175,000	$ 72,000	$ 26,000	$ 162,000	$ 6,117,000	$ 436,000	$ 6,377,000	$ 11,578,000
6.25% Convertible Debt [Member]
Debt Instrument [Line Items]
Interest rate		6.25%	6.25%								6.25%
Principal amount		$ 1,012,000
Maximum ownership percentage of voting stock upon debt conversion		49.00%
Gain (loss) on derivatives and convertible debt											$ 246,000	$ (303,000)
6.25% Convertible Debt [Member] | Series D Preferred Stock [Member]
Debt Instrument [Line Items]
Number of shares of common stock debt can convert into		97,269
6.25% Convertible Debt [Member] | Series E Preferred Stock [Member]
Debt Instrument [Line Items]
Number of shares of common stock debt can convert into	97,269

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Convertible Debt At Fair Value (Difference Between Fair Value And Unpaid Principal Balance Of Note) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Mar. 16, 2016
Debt Instrument [Line Items]
Convertible debt	$ (1,069)	$ (1,315)
6.25% Convertible Debt [Member]
Debt Instrument [Line Items]
Interest rate	6.25%		6.25%
Convertible debt	$ (1,069)
Unpaid principal balance	(1,012)
Fair value carrying amount (over)/under unpaid principal	$ (57)

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Fair Value Measurements And Derivative Instruments (Narrative) (Details) - USD ($)		1 Months Ended	12 Months Ended
	Feb. 28, 2017	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Mar. 01, 2017
Fair Value Measurements And Derivative Instruments [Line Items]
Adjustment to additional paid in capital, warrant			$ 611,000
Net gain (loss) on interest rate instruments			190,000	$ 6,680,000	$ 11,578,000
Transfers between levels			$ 0	$ 0	$ 0
Series C Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Preferred stock, annual dividend rate			6.25%
Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Preferred stock, annual dividend rate	6.25%	6.25%	6.25%
Redemption Rights [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Number of shares called by redemption						490,250
Level 3 [Member] | Redemption Rights [Member] | Series E Preferred Stock [Member]
Fair Value Measurements And Derivative Instruments [Line Items]
Assets fair value						$ 150,000

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Fair Value Measurements And Derivative Instruments (Schedule Of Interest Rate Swaps And Caps) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Wells Fargo [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Effective date	Nov. 01, 2017
Maturity date	Nov. 01, 2022
Notional amount	$ 26,465
KeyBank Credit Facility [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Effective date	Mar. 01, 2017
Maturity date	Mar. 01, 2019
Notional amount	$ 50,000
The Huntington National Bank [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Effective date	Nov. 01, 2015
Maturity date	Nov. 01, 2020
Notional amount		7,361
Cancellation date, without penalty	Nov. 01, 2018
LMREC 2015 - CREI, Inc. (Latitude) [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Effective date	Mar. 01, 2016
Maturity date	Jun. 01, 2017
Notional amount		$ 11,124
LIBOR [Member] | Wells Fargo [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.39%
LIBOR [Member] | Wells Fargo [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.053%
LIBOR [Member] | KeyBank Credit Facility [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
LIBOR [Member] | KeyBank Credit Facility [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.50%
LIBOR [Member] | The Huntington National Bank [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.25%
LIBOR [Member] | The Huntington National Bank [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	2.25%
LIBOR [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	6.25%
LIBOR [Member] | LMREC 2015 - CREI, Inc. (Latitude) [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Reference rate	30-day LIBOR
Basis spread	1.00%
Federal Funds Effective Swap Rate [Member] | Wells Fargo [Member]
Derivative [Line Items]
Basis spread	4.44%
Federal Funds Effective Swap Rate [Member] | The Huntington National Bank [Member]
Derivative [Line Items]
Basis spread	4.13%
Federal Funds Effective Swap Rate [Member] | The Huntington National Bank [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Basis spread	4.13%

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Fair Value Measurements And Derivative Instruments (Schedule Of Fair Value Assets And (Liabilities) Carried At Fair Value And Measured On Recurring Basis) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	$ 391
Convertible debt	(1,069)	$ (1,315)
Total	(678)	(1,323)
Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Total	77	(8)
Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Convertible debt	(1,069)	(1,315)
Total	(755)	(1,315)
Interest Rate Derivatives [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	77	8
Interest Rate Derivatives [Member] | Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	77	$ 8
Series E Preferred Embedded Redemption Option [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	314
Series E Preferred Embedded Redemption Option [Member] | Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Derivative asset	$ 314

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Fair Value Measurements And Derivative Instruments (Reconciliation Of Fair Value Liabilities Measured On Recurring Basis) (Details) - Level 3 [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	$ (1,315)	$ (8,682)
Net gains (losses) recognized in earnings	410	6,345
Purchases and issuances	150	(1,012)
Sales and settlements		1,423
Gross transfers out of Level 3		611
Fair value, end of period	(755)	(1,315)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	410	(303)
Series E Preferred Embedded Redemption Option [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period
Net gains (losses) recognized in earnings	164
Purchases and issuances	150
Fair value, end of period	314
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	164
Series C Preferred Embedded Derivative [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period		(6,271)
Net gains (losses) recognized in earnings		4,848
Sales and settlements		1,423
Convertible Debt [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	(1,315)
Net gains (losses) recognized in earnings	246	(303)
Purchases and issuances		(1,012)
Fair value, end of period	(1,069)	(1,315)
Total unrealized gains (losses) during the period included in earnings related to instruments held at end of period	$ 246	(303)
Real Estate Strategies, L.P. [Member] | Warrant Derivative [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period		(2,411)
Net gains (losses) recognized in earnings		1,800
Gross transfers out of Level 3		$ 611

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Fair Value Measurements And Derivative Instruments (Schedule Of Carrying Value And Estimated Fair Value Of Long-Term Debt) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 120,581	$ 62,720
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	120,215	63,220
Held For Use [Member] | Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	115,605	47,918
Held For Use [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	115,239	48,034
Held For Sale [Member] | Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	4,976	14,802
Held For Sale [Member] | Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 4,976	$ 15,186

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Fair Value Measurements And Derivative Instruments (Schedule Of Impairment And Recovery Of Previously Recorded Impairment) (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($) item
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item									5	5	11
Impairment (loss) recovery, Continuing operations, Total net impairment loss	$ (553)	$ (848)	$ (479)	$ (271)	$ (220)	$ (343)	$ (121)	$ (793)	$ (2,151)	$ (1,477)	$ (3,829)
Impairment loss, net									$ 2,151	$ 1,477	$ 3,708
Continuing Operations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item									5	5	7
Impairment (loss) recovery, Continuing operations, Total net impairment loss									$ (2,151)	$ (1,477)	$ (3,829)
Discontinued Operations [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item											4
Net impairment loss reported in discontinued operations											$ 121
Held For Sale [Member] | Continuing Operations [Member] | Impairment Loss [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item									1		1
Impairment (loss) recovery, Continuing operations, Held for sale hotels									$ (1,448)		$ (1,537)
Sold [Member] | Continuing Operations [Member] | Impairment Loss [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item									2	5	5
Impairment (loss) recovery, Continuing operations, Sold hotels									$ (783)	$ (1,477)	$ (2,377)
Sold [Member] | Continuing Operations [Member] | Impairment Recovery [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item									2		1
Impairment (loss) recovery, Continuing operations, Sold hotels									$ 80		$ 85
Sold [Member] | Discontinued Operations [Member] | Impairment Loss [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item											1
Impairment (loss) recovery, Discontinued operations, Sold hotels											$ (117)
Sold [Member] | Discontinued Operations [Member] | Impairment Recovery [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Number of hotels | item											3
Impairment (loss) recovery, Discontinued operations, Sold hotels											$ 238

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Common Stock (Narrative) (Details)							12 Months Ended
	Mar. 29, 2017 USD ($) $ / shares shares	Mar. 15, 2017 USD ($) shares	Feb. 28, 2017 $ / shares shares	Feb. 27, 2017 $ / shares shares	Jan. 24, 2017 USD ($) $ / shares shares	Mar. 11, 2015 $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) shares	Sep. 20, 2017 USD ($)
Class of Stock [Line Items]
Warrant issuance costs | $							$ 289,000	$ 12,000	$ 58,000
Reverse stock split, conversion ratio		0.1538
Reverse stock split, fractional shares issued		0
Reverse stock split, shares settled in cash		73
Reverse stock split, shares settled in cash, amount | $		$ 1,000					1,000
Proceeds from common stock issued | $							47,468,000		$ 346,000
Issuance costs | $							$ 1,210,000
Underwritten Public Offering [Member]
Class of Stock [Line Items]
Shares issued, price per share | $ / shares	$ 10.50
Issuance of common stock, shares	4,772,500
Proceeds from common stock issued | $	$ 45,850,000
ATM Program [Member]
Class of Stock [Line Items]
Shares issued, price per share | $ / shares							$ 10.15
Issuance of common stock, shares							169,004
Proceeds from common stock issued | $							$ 1,715,000
Equity distribution agreement, commission fee, percent							2.00%
Net proceeds from common stock issue | $							$ 1,619,000
Maximum [Member] | ATM Program [Member]
Class of Stock [Line Items]
Equity distribution agreement, aggregate price of shares available for sale | $										$ 50,000,000
Minimum [Member] | ATM Program [Member]
Class of Stock [Line Items]
Public float required to sell shares of common stock | $										$ 75,000,000
Pursuant To Full Exercise Of An Option To Purchase Additional Shares Of Common Stock Granted To Underwriters [Member] | Underwritten Public Offering [Member]
Class of Stock [Line Items]
Issuance of common stock, shares	622,500
New Warrants [Member]
Class of Stock [Line Items]
Shares issued upon conversion					23,160
Common stock warrants, exercise price | $ / shares					$ 0.0065
Warrant expiration					Jan. 24, 2019
Warrant issuance costs | $					$ 289,000
Warrants [Member] | Executive Officer [Member]
Class of Stock [Line Items]
Stock issued by exercise of warrant or right						35,060
Common stock warrants, exercise price | $ / shares						$ 9.88
Real Estate Strategies, L.P. [Member] | Warrants [Member]
Class of Stock [Line Items]
Shares converted					576,923
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion			6,004,957	6,004,957
Number of shares called by warrant					23,160
Shares issued, price per share | $ / shares			$ 10.40	$ 10.40
Issuance of common stock, shares							4,972,000		35,000

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Preferred Stock (Narrative) (Details) - USD ($)					1 Months Ended		12 Months Ended
	Feb. 28, 2017	Feb. 27, 2017	Apr. 15, 2016	Mar. 16, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Feb. 29, 2012	Dec. 30, 2005
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion	6,004,957	6,004,957
Shares issued, price per share	$ 10.40	$ 10.40
6.25% Convertible Debt [Member]
Class of Stock [Line Items]
Interest rate				6.25%			6.25%
Principal amount				$ 1,012,000
Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Preferred dividends, cash				$ 1,484,000
Percentage of voting stock				49.00%
Real Estate Strategies, L.P. [Member] | 6.25% Convertible Debt [Member]
Class of Stock [Line Items]
Interest rate				6.25%
Principal amount				$ 1,012,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate							8.00%	8.00%
Preferred stock, shares issued											1,521,258
Preferred stock, shares outstanding			803,270						803,270
Preferred stock, redemption price			$ 10.00				$ 10.00
Dividends unpaid and accrued per share			$ 2.084940
Redemption liability			$ 9,707,000
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate							10.00%
Preferred stock, redemption price			$ 25.00				$ 25.00
Dividends unpaid and accrued per share			$ 6.354167
Redeemable preferred stock, shares outstanding			332,500						332,500
Redemption liability			$ 10,425,000
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate						6.25%		6.25%
Preferred stock, value								$ 61,333,000
Preferred dividends, cash							$ 650,000	$ 3,090,000
Preferred stock, shares outstanding				6,245,156				6,245,156
Series D Preferred Stock [Member] | SREP III Flight Investco L.P. [Member]
Class of Stock [Line Items]
Preferred stock, shares issued				3,000,000
Preferred stock, value				$ 30,000,000
Series D Preferred Stock [Member] | Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Preferred stock, shares issued				245,156
Shares issued upon conversion				3,000,000
Series A and B Preferred Stock [Member] | SREP III Flight Investco L.P. [Member]
Class of Stock [Line Items]
Preferred stock, value				$ 20,147,000
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate							6.25%
Preferred stock, shares issued										3,000,000
Percentage of voting stock							34.00%
Series C Preferred Stock [Member] | Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Shares converted				3,000,000
Dividends unpaid and accrued				$ 4,947,000
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate	6.25%				6.25%		6.25%
Preferred stock, value							$ 10,050,000
Shares issued upon conversion		925,000
Preferred dividends, cash							$ 483,000
Preferred stock, shares outstanding							925,000
Shares issued, price per share	$ 13.845
Shares issued upon conversion, amount	$ 9,250,000
Preferred stock, dividend rate increase resulting from failure to pay dividend, with equity offerings	9.50%

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Preferred Stock (Series A Preferred Stock) (Narrative) (Details) - Series A Preferred Stock [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Apr. 15, 2016	Dec. 31, 2015	Dec. 30, 2005
Class of Stock [Line Items]
Preferred stock, shares issued					1,521,258
Preferred stock, shares outstanding			803,270	803,270
Preferred stock, annual dividend rate	8.00%	8.00%
Preferred stock, liquidation preference per share	$ 10.00
Preferred stock, fixed annual amount of dividend per share	0.80
Preferred stock, redemption price	$ 10.00		$ 10.00
Preferred stock, deemed dividend		$ 2,326
Preferred stock dividends, adjustment to net earnings attributable to common shareholders		$ 874

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Preferred Stock (Series B Preferred Stock) (Narrative) (Details) - Series B Preferred Stock [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Apr. 15, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Redeemable preferred stock, shares outstanding			332,500	332,500
Preferred stock, annual dividend rate	10.00%
Preferred stock, liquidation preference per share	$ 25.00
Preferred stock, fixed annual amount of dividend per share	2.50
Preferred stock, redemption price	$ 25.00		$ 25.00
Preferred stock, deemed dividend		$ 2,781
Preferred stock dividends, adjustment to net earnings attributable to common shareholders		$ 911

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Preferred Stock (Series C Preferred Stock) (Narrative) (Details) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Mar. 16, 2016 USD ($)	Feb. 29, 2012 $ / shares item shares	Dec. 31, 2017 $ / shares shares
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Number of closings for sale of preferred stock | item		2
Preferred stock, shares issued and sold | shares		3,000,000
Preferred stock, liquidation preference per share		$ 10.00
Number of shares issued for each convertible preferred stock | shares			0.9615385
Percentage of voting stock			34.00%
Preferred stock, fixed annual amount of dividend per share			$ 0.625
Preferred stock, annual dividend rate			6.25%
Preferred stock, voting rights per share			$ 0.12096
Preferred stock, deemed dividend | $	$ 20,366
Preferred stock dividends, adjustment to net earnings attributable to common shareholders | $	$ 15,873
Real Estate Strategies, L.P. [Member]
Class of Stock [Line Items]
Percentage of voting stock	49.00%

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Preferred Stock (Series D Preferred Stock) (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		12 Months Ended
	Feb. 28, 2017	Feb. 27, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Mar. 16, 2016
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding						6,245,156	6,245,156
Preferred stock, annual dividend rate				6.25%		6.25%
Preferred stock, face value						$ 10.00
Aggregate outstanding shares required for liquidation election						40.00%
Conversion price per share	$ 10.40					$ 10.40
Debt instrument conversion ratio to common stock						0.9615385
Preferred stock, partial redemption value						$ 30,000
Series D Preferred Stock [Member] | On Or Before March 16, 2019 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price						$ 12.00
Series D Preferred Stock [Member] | March 16, 2019 to March 16, 2020 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price						13.00
Series D Preferred Stock [Member] | On Or After March 16, 2020 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price						14.00
Series D Preferred Stock [Member] | On Or Before September 30,2021 [Member]
Class of Stock [Line Items]
Preferred stock, redemption price						$ 14.00
Series D Preferred Stock [Member] | After September 30, 2021 [Member]
Class of Stock [Line Items]
Preferred stock, annual dividend rate						12.50%
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding					925,000
Preferred stock, annual dividend rate	6.25%		6.25%		6.25%
Preferred stock, face value	$ 10.00
Shares issued upon conversion		925,000
Shares issued upon conversion, amount	$ 9,250
Minimum [Member] | Series D Preferred Stock [Member]
Class of Stock [Line Items]
Debt instrument conversion amount upon closing of qualified offering						$ 50,000
Maximum [Member] | Series D Preferred Stock [Member]
Class of Stock [Line Items]
Debt instrument conversion amount upon closing of qualified offering						$ 75,000
Common Stock [Member]
Class of Stock [Line Items]
Shares issued upon conversion	6,004,957	6,004,957

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Preferred Stock (Series E Redeemable Convertible Preferred Stock) (Narrative) (Details) - USD ($)		1 Months Ended	12 Months Ended
	Feb. 28, 2017	Mar. 31, 2017	Dec. 31, 2017	Mar. 01, 2017
Class of Stock [Line Items]
Issuance costs			$ 1,210,000
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, shares outstanding			925,000
Preferred stock, annual dividend rate	6.25%	6.25%	6.25%
Preferred stock, face value	$ 10.00
Preferred stock, dividend rate increase resulting from failure to pay dividend, with equity offerings	9.50%
Preferred stock, percentage of conversion price at which preferred stock automatically converts to common stock	120.00%
Preferred stock, trading days for preferred stock automatically converting to common stock	60 days
Number of shares redeemable by company when market price is within defined range	490,250
Preferred stock, percentage of liquidation value at which holders can sell	130.00%
Threshold of originally issued preferred stock shares outstanding required for approval of certain transactions by preferred shareholders	434,750
Threshold of originally issued preferred stock shares outstanding required for approval of certain transactions by preferred shareholders, percent	47.00%
Percentage of approval required for certain transactions by preferred shareholders	75.00%
Threshold of amount of related party transactions for aprroval by preferred shareholders	$ 120,000
Threshold of maximum percentage of shares grantable before shareholder approval required	9.90%
Preferred stock, value			$ 10,050,000
Minimum [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, percentage of liquidation value at which company can redeem preferred stock	110.00%
Maximum [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, percentage of liquidation value at which company can redeem preferred stock	130.00%
Level 3 [Member] | Redemption Rights [Member] | Series E Preferred Stock [Member]
Class of Stock [Line Items]
Assets fair value				$ 150,000

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Preferred Stock (Components Of Dividends Declared And Undeclared And In Kind Dividends Deemed On Preferred Stock) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$ 12,243	$ 20,748	$ 3,632
Accrued At Stated Rate [Member] | Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		222	727
Accrued At Stated Rate [Member] | Series B Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		243	831
Accrued At Stated Rate [Member] | Series C Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		455	$ 2,074
Accrued At Stated Rate [Member] | Series D Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	650	3,090
Accrued At Stated Rate [Member] | Series E Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	483
Deemed Upon Notice Of Redemption [Member] | Series A Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		652
Deemed Upon Notice Of Redemption [Member] | Series B Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		668
Deemed At Exchange [Member] | Series C Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock		$ 15,418
Inducement To Convert [Member] | Series D Preferred Stock [Member]
Dividends Payable [Line Items]
Dividends declared and undeclared and in kind dividends deemed on preferred stock	$ 11,110

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Noncontrolling Interest Of Common Units In The Operating Partnership (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Redeemable Noncontrolling Interest [Line Items]
Redemption value	$ 871	$ 2,008
Common units redemption to common stock	12.50%
Common units redeemed	0	0	0
Limited Partner [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding	4,550,242	2,609,791
Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage of minority interest	99.30%	97.80%
Common Units and LTIP [Member]
Redeemable Noncontrolling Interest [Line Items]
Redemption value	$ 871	$ 2,008
LTIP Awards [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding		5,263,152
Noncontrolling Interest [Member] | Condor Hospitality Limited Partnership [Member]
Redeemable Noncontrolling Interest [Line Items]
Common units outstanding	4,550,242	7,872,943

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Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands					12 Months Ended
	Jun. 28, 2017	Mar. 17, 2015	Mar. 11, 2015	Mar. 02, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Jun. 15, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted					96,286
Unrecognized compensation cost					$ 1,573
Unrecognized compensation cost recognition period					3 years 2 months 12 days
Common units redemption to common stock					12.50%
Stock-based compensation					$ 1,237	$ 305	$ 285
2006 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized					9,615
Expiration date					Dec. 31, 2015
Shares issued to independent directors							3,295
2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance					357,742
Vesting period					5 years
Shares issued to independent directors					5,369	2,361
Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized								461,538
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested options, outstanding						865
Vested options, weighted average exercise price						$ 48.945
Market Based Share Awards [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 1,305
Market Based Share Awards [Member] | Executive Officer [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	36,692
Market price target increments	$ 1
Trading period used to determine award price	60 days
Market Based Share Awards [Member] | Executive Officer [Member] | Minimum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price target	$ 11.00
Market Based Share Awards [Member] | Executive Officer [Member] | Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Market price target	$ 18.00
Performance Based Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted				101,213
Units earned, increments				33.33%
Performance Based Share Awards [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share milestone				$ 22.75
Vesting percentage				1.923%
Performance Based Share Awards [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share milestone				$ 29.25
Performance Based Share Awards [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price per share milestone				$ 35.75
Performance Based Share Awards [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost					$ 191
Additional shares earned per percentage if actual FFO exceeds budgeted FFO	391
Percentage increment required to earn additional shares	2.00%
Grant date fair value, assumed percentage of budgeted FFO					100.00%
Performance Based Share Awards [Member] | Minimum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required percentage of budgeted FFO to achieve performance award	85.00%
Potential shares earned and issued if operating results are obtained	11,741
Performance Based Share Awards [Member] | Maximum [Member] | 2016 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Required percentage of budgeted FFO to achieve performance award	101.00%
Potential shares earned and issued if operating results are obtained	19,569
Additional shares earned per percentage if actual FFO exceeds budgeted FFO	3,910
Performance Based Share Awards [Member] | Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share awards granted				5,263,152
Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock warrants, exercise price					$ 12.48
Warrants [Member] | Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares called by warrant				101,213
Common stock warrants, exercise price		$ 12.48	$ 9.88	$ 9.88
Expiration period					3 years
Shares purchased with warrants			35,060		66,153
Warrants [Member] | Executive Officer [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units earned, increments		33.33%
Warrants [Member] | Executive Officer [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Units earned, increments		50.00%

XML

Stock-Based Compensation (Summary Of Service Condition Unvested Share Activity) (Details)	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Stock-Based Compensation [Abstract]
Shares: Unvested at December 31, 2016 | shares
Shares: Granted | shares	96,286
Shares: Vested | shares	(234)
Shares: Forfeited | shares	(220)
Shares: Unvested at December 31, 2017 | shares	95,832
Weighted-average grant date fair value: Unvested at December 31, 2016 | $ / shares
Weighted-average grant date fair value: Granted | $ / shares	10.54
Weighted-average grant date fair value: Vested | $ / shares	10.60
Weighted-average grant date fair value: Forfeited | $ / shares	10.54
Weighted-average grant date fair value: Unvested at December 31, 2017 | $ / shares	$ 10.54

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Stock-Based Compensation (Schedule Of Estimated Fair Value Of Options) (Details) - $ / shares		12 Months Ended
	Mar. 02, 2015	Dec. 31, 2017
Market Based Share Awards [Member] | Monte Carlo Option-Pricing Model [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility		25.00%
Stock price		$ 10.60
Dividend yield		7.40%
Risk free interest rate, minimum		0.89%
Risk free interest rate, maximum		1.81%
$9.88 Grant March 2, 2015 [Member] | Black-Scholes Option-Pricing Model [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	53.10%
Expected forfeitures	0.00%
Expected term (in days/years)	15 days
Risk free interest rate	0.02%
$12.48 Grant March 2, 2015 [Member] | Black-Scholes Option-Pricing Model [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	78.60%
Expected forfeitures	0.00%
Expected term (in days/years)	3 years
Risk free interest rate	1.06%
March 2, 2015 [Member] | Monte Carlo Option-Pricing Model [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility	75.50%
Expected forfeitures	0.00%
Stock price	$ 9.945
Expected term (in days/years)	3 years
Risk free interest rate	1.06%

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Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Line Items]
Alternative minimum tax expense			$ 20,000	$ 35,000	$ 0
U.S. federal income tax rate			34.00%
Net operating loss carryforward for federal income tax purposes	$ 814,000		$ 814,000	$ 1,295,000
Dividends					$ 0
Tax expense resulted from the change in tax rate	304,000
Minimum [Member]
Income Tax Disclosure [Line Items]
Tax year subject to examination			2014
Maximum [Member]
Income Tax Disclosure [Line Items]
Tax year subject to examination			2017
Scenario, Plan [Member]
Income Tax Disclosure [Line Items]
U.S. federal income tax rate		21.00%
TRS Leasing, Inc [Member]
Income Tax Disclosure [Line Items]
Net operating loss carryforward for federal income tax purposes	$ 3,876,000		$ 3,876,000
TRS Leasing, Inc [Member] | Minimum [Member]
Income Tax Disclosure [Line Items]
Loss carryforwards expiration period			Dec. 31, 2027
TRS Leasing, Inc [Member] | Maximum [Member]
Income Tax Disclosure [Line Items]
Loss carryforwards expiration period			Dec. 31, 2034

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Income Taxes (Schedule Of Components Of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Line Items]
Total income tax expense (benefit)	$ (645)	$ 15	$ 35	$ 125	$ (595)	$ 125
TRS Leasing, Inc [Member]
Income Tax Disclosure [Line Items]
Current tax expense, Federal					33	90
Deferred tax expense, Federal					(615)
Current tax expense, State and local					12
Deferred tax expense, State and local					(45)
Total income tax expense (benefit)					$ (615)	$ 90

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Income Taxes (Schedule Of Actual Income Benefit From Continuing Operations) (Details) - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Line Items]
Total income tax expense (benefit)	$ (645)	$ 15	$ 35	$ 125	$ (595)	$ 125
TRS Leasing, Inc [Member]
Income Tax Disclosure [Line Items]
Computed "expected" income tax (benefit) expense					546	993	$ 684
State income taxes, net of Federal income tax (benefit) expense					47	139	82
(Decrease) increase in valuation allowance					(1,097)	(1,082)	(722)
Other					(145)	(50)	$ (44)
AMT					34	90
Total income tax expense (benefit)					$ (615)	$ 90

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Income Taxes (Schedule Of Deferred Tax Assets And Deferred Tax Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Abstract]
Accrued expenses and other	$ 104	$ 99
Net operating losses carried forward for federal income tax purposes	814	1,295
Net operating losses carried forward for state income tax purposes	579	182
AMT	123
Book depreciation in excess of tax depreciation		38
Subtotal deferred tax assets	1,620	1,614
Valuation allowance	(454)	(1,551)
Total deferred tax assets	1,166	63
Tax depreciation in excess of book depreciation	363
Atlanta JV bases difference	143	63
Total deferred tax liabilities	506	63
Net deferred tax assets	$ 660

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Income Taxes (Summary Of Distributions Paid) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Class of Stock [Line Items]
Common Shares, Ordinary income, Amount	$ 0.156000	$ 0.455000
Common Shares, Capital gain, Amount
Common Shares, Return of capital, Amount	0.624000
Common Shares, Total, Amount	$ 0.780000	$ 0.455000
Common Shares, Ordinary income, Percent	20.00%	100.00%
Common Shares, Capital gain, Percent
Common Shares, Return of capital, Percent	80.00%
Common Shares, Total, Percent	100.00%	100.00%
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Shares, Ordinary income, Amount		$ 1.649124
Preferred Shares, Capital gain, Amount
Preferred Shares, Return of capital, Amount
Preferred Shares, Total, Amount		$ 1.649124
Preferred Shares, Ordinary income, Percent		100.00%
Preferred Shares, Capital gain, Percent
Preferred Shares, Return of capital, Percent
Preferred Shares, Total, Percent		100.00%
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Shares, Ordinary income, Amount	$ 0.104160	$ 0.494792
Preferred Shares, Capital gain, Amount
Preferred Shares, Return of capital, Amount
Preferred Shares, Total, Amount	$ 0.104160	$ 0.494792
Preferred Shares, Ordinary income, Percent	100.00%	100.00%
Preferred Shares, Capital gain, Percent
Preferred Shares, Return of capital, Percent
Preferred Shares, Total, Percent	100.00%	100.00%
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Shares, Ordinary income, Amount	$ 0.522569
Preferred Shares, Capital gain, Amount
Preferred Shares, Return of capital, Amount
Preferred Shares, Total, Amount	$ 0.522569
Preferred Shares, Ordinary income, Percent	100.00%
Preferred Shares, Capital gain, Percent
Preferred Shares, Return of capital, Percent
Preferred Shares, Total, Percent	100.00%

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Earnings Per Share (Reconciliation Of Basic And Diluted Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator: Basic
Net earnings (loss) attributable to common shareholders: Continuing operations									$ (9,362)	$ 1,390	$ 6,055
Net earnings (loss) attributable to common shareholders: Discontinued operations										657	3,438
Net earnings (loss) attributable to common shareholders	$ 1,174	$ (1,237)	$ 4,654	$ (13,953)	$ 3,565	$ 1,816	$ 7,108	$ (10,442)	(9,362)	2,047	9,493
Less: Allocation to participating securities									(56)
Net earnings (loss) attributable to common shareholders, net of amount allocated to participating securities									(9,418)	2,047	9,493
Numerator: Diluted
Net earnings (loss) attributable to common shareholders from continuing operations, net of amount allocated to participating securities									(9,418)	1,390	6,055
Continuing operations - Diluted									(9,418)	4,480	(3,526)
Discontinued operations - Diluted										657	3,438
Total Diluted									$ (9,418)	$ 5,137	$ (88)
Denominator
Weighted average number of common shares - Basic									9,437,824	761,112	751,634
Unvested restricted stock											619
Warrants - Employees											106
Warrants - RES											(61,504)
Weighted average number of common shares - Diluted									9,437,824	5,535,545	3,575,470
Earnings per Share:
Continuing operations - Basic					$ 4.68	$ 2.41	$ 9.36	$ (14.63)	$ (1.00)	$ 1.82	$ 8.06
Discontinued operations - Basic								0.91		0.85	4.55
Total - Basic Earnings (Loss) per Share	$ 0.10	$ (0.11)	$ 0.40	$ (4.75)	4.68	2.41	9.36	(13.72)	(1.00)	2.67	12.61
Continuing operations - Diluted					0.65	0.39	1.17	(14.63)	(1.00)	0.78	(0.98)
Discontinued operations - Diluted								0.91		0.13	$ 0.98
Total - Diluted Earnings (Loss) per Share	$ 0.10	$ (0.11)	$ 0.37	$ (4.75)	$ 0.65	$ 0.39	$ 1.17	$ (13.72)	$ (1.00)	$ 0.91
Warrant Derivative [Member]
Numerator: Diluted
Unrealized gain on derivative											$ (4,122)
Embedded Derivative [Member]
Numerator: Diluted
Unrealized gain on derivative											(7,533)
Series C Preferred Stock [Member]
Numerator: Diluted
Dividends on Series D Preferred Stock											$ 2,074
Denominator
Preferred Stock											2,884,615
Series D Preferred Stock [Member]
Numerator: Diluted
Dividends on Series D Preferred Stock										$ 3,090
Denominator
Preferred Stock										4,774,433

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Earnings Per Share (Schedule Of Potentially Dilutive Securities Excluded From Computation Of Earnings Per Share) (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	1,917,236	1,467,746	153,698
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	258	865	865
Unvested Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	48,869
Warrants - Employees [Member}
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	66,153	66,153	55,249
Series C Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator		598,991
Series D Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	970,606
Series E Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	560,115
Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	97,269	77,336
LTIP Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	49,636	101,213	84,576
Real Estate Strategies, L.P. [Member] | Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	53,608	576,923
Condor Hospitality Trust, Inc. [Member] | Common Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive securities excluded from the denominator	70,722	46,265	13,008

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Commitments And Contingencies (Narrative) (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017 USD ($) property	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) property item	Dec. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)	Jan. 01, 2017 property
Loss Contingencies [Line Items]
Incentive fee percent										190.00%
Management fees incurred									$ 1,700	$ 1,619	$ 2,466
Hotel and property operations									37,134	37,092	43,367
Incentive management fee									$ 306		158
Management agreement renewal additional term									1 year
Management agreement written notice of termination period									90 days
Number of hotels | property	18								18
Franchise costs									$ 3,800	3,123	3,883
Number of land lease agreements related to properties owned | item									0
Lease expense									$ 9	$ 105	105
Number of new leases entered into during period | item										3
Lease income									71	$ 86	198
Room rentals and other hotel services	$ 15,278	$ 15,562	$ 14,252	$ 10,361	$ 10,470	$ 13,519	$ 14,155	$ 12,503	55,453	50,647	58,714
Employer contribution expense									67	73	66
Office Building [Member]
Loss Contingencies [Line Items]
Annual lease payment										154
Lease expense									$ 154	199	163
Restaurant [Member]
Loss Contingencies [Line Items]
Number of real estate properties associated with lease agreements | item									1
Cell Tower [Member]
Loss Contingencies [Line Items]
Number of real estate properties associated with lease agreements | item									1
Minimum [Member]
Loss Contingencies [Line Items]
Management fee percent									3.00%
Management agreement term									1 year
Franchise fee percent									3.30%
Other franchiser programs and service fee percent									2.50%
Franchise agreement term									10 years
Lease expiration									Dec. 31, 2019
Maximum [Member]
Loss Contingencies [Line Items]
Management fee percent									3.50%
Incentive fee percent									5.00%
Management agreement term									3 years
Franchise fee percent									5.50%
Other franchiser programs and service fee percent									6.00%
Franchise agreement term									25 years
Lease expiration									Dec. 31, 2021
Continuing Operations [Member]
Loss Contingencies [Line Items]
Hotel and property operations									$ 1,700	1,619	2,348
Franchise costs									3,800	3,123	3,853
Room rentals and other hotel services									$ 71	$ 86	$ 177
Held For Sale [Member]
Loss Contingencies [Line Items]
Number of hotels | property	3								3			7
Wholly Owned Properties [Member]
Loss Contingencies [Line Items]
Number of hotels | property	17								17
Wholly Owned Properties [Member] | Franchise Rights [Member]
Loss Contingencies [Line Items]
Number of hotels | property	16								16

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Commitments And Contingencies (Schedule Of Future Minimum Lease Payments) (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Operating Leases, Future Minimum Payments Due, Rolling Maturity [Abstract]
2018	$ 159
2019	138
2020	61
2021	47
Total future minimum lease payments	$ 405

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Quarterly Operating Results (Schedule Of Quarterly Operations) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Operating Results [Abstract]
Revenue	$ 15,278	$ 15,562	$ 14,252	$ 10,361	$ 10,470	$ 13,519	$ 14,155	$ 12,503	$ 55,453	$ 50,647	$ 58,714
Operating expenses	14,040	14,417	12,719	11,001	11,009	12,445	12,508	12,662	52,177	48,624	55,190
Operating income	1,238	1,145	1,533	(640)	(539)	1,074	1,647	(159)	3,276	2,023	3,524
Net gain (loss) on dispositions of assets	2,004	(46)	4,852	(3)	7,318	3,591	8,856	3,367	6,807	23,132	4,798
Equity in earnings (loss) of joint venture	(105)	159	25	111	(190)	(54)			190	(244)
Net gain on derivatives and convertible debt	20	14	227	175	72	26	162	6,117	436	6,377	11,578
Other income (expense), net	(28)	(43)	(39)	(1)	(32)	85	23	(21)	(111)	55	114
Interest expense	(1,706)	(1,405)	(1,092)	(971)	(1,006)	(1,127)	(1,248)	(1,329)	(5,174)	(4,710)	(5,522)
Loss on debt extinguishment	(167)			(800)	(639)	(399)	(976)	(173)	(967)	(2,187)	(213)
Impairment loss, net	(553)	(848)	(479)	(271)	(220)	(343)	(121)	(793)	(2,151)	(1,477)	(3,829)
Earnings from continuing operations before income taxes	703	(1,024)	5,027	(2,400)	4,764	2,853	8,343	7,009	2,306	22,969	10,450
Income tax benefit (expense)	645	(15)	(35)		(125)				595	(125)
Earnings from continuing operations					4,639	2,853	8,343	7,009	2,901	22,844	10,450
Gain from discontinued operations, net of tax								678		678	3,872
Net earnings	1,348	(1,039)	4,992	(2,400)	4,639	2,853	8,343	7,687	2,901	23,522	14,322
(Earning) loss attributable to noncontrolling interest	(10)	7	(67)	50	(99)	(61)	(178)	(389)	(20)	(727)	(1,197)
Net earnings attributable to controlling interests	1,338	(1,032)	4,925	(2,350)	4,540	2,792	8,165	7,298	2,881	22,795	13,125
Dividends declared and undeclared and in kind dividends deemed on preferred stock	(164)	(205)	(271)	(11,603)	(975)	(976)	(1,057)	(17,740)	(12,243)	(20,748)	(3,632)
Net earnings (loss) attributable to common shareholders	$ 1,174	$ (1,237)	$ 4,654	$ (13,953)	$ 3,565	$ 1,816	$ 7,108	$ (10,442)	$ (9,362)	$ 2,047	$ 9,493
Earnings per Share
Continuing operations - Basic					$ 4.68	$ 2.41	$ 9.36	$ (14.63)	$ (1.00)	$ 1.82	$ 8.06
Discontinued operations - Basic								0.91		0.85	4.55
Total - Basic Earnings (Loss) per Share	$ 0.10	$ (0.11)	$ 0.40	$ (4.75)	4.68	2.41	9.36	(13.72)	(1.00)	2.67	12.61
Diluted Earnings Per Share
Continuing operations - Diluted					0.65	0.39	1.17	(14.63)	(1.00)	0.78	(0.98)
Discontinued operations - Diluted								0.91		0.13	$ 0.98
Total - Diluted Earnings (Loss) per Share	$ 0.10	$ (0.11)	$ 0.37	$ (4.75)	$ 0.65	$ 0.39	$ 1.17	$ (13.72)	$ (1.00)	$ 0.91

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Subsequent Events (Narrative) (Details) $ / shares in Units, $ in Thousands					3 Months Ended									12 Months Ended
	Mar. 15, 2018 USD ($) room	Feb. 21, 2018 USD ($) room	Jan. 25, 2018 USD ($) room	Jan. 18, 2018 USD ($) room	Mar. 16, 2018 USD ($) property $ / shares shares	Dec. 31, 2017 USD ($) property $ / shares	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) property $ / shares shares	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Feb. 28, 2017 $ / shares
Subsequent Event [Line Items]
Gain on dispositions of assets						$ 2,004	$ (46)	$ 4,852	$ (3)	$ 7,318	$ 3,591	$ 8,856	$ 3,367	$ 6,807	$ 23,132	$ 4,798
Number of hotels | property						18								18
Investment in hotel properties held for sale, net						$ 12,655				35,640				$ 12,655	35,640
Long-term debt related to hotel properties held for sale, net of deferred financing costs						4,976				$ 14,802				4,976	$ 14,802
Proceeds from common stock issued														47,468		$ 346
Series E Preferred Stock [Member]
Subsequent Event [Line Items]
Shares issued, price per share | $ / shares																	$ 13.845
Additional Hotel Property that Meets Criteria to be Considered Held For Sale [Member]
Subsequent Event [Line Items]
Investment in hotel properties held for sale, net						1,191								1,191
Long-term debt related to hotel properties held for sale, net of deferred financing costs						$ 3,089								$ 3,089
Subsequent Event [Member] | Towne Place Suites Austin North Tech Ridge [Member]
Subsequent Event [Line Items]
Number of rooms acquired | room				122
Purchase price of hotel acquisition				$ 19,750
Subsequent Event [Member] | Additional Hotel Property that Meets Criteria to be Considered Held For Sale [Member]
Subsequent Event [Line Items]
Number of hotels | property					1
Creston, Iowa [Member] | Supertel Inn [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of rooms sold | room			41
Gain on dispositions of assets			$ 2,050
Summerville / Charleston [Member] | Subsequent Event [Member] | Home2 Suites [Member]
Subsequent Event [Line Items]
Number of rooms acquired | room		93
Purchase price of hotel acquisition		$ 16,325
Cash paid for acquisition		1,507
South Bend, Indiana [Member] | Comfort Suites [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of rooms sold | room	135
Gain on dispositions of assets	$ 6,100
ATM Program [Member]
Subsequent Event [Line Items]
Issuance of common stock, shares | shares														169,004
Shares issued, price per share | $ / shares						$ 10.15								$ 10.15
Proceeds from common stock issued														$ 1,715
Net proceeds from common stock issue														$ 1,619
ATM Program [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Issuance of common stock, shares | shares					12,334
Shares issued, price per share | $ / shares					$ 10.40
Proceeds from common stock issued					$ 128
Net proceeds from common stock issue					$ 125
KeyBank Credit Facility [Member] | Summerville / Charleston [Member] | Subsequent Event [Member] | Home2 Suites [Member]
Subsequent Event [Line Items]
Debt originated at acquisition		$ 14,818

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Schedule III Real Estate And Accumulated Depreciation (Schedule Of Real Estate Investments And Accumulated Depreciation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Real Estate and Accumulated Depreciation [Line Items]
Initial cost, Land	$ 22,131
Initial cost, Buildings & Other	197,501
Initial cost, Furniture & equipment	17,174
Additions, (dispositions), and (impairments) Subsequent to acquisition, Land	(282)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	284
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	4,320
Gross amount at December 31, 2017, Land	21,849
Gross amount at December 31, 2017, Buildings & Other	197,785
Gross amount at December 31, 2017, Furniture & equipment	21,494
Accumulated depreciation	(21,548)	$ (28,513)	$ (58,200)	$ (75,403)
Net book value	219,580
Hotel [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial cost, Land	22,062
Initial cost, Buildings & Other	195,984
Initial cost, Furniture & equipment	17,174
Additions, (dispositions), and (impairments) Subsequent to acquisition, Land	(213)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	1,714
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	3,624
Gross amount at December 31, 2017, Land	21,849
Gross amount at December 31, 2017, Buildings & Other	197,698
Gross amount at December 31, 2017, Furniture & equipment	20,798
Accumulated depreciation	(21,180)
Net book value	219,165
Construction-In-Progress [Member]
Real Estate and Accumulated Depreciation [Line Items]
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	87
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	191
Gross amount at December 31, 2017, Buildings & Other	87
Gross amount at December 31, 2017, Furniture & equipment	191
Net book value	278
Office Building [Member]
Real Estate and Accumulated Depreciation [Line Items]
Initial cost, Land	69
Initial cost, Buildings & Other	1,517
Additions, (dispositions), and (impairments) Subsequent to acquisition, Land	(69)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	(1,517)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	505
Gross amount at December 31, 2017, Furniture & equipment	505
Accumulated depreciation	(368)
Net book value	$ 137
Super 8 [Member] | Creston, Iowa [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Sep. 19, 1978
Encumbrance	KEY
Initial cost, Land	$ 56
Initial cost, Buildings & Other	765
Initial cost, Furniture & equipment	76
Additions, (dispositions), and (impairments) Subsequent to acquisition, Land	89
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	1,572
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	907
Gross amount at December 31, 2017, Land	145
Gross amount at December 31, 2017, Buildings & Other	2,337
Gross amount at December 31, 2017, Furniture & equipment	983
Accumulated depreciation	(2,274)
Net book value	$ 1,191
Quality Inn [Member] | Solomons, Maryland [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Jun. 01, 1986
Encumbrance	KEY
Initial cost, Land	$ 2,304
Initial cost, Buildings & Other	2,719
Initial cost, Furniture & equipment	269
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	1,565
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	462
Gross amount at December 31, 2017, Land	2,304
Gross amount at December 31, 2017, Buildings & Other	4,284
Gross amount at December 31, 2017, Furniture & equipment	731
Accumulated depreciation	(3,356)
Net book value	$ 3,963
Comfort Suites [Member] | Ft. Wayne, Indiana [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Nov. 07, 2005
Encumbrance	KEY
Initial cost, Land	$ 1,200
Initial cost, Buildings & Other	3,964
Initial cost, Furniture & equipment	840
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	1,060
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	617
Gross amount at December 31, 2017, Land	1,200
Gross amount at December 31, 2017, Buildings & Other	5,024
Gross amount at December 31, 2017, Furniture & equipment	1,457
Accumulated depreciation	(2,765)
Net book value	$ 4,916
Comfort Suites [Member] | South Bend, Indiana [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Nov. 30, 2005
Encumbrance	KEY
Initial cost, Land	$ 500
Initial cost, Buildings & Other	10,602
Initial cost, Furniture & equipment	910
Additions, (dispositions), and (impairments) Subsequent to acquisition, Land	(302)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	(4,714)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	684
Gross amount at December 31, 2017, Land	198
Gross amount at December 31, 2017, Buildings & Other	5,888
Gross amount at December 31, 2017, Furniture & equipment	1,594
Accumulated depreciation	(1,884)
Net book value	$ 5,796
Supertel Inn [Member] | Creston, Iowa [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Jun. 30, 2006
Encumbrance	KEY
Initial cost, Land	$ 235
Initial cost, Buildings & Other	2,364
Initial cost, Furniture & equipment	344
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	(16)
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	69
Gross amount at December 31, 2017, Land	235
Gross amount at December 31, 2017, Buildings & Other	2,348
Gross amount at December 31, 2017, Furniture & equipment	413
Accumulated depreciation	(1,055)
Net book value	$ 1,941
Hilton Garden Inn [Member] | Dowell, Maryland [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	May 25, 2012
Encumbrance	KEY
Initial cost, Land	$ 1,400
Initial cost, Buildings & Other	9,492
Initial cost, Furniture & equipment	323
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	657
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	459
Gross amount at December 31, 2017, Land	1,400
Gross amount at December 31, 2017, Buildings & Other	10,149
Gross amount at December 31, 2017, Furniture & equipment	782
Accumulated depreciation	(1,987)
Net book value	$ 10,344
SpringHill Suites [Member] | San Antonio, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Oct. 01, 2015
Encumbrance	WELLS
Initial cost, Land	$ 1,597
Initial cost, Buildings & Other	14,353
Initial cost, Furniture & equipment	1,550
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	114
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	34
Gross amount at December 31, 2017, Land	1,597
Gross amount at December 31, 2017, Buildings & Other	14,467
Gross amount at December 31, 2017, Furniture & equipment	1,584
Accumulated depreciation	(1,416)
Net book value	$ 16,232
Courtyard by Mariott [Member] | Jacksonville, Florida [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Oct. 02, 2015
Encumbrance	WELLS
Initial cost, Land	$ 2,100
Initial cost, Buildings & Other	11,050
Initial cost, Furniture & equipment	850
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	178
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	68
Gross amount at December 31, 2017, Land	2,100
Gross amount at December 31, 2017, Buildings & Other	11,228
Gross amount at December 31, 2017, Furniture & equipment	918
Accumulated depreciation	(1,279)
Net book value	$ 12,967
Hotel Indigo [Member] | Atlanta, Georgia [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Oct. 02, 2015
Encumbrance	WELLS
Initial cost, Land	$ 800
Initial cost, Buildings & Other	8,700
Initial cost, Furniture & equipment	1,500
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	97
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	212
Gross amount at December 31, 2017, Land	800
Gross amount at December 31, 2017, Buildings & Other	8,797
Gross amount at December 31, 2017, Furniture & equipment	1,712
Accumulated depreciation	(1,335)
Net book value	$ 9,974
Aloft [Member] | Leawood, Kansas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Dec. 14, 2016
Encumbrance	GWB
Initial cost, Land	$ 3,339
Initial cost, Buildings & Other	18,046
Initial cost, Furniture & equipment	1,115
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	133
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	61
Gross amount at December 31, 2017, Land	3,339
Gross amount at December 31, 2017, Buildings & Other	18,179
Gross amount at December 31, 2017, Furniture & equipment	1,176
Accumulated depreciation	(794)
Net book value	$ 21,900
Home2 Suites [Member] | Lexington, Kentucky [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Mar. 24, 2017
Encumbrance	KEY
Initial cost, Land	$ 905
Initial cost, Buildings & Other	14,204
Initial cost, Furniture & equipment	1,351
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	150
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	12
Gross amount at December 31, 2017, Land	905
Gross amount at December 31, 2017, Buildings & Other	14,354
Gross amount at December 31, 2017, Furniture & equipment	1,363
Accumulated depreciation	(501)
Net book value	$ 16,121
Home2 Suites [Member] | Round Rock, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Mar. 24, 2017
Encumbrance	KEY
Initial cost, Land	$ 1,087
Initial cost, Buildings & Other	14,345
Initial cost, Furniture & equipment	1,285
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	150
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	2
Gross amount at December 31, 2017, Land	1,087
Gross amount at December 31, 2017, Buildings & Other	14,495
Gross amount at December 31, 2017, Furniture & equipment	1,287
Accumulated depreciation	(480)
Net book value	$ 16,389
Home2 Suites [Member] | Tallahassee, Florida [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Mar. 24, 2017
Encumbrance	KEY
Initial cost, Land	$ 1,519
Initial cost, Buildings & Other	18,229
Initial cost, Furniture & equipment	1,727
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	159
Gross amount at December 31, 2017, Land	1,519
Gross amount at December 31, 2017, Buildings & Other	18,388
Gross amount at December 31, 2017, Furniture & equipment	1,727
Accumulated depreciation	(623)
Net book value	$ 21,011
Home2 Suites [Member] | Southaven, Mississippi [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Apr. 14, 2017
Encumbrance	MS
Initial cost, Land	$ 1,311
Initial cost, Buildings & Other	16,792
Initial cost, Furniture & equipment	897
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	184
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	9
Gross amount at December 31, 2017, Land	1,311
Gross amount at December 31, 2017, Buildings & Other	16,976
Gross amount at December 31, 2017, Furniture & equipment	906
Accumulated depreciation	(593)
Net book value	$ 18,600
Hampton Inn And Suites [Member] | Lake Mary, Florida [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Jun. 19, 2017
Encumbrance	KEY
Initial cost, Land	$ 1,200
Initial cost, Buildings & Other	16,432
Initial cost, Furniture & equipment	1,773
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	175
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	3
Gross amount at December 31, 2017, Land	1,200
Gross amount at December 31, 2017, Buildings & Other	16,607
Gross amount at December 31, 2017, Furniture & equipment	1,776
Accumulated depreciation	(387)
Net book value	$ 19,196
Fairfield Inn & Suites [Member] | El Paso, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Aug. 31, 2017
Encumbrance	KEY
Initial cost, Land	$ 1,014
Initial cost, Buildings & Other	14,297
Initial cost, Furniture & equipment	1,089
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	100
Gross amount at December 31, 2017, Land	1,014
Gross amount at December 31, 2017, Buildings & Other	14,397
Gross amount at December 31, 2017, Furniture & equipment	1,089
Accumulated depreciation	(203)
Net book value	$ 16,297
Residence Inn [Member] | Austin, Texas [Member]
Real Estate and Accumulated Depreciation [Line Items]
Acquisition date	Aug. 31, 2017
Encumbrance	KEY
Initial cost, Land	$ 1,495
Initial cost, Buildings & Other	19,630
Initial cost, Furniture & equipment	1,275
Additions, (dispositions), and (impairments) Subsequent to acquisition, Buildings & Other	150
Additions, (dispositions), and (impairments) Subsequent to acquisition, Furniture & equipment	25
Gross amount at December 31, 2017, Land	1,495
Gross amount at December 31, 2017, Buildings & Other	19,780
Gross amount at December 31, 2017, Furniture & equipment	1,300
Accumulated depreciation	(248)
Net book value	$ 22,327

XML

Schedule III Real Estate And Accumulated Depreciation (Schedule Of Changes In Rental Properties And Accumulated Depreciation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Real Estate and Accumulated Depreciation [Line Items]
Balance	$ 143,384	$ 188,899	$ 214,585
Additions	134,709	25,618	46,489
Disposals	(34,814)	(68,256)	(65,802)
Impairment loss, net	(2,151)	(2,877)	(6,373)
Balance	241,128	143,384	188,899
Balance	28,513	58,200	75,403
Depreciation for the period	6,898	5,190	5,400
Depreciation on assets sold or disposed	(13,863)	(33,477)	(19,938)
Impairment loss, net		(1,400)	(2,665)
Balance	21,548	$ 28,513	$ 58,200
Aggregate cost of land, buildings, furniture and equipment for Federal income tax purposes	$ 245,000
Minimum [Member] | Building And Improvements [Member]
Real Estate and Accumulated Depreciation [Line Items]
Useful life used for computation of depreciation	15 years
Minimum [Member] | Furniture And Equipment [Member]
Real Estate and Accumulated Depreciation [Line Items]
Useful life used for computation of depreciation	3 years
Maximum [Member] | Building And Improvements [Member]
Real Estate and Accumulated Depreciation [Line Items]
Useful life used for computation of depreciation	40 years
Maximum [Member] | Furniture And Equipment [Member]
Real Estate and Accumulated Depreciation [Line Items]
Useful life used for computation of depreciation	12 years

XML

Label	Element	Value
Series E Preferred Stock [Member]
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 9,900,000