(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of each Exchange on which Registered | ||||||||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||
ASSETS | ||||||||||||||
Real estate properties: | ||||||||||||||
Land | $ | $ | ||||||||||||
Buildings, improvements and equipment | ||||||||||||||
Total real estate properties, gross | ||||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
Total real estate properties, net | ||||||||||||||
Acquired real estate leases and other intangibles, net | ||||||||||||||
Assets held for sale | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Restricted cash | ||||||||||||||
Equity method investments | ||||||||||||||
Investment in equity securities | ||||||||||||||
Due from related persons | ||||||||||||||
Other assets, net | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Revolving credit facility | $ | $ | ||||||||||||
Senior unsecured notes, net | ||||||||||||||
Accounts payable and other liabilities | ||||||||||||||
Due to related persons | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common shares of beneficial interest, $ | ||||||||||||||
Additional paid in capital | ||||||||||||||
Cumulative other comprehensive income | ||||||||||||||
Cumulative net income available for common shareholders | ||||||||||||||
Cumulative common distributions | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Revenues: | ||||||||||||||
$ | $ | |||||||||||||
Rental income | ||||||||||||||
Total revenues | ||||||||||||||
Expenses: | ||||||||||||||
Other operating expenses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
General and administrative | ||||||||||||||
Transaction related costs | ||||||||||||||
Loss on asset impairment, net | ||||||||||||||
Total expenses | ||||||||||||||
Other operating income: | ||||||||||||||
Gain (loss) on sale of real estate, net | ( | |||||||||||||
Unrealized losses on equity securities, net | ( | ( | ||||||||||||
Interest income | ||||||||||||||
Interest expense (including amortization of debt issuance costs and debt discounts and premiums of $ | ( | ( | ||||||||||||
Loss before income taxes and equity in losses of an investee | ( | ( | ||||||||||||
Income tax expense | ( | ( | ||||||||||||
Equity in losses of an investee | ( | ( | ||||||||||||
Net loss | ( | ( | ||||||||||||
Other comprehensive income: | ||||||||||||||
Equity interest in investee’s unrealized gains | ||||||||||||||
Other comprehensive income | ||||||||||||||
Comprehensive loss | $ | ( | $ | ( | ||||||||||
Weighted average common shares outstanding (basic and diluted) | ||||||||||||||
Net loss per common share (basic and diluted) | $ | ( | $ | ( | ||||||||||
Common Shares | Additional Paid in Capital | Cumulative Net Income Available for Common Shareholders | Cumulative Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||
Number of Shares | Common Shares | Cumulative Common Distributions | |||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Equity in unrealized gains of investees | — | — | — | — | — | 4 | |||||||||||||||||||||||||||||||||||
Common share grants | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common share forfeitures | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Distributions | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Common share grants | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distributions to common shareholders | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Net amortization of debt issuance costs, discounts and premiums as interest | ||||||||||||||
Straight-line rental income | ||||||||||||||
Loss on asset impairment | ||||||||||||||
Unrealized loss on equity securities, net | ||||||||||||||
Equity in losses of an investee | ||||||||||||||
(Gain) loss on sale of real estate | ( | |||||||||||||
Other non-cash income, net | ( | ( | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Due from related persons | ( | |||||||||||||
Other assets | ( | |||||||||||||
Accounts payable and other liabilities | ( | ( | ||||||||||||
Due to related persons | ||||||||||||||
Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Real estate acquisitions and deposits | ( | |||||||||||||
Real estate improvements | ( | ( | ||||||||||||
Hotel managers’ purchases with restricted cash | ( | ( | ||||||||||||
Net proceeds from sale of real estate | ||||||||||||||
Investment in Sonesta | ( | |||||||||||||
Net cash provided by (used in) investing activities | ( | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Borrowings under revolving credit facility | ||||||||||||||
Repayments of revolving credit facility | ( | |||||||||||||
Deferred financing costs | ( | ( | ||||||||||||
Distributions to common shareholders | ( | ( | ||||||||||||
Net cash (used in) provided by financing activities | ( | |||||||||||||
Increase in cash and cash equivalents and restricted cash | ||||||||||||||
Cash and cash equivalents and restricted cash at beginning of period | ||||||||||||||
Cash and cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
Supplemental disclosure of cash and cash equivalents and restricted cash: | ||||||||||||||
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amount shown in the condensed consolidated statements of cash flows: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Total cash and cash equivalents and restricted cash | $ | $ | ||||||||||||
For the Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Supplemental cash flow information: | ||||||||||||||
Cash paid for interest | $ | $ | ||||||||||||
Cash paid for income taxes | ||||||||||||||
Non-cash investing activities: | ||||||||||||||
Real estate improvements accrued, not paid | $ | $ | ||||||||||||
Year of Sale | Property Type | Number of Properties | Rooms or Suites/Square Feet | Gross Sales Price | Gain/ (Loss) on Sale | |||||||||||||||||||||||||||
Properties sold during the three months ended March 31, 2022 | ||||||||||||||||||||||||||||||||
2022 | Hotels | $ | $ | |||||||||||||||||||||||||||||
2022 | Net Lease | |||||||||||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||||||||
Declaration Date | Record Date | Paid Date | Dividend Per Common Share | Total Distributions | ||||||||||||||||||||||
January 13, 2022 | January 24, 2022 | February 17, 2022 | $ | $ | ||||||||||||||||||||||
For the Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||
Hotels | Net Lease | Corporate | Consolidated | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Hotel operating revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||
Hotel operating expenses | ||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Transaction related costs | ||||||||||||||||||||||||||
Loss on asset impairment | ( | |||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||
Gain on sale of real estate, net | ||||||||||||||||||||||||||
Unrealized loss on equity securities, net | ( | ( | ||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Income (loss) before income taxes and equity in earnings of an investee | ( | ( | ( | |||||||||||||||||||||||
Income tax expense | ( | ( | ||||||||||||||||||||||||
Equity in losses of an investee | ( | ( | ||||||||||||||||||||||||
Net income (loss) | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
As of March 31, 2022 | ||||||||||||||||||||||||||
Hotels | Net Lease | Corporate | Consolidated | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ |
For the Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Hotels | Net Lease | Corporate | Consolidated | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Hotel operating revenues | $ | $ | $ | $ | ||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||
Hotel operating expenses | ||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Transition related costs | ||||||||||||||||||||||||||
Loss on asset impairment | ||||||||||||||||||||||||||
Total expenses | ||||||||||||||||||||||||||
Loss on sale of real estate, net | ( | ( | ||||||||||||||||||||||||
Unrealized loss on equity securities, net | ( | ( | ||||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Income (loss) before income taxes and equity in losses of an investee | ( | ( | ( | |||||||||||||||||||||||
Income tax expense | ( | ( | ||||||||||||||||||||||||
Equity in losses of an investee | ( | ( | ||||||||||||||||||||||||
Net income (loss) | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
As of December 31, 2021 | ||||||||||||||||||||||||||
Hotels | Net Lease | Corporate | Consolidated | |||||||||||||||||||||||
Total assets | $ | $ | $ | ` | $ |
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
Recurring Fair Value Measurement Assets: | ||||||||||||||||||||||||||
Investment in TA (Level 1) (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Non-Recurring Fair Value Measurement Assets: | ||||||||||||||||||||||||||
Assets of properties held for sale (Level 2) (2) | $ | $ | $ | $ | ||||||||||||||||||||||
Assets of properties held for sale (Level 3) (2) | $ | $ | $ | $ | ||||||||||||||||||||||
March 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||
Carrying Value (1) | Fair Value | Carrying Value (1) | Fair Value | |||||||||||||||||||||||
Senior Unsecured Notes, due 2022 at | $ | $ | $ | $ | ||||||||||||||||||||||
Senior Unsecured Notes, due 2023 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2024 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2024 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2025 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2025 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2026 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2026 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2027 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2027 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2028 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2029 at | ||||||||||||||||||||||||||
Senior Unsecured Notes, due 2030 at | ||||||||||||||||||||||||||
Total financial liabilities | $ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||||||||
2022 | 2021 | Change | ||||||||||||||||||
All Hotels | ||||||||||||||||||||
No. of hotels | 298 | 310 | (12) | |||||||||||||||||
No. of rooms or suites | 47,285 | 49,015 | (1,730) | |||||||||||||||||
Occupancy | 53.3 | % | 40.1 | % | 13.2 | pts | ||||||||||||||
ADR | $ | 115.24 | $ | 88.02 | 30.9 | % | ||||||||||||||
RevPAR | $ | 61.42 | $ | 35.30 | 74.0 | % |
Three Months Ended March 31, | ||||||||||||||||||||
2022 | 2021 | Change | ||||||||||||||||||
Comparable Hotels | ||||||||||||||||||||
No. of hotels | 295 | 295 | — | |||||||||||||||||
No. of rooms or suites | 46,596 | 46,596 | — | |||||||||||||||||
Occupancy | 53.6 | % | 39.8 | % | 13.8 | pts | ||||||||||||||
ADR | $ | 114.85 | $ | 88.59 | 29.6 | % | ||||||||||||||
RevPAR | $ | 61.56 | $ | 35.26 | 74.6 | % |
For the Three Months Ended March 31, | ||||||||||||||||||||||||||
Increase | % Increase | |||||||||||||||||||||||||
2022 | 2021 | (Decrease) | (Decrease) | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Hotel operating revenues | $ | 297,406 | $ | 168,953 | $ | 128,453 | 76.0 | % | ||||||||||||||||||
Rental income - hotels | — | 496 | (496) | (100.0) | % | |||||||||||||||||||||
Rental income - net lease | 96,358 | 91,721 | 4,637 | 5.1 | % | |||||||||||||||||||||
Total revenues | 393,764 | 261,170 | 132,594 | 50.8 | % | |||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||
Hotel operating expenses | 290,343 | 195,352 | 94,991 | 48.6 | % | |||||||||||||||||||||
Other operating expenses | 2,269 | 3,417 | (1,148) | (33.6) | % | |||||||||||||||||||||
Depreciation and amortization - hotels | 56,162 | 68,124 | (11,962) | (17.6) | % | |||||||||||||||||||||
Depreciation and amortization - net lease | 47,951 | 56,244 | (8,293) | (14.7) | % | |||||||||||||||||||||
Total depreciation and amortization | 104,113 | 124,368 | (20,255) | (16.3) | % | |||||||||||||||||||||
General and administrative | 11,989 | 12,657 | (668) | (5.3) | % | |||||||||||||||||||||
Transaction related costs | 1,177 | 19,635 | (18,458) | (94.0) | % | |||||||||||||||||||||
Loss on asset impairment | 5,500 | 1,211 | 4,289 | 354.2 | % | |||||||||||||||||||||
Total expenses | 415,391 | 356,640 | 58,751 | 16.5 | % | |||||||||||||||||||||
Other operating income: | ||||||||||||||||||||||||||
Gain (loss) on sale of real estate, net | 5,548 | (9) | 5,557 | n/m | ||||||||||||||||||||||
Unrealized loss on equity securities, net | (10,260) | (6,481) | (3,779) | 58.3 | % | |||||||||||||||||||||
Interest income | 273 | 57 | 216 | 378.9 | % | |||||||||||||||||||||
Interest expense | (92,344) | (89,391) | (2,953) | 3.3 | % | |||||||||||||||||||||
Loss before income taxes and equity in losses of an investee | (118,410) | (191,294) | 72,884 | (38.1) | % | |||||||||||||||||||||
Income tax expense | (695) | (853) | 158 | (18.5) | % | |||||||||||||||||||||
Equity in losses of an investee | (717) | (2,843) | 2,126 | (74.8) | % | |||||||||||||||||||||
Net loss | $ | (119,822) | $ | (194,990) | $ | 75,168 | 38.5 | % | ||||||||||||||||||
Weighted average shares outstanding (basic and diluted) | 164,667 | 164,498 | 169 | 0.1 | % | |||||||||||||||||||||
Net loss per common share (basic and diluted) | $ | (0.73) | $ | (1.19) | $ | 0.46 | (38.7) | % |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash and cash equivalents and restricted cash at the beginning of the period | $ | 947,418 | $ | 91,456 | ||||||||||
Net cash provided by (used in): | ||||||||||||||
Operating activities | (11,983) | (62,724) | ||||||||||||
Investing activities | 38,870 | (68,806) | ||||||||||||
Financing activities | (1,733) | 919,625 | ||||||||||||
Cash and cash equivalents and restricted cash at the end of the period | $ | 972,572 | $ | 879,551 |
Declaration Date | Record Date | Paid Date | Dividend Per Common Share | Total Distributions | ||||||||||||||||||||||
January 13, 2022 | January 24, 2022 | February 17, 2022 | $ | 0.01 | $ | 1,651 | ||||||||||||||||||||
Year | Maturity | |||||||
2022 | $ | 500,000 | ||||||
2023 | 500,000 | |||||||
2024 | 1,175,000 | |||||||
2025 | 1,150,000 | |||||||
2026 | 800,000 | |||||||
2027 | 850,000 | |||||||
2028 | 400,000 | |||||||
2029 | 425,000 | |||||||
2030 | 400,000 | |||||||
$ | 6,200,000 |
Actual Results | Covenant Requirement | ||||||||||||||||
Total debt / adjusted total assets | 58.3% | Maximum of 60% | |||||||||||||||
Secured debt / adjusted total assets | 8.1% | Maximum of 40% | |||||||||||||||
Consolidated income available for debt service / debt service | 1.32x | Minimum of 1.50x | |||||||||||||||
Total unencumbered assets / unsecured debt | 170.4% | Minimum 150% | |||||||||||||||
As of March 31, 2022 | As of December 31, 2021 | |||||||||||||
Real estate properties, net(1) | $ | 5,562,808 | $ | 5,607,883 | ||||||||||
Intercompany balances(2) | 874,409 | 826,338 | ||||||||||||
Other assets, net | 1,969,120 | 2,074,353 | ||||||||||||
Indebtedness, net | $ | 7,146,258 | $ | 7,143,022 | ||||||||||
Other liabilities | 419,252 | 430,267 | ||||||||||||
Three Months Ended March 31, 2022 | ||||||||
Revenues | $ | 368,368 | ||||||
Expenses | 491,593 | |||||||
Net income (loss) | (123,225) |
Comparable Hotels* | No. of Rooms or Suites | Occupancy | ADR | RevPAR | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Service Level | No. of Hotels | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Brand | 2022 | 2021 | Change | 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
Sonesta (1) | Full Service | 22 | 7,145 | 51.9 | % | 31.2 | % | 20.7 Pts | $ | 144.09 | $ | 109.85 | 31.2 | % | $ | 74.78 | $ | 34.27 | 118.2 | % | ||||||||||||||||||||||||||||||||||||
Royal Sonesta (1) | Full Service | 16 | 5,291 | 37.3 | % | 22.2 | % | 15.1 Pts | 211.22 | 150.05 | 40.8 | % | 78.79 | 33.31 | 136.5 | % | ||||||||||||||||||||||||||||||||||||||||
Radisson Hotel | Full Service | 5 | 1,149 | 57.5 | % | 38.0 | % | 19.5 Pts | 126.88 | 90.60 | 40.0 | % | 72.96 | 34.43 | 111.9 | % | ||||||||||||||||||||||||||||||||||||||||
Crowne Plaza | Full Service | 1 | 495 | 43.4 | % | 36.0 | % | 7.4 Pts | 121.33 | 93.92 | 29.2 | % | 52.66 | 33.81 | 55.8 | % | ||||||||||||||||||||||||||||||||||||||||
Country Inn and Suites | Full Service | 3 | 430 | 52.2 | % | 30.2 | % | 22.0 Pts | 107.10 | 79.75 | 34.3 | % | 55.91 | 24.08 | 132.2 | % | ||||||||||||||||||||||||||||||||||||||||
Full Service Total/Average | 47 | 14,510 | 46.7 | % | 28.6 | % | 18.1 Pts | 160.03 | 117.57 | 36.1 | % | 74.73 | 33.63 | 122.2 | % | |||||||||||||||||||||||||||||||||||||||||
Sonesta Select (1) | Select Service | 62 | 8,750 | 40.4 | % | 25.1 | % | 15.3 Pts | 104.22 | 85.57 | 21.8 | % | 42.10 | 21.48 | 96.0 | % | ||||||||||||||||||||||||||||||||||||||||
Hyatt Place | Select Service | 17 | 2,107 | 58.6 | % | 47.5 | % | 11.1 Pts | 113.09 | 84.19 | 34.3 | % | 66.27 | 39.99 | 65.7 | % | ||||||||||||||||||||||||||||||||||||||||
Courtyard | Select Service | 13 | 1,813 | 43.9 | % | 37.0 | % | 6.9 Pts | 106.02 | 82.55 | 28.4 | % | 46.54 | 30.54 | 52.4 | % | ||||||||||||||||||||||||||||||||||||||||
Select Service Total/Average | 92 | 12,670 | 44.0 | % | 30.5 | % | 13.5 Pts | 106.45 | 84.69 | 25.7 | % | 46.84 | 25.83 | 81.3 | % | |||||||||||||||||||||||||||||||||||||||||
Sonesta ES Suites (1) | Extended Stay | 90 | 11,243 | 63.7 | % | 54.0 | % | 9.7 Pts | 107.74 | 88.89 | 21.2 | % | 68.63 | 48.00 | 43.0 | % | ||||||||||||||||||||||||||||||||||||||||
Sonesta Simply Suites | Extended Stay | 63 | 7,831 | 66.9 | % | 55.0 | % | 11.9 Pts | 76.86 | 63.49 | 21.1 | % | 51.42 | 34.92 | 47.3 | % | ||||||||||||||||||||||||||||||||||||||||
Residence Inn | Extended Stay | 3 | 342 | 56.3 | % | 43.7 | % | 12.6 Pts | 106.53 | 96.74 | 10.1 | % | 59.98 | 42.28 | 41.9 | % | ||||||||||||||||||||||||||||||||||||||||
Extended Stay Total/Average | 156 | 19,416 | 64.9 | % | 54.2 | % | 10.7 Pts | 94.96 | 78.60 | 20.8 | % | 61.63 | 42.60 | 44.7 | % | |||||||||||||||||||||||||||||||||||||||||
Comparable Hotels Total/Average | 295 | 46,596 | 53.6 | % | 39.8 | % | 13.8 Pts | $ | 114.85 | $ | 88.59 | 29.6 | % | $ | 61.56 | $ | 35.26 | 74.6 | % |
All Hotels* | No. of Rooms or Suites | Occupancy | ADR | RevPAR | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Service Level | No. of Hotels | Three Months Ended March 31, | Three Months Ended March 31, | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Brand | 2022 | 2021 | Change | 2022 | 2021 | Change | 2022 | 2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
Sonesta (1) | Full Service | 23 | 7,364 | 51.9 | % | 30.9 | % | 21.0 Pts | $ | 144.09 | $ | 109.85 | 31.2 | % | $ | 74.78 | $ | 33.94 | 120.3 | % | ||||||||||||||||||||||||||||||||||||
Royal Sonesta (1) | Full Service | 17 | 5,663 | 36.8 | % | 22.2 | % | 14.6 Pts | 210.61 | 150.05 | 40.4 | % | 77.50 | 33.31 | 132.7 | % | ||||||||||||||||||||||||||||||||||||||||
Radisson Hotel | Full Service | 5 | 1,149 | 57.5 | % | 38.0 | % | 19.5 Pts | 126.88 | 90.60 | 40.0 | % | 72.96 | 34.43 | 111.9 | % | ||||||||||||||||||||||||||||||||||||||||
Crowne Plaza | Full Service | 1 | 495 | 43.4 | % | 36.0 | % | 7.4 Pts | 121.33 | 93.92 | 29.2 | % | 52.66 | 33.81 | 55.8 | % | ||||||||||||||||||||||||||||||||||||||||
Country Inn and Suites | Full Service | 3 | 430 | 52.2 | % | 30.2 | % | 22.0 Pts | 107.10 | 79.75 | 34.3 | % | 55.91 | 24.08 | 132.2 | % | ||||||||||||||||||||||||||||||||||||||||
Full Service Total/Average | 49 | 15,101 | 46.3 | % | 28.4 | % | 17.9 Pts | 160.71 | 117.57 | 36.7 | % | 74.41 | 33.39 | 122.9 | % | |||||||||||||||||||||||||||||||||||||||||
Sonesta Select (1) | Select Service | 62 | 8,750 | 40.4 | % | 25.1 | % | 15.3 Pts | 104.22 | 85.57 | 21.8 | % | 42.10 | 21.48 | 96.0 | % | ||||||||||||||||||||||||||||||||||||||||
Hyatt Place | Select Service | 17 | 2,107 | 58.6 | % | 47.5 | % | 11.1 Pts | 113.09 | 84.19 | 34.3 | % | 66.27 | 39.99 | 65.7 | % | ||||||||||||||||||||||||||||||||||||||||
Courtyard | Select Service | 13 | 1,813 | 43.9 | % | 37.0 | % | 6.9 Pts | 106.02 | 82.55 | 28.4 | % | 46.54 | 30.54 | 52.4 | % | ||||||||||||||||||||||||||||||||||||||||
Select Service Total/Average | 92 | 12,670 | 44.0 | % | 30.5 | % | 13.5 Pts | 106.45 | 84.69 | 25.7 | % | 46.84 | 25.83 | 81.3 | % | |||||||||||||||||||||||||||||||||||||||||
Simply ES Suites (1) | Extended Stay | 90 | 11,243 | 63.7 | % | 54.0 | % | 9.7 Pts | 107.74 | 88.89 | 21.2 | % | 68.63 | 48.00 | 43.0 | % | ||||||||||||||||||||||||||||||||||||||||
Sonesta Simply Suites | Extended Stay | 64 | 7,929 | 66.2 | % | 55.1 | % | 11.1 Pts | 76.86 | 63.40 | 21.2 | % | 50.88 | 34.93 | 45.7 | % | ||||||||||||||||||||||||||||||||||||||||
Residence Inn | Extended Stay | 3 | 342 | 56.3 | % | 43.7 | % | 12.6 Pts | 106.53 | 96.74 | 10.1 | % | 59.98 | 42.28 | 41.9 | % | ||||||||||||||||||||||||||||||||||||||||
Extended Stay Total/Average | 157 | 19,514 | 64.6 | % | 54.3 | % | 10.3 Pts | 94.96 | 78.47 | 21.0 | % | 61.34 | 42.61 | 44.0 | % | |||||||||||||||||||||||||||||||||||||||||
All Hotels Total/Average | 298 | 47,285 | 53.3 | % | 39.8 | % | 13.5 Pts | $ | 115.24 | $ | 88.48 | 30.2 | % | $ | 61.42 | $ | 35.22 | 74.4 | % |
Brand | No. of Buildings | Investment (1) | Percent of Total Investment | Annualized Minimum Rent (2) | Percent of Total Annualized Minimum Rent | Coverage (3) | ||||||||||||||||||||||||||||||||||||||
1. | TravelCenters of America | 134 | $ | 2,289,189 | 44.8 | % | $ | 168,012 | 45.2 | % | 2.35 | x | ||||||||||||||||||||||||||||||||
2. | Petro Stopping Centers | 45 | 1,021,226 | 20.0 | % | 78,099 | 21.0 | % | 2.10 | x | ||||||||||||||||||||||||||||||||||
3. | AMC Theatres | 11 | 102,580 | 2.0 | % | 7,751 | 2.1 | % | 0.52 | x | ||||||||||||||||||||||||||||||||||
4. | The Great Escape | 14 | 98,242 | 1.9 | % | 7,140 | 1.9 | % | 7.79 | x | ||||||||||||||||||||||||||||||||||
5. | Life Time Fitness | 3 | 92,617 | 1.8 | % | 5,770 | 1.6 | % | 1.81 | x | ||||||||||||||||||||||||||||||||||
6. | Buehler's Fresh Foods | 5 | 76,536 | 1.5 | % | 5,657 | 1.5 | % | 5.90 | x | ||||||||||||||||||||||||||||||||||
7. | Heartland Dental | 59 | 61,120 | 1.2 | % | 4,561 | 1.2 | % | 4.60 | x | ||||||||||||||||||||||||||||||||||
8. | Norms | 10 | 53,673 | 1.0 | % | 3,232 | 0.9 | % | 0.47 | x | ||||||||||||||||||||||||||||||||||
9. | Express Oil Change | 23 | 49,724 | 1.0 | % | 3,717 | 1.0 | % | 4.34 | x | ||||||||||||||||||||||||||||||||||
10. | Regal Cinemas | 6 | 44,476 | 0.9 | % | 3,736 | 1.0 | % | 0.47 | x | ||||||||||||||||||||||||||||||||||
11. | Other (4) | 476 | 1,223,457 | 23.9 | % | 84,348 | 22.6 | % | 3.45 | x | ||||||||||||||||||||||||||||||||||
Total | 786 | $ | 5,112,840 | 100.0 | % | $ | 372,023 | 100.0 | % | 2.67 | x |
Tenant | Brand Affiliation | No. of Buildings | Investment (1) | Percent of Total Investment | Annualized Minimum Rent(2) | Percent of Total Annualized Minimum Rent | Coverage (3) | |||||||||||||||||||||||||||||||||||||||||||
1. | TravelCenters of America | TravelCenters of America / Petro Stopping Centers | 179 | $ | 3,310,415 | 64.7 | % | $ | 246,110 | 66.2 | % | 2.18x | (4) | |||||||||||||||||||||||||||||||||||||
2. | American Multi-Cinema, Inc. | AMC Theatres | 11 | 102,580 | 2.0 | % | 7,751 | 2.1 | % | 0.33x | ||||||||||||||||||||||||||||||||||||||||
3. | Universal Pool Co., Inc. | The Great Escape | 14 | 98,242 | 1.9 | % | 7,140 | 1.9 | % | 7.79x | ||||||||||||||||||||||||||||||||||||||||
4. | Healthy Way of Life II, LLC | Life Time Fitness | 3 | 92,617 | 1.8 | % | 5,770 | 1.6 | % | 1.24x | ||||||||||||||||||||||||||||||||||||||||
5. | Styx Acquisition, LLC | Buehler's Fresh Foods | 5 | 76,536 | 1.5 | % | 5,657 | 1.5 | % | 5.90x | ||||||||||||||||||||||||||||||||||||||||
6. | Professional Resource Development, Inc. | Heartland Dental | 59 | 61,120 | 1.2 | % | 4,561 | 1.2 | % | 4.60x | ||||||||||||||||||||||||||||||||||||||||
7. | Norms Restaurants, LLC | Norms | 10 | 53,673 | 1.0 | % | 3,232 | 0.9 | % | 0.47x | ||||||||||||||||||||||||||||||||||||||||
8. | Express Oil Change, L.L.C. | Express Oil Change | 23 | 49,724 | 1.0 | % | 3,717 | 1.0 | % | 4.34x | ||||||||||||||||||||||||||||||||||||||||
9. | Regal Cinemas, Inc. | Regal Cinemas | 6 | 44,476 | 0.9 | % | 3,736 | 1.0 | % | 0.37x | ||||||||||||||||||||||||||||||||||||||||
10. | Pilot Travel Centers LLC | Flying J Travel Plaza | 3 | 41,681 | 0.8 | % | 3,215 | 0.9 | % | 3.99x | ||||||||||||||||||||||||||||||||||||||||
Subtotal, top 10 | 313 | 3,931,064 | 76.8 | % | 290,889 | 78.3 | % | 2.37x | ||||||||||||||||||||||||||||||||||||||||||
11. | Other (5) | Various | 473 | 1,181,776 | 23.2 | % | 81,134 | 21.7 | % | 3.76x | ||||||||||||||||||||||||||||||||||||||||
Total | 786 | $ | 5,112,840 | 100.0 | % | $ | 372,023 | 100.0 | % | 2.67x |
Industry | No. of Buildings | Investment (1) | Percent of Total Investment | Annualized Minimum Rent (2) | Percent of Total Annualized Minimum Rent | Coverage (3) | |||||||||||||||||||||||||||||||||||
Travel Centers | 182 | $ | 3,352,096 | 65.5% | $ | 249,325 | 67.1 | % | 2.29 | x | |||||||||||||||||||||||||||||||
Restaurants-Quick Service | 226 | 301,088 | 5.9% | 20,287 | 5.5 | % | 2.90 | x | |||||||||||||||||||||||||||||||||
Restaurants-Casual Dining | 53 | 192,170 | 3.9% | 11,434 | 3.1 | % | 1.92 | x | |||||||||||||||||||||||||||||||||
Movie Theaters | 22 | 190,725 | 3.7% | 14,712 | 4.0 | % | 0.47 | x | |||||||||||||||||||||||||||||||||
Health and Fitness | 13 | 185,458 | 3.6% | 10,588 | 2.8 | % | 1.89 | x | |||||||||||||||||||||||||||||||||
Grocery Stores | 19 | 129,219 | 2.5% | 9,191 | 2.5 | % | 5.51 | x | |||||||||||||||||||||||||||||||||
Home Goods and Leisure | 20 | 118,899 | 2.3% | 9,065 | 2.4 | % | 7.79 | x | |||||||||||||||||||||||||||||||||
Medical, Dental Office | 71 | 118,098 | 2.3% | 9,369 | 2.5 | % | 4.42 | x | |||||||||||||||||||||||||||||||||
Automotive Equipment & Services | 64 | 98,473 | 1.9% | 7,132 | 1.9 | % | 3.19 | x | |||||||||||||||||||||||||||||||||
Entertainment | 4 | 61,436 | 1.2% | 4,367 | 1.2 | % | 2.48 | x | |||||||||||||||||||||||||||||||||
Automotive Dealers | 8 | 60,119 | 1.2% | 5,087 | 1.4 | % | 6.95 | x | |||||||||||||||||||||||||||||||||
General Merchandise Stores | 5 | 56,321 | 1.1% | 3,892 | 1.0 | % | 3.28 | x | |||||||||||||||||||||||||||||||||
Educational Services | 9 | 55,647 | 1.1% | 4,376 | 1.2 | % | 1.42 | x | |||||||||||||||||||||||||||||||||
Miscellaneous Manufacturing | 6 | 29,837 | 0.6% | 2,228 | 0.6 | % | 17.27 | x | |||||||||||||||||||||||||||||||||
Building Materials | 27 | 31,317 | 0.6% | 2,644 | 0.7 | % | 4.20 | x | |||||||||||||||||||||||||||||||||
Car Washes | 5 | 28,658 | 0.6% | 2,128 | 0.6 | % | 1.74 | x | |||||||||||||||||||||||||||||||||
Drug Stores and Pharmacies | 7 | 19,251 | 0.4% | 1,258 | 0.3 | % | 1.61 | x | |||||||||||||||||||||||||||||||||
Sporting Goods | 3 | 17,596 | 0.3% | 1,081 | 0.2 | % | 5.21 | x | |||||||||||||||||||||||||||||||||
Legal Services | 5 | 11,362 | 0.2% | 1,119 | 0.2 | % | (2.75) | x | |||||||||||||||||||||||||||||||||
Dollar Stores | 3 | 2,971 | 0.1% | 189 | 0.1 | % | 2.64 | x | |||||||||||||||||||||||||||||||||
Other | 5 | 16,538 | 0.3% | 2,551 | 0.7 | % | 2.10 | x | |||||||||||||||||||||||||||||||||
Vacant | 29 | 35,561 | 0.7% | — | — | % | n/a | ||||||||||||||||||||||||||||||||||
Total | 786 | $ | 5,112,840 | 100.0% | $ | 372,023 | 100.0 | % | 2.67 | x |
Year(1) | Square Feet | Annualized Minimum Rent Expiring | Percent of Total Annualized Minimum Rent Expiring | Cumulative % of Total Minimum Rent Expiring | |||||||||||||||||||||||||
2022 | 210,412 | 2,390 | 0.6% | 0.6% | |||||||||||||||||||||||||
2023 | 315,142 | 2,799 | 0.8% | 1.4% | |||||||||||||||||||||||||
2024 | 779,371 | 11,656 | 3.1% | 4.5% | |||||||||||||||||||||||||
2025 | 436,043 | 8,906 | 2.4% | 6.9% | |||||||||||||||||||||||||
2026 | 1,077,985 | 12,030 | 3.2% | 10.1% | |||||||||||||||||||||||||
2027 | 1,050,075 | 13,674 | 3.7% | 13.8% | |||||||||||||||||||||||||
2028 | 546,300 | 9,178 | 2.5% | 16.3% | |||||||||||||||||||||||||
2029 | 1,343,309 | 48,441 | 13.0% | 29.3% | |||||||||||||||||||||||||
2030 | 138,590 | 4,158 | 1.1% | 30.4% | |||||||||||||||||||||||||
2031 | 1,313,222 | 48,778 | 13.1% | 43.5% | |||||||||||||||||||||||||
2032 | 1,275,277 | 53,485 | 14.4% | 57.9% | |||||||||||||||||||||||||
2033 | 1,146,326 | 51,938 | 14.0% | 71.9% | |||||||||||||||||||||||||
2034 | 122,877 | 4,057 | 1.1% | 73.0% | |||||||||||||||||||||||||
2035 | 2,234,644 | 80,285 | 21.6% | 94.6% | |||||||||||||||||||||||||
2036 | 552,708 | 7,529 | 2.0% | 96.6% | |||||||||||||||||||||||||
2037 | 4,970 | 421 | 0.1% | 96.7% | |||||||||||||||||||||||||
2038 | 44,484 | 1,108 | 0.3% | 97.0% | |||||||||||||||||||||||||
2039 | 134,901 | 3,209 | 0.9% | 97.9% | |||||||||||||||||||||||||
2040 | 115,142 | 2,406 | 0.6% | 98.5% | |||||||||||||||||||||||||
2041 | 223,043 | 2,189 | 0.6% | 99.1% | |||||||||||||||||||||||||
2042 | 57,499 | 155 | 0.0% | 99.1% | |||||||||||||||||||||||||
2045 | 63,489 | 3,232 | 0.9% | 100.0% | |||||||||||||||||||||||||
Total | 13,185,809 | $ | 372,024 | 100% | |||||||||||||||||||||||||
State | Square Feet | Annualized Minimum Rent | Percent of Total Annualized Minimum Rent | |||||||||||||||||
Texas | 1,205,393 | $ | 32,409 | 8.7% | ||||||||||||||||
Ohio | 1,302,273 | 26,276 | 7.1% | |||||||||||||||||
Illinois | 1,016,187 | 26,125 | 7.0% | |||||||||||||||||
California | 399,045 | 23,463 | 6.3% | |||||||||||||||||
Georgia | 597,248 | 20,224 | 5.4% | |||||||||||||||||
Florida | 538,130 | 16,153 | 4.3% | |||||||||||||||||
Arizona | 476,651 | 17,226 | 4.6% | |||||||||||||||||
Indiana | 637,239 | 17,035 | 4.6% | |||||||||||||||||
Pennsylvania | 543,959 | 15,158 | 4.1% | |||||||||||||||||
Nevada | 190,262 | 9,625 | 2.6% | |||||||||||||||||
Other | 6,608,713 | 168,329 | 45.3% | |||||||||||||||||
Total | 13,515,100 | $ | 372,023 | 100.0% |
For the Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Net loss | $ | (119,822) | $ | (194,990) | |||||||||||||
Add (Less): | Depreciation and amortization expense | 104,113 | 124,368 | ||||||||||||||
Loss on asset impairment (1) | 5,500 | 1,211 | |||||||||||||||
(Gain) loss on sale of real estate, net (2) | (5,548) | 9 | |||||||||||||||
Unrealized gains on equity securities, net (3) | 10,260 | 6,481 | |||||||||||||||
Adjustments to reflect our share of FFO attributable to an investee (4) | 666 | 465 | |||||||||||||||
FFO | (4,831) | (62,456) | |||||||||||||||
Add (less): | Adjustments to reflect our share of Normalized FFO attributable to an investee (4) | 245 | 825 | ||||||||||||||
Transaction related costs (5) | 1,177 | 19,635 | |||||||||||||||
Normalized FFO | $ | (3,409) | $ | (41,996) | |||||||||||||
Weighted average shares outstanding (basic and diluted) (6) | 164,667 | 164,498 | |||||||||||||||
Basic and diluted per common share amounts: | |||||||||||||||||
Net loss | $ | (0.73) | $ | (1.19) | |||||||||||||
FFO | $ | (0.03) | $ | (0.38) | |||||||||||||
Normalized FFO | $ | (0.02) | $ | (0.26) | |||||||||||||
Distributions declared per share | $ | 0.01 | $ | 0.01 |
Principal Balance | Annual Interest Rate | Annual Interest Expense | Maturity | Interest Payments Due | ||||||||||||||||||||||
$ | 500,000 | 5.000 | % | $ | 25,000 | 2022 | Semi-Annually | |||||||||||||||||||
500,000 | 4.500 | % | 22,500 | 2023 | Semi-Annually | |||||||||||||||||||||
350,000 | 4.650 | % | 16,275 | 2024 | Semi-Annually | |||||||||||||||||||||
825,000 | 4.350 | % | 35,888 | 2024 | Semi-Annually | |||||||||||||||||||||
350,000 | 4.500 | % | 15,750 | 2025 | Semi-Annually | |||||||||||||||||||||
800,000 | 7.500 | % | 60,000 | 2025 | Semi-Annually | |||||||||||||||||||||
350,000 | 5.250 | % | 18,375 | 2026 | Semi-Annually | |||||||||||||||||||||
450,000 | 4.750 | % | 21,375 | 2026 | Semi-Annually | |||||||||||||||||||||
400,000 | 4.950 | % | 19,800 | 2027 | Semi-Annually | |||||||||||||||||||||
450,000 | 5.500 | % | 24,750 | 2027 | Semi-Annually | |||||||||||||||||||||
400,000 | 3.950 | % | 15,800 | 2028 | Semi-Annually | |||||||||||||||||||||
425,000 | 4.950 | % | 21,038 | 2029 | Semi-Annually | |||||||||||||||||||||
400,000 | 4.375 | % | 17,500 | 2030 | Semi-Annually | |||||||||||||||||||||
$ | 6,200,000 | $ | 314,051 |
Impact of Increase in Interest Rates | |||||||||||||||||||||||
Interest Rate Per Year (1) | Outstanding Debt (2) | Total Interest Expense Per Year | Annual Per Share Impact (3) | ||||||||||||||||||||
At March 31, 2022 | 2.85 | % | $ | 1,000,000 | $ | 28,500 | $ | 0.17 | |||||||||||||||
One percentage point increase | 3.85 | % | $ | 1,000,000 | $ | 38,500 | $ | 0.23 |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
4.3 | ||||||||
4.4 | ||||||||
4.5 | ||||||||
4.6 | ||||||||
4.7 | ||||||||
4.8 | ||||||||
4.9 | ||||||||
4.10 | ||||||||
4.11 | ||||||||
4.12 | ||||||||
4.13 | ||||||||
4.14 | ||||||||
4.15 | ||||||||
4.16 |
Exhibit Number | Description | |||||||
4.17 | ||||||||
4.18 | ||||||||
4.19 | ||||||||
4.20 | ||||||||
4.21 | ||||||||
4.22 | ||||||||
4.23 | ||||||||
4.24 | ||||||||
4.25 | ||||||||
4.26 | ||||||||
4.27 | ||||||||
10.1 | ||||||||
22.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
31.3 | ||||||||
31.4 | ||||||||
32.1 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document. (Filed herewith.) | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.) | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.) | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.) | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.) |
Exhibit Number | Description | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SERVICE PROPERTIES TRUST | |||||
/s/ Todd W. Hargreaves | |||||
Todd W. Hargreaves | |||||
President and Chief Investment Officer | |||||
Dated: May 4, 2022 | |||||
/s/ Brian E. Donley | |||||
Brian E. Donley | |||||
Chief Financial Officer and Treasurer | |||||
(Principal Financial and Accounting Officer) | |||||
Dated: May 4, 2022 |
Exact Name of Guarantor Subsidiary | Jurisdiction | ||||||||||||||||
Cambridge TRS, Inc. | Maryland | ||||||||||||||||
Harbor Court Associates, LLC | Maryland | ||||||||||||||||
Highway Ventures Borrower LLC | Delaware | ||||||||||||||||
Highway Ventures LLC | Delaware | ||||||||||||||||
HPT Clift TRS LLC | Maryland | ||||||||||||||||
HPT CW MA Realty LLC | Maryland | ||||||||||||||||
HPT CW MA Realty Trust | Massachusetts | ||||||||||||||||
HPT CY TRS, Inc. | Maryland | ||||||||||||||||
HPT Geary ABC Holdings LLC | Maryland | ||||||||||||||||
HPT Geary Properties Trust | Maryland | ||||||||||||||||
HPT IHG Chicago Property LLC | Maryland | ||||||||||||||||
HPT IHG GA Properties LLC | Maryland | ||||||||||||||||
HPT IHG-2 Properties Trust | Maryland | ||||||||||||||||
HPT IHG-3 Properties LLC | Maryland | ||||||||||||||||
HPT SN Holding, Inc. | New York | ||||||||||||||||
HPT State Street TRS LLC | Maryland | ||||||||||||||||
HPT Suite Properties Trust | Maryland | ||||||||||||||||
HPT TA Properties Trust | Maryland | ||||||||||||||||
HPT TRS IHG-2, Inc. | Maryland | ||||||||||||||||
HPT TRS Inc. | Maryland | ||||||||||||||||
HPT TRS MRP, Inc. | Maryland | ||||||||||||||||
HPT TRS SPES II, Inc. | Maryland | ||||||||||||||||
HPT TRS WYN, Inc. | Maryland | ||||||||||||||||
HPT Wacker Drive TRS LLC | Maryland | ||||||||||||||||
HPTCY Properties Trust | Maryland | ||||||||||||||||
HPTMI Hawaii, Inc. | Delaware | ||||||||||||||||
HPTMI Properties Trust | Maryland | ||||||||||||||||
SVC Gatehall Drive TRS LLC | Maryland | ||||||||||||||||
SVC Holdings LLC | Maryland | ||||||||||||||||
SVC Jersey City TRS LLC | Maryland | ||||||||||||||||
SVC Minneapolis TRS LLC | Maryland | ||||||||||||||||
SVC Morris Plains TRS LLC | Maryland | ||||||||||||||||
SVC Nanuet TRS LLC | Maryland | ||||||||||||||||
SVC NJ TRS LLC | Maryland | ||||||||||||||||
SVC Randolph Street TRS LLC | Maryland | ||||||||||||||||
SVC Redondo Beach TRS LLC | Maryland | ||||||||||||||||
SVCN 1 LLC | Delaware | ||||||||||||||||
SVCN 2 LLC | Delaware | ||||||||||||||||
SVCN 3 LLC | Delaware | ||||||||||||||||
SVCN 4 LLC | Delaware | ||||||||||||||||
SVCN 5 LLC | Delaware |
Date: May 4, 2022 | /s/Todd W. Hargreaves | ||||
Todd W. Hargreaves | |||||
President and Chief Investment Officer |
Date: May 4, 2022 | /s/ Brian E. Donley | ||||
Brian E. Donley | |||||
Chief Financial Officer and Treasurer |
Date: May 4, 2022 | /s/ Adam D. Portnoy | ||||
Adam D. Portnoy | |||||
Managing Trustee |
Date: May 4, 2022 | /s/ John G. Murray | ||||
John G. Murray | |||||
Managing Trustee |
/s/ Adam D. Portnoy | /s/ John G. Murray | |||||||
Adam D. Portnoy | John G. Murray | |||||||
Managing Trustee | Managing Trustee | |||||||
/s/ Todd W. Hargreaves | /s/ Brian E. Donley | |||||||
Todd Hargreaves | Brian E. Donley | |||||||
President and Chief Investment Officer | Chief Financial Officer and Treasurer | |||||||
Date: May 4, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2022 |
Dec. 31, 2021 |
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Shareholders’ equity: | ||
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common shares, shares issued (in shares) | 165,091,533 | 165,092,333 |
Common shares, shares outstanding (in shares) | 165,091,533 | 165,092,333 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
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Income Statement [Abstract] | ||
Interest expense, amortization of debt issuance costs and debt discounts and premiums | $ 5,913 | $ 4,355 |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Common Shares |
Cumulative Common Distributions |
Additional Paid in Capital |
Cumulative Net Income Available for Common Shareholders |
Cumulative Other Comprehensive Income (Loss) |
---|---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2020 | 164,823,833 | |||||
Beginning balance at Dec. 31, 2020 | $ 2,102,790 | $ 1,648 | $ (5,628,746) | $ 4,550,385 | $ 3,180,263 | $ (760) |
Increase (Decrease) in Shareholders' Equity | ||||||
Net loss | (194,990) | (194,990) | ||||
Equity interest in investee’s unrealized gains | 0 | |||||
Common share grants | 380 | 380 | ||||
Distributions | (1,648) | (1,648) | ||||
Ending balance (in shares) at Mar. 31, 2021 | 164,823,833 | |||||
Ending balance at Mar. 31, 2021 | 1,906,532 | $ 1,648 | (5,630,394) | 4,550,765 | 2,985,273 | (760) |
Beginning balance (in shares) at Dec. 31, 2021 | 165,092,333 | |||||
Beginning balance at Dec. 31, 2021 | 1,555,306 | $ 1,651 | (5,635,342) | 4,552,558 | 2,635,660 | 779 |
Increase (Decrease) in Shareholders' Equity | ||||||
Net loss | (119,822) | (119,822) | ||||
Equity interest in investee’s unrealized gains | 4 | |||||
Common share grants | 462 | 462 | ||||
Common share repurchases and forfeitures (in shares) | (800) | |||||
Distributions | (1,651) | (1,651) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 165,091,533 | |||||
Ending balance at Mar. 31, 2022 | $ 1,434,299 | $ 1,651 | $ (5,636,993) | $ 4,553,020 | $ 2,515,838 | $ 783 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Supplemental Information - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
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Supplemental disclosure of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents | $ 969,609 | $ 874,455 |
Restricted cash | 2,963 | 5,096 |
Total cash and cash equivalents and restricted cash | 972,572 | 879,551 |
Supplemental cash flow information: | ||
Cash paid for interest | 102,164 | 98,410 |
Cash paid for income taxes | 581 | 182 |
Non-cash investing activities: | ||
Real estate improvements accrued, not paid | $ 7,901 | $ 9,250 |
Organization and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Note 1. Organization and Basis of Presentation Service Properties Trust, or we, us or our, is a real estate investment trust, or REIT, organized on February 7, 1995 under the laws of the State of Maryland, which invests in hotels and service-focused retail net lease properties. At March 31, 2022, we owned, directly and through our subsidiaries, 298 hotels and 786 net lease properties. At March 31, 2022, all 298 of our hotels were operated by subsidiaries of the following companies: Sonesta Holdco Corporation, or Sonesta (256 hotels), Hyatt Hotels Corporation, or Hyatt (17 hotels), Radisson Hospitality, Inc., or Radisson (eight hotels), Marriott International, Inc., or Marriott (16 hotels), and InterContinental Hotels Group, plc, or IHG (one hotel). At March 31, 2022, we owned 786 net lease properties with 174 tenants, including 179 travel centers leased to TravelCenters of America Inc., or TA, our largest tenant. Hereinafter, these companies are sometimes referred to as our managers and/or tenants, or collectively, operators. Impact of COVID-19 As a result of the COVID-19 pandemic and the impact it has had on travel and the broader economy throughout the U.S. since March 2020, our hotels have experienced significant declines in occupancy, which have had and are expected to continue to have a significant negative effect on our operating results and cash flow. While occupancy has since recovered significantly, there remains uncertainty as to when and if operations at our hotels will return to pre-pandemic levels. Liquidity As of March 31, 2022, our $1,000,000 revolving credit facility was scheduled to mature on July 15, 2022. In April 2022, we amended the agreement governing the credit facility to among other things, obtain additional covenant relief, we repaid $200,000 of the outstanding balance, and reduced the size of the facility from $1,000,000 to $800,000. Also in April 2022, we exercised a six month option to extend the maturity date of the credit facility to January 15, 2023. We have $500,000 of unsecured senior notes due on August 15, 2022, which we currently expect to repay with cash on hand on or prior to the maturity date. As of May 3, 2022, we have $916,106 of cash or cash equivalents. We also have entered agreements to sell 47 properties for an aggregate sales price of $304,940. See Notes 4 and 7 for further information regarding our asset sales and debt. Basis of Presentation The accompanying condensed consolidated financial statements of us are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2021, or our 2021 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period, have been included. These condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are 100% owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for credit losses, purchase price allocations, useful lives of fixed assets, impairment of real estate and related intangibles. We have determined that each of our wholly owned taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification™. We have concluded that we must consolidate each of our wholly owned TRSs because we are the entity with the power to direct the activities that most significantly impact such VIEs’ performance and we have the obligation to absorb losses or the right to receive benefits from each VIE that could be significant to the VIE and are, therefore, the primary beneficiary of each VIE. The assets of our TRSs were $109,031 and $113,705 as of March 31, 2022 and December 31, 2021, respectively, and consist primarily of amounts due from and working capital advances to certain of our hotel managers. The liabilities of our TRSs were $33,192 and $42,432 as of March 31, 2022 and December 31, 2021, respectively, and consist primarily of amounts payable to certain of our hotel managers. The assets of our TRSs are available to satisfy our TRSs’ obligations and we have guaranteed certain obligations of our TRSs.
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Revenue Recognition |
3 Months Ended |
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Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Note 2. Revenue Recognition We report hotel operating revenues for managed hotels in our condensed consolidated statements of comprehensive income (loss). We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided. We report rental income for leased properties in our condensed consolidated statements of comprehensive income (loss). We recognize rental income from operating leases on a straight line basis over the term of the lease agreements. We reduced rental income by $1,973 and $1,883 for the three months ended March 31, 2022 and 2021, respectively, to record scheduled rent changes under certain of our leases, the deferred rent obligations payable to us under our leases with TA and the estimated future payments to us under our TA leases for the cost of removing underground storage tanks at our travel centers on a straight line basis. See Notes 5 and 10 for further information regarding our TA leases. Due from related persons includes $17,321 and $20,655 and other assets, net, includes $28,252 and $26,881 of straight line rent receivables at March 31, 2022 and December 31, 2021, respectively. Certain of our lease agreements require additional percentage rent if gross revenues of our properties exceed certain thresholds defined in our lease agreements. We may determine percentage rent due to us under our leases monthly, quarterly or annually, depending on the specific lease terms, and recognize it when all contingencies are met and the rent is earned. We recorded percentage rent of $756 and $180 for the three months ended March 31, 2022 and 2021, respectively. We had deferred estimated percentage rent of $2,499 and $1,386 for the three months ended March 31, 2022 and 2021, respectively. See Note 5 for further information on this deferred estimated percentage rent.
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Weighted Average Common Shares |
3 Months Ended |
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Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares | Note 3. Weighted Average Common Shares We calculate basic earnings per common share by dividing net loss by the weighted average number of our common shares outstanding during the period. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested share awards and other potentially dilutive common shares, and the related impact on earnings, are considered when calculating diluted earnings per share. For the three months ended March 31, 2022 and 2021, there were no dilutive common shares and certain unvested common shares were not included in the calculation of diluted earnings per share because to do so would have been antidilutive.
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Real Estate Properties |
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Properties | Note 4. Real Estate Properties At March 31, 2022, we owned 298 hotels with an aggregate of 47,285 rooms or suites and 786 service-oriented retail properties with an aggregate of 13,515,100 square feet that are primarily subject to “triple net” leases, or net leases where the tenant is generally responsible for payment of operating expenses and capital expenditures of the property during the lease term. Our properties had an aggregate undepreciated carrying value of $10,361,126, including $452,100 related to properties classified as held for sale as of March 31, 2022. We made capital expenditures at certain of our properties of $28,884 during the three months ended March 31, 2022. Dispositions During the three months ended March 31, 2022, we sold seven properties for an aggregate sales price of $65,524, excluding closing costs, as presented in the table below. The sales of these properties do not represent significant dispositions individually or in the aggregate nor do they represent a strategic shift. As a result, the results of the operations of these properties are included in continuing operations through the date of sale in our condensed consolidated statements of comprehensive income (loss).
As of March 31, 2022, we had 62 hotels with 7,607 rooms and an aggregate carrying value of $445,935 classified as held for sale and 19 net lease properties with 117,142 square feet and an aggregate carrying value of $6,165 classified as held for sale. See Notes 5 and 13 for further information on these properties. From April 1, 2022 through May 3, 2022, we sold 16 hotels with 2,021 rooms and an aggregate carrying value of $146,350 for an aggregate sales price of $169,469, excluding closing costs and four net lease properties with 38,578 square feet and a net carrying value of $4,697 for an aggregate sales price of $3,469 excluding closing costs. As of May 3, 2022, we have entered into agreements to sell 42 Sonesta branded hotels located in 22 states for an aggregate sales price of $301,125 and five net lease properties with an aggregate of 64,617 square feet for an aggregate sales price of $3,815. We expect the majority of these sales to be completed by the end of the second quarter of 2022. We continue to market four additional hotels with 631 keys for sale.
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Management Agreements and Leases |
3 Months Ended |
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Mar. 31, 2022 | |
Leases [Abstract] | |
Management Agreements and Leases | Note 5. Management Agreements and Leases As of March 31, 2022, we owned 298 hotels which were included in six operating agreements and 786 service oriented retail properties net leased to 174 tenants. We do not operate any of our properties. Hotel agreements Sonesta agreement. As of March 31, 2022, Sonesta managed 40 of our full-service hotels, 154 of our extended stay hotels, and 62 of our select service hotels pursuant to management agreements for all of the hotels. The hotels Sonesta managed for us comprised approximately 50.9% of our total historical real estate investments. On January 7, 2022, we and Sonesta amended and restated our management agreements effective January 1, 2022. We refer to our management agreements with Sonesta collectively as our Sonesta agreement. As of that date, we owned 261 hotels managed by Sonesta and 67 of these hotels were expected to be sold, or the Sale Hotels. Among other things, the amendments to the agreements between us and Sonesta for 194 hotels, or the Retained Hotels, are as follows: •The term for the Retained Hotels expires on January 31, 2037 and includes two 15-year renewal options. •All Retained Hotels are subject to a pooling agreement that combines the management agreements for the Retained Hotels for purposes of calculating gross revenues, hotel operating expenses, fees and distributions and the owner’s priority return due to us. •The owner’s priority return for the Retained Hotels was initially set at $325,200 annually. We have the right to terminate Sonesta’s management of specific hotels that we own if minimum performance thresholds are not met starting in 2023. •We will renovate the Retained Hotels to comply with agreed upon brand standards. As we advance such funding or fund other capital expenditures, the aggregate annual owner’s priority return due to us will increase by 6% of the amounts funded. •Trade area restrictions by hotel brand were added to define boundaries to protect our owned hotels in response to Sonesta increasing its franchising and third-party management activities. For the Sale Hotels, the term was extended to December 31, 2022 (or until the applicable hotel has been sold) and the reserve established for the regular refurbishment of our hotels, or FF&E, reserve funding requirement was removed. The Sale Hotels are subject to a pooling agreement that combines the management agreements for the Sale Hotels for purposes of calculating gross revenues, hotel operating expenses, management and related fees and the owner’s priority return due to us. Our owner’s priority return will be reduced by the current owner’s priority return for a Sale Hotel once sold. We sold five of the Sale Hotels during the three months ended March 31, 2022. The total annual owner’s priority return for the remaining 62 Sale Hotels was $75,159 as of March 31, 2022. We also sold 16 Sonesta hotels between April 1, 2022 and May 3, 2022 that had a total annual owner’s priority return of $18,724 as of March 31, 2022. As of May 3, 2022, we had agreements to sell 42 additional Sonesta managed hotels for an aggregate sales price of $301,125 and having a total annual owner’s priority return of $46,527 as of March 31, 2022. These pending sales are subject to conditions; as a result, those sales may not occur, may be delayed or their terms may change. See Notes 6 and 10 for further information regarding our sales of hotels managed by Sonesta. Our Sonesta agreement provides that we are paid an annual owner’s priority return if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so. The Sonesta agreement further provides that we are paid an additional return equal to 80% of the operating profits, as defined therein, after reimbursement of owner or manager advances and with respect to the Retained Hotels, FF&E reserve escrows and Sonesta’s incentive fee, if applicable. Our Sonesta hotels generated net operating cash flow of $3,029 and a net operating cash flow deficit of $37,394 for the three months ended March 31, 2022 and 2021, respectively. Pursuant to our Sonesta agreement, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third-party reservation transmission fees of $23,797 and $11,275 for the three months ended March 31, 2022 and 2021, respectively. These fees and costs are included in hotel operating expenses in our condensed consolidated statements of comprehensive income (loss). In addition, we incurred procurement and construction supervision fees payable to Sonesta of $285 and $743 for the three months ended March 31, 2022 and 2021, respectively, which amounts have been capitalized in our condensed consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets. Our Sonesta agreement requires us to fund capital expenditures that we approve at the hotels. We incurred capital expenditures for hotels included in our Sonesta agreement in an aggregate amount of $19,067 and $21,713 during the three months ended March 31, 2022 and 2021, respectively, which resulted in increases in our contractual annual owner’s priority returns of $1,144 and $1,737, respectively. We owed Sonesta $4,633 and $17,248 for capital expenditures and other reimbursements at March 31, 2022 and 2021, respectively. Sonesta owed us $3,029 in owner’s priority returns as of March 31, 2022. Amounts due from Sonesta are included in due from related persons and amounts owed to Sonesta are included in due to related persons in our condensed consolidated balance sheets. All of the hotels operated under the Retained Hotels management agreements require that 5% of the hotel gross revenues be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the owner’s priority returns due to us. No FF&E escrow deposits were required during either of the three months ended March 31, 2022 or 2021. We are required to maintain working capital for each of our hotels managed by Sonesta and have advanced a fixed amount based on the number of rooms in each hotel to meet the cash needs for hotel operations. The sales of the hotels managed by Sonesta referenced above resulted in a return to us of working capital amounts we had previously advanced with respect to those hotels. As of March 31, 2022 and December 31, 2021, we had advanced $55,158 and $56,697, respectively, of initial working capital to Sonesta net of any working capital returned to us on termination of the applicable management agreements in connection with such sales. These amounts are included in other assets in our condensed consolidated balance sheets. Any remaining working capital would be returned to us upon termination in accordance with the terms of our Sonesta agreement. See Notes 6 and 10 for further information regarding our relationship, agreements and transactions with Sonesta. Hyatt agreement. As of March 31, 2022, Hyatt managed 17 of our select service hotels pursuant to a portfolio management agreement that expires on March 31, 2031, or our Hyatt agreement, and provides that, as of March 31, 2022, we are to be paid an annual owner’s priority return of $12,651. Any returns we receive from Hyatt are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses. Hyatt has provided us with a $30,000 limited guarantee for 75% of the aggregate annual owner's priority returns due to us beginning in 2023. We realized returns of $1,863 and $1,555 during the three months ended March 31, 2022 and 2021, respectively under our Hyatt agreement. We incurred capital expenditures for certain hotels included in our Hyatt agreement of $10,843 during the three months ended March 31, 2022, which resulted in an aggregate increase in our contractual annual owner’s priority returns of $651. We did not incur any capital expenditures for any of the hotels included in our Hyatt agreement during the three months ended March 31, 2021. Radisson agreement. As of March 31, 2022, Radisson managed eight of our full service hotels pursuant to a portfolio management agreement that expires on July 31, 2031, or our Radisson agreement, and provides that we are to be paid an annual owner’s priority return of $10,200. Any returns we receive from Radisson are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses. Radisson has provided us with a $22,000 limited guarantee for 75% of the aggregate annual owner's priority returns due to us beginning in 2023. We realized returns of $454 and $5,150 during the three months ended March 31, 2022 and 2021, respectively, under our Radisson agreement. We did not incur capital expenditures for any of the hotels included in our Radisson agreement during either of the three months ended March 31, 2022 or March 31, 2021. Marriott agreement. As of March 31, 2022, Marriott managed 16 of our hotels. We were previously in arbitration proceedings with Marriott regarding, among other things, the validity of the timing of the termination of the Marriott agreements in 2020, including an exit hotel agreement which, if not terminated, would have required us to sell the 16 hotels encumbered with a Marriott brand. We entered an agreement with Marriott regarding the 16 hotels currently managed by Marriott, pursuant to which we agreed to have these hotels remain Marriott branded until the arbitration was resolved. On January 18, 2022, the arbitration concluded, and we are currently evaluating our plans to maximize the value to us of these hotels. Our Marriott hotels generated net operating cash flow of $323 during the three months ended March 31, 2022 and a net operating cash flow deficit of $14,921 during the three months ended March 31, 2021. Any returns we receive from Marriott are limited to the hotels’ available cash flows, if any, after payment of operating expenses. We did not incur any capital expenditures for any of the hotels included in our Marriott agreement during the three months ended March 31, 2022 and incurred capital expenditures of $7,000 during the three months ended March 31, 2021. Other. Our management agreement with IHG for one hotel expires on January 31, 2026. Our IHG hotel generated net operating cash flow of $130 for the three months ended March 31, 2022 and a cash flow deficit of $1,502 for the three months ended March 31, 2021. Any returns we receive from IHG are limited to the hotel’s available cash flows, if any, after payment of operating expenses. Net lease portfolio As of March 31, 2022, we owned 786 service-focused retail net lease properties with 13,515,100 square feet with leases requiring annual minimum rents of $372,023 with a weighted (by annual minimum rents) average remaining lease term of 10 years. The portfolio was 97.6% leased by 174 tenants operating under 133 brands in 21 distinct industries. TA leases. TA is our largest tenant, leasing 27.5% of our total historical real estate investments as of March 31, 2022. We lease to TA a total of 179 travel centers under five leases that expire between 2029 and 2035, subject to TA’s right to extend those leases, and require annual minimum rents of $246,110 as of March 31, 2022. In addition, TA is required to pay us previously deferred rent obligations in quarterly installments of $4,404 through January 31, 2023. TA paid $4,404 of deferred rent to us for each of the three months ended March 31, 2022 and 2021. The remaining balance of previously deferred rents was $17,614 and $22,018 as of March 31, 2022 and December 31, 2021, respectively. We recognized rental income from our TA leases of $62,038 and $62,077 for the three months ended March 31, 2022 and 2021, respectively. Rental income was reduced by $3,344 and $3,305 for the three months ended March 31, 2022 and 2021, respectively, to record the deferred rent obligations under our TA leases and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight-line basis. As of March 31, 2022 and December 31, 2021, we had receivables for current rent amounts owed to us by TA and straight-line rent adjustments of $40,606 and $48,168, respectively. These amounts are included in due from related persons in our condensed consolidated balance sheets. In addition to the rental income that we recognized during the three months ended March 31, 2022 and 2021 as described above, our TA leases require TA to pay us percentage rent based upon increases in certain sales. We recognize percentage rent due under our TA leases as rental income when all contingencies are met. We had aggregate deferred percentage rent under our TA leases of $2,391 and $1,386 for the three months ended March 31, 2022 and 2021, respectively. Our TA leases do not require FF&E escrow deposits. However, TA is required to maintain the leased travel centers, including structural and non-structural components. Under our TA leases, TA may request that we fund capital improvements in return for increases in TA’s annual minimum rent equal to 8.5% of the amounts funded. We did not fund any capital improvements to our properties that we leased to TA during either of the three months ended March 31, 2022 or 2021. See Notes 6 and 10 for further information regarding our relationship with TA. Our other net lease agreements generally provide for minimum rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight-line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We recognized rental income from our net lease properties (excluding TA) of $34,320 and $29,644 for the three months ended March 31, 2022 and 2021, respectively, which included $1,371 and $1,422, respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight-line basis. We continually review receivables related to rent, straight-line rent and property operating expense reimbursements and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The review includes an assessment of whether substantially all of the amounts due under a tenant’s lease are probable of collection. For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For leases that are deemed not probable of collection, revenue is recorded as cash is received. We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income. We reduced our reserves for uncollectible amounts and increased rental income by $507 for the three months ended March 31, 2022 based on our assessment of collectability and cash received from certain tenants. We recorded reserves for uncollectable amounts against rental income of $4,785 for the three months ended March 31, 2021. We had reserves for uncollectable rents of $11,420 and $15,519 as of March 31, 2022 and December 31, 2021, respectively, included in other assets in our condensed consolidated balance sheets. As of March 31, 2022, we had $6,355 of deferred rents outstanding related to six tenants who represented approximately 6.6% of our annualized rental income of our net lease retail portfolio as of March 31, 2022, to which we granted rent relief during the COVID-19 pandemic. These deferred rents are included in other assets, net in our condensed consolidated balance sheets. The deferred amounts did not impact our operating results for the three months ended March 31, 2022.
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Other Investments |
3 Months Ended |
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Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Other Investments | Note 6. Other Investments Equity method investment As of March 31, 2022, we owned approximately 34% of Sonesta’s outstanding common stock. We account for our 34% non-controlling interest in Sonesta under the equity method of accounting. As of March 31, 2022 and December 31, 2021, our investment in Sonesta had a carrying value of $61,974 and $62,687, respectively. The cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total stockholders’ equity book value on the date of acquisition of our initial equity interest in Sonesta, February 27, 2020, by an aggregate of $8,000. As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 31 years, the weighted average remaining useful life of the real estate assets and intangible assets and liabilities owned by Sonesta as of the date of our acquisition. We recorded amortization of the basis difference of $65 in each of the three months ended March 31, 2022 and 2021. We recognized losses of $652 and $2,778 related to our investment in Sonesta for the three months ended March 31, 2022 and 2021, respectively. These amounts are included in equity in earnings (losses) of an investee in our condensed consolidated statements of comprehensive income (loss). We recorded a liability for the fair value of our initial investment in Sonesta, as no cash consideration was exchanged related to the modification of our management agreement with, and investment in, Sonesta. This liability for our investment in Sonesta is included in accounts payable and other liabilities in our condensed consolidated balance sheet and is being amortized on a straight-line basis through January 31, 2037, as a reduction to hotel operating expenses in our condensed consolidated statements of comprehensive income (loss). We reduced hotel operating expenses by $621 for each of the three months ended March 31, 2022 and 2021, respectively, for amortization of this liability. As of March 31, 2022 and December 31, 2021, the unamortized balance of this liability was $36,826 and $37,447, respectively. In March 2021, we funded a $25,443 capital contribution to Sonesta related to its acquisition of Red Lion Hotels Corporation, which maintained our 34% ownership in Sonesta. In April, 2022, we funded a $25,000 capital contribution to Sonesta related to Sonesta’s acquisition of a portfolio of four hotels located in New York, NY. We continue to maintain our 34% ownership in Sonesta after giving effect to this funding. We currently expect to make an additional capital contribution of approximately $21,000 before December 31, 2022 in connection with Sonesta’s acquisition of these four hotels. Investment in equity securities. As of both March 31, 2022 and December 31, 2021, we owned 1,184,797 shares of TA common stock, representing approximately 8.0% of TA’s outstanding shares of common stock, and reported them at fair value based on quoted market prices (Level 1 inputs). Our TA shares had a carrying value of $50,899 and $61,159 as of March 31, 2022 and December 31, 2021, respectively. Our historical cost basis for these shares was $24,418 as of both March 31, 2022 and December 31, 2021. We recorded unrealized losses of $10,260 and $6,481 during the three months ended March 31, 2022 and 2021, respectively, to adjust the carrying value of our investment in shares of TA common stock to its fair value. See Notes 4, 5 and 10 for further information regarding our relationships, agreements and transactions with TA and Note 13 for further information regarding our investment in TA.
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Indebtedness |
3 Months Ended |
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Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Indebtedness | Note 7. Indebtedness Our principal debt obligations at March 31, 2022 were: (1) $1,000,000 of outstanding borrowings under our $1,000,000 revolving credit facility; and (2) $6,200,000 aggregate outstanding principal amount of senior unsecured notes. Our revolving credit facility is governed by a credit agreement with a syndicate of institutional lenders. As of March 31, 2022, the maturity date of our revolving credit facility was July 15, 2022, and, subject to the payment of an extension fee and meeting certain other conditions, we had the option to extend the maturity date of the facility for two additional six-month periods. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity. We are required to pay interest on borrowings under our revolving credit facility at the rate of LIBOR plus a premium, which was 235 basis points per annum, subject to a LIBOR floor of 0.50%, as of March 31, 2022. We also pay a facility fee, which was 30 basis points per annum at March 31, 2022, on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and the facility fee are subject to adjustment based upon, among other things, changes to our credit ratings. As of March 31, 2022, the annual interest rate payable on borrowings under our revolving credit facility was 2.85%. The weighted average annual interest rate for borrowings under our revolving credit facility was 2.85% for both the three months ended March 31, 2022 and 2021. As of March 31, 2022, our revolving credit facility was fully drawn. We and our lenders amended the credit agreement governing our $1,000,000 revolving credit facility, or our credit agreement, in 2020. Among other things, the amendments waived all of the then existing financial covenants through the end of the then existing agreement term, or July 15, 2022. As a result of the amendment, among other things: •we pledged certain equity interests of subsidiaries owning properties and provided first mortgage liens on 74 properties owned by the pledged subsidiaries; •we had the ability to fund up to $250,000 of capital expenditures per year and up to $50,000 of certain other investments per year as defined in the credit agreement; •we agreed to certain covenants and restrictions on distributions to common shareholders, share repurchases, incurring indebtedness, and acquiring real property (in each case subject to various exceptions); •we agreed to maintain minimum liquidity of $125,000; •we were generally required to apply the net cash proceeds from the disposition of assets, capital markets transactions and debt refinancings to repay outstanding amounts under the credit agreement, and then to other debt maturities; •in order to exercise the first six month extension option under the credit agreement, we would have needed to be in compliance with the financial covenants under the agreement calculated using pro forma projections as defined in the agreement for the quarter ending June 30, 2022, annualized, and have repaid or refinanced our $500,000 of 5.00% senior notes due in August 2022; and •we were not able to utilize the feature in our credit agreement pursuant to which maximum aggregate borrowings may be increased to up to $2,300,000 on a combined basis in certain circumstances until we demonstrated compliance with certain covenants. On April 14, 2022, we further amended our credit agreement and exercised our option to extend the maturity date of our revolving credit facility by six months to January 15, 2023. Pursuant to the amendment: •we repaid $200,000 of the outstanding balance and reduced the size of the revolving credit facility from $1,000,000 to $800,000; •we are permitted to acquire up to an aggregate of $300,000 of real property through the waiver period, which was extended pursuant to the amendment to December 31, 2022; •certain of the financial covenants in our credit agreement will be tested and in full force and effect beginning with the quarter ending September 30, 2022 and were modified to lower the required fixed charge coverage ratio from 1.5x to 1.0x through December 31, 2022, increase the required leverage ratio limit from 60% to 70% and increase the minimum liquidity requirement from $125,000 to $150,000 (which amount is subject to an additional increase as noted below); •we can fund through the waiver period an aggregate of $100,000 of capital contributions requested by Sonesta for business activities and to acquire additional shares of common stock of TA to retain our pro rata ownership of TA, an increase from the previous aggregate limit of $50,000; •the interest rate premium payable on borrowings under our revolving credit facility is increased from 235 basis points per annum to 250 basis points per annum, with the facility fee remaining unchanged at 30 basis points per annum on the total amount of lending commitments under the facility. The interest rate premiums and the facility fee continue to be subject to adjustment based upon changes to our credit ratings and, pursuant to the amendment, the interest rate premium will increase by an additional 25 basis points if we do not satisfy certain financial covenants; and •we are required to maintain minimum liquidity of $650,000 until we repay our $500,000 of 5.0% senior notes due in August, 2022 and at least $150,000 of liquidity thereafter. We continue to have the option to further extend the maturity date of our revolving credit facility by an additional six months, subject to the payment of an extension fee and meeting certain other conditions, including pursuant to the amendment, maintaining a $650,000 minimum liquidity requirement until we repay or refinance our $500,000 of 4.5% senior notes due June 2023. This requirement is reduced to $150,000 if we are in compliance with certain financial covenants, including the 1.5x ratio of consolidated income available for debt service to debt service required to incur additional debt under the agreements governing our public debt. Our revolving credit facility continues to be secured by 73 properties with an undepreciated book value of $1,757,253 as of March 31, 2022 to secure our obligations under the credit agreement. Our credit agreement and our unsecured senior notes indentures and their supplements provide for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as, in the case of our credit agreement, a change of control of us, which includes The RMR Group LLC, or RMR, ceasing to act as our business manager. Our credit agreement and our unsecured senior notes indentures and their supplements also contain covenants, including those that restrict our ability to incur debts or to make distributions under certain circumstances and generally require us to maintain certain financial ratios. As of March 31, 2022, we were not in compliance with one of our debt covenants necessary to incur additional debt, and as a result, we will not be able to incur additional debt until we meet the required covenant level.
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Shareholders' Equity |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Note 8. Shareholders' Equity Distributions During the three months ended March 31, 2022, we declared and paid regular quarterly distributions to common shareholders as follows:
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Business and Property Management Agreements with RMR |
3 Months Ended |
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Mar. 31, 2022 | |
Real Estate [Abstract] | |
Business and Property Management Agreements with RMR | Note 9. Business and Property Management Agreements with RMR We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally, and (2) a property management agreement, which relates to our property level operations of our net lease portfolio, excluding properties leased to TA, the office building component of one of our hotels and major renovation or repositioning activities at our hotels that we may request RMR to manage from time to time. We recognized net business management fees payable to RMR of $9,878 and $10,299 for the three months ended March 31, 2022 and 2021, respectively. Based on our common share total return, as defined in our business management agreement, as of each of March 31, 2022 and 2021, no incentive fees are included in the net business management fees we recognized for the three months ended March 31, 2022 or 2021. The actual amount of annual incentive fees for 2022, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2022, and will be payable in January 2023. We did not incur an incentive fee payable to RMR for the year ended December 31, 2021. We include business management fee amounts in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). We and RMR amended our business management agreement effective August 1, 2021 to provide that (i) for periods beginning on and after August 1, 2021, the MSCI U.S. REIT/Hotel & Resort REIT Index will be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR, and (ii) for periods prior to August 1, 2021, the SNL U.S. REIT Hotel Index will continue to be used. This change of index was due to S&P Global, Inc. ceasing to publish the SNL U.S. REIT Hotel Index. We recognized property management and construction supervision fees payable to RMR of $1,663 and $804 for the three months ended March 31, 2022 and 2021, respectively. Of those amounts, for the three months ended March 31, 2022 and 2021, $1,018 and $802, respectively, of property management fees were expensed to other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $645 and $2, respectively, of construction and supervision fees were capitalized for the three months ended March 31, 2022 and 2021. The amounts capitalized are included in building, improvements and equipment in our condensed consolidated balance sheets and are being depreciated over the estimated useful lives of the related capital assets. We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR employees assigned to work exclusively or partly at our net lease properties, our share of the wages, benefits and other related costs of RMR's centralized accounting personnel, our share of RMR’s costs for providing our internal audit function, and as otherwise agreed. We reimbursed RMR $764 and $744 for these expenses and costs for the three months ended March 31, 2022 and 2021, respectively. We included these amounts in other operating expenses and selling, general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss). On June 22, 2021, we and RMR amended our property management agreement to, among other things, provide for RMR's oversight of any major capital projects and repositioning activities at our hotels, including our hotels that are managed by Sonesta, as we may request from time to time. RMR will receive the same fee previously paid to Sonesta for these services, which is equal to 3% of the cost of any such major capital project or repositioning activity.
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Related Person Transactions |
3 Months Ended |
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Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Note 10. Related Person Transactions We have relationships and historical and continuing transactions with TA, Sonesta, RMR, The RMR Group, Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned operating subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR. John G. Murray, our other Managing Trustee and our former President and Chief Executive Officer until March 31, 2022, also serves as an officer and employee of RMR, and each of our other officers serves as an officer of RMR. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR or its subsidiaries provide management services. Adam Portnoy serves as chair of the boards and as a managing trustee or managing director of those companies. Other officers of RMR, including Mr. Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies. TA. We lease 179 of our travel centers to TA under our TA leases. As of March 31, 2022, we owned approximately 8.0% of TA’s outstanding shares of common stock. RMR provides management services to both us and TA, and Adam D. Portnoy, also serves as the chair of the board of directors and as a managing director of TA and, as of March 31, 2022, beneficially owned 658,505 shares of TA common stock (including through RMR), representing approximately 4.4% of TA’s outstanding shares of common stock. See Notes 5, 6 and 13 for further information regarding our relationships, agreements, transactions and investments with TA. Sonesta. Sonesta is a private company and is controlled by one of our Managing Trustees, Adam D. Portnoy. Mr. Portnoy, is the largest owner and controlling shareholder and a director of Sonesta. One of Sonesta’s other directors is our other Managing Trustee and former President and Chief Executive Officer and is Sonesta’s president and chief executive officer. Sonesta’s other director serves as RMR’s and RMR Inc.’s executive vice president, general counsel and secretary, as a managing director of RMR Inc. and as our Secretary. Certain other officers of Sonesta are officers of RMR and certain other officers and employees of Sonesta are former employees of RMR. RMR also provides certain services to Sonesta. As of March 31, 2022, we owned approximately 34% of Sonesta which managed 256 of our hotels. See Notes 4, 5 and 6 for further information regarding our relationships, agreements and transactions with Sonesta. Our Manager, RMR. We have two agreements with RMR to provide management services to us. See Note 9 for further information regarding our management agreements with RMR. For further information about these and certain other such relationships and certain other related person transactions, refer to our 2021 Annual Report.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes We have elected to be taxed as a REIT under the United States Internal Revenue Code of 1986, as amended, or the IRC, and, as such, are generally not subject to federal and most state income taxation on our operating income provided we distribute our taxable income to our shareholders and meet certain organization and operating requirements. We are subject to income tax in Canada, Puerto Rico and certain states despite our qualification for taxation as a REIT. Further, we lease our managed hotels to our wholly owned TRSs that, unlike most of our subsidiaries, file a separate consolidated tax return and are subject to federal, state and foreign income taxes. Our consolidated income tax provision includes the income tax provision related to the operations of our TRSs and certain state and foreign income taxes incurred by us despite our qualification for taxation as a REIT. During the three months ended March 31, 2022, we recognized an income tax expense of $695, which includes $581 of state tax expense and $114 of foreign tax expense. During the three months ended March 31, 2021, we recognized an income tax expense of $853, which includes $753 of state tax expense and $100 of foreign tax expense.
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Segment Information |
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Segment Information | Note 12. Segment Information We aggregate our hotels and net lease portfolio into two reportable segments, hotel investments and net lease investments, based on their similar operating and economic characteristics.
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Fair Value of Assets and Liabilities |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | Note 13. Fair Value of Assets and Liabilities The table below presents certain of our assets carried at fair value at March 31, 2022, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.
(1)See Note 6 for further information regarding our investment in TA. (2)As of March 31, 2022, we owned 62 hotels with 7,607 rooms with an aggregate carrying value of $445,935 classified as held for sale and 19 net lease properties with 117,142 square feet with an aggregate carrying value of $6,165 classified as held for sale. These properties are recorded at their estimated fair value less costs to sell based on offers received from third parties (Level 2 inputs as defined in the fair value hierarchy under GAAP). As of December 31, 2021, we owned 67 hotels with 8,667 rooms with an aggregate carrying value of $503,078 classified as held for sale and 22 net lease properties with 154,206 square feet with an aggregate carrying value of $12,440 classified as held for sale. These properties are recorded at their estimated fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP). We recorded a $78,620 loss on asset impairment in 2021 to reduce the carrying value of certain of these properties to their estimated fair value less costs to sell. In addition to the assets included in the table above, our financial instruments include our cash and cash equivalents, restricted cash, rents receivable, revolving credit facility and senior notes. At March 31, 2022 and December 31, 2021, the fair values of these additional financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short-term nature or floating interest rates, except as follows:
(1)Carrying value includes unamortized discounts and premiums and issuance costs. At March 31, 2022 and December 31, 2021, we estimated the fair values of our senior notes using an average of the bid and ask price of our then outstanding issuances of senior notes (Level 2 inputs).
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Organization and Basis of Presentation (Policies) |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying condensed consolidated financial statements of us are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2021, or our 2021 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair statement of results for the interim period, have been included. These condensed consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are 100% owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods and those of our managers and tenants are not necessarily indicative of the results that may be expected for the full year. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in our condensed consolidated financial statements include the allowance for credit losses, purchase price allocations, useful lives of fixed assets, impairment of real estate and related intangibles. |
Variable Interest Entity | We have determined that each of our wholly owned taxable REIT subsidiaries, or TRSs, is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification™. We have concluded that we must consolidate each of our wholly owned TRSs because we are the entity with the power to direct the activities that most significantly impact such VIEs’ performance and we have the obligation to absorb losses or the right to receive benefits from each VIE that could be significant to the VIE and are, therefore, the primary beneficiary of each VIE. |
Revenue Recognition | We report hotel operating revenues for managed hotels in our condensed consolidated statements of comprehensive income (loss). We generally recognize hotel operating revenues, consisting primarily of room and food and beverage sales, when goods and services are provided.Certain of our lease agreements require additional percentage rent if gross revenues of our properties exceed certain thresholds defined in our lease agreements. We may determine percentage rent due to us under our leases monthly, quarterly or annually, depending on the specific lease terms, and recognize it when all contingencies are met and the rent is earned. |
Revenue Recognition | We report rental income for leased properties in our condensed consolidated statements of comprehensive income (loss). We recognize rental income from operating leases on a straight line basis over the term of the lease agreements. |
Real Estate Properties (Tables) |
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of sale of properties |
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Shareholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | During the three months ended March 31, 2022, we declared and paid regular quarterly distributions to common shareholders as follows:
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Segment Information (Tables) |
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Schedule of segment information |
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Fair Value of Assets and Liabilities (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of certain of the entity's assets carried at fair value, categorized by the level of inputs used in the valuation of each asset | The table below presents certain of our assets carried at fair value at March 31, 2022, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset.
(1)See Note 6 for further information regarding our investment in TA. (2)As of March 31, 2022, we owned 62 hotels with 7,607 rooms with an aggregate carrying value of $445,935 classified as held for sale and 19 net lease properties with 117,142 square feet with an aggregate carrying value of $6,165 classified as held for sale. These properties are recorded at their estimated fair value less costs to sell based on offers received from third parties (Level 2 inputs as defined in the fair value hierarchy under GAAP). As of December 31, 2021, we owned 67 hotels with 8,667 rooms with an aggregate carrying value of $503,078 classified as held for sale and 22 net lease properties with 154,206 square feet with an aggregate carrying value of $12,440 classified as held for sale. These properties are recorded at their estimated fair value less costs to sell based on information derived from third party appraisals (Level 3 inputs as defined in the fair value hierarchy under GAAP). We recorded a $78,620 loss on asset impairment in 2021 to reduce the carrying value of certain of these properties to their estimated fair value less costs to sell.
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Schedule of fair value of additional financial instruments | At March 31, 2022 and December 31, 2021, the fair values of these additional financial instruments approximated their carrying values in our condensed consolidated balance sheets due to their short-term nature or floating interest rates, except as follows:
(1)Carrying value includes unamortized discounts and premiums and issuance costs.
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Revenue Recognition (Details) - USD ($) $ in Thousands |
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Mar. 31, 2021 |
Dec. 31, 2021 |
|
Revenue from Contract with Customer [Abstract] | |||
Adjustments necessary to record rent on straight line basis | $ 1,973 | $ 1,883 | |
Straight line rent receivables | 28,252 | $ 26,881 | |
TA | |||
Related Party Transaction [Line Items] | |||
Straight line rent receivable, due from related persons | 17,321 | $ 20,655 | |
Percentage rent | (756) | (180) | |
Deferred percentage rental income | $ 2,499 | $ 1,386 |
Management Agreements and Leases - Narrative (Details) |
Mar. 31, 2022
property
agreement
tenant
hotel
|
---|---|
Management Agreements and Leases [Line Items] | |
Number of operating agreements | agreement | 6 |
Hotels | |
Management Agreements and Leases [Line Items] | |
Number of properties owned | hotel | 298 |
Net Lease | |
Management Agreements and Leases [Line Items] | |
Number of properties owned | property | 786 |
Number of tenants | tenant | 174 |
Management Agreements and Leases - Hyatt Agreement (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
hotel
|
Mar. 31, 2021
USD ($)
|
|
Management Agreements and Leases [Line Items] | ||
Capital improvements from leased facilities, funded | $ 26,561 | $ 21,891 |
Hotels | ||
Management Agreements and Leases [Line Items] | ||
Number of properties owned | hotel | 298 | |
Hyatt Hotels Corporation | Hotels | ||
Management Agreements and Leases [Line Items] | ||
Number of properties owned | hotel | 17 | |
Hotels | Hyatt Hotels Corporation | ||
Management Agreements and Leases [Line Items] | ||
Operating agreement annual rent and return | $ 12,651 | |
Limited guarantee amount | $ 30,000 | |
Limited guarantee, percentage of annual minimum returns | 75.00% | |
Realized returns and rents | $ 1,863 | 1,555 |
Capital improvements from leased facilities, funded | 10,843 | $ 0 |
Increase in annual owner's priority returns | $ 651 |
Management Agreements and Leases - Radisson Agreement (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
hotel
|
Mar. 31, 2021
USD ($)
|
|
Management Agreements and Leases [Line Items] | ||
Capital improvements from leased facilities, funded | $ 26,561 | $ 21,891 |
Radisson Agreement | ||
Management Agreements and Leases [Line Items] | ||
Capital improvements from leased facilities, funded | $ 0 | 0 |
Hotels | Radisson Agreement | ||
Management Agreements and Leases [Line Items] | ||
Number of properties owned | hotel | 8 | |
Operating agreement annual rent and return | $ 10,200 | |
Limited guarantee amount | $ 22,000 | |
Limited guarantee, percentage of annual minimum returns | 75.00% | |
Realized returns and rents | $ 454 | $ 5,150 |
Management Agreements and Leases - Marriott Agreement (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022
USD ($)
hotel
|
Mar. 31, 2021
USD ($)
|
|
Management Agreements and Leases [Line Items] | ||
Cash provided by (used in) operating activities | $ (11,983) | $ (62,724) |
Capital improvements from leased facilities, funded | $ 26,561 | 21,891 |
Marriott Contracts | Hotels | ||
Management Agreements and Leases [Line Items] | ||
Number of properties owned | hotel | 16 | |
Cash provided by (used in) operating activities | $ 323 | (14,921) |
Capital improvements from leased facilities, funded | $ 7,000 | |
Marriott Contracts | Hotels | Marriott International, Inc. | ||
Management Agreements and Leases [Line Items] | ||
Number of properties owned | hotel | 16 |
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 14, 2022 |
Mar. 31, 2022 |
|
Class of Stock [Line Items] | ||
Dividend Per Common Share (in dollars per share) | $ 0.01 | |
Total Distributions | $ 1,651 | |
Subsequent event | ||
Class of Stock [Line Items] | ||
Total Distributions | $ 1,651 | |
Quarterly distribution declared (in dollars per share) | $ 0.01 |
Business and Property Management Agreements with RMR (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 22, 2021 |
Mar. 31, 2022
USD ($)
employee
agreement
|
Mar. 31, 2021
USD ($)
|
|
Real Estate Properties [Line Items] | |||
Number of employees | employee | 0 | ||
RMR LLC | |||
Real Estate Properties [Line Items] | |||
Incentive fee calculation period | 3 years | ||
Related party property management and construction management fee | $ 1,663 | $ 804 | |
RMR LLC | Amended And Restate Business Management Agreement | |||
Real Estate Properties [Line Items] | |||
Number of management service agreements | agreement | 2 | ||
Business management fees incurred | $ 9,878 | 10,299 | |
Related party reimbursement expenses | 764 | 744 | |
RMR LLC | Property Management Fees | |||
Real Estate Properties [Line Items] | |||
Related party expenses | 1,018 | 802 | |
Related party, percentage fee | 3.00% | ||
RMR LLC | Construction and Supervision Fees Capitalized | |||
Real Estate Properties [Line Items] | |||
Related party transaction amount | $ 645 | $ 2 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Components of provision for income taxes | ||
Income tax expense | $ 695 | $ 853 |
Current foreign tax expense | 114 | 100 |
Current state tax expense | $ 581 | $ 753 |
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